Catherine Rampell at The New York Times: Could Obama Just Ignore the Debt Ceiling?
Ryan Grim at The Huffington Post: 14th Amendment: Democratic Senators See Debt Ceiling As Unconstitutional
Beowulf has already told us some time ago that the Supreme Court decided that Congress does not have the authority to renege on obligations previously entered into on behalf of the United States. See Perry V. United States, 294 U. S. 330 (1935).
Case closed.
Now do the spineless Democrats have the spine to do this? That question answers itself.
19 comments:
Barry is talking right now on this subject.... stand by. Resp,
Question just asked directly on constitutionality of 'debt limit' Barry dodged for now: "I'm not on the supreme court"
Dodged for second time.. jump to gay marriage...
Tom,
This issue was specifically part of the FIRST QUESTION asked in the Presidents press conference this morning and it was blown off.....
He sounds like the professor on Gilligan's Island.
A comment at Times link (Wayne from Boulder CO) is worth quoting...
"section 4 of the 14th Amendment was specifically intended to prevent Congress from holding the debt for ransom in order to achieve other political goals. Originally, the problem was southern congressmen after the Civil War who wanted to invalidate the national debt unless the Federal government honored the Confederate debt. Section 4 removed this option, and it should similarly remove the option from the current Congress."
Beo,
I was listening on the radio this morning and his response was something like: "Im not on the supreme court"....
Dodged. I guess it is some progress that it showed up in a press conference at all... perhaps we (me) should be happy about that for now but progress is sloooooow.
Great additional cite wrt the 14th amendment... Resp,
The debt ceiling was an instrument of control on the Treasury when Congress transferred the authority to issue debt to the Treasury (from my understanding, before that Congress would approve every single debt issue.) Congress did not want to do that clerical work for debt appropriations it had already approved but was concerned about giving the Treasury free reign to issue debt so it put this “control” in place. This situation seems the same as the authorization signature on corporate checks – simply a control and oversight measure.
The problem is that most Americans see it as a credit limit, like on their credit cards, instead of the “control” it is and think it is some prudent measurement the government must obey and it is irresponsible to dodge it.
So, I think if a constitutional challenge were successful legally, it would hurt the politicians who successfully challenged it (so none will.) To do it without that risk, first you would have to educate the public on what the debt ceiling is and with unlimited time, I am not sure you could do that, much less do it in a few weeks. An alternative would be to get a damaged party, after default, to sue on the constitutionality of it and be the scapegoat but that would be post default.
Bottom line, this politically won't happen.
"Bottom line, this politically won't happen."
Yeah, I'm sure they have already polled it.
The GOP/Tea Party has the public convinced that the debt ceiling put a limit on future expenditure and the Dems did not counter this while they had the time to do so. Behind the curve again.
I wonder if it is ineptness or political string pulling. What groups win if we have major spending cuts and adherence to the debt ceiling? (Not a rhetorical question – I really do not know.)
I followed the NY Times link in the article and I noticed Tom's comment in the comment section. Perhaps there should be some coordination between readers of this blog to comment in main stream media articles en mass?
Crake: "I wonder if it is ineptness or political string pulling. What groups win if we have major spending cuts and adherence to the debt ceiling? (Not a rhetorical question – I really do not know.)"
The not so hidden agenda is eliminating "the welfare state" and turning the US into a neoliberal "paradise." Go figure on who profits from that. Hint: the people bankrolling the politics behind the not so hidden agenda and all the self-deluded people who are firmly convinced that they are John or Jane Galt, only the government is holding them back from claiming what its theirs.
Congress already has a control and oversight measure, they're called appropriation bills. Congress appropriates money annually to spend according to existing authorization statutes. Without a specific annual appropriation, Tsy can't spend a dollar. There is one major exception in the US Code (along with a few minor ones) under "Miscellaneous Permanent Appropriations"
"Necessary amounts are appropriated... to pay interest on the public debt under laws authorizing payment."31 USC 1305
As for laws authorizing payment, the three Code sections following the debt ceiling (31 USC 3101) authorize issuance and repayment of Bonds [>10 yrs], Notes [1><10 yrs], Certificates of indebtedness and Treasury bills [1 yr or less).
Congress could forbid future issuance of long term bonds and notes and Tsy could keep on keeping on by issuing short term T-bills [31 USC 3104(a)(2)]. Now notice that code section; not sure what the significance is that T-Bills are specifically exempted from this:
"An obligation issued under sections 3102–3104(a)(1) and 3105–3107 of this title may not bear the circulation privilege."
31 USC 3108
Crake: first you would have to educate the public on what the debt ceiling is Not so hard. Enforcing the dubious debt ceiling amounts to saying the government will stop payment on its checks, just because it can. This will not go over well with SS recipients.
Some interesting and knowledgeable comments at Matthew Zeitlin's The Debt Ceiling: Why Obama Should Just Ignore It. Particularly from roidubouloi, with "years spent in one of the premier commercial banking legal practices in the country". His idea is that the Fed could just buy Treasury checks with reserves, in effect "printing money". He argues that checks, while debt, are not debt for the debt ceiling or for direct Fed-Treas loan prohibitions. So maybe we have a Fed check kite, in addition to the Treasury coin caper.
The dots need to be placed closer together for people to understand how monetary operations work.
All savings by users in banknotes, deposits, or treasuries create a corresponding liability with the issuer as a matter of double-entry accounting. The issuer’s debt, or liability, exists as a convenience to those users who choose to save risk-free instead of invest or spend in the private sector.
DollarMonopoly.com - let me know what you think
Crake, Tom Hickey: re: What groups win if we have major spending cuts and adherence to the debt ceiling? (Not a rhetorical question – I really do not know.)I used to wonder about this also. It would seem that everyone would benefit from a robust economy, with everyone working. But the real agenda is apparent, it is to acquire all public assets, lands and utilities and charge rents for their use by the public. This is under threat in Greece as part of the terms to roll-over thier debt, and is happening in the US, sale of toll roads, parking meter franchises, the attempt in Wisconsin to sell off the public utilities under the table, as a hiden part of the recent bill to eliminate public sector unions. It would mean a gradual return to a feudal society, in which all assets are owned by the aristocracy and the rest pay the rents. Cheers, Jim
Yup, Jim. It would not have been hard at all to design policies that made the rich richer and the poor richer. The US had them, more or less, for decades. Making the poor richer tends to make everything advance more swiftly.
But that ain't what THEY want. They want a return to slavery. Said that at Krugman's NYT blog once, not the leftiest location, and was surprised at the dozens of recommendations it got.
I was having this discussion with someone on the blogs a while ago, don't recall, where, and he actually said that he preferred wide income and wealth disparity because it made him feel richer. He was not at all embarrassed about admitting it, nor did he see anything wrong with making a lot of people poorer than they need to be to make people like him feel richer.
If jumbo coin seigniorage can be used to keep a positive balance in the Treasury General Account (TGA) as originally outlined by beowulf, then the implication is 1) that the 14th amendment and the debt ceiling are not currently in conflict because the Government doesn't have to borrow anymore to pay its bills and 2) since coin seigniorage may be the only way, apart from debt issuance, to keep a positive balance in the TGA, and to pay the bills, it follows that the President has a constitutional obligation to use it. If he didn't it would be he would be violating the amendment by questioning the debt.
Here's a post making that case: http://www.correntewire.com/debt_ceiling_emnotem_unconstitutional_right_now
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