Reform Congress at the Root of Federal Debt
Economist Dave Hebert’s Wall Street Journal letter (Ditch the Debt Ceiling but Bring Back 1917, February 2, 2026) offers a powerful reform Congress case for NCFCA debaters:
In his Jan. 30 [WSJ] op-ed “The World’s Worst Budget Process,” former Rep. Van Taylor correctly identifies the Congressional Budget and Impoundment Control Act of 1974 as a problem in the federal budget process. But that was a Band-Aid solution to the real problem: the Second Liberty Bond Act of 1917, which created the first debt ceiling of $15 billion.
Before the Liberty Bond Act of 1917, Congress could borrow money, but purchases were tied to specific projects.
This history is further discussed in When Will America Max Out the National Credit Card? (Civitas Institute, August 4, 2025):
At the outset of our nation, the Founders explicitly gave Congress the. However, they did not create a national credit card. This was done intentionally, as any borrowing that the Congress was going to do would have to be explicitly authorized by Congress. Major decisions, such as the Louisiana Purchase in 1803 and the Panama Canal in 1912, were paid for through the issuance of public debt, but that debt was only possible after weeks of careful and serious deliberation. Further, what this meant was that any debt incurred would have been tied to a specific and identifiable purpose. Importantly, this allowed voters to assess whether the national debt was worthwhile, as they could evaluate exactly what the debt was being used to finance.
Keynesian economic theory provided a justification for expanding federal debt without the justification of war or specific projects. Keynesians claimed that deficit spending during recessions could boost the economy toward recovery. And the flip side, when the economy was booming, federal spending could be cut to “cool off” the “overheated” economy. Instead, deficit spending just goes onward and upward.
More from the Civitas Institute article:
But then came the economic calamity of the Great Depression. Keynesian economics, conceived initially as a relatively benign idea that promised to be simple in application and profound in impact, provided the supposed cure. When faced with an economic downturn, government officials could engage in deficit spending and thereby provide the stimulus needed to prevent catastrophe. In times of plenty, the government could run surpluses and either pay off previously accumulated debt or establish a rainy-day fund for a future downturn. The implication of this is that the federal government need not balance its budget on an annual basis; the budget would balance itself over a sufficiently long run as government officials wisely responded to the changing business cycle.
Unfortunately, this fundamentally changed the relationship between debt, federal budgets, and the economy. The days of fiscal prudence were over. Now, not only was incurring debt viewed as morally good, but it came with a powerful economic justification. The issuance of debt was no longer viewed as a last resort, to be used only in cases of extreme necessity. Instead, deficits became a vital component of federal budget policy. The debt limit allowed Congress to spend money it did not have without the need for onerous project-specific authorization and tedious debate. What’s more, the fear of repeating the Great Depression gave something that policymakers could guard against through deficit spending.
The Congressional reform Hebert proposes:
Rather than raising the debt ceiling, as the One Big Beautiful Bill Act did, Congress needs to eliminate it or, at the very least, significantly lower it and return to the project-specific debt authorization that guided our nation’s fiscal house in the past. Contrary to what some may think, this would not preclude any spending. Instead, it would restore the deliberative process that once characterized fiscal policy in Washington. In doing so, it would transform budget debates from obscure concepts such as overall spending levels, omnibus appropriations packages, and continuing resolutions to something that more closely resembles the fiscal reality of everyday Americans. It would force members of both parties to defend their priorities explicitly and would tie any debts to specific projects.