29 Jul 11
Originally posted by sh76But there is enough money coming into the treasury to cover the interest on the debt without incurring more debt. It "just" means a 40% reduction in government spending in other areas, causing a meltdown in GDP, and you know, probably eating our pets somewhere down the road.
Yes, but the argument is that failing to live up to obligations based on debt that already legally exists is unconstitutional. If rolling it over into new debt is required by the old legally generated debt, the 14th Amendment would seem to apply.
29 Jul 11
Originally posted by SleepyguyThat's economically foolish. You don't prioritize interest on debts over living expenses.
But there is enough money coming into the treasury to cover the interest on the debt without incurring more debt. It "just" means a 40% reduction in government spending in other areas, causing a meltdown in GDP, and you know, probably eating our pets somewhere down the road.
29 Jul 11
1 edit
Originally posted by PalynkaI suspect there are some language issues here: Does “debt” in the 14th amendment mean a nominal amount or the obligation to pay? Both are valid uses of the term; and the mention of pensions might imply that the famers intended the latter. The debt ceiling seems to refer only to the former. The question is whether or not adherence to that nominal limit can be permitted to set up a constitutional violation if actual “pre-existing” debt obligations are “questioned”.
...by rolling it over with the emission of new debt. Or else the debt ceiling wouldn't be an issue.
29 Jul 11
Originally posted by PalynkaHonestly, I don't know what he'd be allowed to do. This is all untested waters.
I see, so he would be able to emit only up to the amount required for rolling over the debt? If I'm reading you correctly, then this would allow an increase of the ceiling only by the amount of interest to be paid on the newly emitted bonds?
This wouldn't be enough to avoid a strong contraction of expenditure, I think.
29 Jul 11
Originally posted by sh76Yes, and we're just speculating--but so are policy advisors. The phrase "including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion..." might be construed to include, say Social Security payments. Nevertheless, refusal to pay principal amounts in addition to interest, if further debt-financiing is available, might still be "questioning" the full value of the incurred debt-obligations.
Honestly, I don't know what he'd be allowed to do. This is all untested waters.
As most strict constructionists would, I imagine, point out, the language-intent of the framers at the time is determining. Most non-strict-constructionists would likely agree that it matters to interpretation.
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29 Jul 11
Originally posted by sh76No, but in this case he stupidly said that his lawyers don't think he can do it.
Presidential acts and congressional acts are overturned as unconstitutional all the time. No President has ever been impeached nor has any Congressman ever been prosecuted for taking an official act that was later declared unconstitutional.
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29 Jul 11
Originally posted by SleepyguyThat's not the issue. The issue is the credit rating, and the impact on markets. It will be sent into freefall, regardless of how the bills are paid.
But there is enough money coming into the treasury to cover the interest on the debt without incurring more debt. It "just" means a 40% reduction in government spending in other areas, causing a meltdown in GDP, and you know, probably eating our pets somewhere down the road.
29 Jul 11
Originally posted by AThousandYoungYou know what else is economically foolish? Failing to pass a budget for two years while borrowing over 40% of everything you spend. That will end one way or another eventually, because the math really doesn't care what you or I think we're entitled to from the government.
That's economically foolish. You don't prioritize interest on debts over living expenses.
29 Jul 11
1 edit
Originally posted by SleepyguyIt's not foolish under the circumstances. Emergencies need to be dealt with.
You know what else is economically foolish? Failing to pass a budget for two years while borrowing over 40% of everything you spend. That will end one way or another eventually, because the math really doesn't care what you or I think we're entitled to from the government.
EDIT - "The math"? The math of what? Paper dollars. Not the math of, say, projectile motion, which is really grounded in reality.
29 Jul 11
Originally posted by KunsooNewsflash, the credit rating is very likely getting downgraded even if they raise the debt ceiling.
That's not the issue. The issue is the credit rating, and the impact on markets. It will be sent into freefall, regardless of how the bills are paid.
29 Jul 11
Obama would gain my vote in the next election if he showed the courage to do this. He obviously believes default would be horrible and if he's willing to hang his a** out there to prevent it regardless of possible political consequences I would have huge respect for him.