Thursday, July 7, 2011

GOP Sen. Grassley: 14th Amendment option possible

Sen. Chuck Grassley (R-Iowa) said on Thursday that the Constitution may trump the debt ceiling, allowing the administration a way out of the default impasse.

Negotiators are considering gutting the social safety net in exchange for a vote to lift the debt ceiling. Grassley, in a conference call with local reporters, said that there may be another way out.

"There’s one thing that hasn’t been talked about yet, and I haven't checked on the constitutionality of it -- and I read the Constitution, but I don’t remember reading this -- but in the 14th amendment, there’s something that says something about the debt of the United States government shall be honored," Grassley said, according to a recording of the call. "The 14th Amendment includes a public debt clause that insists the obligations of the government 'shall not be questioned.'"
No platinum coin talk yet, though, outside of MMT anyway. Cullen Roche at Pragmatic Capitalism explains it: Let’s End This Debt Ceiling Debate With A $1 Oz. $1T Coin, crediting beowulf.


Matt Franko said...

"No platinum coin talk yet, though."



Mario said...

Tom and all,

you'll likely appreciate this video. I stumbled upon it at Bloomberg today.

It's Warren Buffett on jobs, obama, and the debt.

He's got some great things to say I think...although he may not be recognizing we are in a balance sheet recession and how the government can help in that way with at least a jobs program.

None the less, you'll notice that in the last minute or so of the video he talks about "printing money" and how the USA can always do that while Greece gave that up and therein makes all the difference. HE KNOWS!!! ;)

Maybe MMT should find more ways in stating what Warren states about how the government can help/hurt us, but still it's the market that really is the determining factor. could it be that MMT is potentially OVER-focused on the role that government plays, albeit MMT is still correct about that role, they may be over-emphasizing it, and losing the forest for the trees?

Just some thoughts for all. To hear Warren talk about "printing money" in its proper fashion was beyond relieving to me. If knows that...then I'd bet most everyone at the top knows it too...they're just lying point blank to America.

Craig Austin said...

yeah i just saw that. peter posted it on moslers blog.

buffett doesn’t grasp mmt. he is a trade deficit terrorist. mosler takes the opposite position. the only reason to trade is to import. the cost of importing is exporting. mosler is right and buffet is wrong. buffett has not thought about it from a currency issuer perspective. he is a very good currency user and a very poor currency issuer.

wait! maybe mr dollarmonopoly can fix him! off to omaha and awayyyyyyy

Tom Hickey said...

"they're just lying point blank to America"

Based on who Warren reports explaining this to and getting assent compared with what they have said later, sometimes only minutes later, it looks pretty disingenuous to me.


Samuelson: "I think there is an element of truth in the view that the superstition that the budget must be balanced at all times [is necessary]. Once it is debunked [that] takes away one of the bulwarks that every society must have against expenditure out of control. There must be discipline in the allocation of resources or you will have anarchistic chaos and inefficiency. And one of the functions of old fashioned religion was to scare people by sometimes what might be regarded as myths into behaving in a way that the long-run civilized life requires. We have taken away a belief in the intrinsic necessity of balancing the budget if not in every year, [then] in every short period of time. If Prime Minister Gladstone came back to life he would say "uh, oh what you have done" and James Buchanan argues in those terms. I have to say that I see merit in that view."

Randy comments: In other words, the need to balance the budget over some time period determined by the movements of celestial objects, or over the course of a business cycle is a myth, an old-fashioned religion. But that superstition is seen as necessary because if everyone realizes that government is not actually constrained by the necessity of balanced budgets, then it might spend "out of control", taking too large a percent of the nation's resources. Samuelson sees merit in that view.

They are lying "for our own good," you see.

Mario said...


Nietzche said it best with "God is dead." IMO he was referring to the effects of capitalism on our minds and society. At the social level, God is dead. Now money is God, and economists seem to playing the role of "priests" back in the middle ages who "prayed for us all" to get to heaven, and of course took our tithings and donations for good measure.


maybe so on that account…however at least he understands how printing money works and how the debt is a non issue. Wanting to produce stuff rather than consume it is more of preference to some degree, although I hear your point as well. I can compromise with either side on that front, but I can’t compromise on how the system works at its most fundamental level of “printing money” and the overall state of the economy.