Example for the US: Denmark knows how to handle a debt ceiling

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The US's debt ceiling and debt compared to Denmark's

Last week’s edition of the New Yorker featured a story by Lauren Collins (paywall) about Britain’s infatuation with the Danes, which is rooted in the country’s obsession with Danish television. According to Collins, ‘the sort of Brit who used to wear driving loafers and say ‘ciao’ is now into knits and ‘tak.'” Collins also notes that more than 500 British women went to Denmark in 2012 to get artificially inseminated, with an ad for one clinic reading, “Congratulations, it’s a Viking!”

The US would do well to adopt Britain’s Danophilia. But, instead of speaking Danish or trying to spawn the next Halfdon, it should focus on emulating Danish composure when it comes to handling the debt ceiling.

Denmark is the only democratic country besides the US that has a self-imposed limit on the amount its government can borrow. In its 20-year history, the Danish debt ceiling has only been raised once, in 2010, when the government’s outstanding debt was less than three-quarters of the limit, and there was no risk of bumping up against it. Not only that, but the Danes more than doubled their debit ceiling, just to be safe.

The US, on the other hand, has raised its borrowing limit 15 times since 1993, with the national debt scraping against the ceiling the entire time.

Those two approaches are, as one economist put it, “as different as tangy Danish Blue and bland Philadelphia cream cheese spread.”

To be fair, the parliamentary government of the Danes, which grants significant clout to the party in power, doesn’t really allow for the kinds of political stunts that ultimately cause the US debt ceiling to move so incrementally. But still, it’s hard not to think that Congress should show some modet and raise the forbandet thing already.