Debt ceiling 101: 12 questions about what's going on

The US Treasury has warned that as early as Oct. 17 it will no longer be able to cover all the government's rising financial obligations. Here’s your guide to the debt limit deadline and its implications.

5. Is the debt ceiling a good idea?

Kevin Lamarque/Reuters/File
These are the long-term consequences of Congress's fiscal habits, according to House Speaker John Boehner last month.

Some economists say it’s an unnecessary ritual. If Congress wants to keep better watch on the national debt, it can do so by other means. The legislators can easily view reports by their own accounting experts (the Congressional Budget Office) to see estimates of how their tax-and-spending decisions will affect total debt.

Other finance experts say the cap can serve a purpose, nudging lawmakers to focus periodically on the long-term consequences of their fiscal habits.

Sometimes lawmakers negotiate over the debt cap, linking a hike to efforts at deficit reduction or other budgetary reforms. But it can be dangerous for the economy if the process leads over a cliff toward a possible default by the Treasury on US obligations.

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