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Why are we even debating about the debt ceiling?
"By virtue of the power to borrow money 'on the credit of the United States,' Congress is authorized to pledge that credit as assurance of payment as stipulated -- as the highest assurance the Government can give -- its plighted faith. To say that Congress may withdraw or ignore that pledge is to assume that the Constitution contemplates a vain promise, a pledge having no other sanction than the pleasure and convenience of the pledgor."
Chief Justice Hughes, Perry v. U.S., 294 U. S. 330 (1935)
http://supreme.justia.com/us/294/330/case.html
In that case, the Court found that the government had not, in fact, defaulted. Indeed our government has never defaulted and so the issue was never formally decided. The decision I cited is the only one I know in which it was even discussed. But the language of the Constitution is clear:
US Cont. Amend. XIV, Sec. 4:
The validity of the public debt of the United States, authorized by law..., shall not be questioned....
http://www.law.cornell.edu/anncon/html/amdt14i_use... (annotated Constitution)
As Chief Executive Officer, Obama is obligated to pay all debts incurred through spending authorized by Congress. Congress can prevent new spending, but they inherently lack the authority to withhold payment for outstanding debts. Obama not only may borrow if necessary to pay off outstanding US debts, he is obligated to do so by the Constitution of the United States. If he fails to do so, regardless of what Congress does, our creditors will sue the US government and the Supreme Court will order Obama to pay, whether he has to borrow without congressional authorization, print new money, collect outstanding debts owed to the US, or any other action within the authority of the Executive branch of government.
I'm not arguing that our debt isn't out of hand and doesn't have to be dealt with, I'm only arguing that the debt ceiling itself is unconstitutional and any debate over balancing the budget should be handled independent of our Constitutionally backed promise to pay existing obligations.
I would argue about the wisdom of cutting spending or raising taxes in any significant way during a recession (though I understand the political difficulty of cutting spending and raising taxes in good economic times, when it makes economic sense), but that's really a separate debate. Holding the full faith and credit of the United States hostage as a bargaining chip is not only dangerous, it is unconstitutional.
Threatening to shut down the government over a new budget is dangerous also, but that is actually within the power of Congress, so at least I understand why we need to have the debate.
Scott, it's irrelevant who the debt is to. In a part of the amendment I skipped, it specifically includes "debts incurred for payment of pensions". This section of the amendment was specifically written to guaranty US payment of Civil War bonds and the case I cited dealt with US bonds backed by gold. Regardless of the nature of the debt, a contractual obligation to pay by the United States authorized by Congress must be paid and Congress lacks the authority to prevent that payment.
4 Answers
- ScottLv 610 years agoFavorite Answer
The debt we would default on is not our foreign debt but the internal debt to already promised entitlements such as welfare, social security, and medicare.
- Mr. SmartypantsLv 710 years ago
The Republicans only really care about debt when there's a Democrat in the White House. Then they suddenly become The Party of Fiscal Responsibility. All Republicans run as strict budget hawks, but once in office they decide that debt simply doesn't matter.
The Repubs are trying to blame Obama and the Democrats for the trouble we're going through now, trouble that was mostly caused by the Repubs themselves. They were successful with this strategy before, blaming Jimmy Carter for the economic problems of the 70s. They were so successful that today people don't remember that Carter INHERITED his economic woes from -two- previous Republican presidents. They did this by simply repeating over and over that it was Carter's fault, until the media picked it up and it became the accepted paradigm.
But it's not working as well for them this time.
- PfoLv 710 years ago
Bypassing debt limits is not a solution in itself.
The debt ceiling serves as a guarantee that the US won't recklessly rack up debt (let's pretend it hasn't). If there is no debt ceiling, then the confidence in the US' ability to meet its debt obligations deteriorates. No one will know where the line is, it's a dangerous path to go down.
