Now that this problem is solved we can grow the debt infinitely and get back to watching Wheel of Fortune.
Growing increasingly pessimistic about the prospects for a deal that would raise the debt ceiling, Democratic senators are revisiting a solution to the crisis that rests on a simple proposition: The debt ceiling itself is unconstitutional.
“The validity of the public debt of the United States, authorized by law… shall not be questioned,” reads the 14th Amendment.
“This is an issue that’s been raised in some private debate between senators as to whether in fact we can default, or whether that provision of the Constitution can be held up as preventing default,” Sen. Chris Coons (D-Del.), an attorney, told The Huffington Post Tuesday. “I don’t think, as of a couple weeks ago, when this was first raised, it was seen as a pressing option. But I’ll tell you that it’s going to get a pretty strong second look as a way of saying, ‘Is there some way to save us from ourselves?'”
By declaring the debt ceiling unconstitutional, the White House could continue to meet its financial obligations, leaving Tea Party-backed Republicans in the difficult position of arguing against the plain wording of the Constitution. Bipartisan negotiators are debating the size of the cuts, now in the trillions, that will come along with raising the debt ceiling.
We can’t have to curative effects of inflation until the government debt grows much faster than GDP, on a continuous basis (not fits and starts).
Wages must also rise.
Which part of “authorized by law” do they not understand?
The President doesn’t make the law, Congress does. Congress imposed the debt ceiling on itself. They can choose to raise the limit, or eliminate the law.
Maybe if the President actually proposed a budget (and not just a speech) then the Republicans could have somewhere to start. Or maybe if the Senate (Democrats) proposed a budget — which they haven’t done in 2 years.
Good contingency plan. Failing to raise the debt ceiling would be economic suicide for the US. Here’s the most likely scenario:
Domino 1: Government shutdown. The Tea Partiers apparently want this to happen.
Domino 2: Devaluation of Treasury Bills, currently considered a safe bet, they will become risky investments.
Domino 3: Bond yields go to 0 then negative. Yes it is possible for bond yields to go negative so that you lose money just by holding them. It has happened before in the 1930s. And because it has happened before, we know the next…
Domino 4: Banks collapse. Banks hold trillions of t-bills as interest bearing cash to keep themselves liquid. If yields go negative, they lose the assets needed to create new loans. With no Federal aid to bail out the banks, there will be runs on all banks threatening even the biggest banks. Banks will have to raise cash quickly and sell assets quickly, leading to…
Domino 5: Stock Market Collapse. Stocks and commodity contracts are the most liquid asset banks possess. Any debt based asset will become worthless as debt base money disappears. We rely on banks to create money, hence mass deflation across the board.
Domino 6: Debt collapse. Without access to debt via banks, companies can’t pay payroll, importers cant pay for shipments. The FED will be forced to print money to keep the system alive as long as possible, but they can only go so far.
After that the waters become murky, but nothing good can possibly happen. Bottom Line: Great Depression 2.0
I’m convinced these dominoes will eventually fall in the near future, but it is likely years away. Forcing the dominoes to fall early is just insane. If using the “unconstitutional” argument stops this suicidal path we are on, then I’m all in favor of it.
#2 Which part of “authorized by law” do they not understand?
Because Congress passed budgets creating the debt in the first place, the debt is “authorized by law”.
#2, BINGO!
There is no question the debt is Constitutional.
Plus . . .
Section 5. The Congress shall have power to enforce, by appropriate legislation, the provisions of this article.
Congress is enforcing the debt limit.
ArianeB, the only way your scenarios come to fruition is if the Treasury Secretary chooses not to pay the interest on the debt the same way he chooses not to pay his taxes.
You know, failing to raise the debt ceiling, or failing to pay a debt, does not invalidate it, constitutionally or otherwise.
You know, failing to raise the debt ceiling says nothing about what obligations (that being payments on debt on equal footing with payment to veterans, retirees, and any and all other payments made by the USA) will be paid in due course.
You know, failing to raise the debt ceiling or even raising the debt ceiling is but one factor in many that creditors use to value the USA as the reserve currency of the world.
We’ve been corrupt for so long, we no longer remember how to act honorably. Let the wealth transfer to the Super Rich continue.
Yea, verily.
#6, That Section 6 IS part of the amendment.
Congress passed legislation limiting the debt.
That legislation does not invalidate the debt. It just sets a limit.
The reason the Dem’s want to raise the debt ceiling is because the Dem Masters need to keep paying entitlements to keep their house slaves (ie Dallas, GregAllen, Fusion, etc.) happy.
#12…that theory also explains the Ryan plan, and how he’s leaving existing recipients (largely R’s) alone, yet hammering future recipients (largely D’s).
#14, Yep. No difference between the two parties . . . except possibly who they are beholden to.
Definition of slave:
1.a person who is the property of and wholly subject to another; a bond servant.
2.a person entirely under the domination of some influence or person.
Ex: See Olo Baggins of Bywater.
It’s also a requirement to be an idiot to be a Dem house slave. See #14 above.
Notice how Baggins swallowed the lies from his Dem Masters without even a thought or question? Smart people would question the information and the source.
A smart person would change their reasoning accordingly. A Dem house slave cannot, they cannot comprehend anything except their Dem Masters indoctrination.
Ex, compare #14 with this statement: “what Rep. Ryan is proposing isn’t a radically new idea, as a broadly similar plan was first considered at length during the Clinton administration.
“It was proposed under the title of ‘premium support,’ though occasionally it has been described as vouchers,” he said. “Essentially, it’s the same concept — provide seniors with a designated amount of money and let them shop for the plan that best meets their needs.”
“seniors will benefit, because they will be able to use their Medicare dollars for benefits that they prefer”
And: “Backers of premium support say it is similar to the health insurance program for federal workers”
Do not expect the Dem house slaves to understand any of this. They are morons, idiots and imbeciles. These house slaves LIKE someone else making all their decisions for them. They LIKE being house slaves because they don’t have to think or be responsible.
http://sciencedaily.com/releases/2011/04/110407171732.htm
http://kaiserhealthnews.org/Stories/2011/April/05/ryan-plan-for-medicare-vouchers-vs-premium-support.aspx
Hmm… I think the wife and I did the right thing by keeping our cash assets out of the ‘States.
If hyper-inflation comes to this country, it will roar in like jet engine that will make Zimbabwe’s period look like a slow-paced economic downturn.
Its all computerized in the West and non-human traders will be handling it at super-human speed.
Selling the US Dollar short will become an extremely fast moving series of digital events.
So tell the Repukes to NEVERMIND, and they can go back to having their HEADS UP THE BUTTS !!!
No EXTORTION ON ENTITLEMENTS OVER THE DEBT CEILING !!!
BTW, what my ex-wife used to call the teentsy Canadian dollarette”, now worth more than the US Dollar, is looking like a safer bet than the Green Back.
The current wife, who’s also a Montréaler, and myself may very well end up back in Montréal permanently instead of just occasionally visiting the old home town for JazzFest.
Another thing to consider: the debt ceiling is just a number picked by Congress. Just because they raise the number doesn’t mean that when they go to borrow the money, that they will get it.
Greece kept spending money and eventually they were told (by the lenders) that they couldn’t have any more. So now they’re throwing a fit.
In a few years, when China says “That’s enough”, will the USA throw a fit?
It seems more likely, instead of “That’s enough”, China will be a bit more subtle and say, diplomatically, “We’re taking Taiwan – if you try and stop us, no more money.”
Ah-yea, nice job at racist projection. You do that well.
“The validity of the public debt of the United States, authorized by law… shall not be questioned,” reads the 14th Amendment.
Congress imposed a limit. Beyond that point dept is not _authorized by law_.
#2 has it.
How’s this for cognitive dissonance:
LibertyLover said, on June 29th, 2011 at 7:45 am
#14, Yep. No difference between the two parties . . . except possibly who they are beholden to.
/////
“Who they are beholden to.”–Yea verily. Beholden to the future or the present, the Dem’s or the Pukes, the top 1% or the bottom 99%.
But LL and Ah Yea say this is no difference at all. No difference at all: just the blood on the floor after you have slit your own throat. No difference at all.
Yea, verily.
Domino #1: Unnecessary programs will get defunded to pay debts.
Domino #2: The American government will learn to live within a budget for the first time in a century.
There is a weird disconnect in the conservative view of the personal debt and US gov debt.
After the fall in real estate prices in ’07 I suggested banks modify people’s loans by decreasing the principal to prevent strategic defaults. Doing so would keep people with underwater loans (they’d obviously be out of luck if they used an HELOC) in their homes. It would take some pressure off the market and the banks would ultimately get more money out of the deal.
This was roundly criticized by most of my conservative friends. They argued there was a moral duty which needed to be considered to pay a debt. Walking from an underwater house was WRONG, even if defaulting would cause minimal damage (once again assuming a non-recourse loan). These people made a promise, after all!
Now the conservatives are making a “moral” argument that the US should do exactly the opposite and default. Not keeping promises is the way to go, because they disagree philosophically with many government programs.
I agree the argument that national finance are at least similar to individual finance. You can take it too far, but overspending is bad all over (even if sometimes necessary in an emergency).
What makes the opposite arguments from conservatives even more ridiculous is that the US would IN NO WAY gain by strategically defaulting. It would mean higher debt costs into the future for quite some time, as well as a snap unwind of the various dollar carry trades.
This is all about the right trying to kill off “The New Deal” programs.
The actual RIGHT path is to dramatically raise taxes on the top 1%, and corporate rates as well. The US gov is getting the smallest slice of GDP as taxes in decades.
Growth in the US, historically, and in other countries, currently, IS NOT choked off by MUCH higher taxes.
Just looking at the real world will show you this.
Pedro–yes thats exactly what You, me, and LL are saying. Yet I am the only one posting that while there are many similarities between the two parties, often summarizing it by saying they are both corrupt, incompetent, self dealing, and two sides to the corporate bought and paid for==yet there are differences.
But for emphasis–Pedro==are you saying the two parties are absolutely the same in every respect?
If not, how are they different? Then pay attention to that difference, as it makes a difference.
If YOU don’t think the difference makes a difference, then enjoy having your benefits cut/pared back as it looks like they are going to be. Thats a difference.
#24 “The American government will learn to live within a budget for the first time in a century.”
Um, there was a guy named Clinton who did this a bit more recently.
This will never happen. Obama is really a Republican in a Democrat skin. He wants to screw us just like the Republicans do. As it stands now the only way out of this is through us and those tough choices have to be made by somebody. That will be his excuse. That is what they want.
Not being a Constitutional lawyer I don’t know for sure, BUT, there might be something there.
Each program is enacted with the understanding it will be funded. The Federal Budget is just that; how the Federal Government will raise and allocate funds. Until Congress changes tax rates or funding, the previous rates remain in effect.
Here’s a compromise for Obama. Raise the debt limit this year to get through this year. Then starting in 2012, the debt limit will be lowered by 3% every year for the next 34 years. In 34 years, we’ll have paid off our national debt.
#28
Um, there was a guy named Clinton who did this a bit more recently.
Except that he didn’t. He increased the intergovernmental debt to pay down the public debt (i.e., robbed Peter to pay Paul). However, in every year of Clinton’s Presidency, the national debt when up. You have to go back to Eisenhower to find a President that actually lowered the national debt.
#33
If Congress can fund a program, then it can defund it.
This issue to me is similar to censure of a Senator or Representative. It is a rule created by Congress for Congress and therefore Constitutionality has no play. IMO, Congress could just ignore the rule or even vote to ignore the rule and it wouldn’t make any difference unless the people of Congress give it teeth.
How to tell a shill: they NEVER answer a direct question. Then, if they are a total tool, they CROW about not doing so and make fun of question they do not answer.
Demonstration:
pedro said, on June 29th, 2011 at 1:12 pm
#29 Wow! What an exercise in cognitive dissonance! The pukes are the ones pushing the debt. Brilliant!
Stunning in its shamelessness. Repeat, repeat, repeat.
Course, the other argument is that if they are both the same, why argue for/against either?
And isn’t it telling that the ONLY shills that make the “there’s no difference/that matters” argument is the Puke’s? Yes, very telling. Lack of clarity/truthfulness/insight/consequences/history is the only thing keeping them in office.
Pukes: a thug party for the super rich maintained by the lies of never answering complaints and sticking to catch phrases and talking points/false equivalancies creating confusion/falsehood in the body politic all as maintained by massive amounts of secret pools of money provided by the same top 1% who benefit from this rape of the bottom 99%.
There are stooges to every political movement, some ride donkeys. Others think their enslavement is a form of freedom.
Imagine how twisted you have to be to believe that the former is a willing sex partner and the former is a position of enlightenment?
Silly Hoomans.
#34
Except that he did. Notice the word BUDGET in the #28 post I was referring to. If you want to slice it a different way that’s fine, but I can do the same: debt-to-gdp WAS down. It was ALSO went down under Carter, LBJ, and JFK.
On the other hand, the Reagan and Bush II’s voodoo economists rapidly increased debt no matter how you present it.
It’s funny that you try and argue a technicality from #28, but sidestep when I paint the GOP as entirely dishonest in how they play the debt issue politically in #27. Wasn’t that direct enough for you?
Fareed Zakaria had an op-ed recently where he compared the GOPs economic thoughts to the committed Marxists of yesteryear. Their arguments become ever more strident as actual experience repeatedly fails to back the model.
I really like that comparison.
Oops…
“It’s funny that you try and argue a technicality from #28, but sidestep when I paint the GOP as entirely dishonest in how they play the debt issue politically in #27.”
Sorry, off by one. I called the GOP a bunch of liars in #26 not #27. Bobbo nailed Pedro pretty convincingly in #27. Good show!