On Super Bowl Sunday, President Trump announced that the penny, a coin that has been in circulation since 1792, will no longer be minted. For as long as America has had a penny, it has also had a national debt, and there has recently been a discussion of how much debt is too much.
The penny has become a microcosm of our financial issues. We collect a penny in revenue but incur three cents in costs. The penny-minting business runs a deficit, just like much else in Washington.
In order to keep our financial system operating smoothly, it is time for Washington to address the question of the debt limit.
Always a political minefield, Congress is supposed to set the credit limit on its own credit card. But for eight of the last ten years, it has given itself unlimited credit by suspending the limit altogether. Congress is now considering raising the debt limit beyond the existing $36 trillion.
But how far can Congress safely go?
In our personal lives, we are all aware that there is a limit to how much can be borrowed on a house or automobile. A banker will ask two questions before approving your loan: how much you earn and what you owe. He is seeking to determine if you have the capacity to handle a certain amount of debt.