Debt Ceiling? What Debt Ceiling?

July 2, 2011 at 6:18 pm | Posted in Congress, Economy, Politics | 4 Comments
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People are going into panic mode—again. We are rapidly approaching the debt limit imposed by legislation and, people say, if we reach that limit the country will default. Defaulting would indeed be a catastrophe for the U.S. and world economies. It would result in a deep recession here and probably across the world. Yet President Obama still leads from the rear, and the Democrats in Congress do little. The Republicans in Congress mulishly refuse to consider increasing revenue, while insisting that we cut spending with a blunt axe before they’ll vote to raise the debt limit even if it sends us into default.

But we don’t need to default. When we reach the debt limit President Obama could thumb his nose at Congress and just keep spending the money to pay the country’s obligations, like Government bonds, Social Security and Medicare payments, subsidies for school lunches, and all that stuff.

President Obama could ignore the debt ceiling and keep spending, because the legislation that imposes the limit is… well, unconstitutional. Section 4 of the 14th Amendment to the Constitution says, “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”

That means we can’t question whether any debt legally incurred by the government is valid (must be paid). It must be paid, and that’s all there is to it. But establishing a debt ceiling casts doubt on whether existing debt will be paid, because the government borrows money to pay its debts: bonds, Social Security and so on. It means that the debt ceiling law is unconstitutional, and the President can ignore it.

That’s not just my opinion. It’s the opinion of several noted Constitutional lawyers, Congressmen, and other Serious People. The option has been raised to President Obama himself at a news conference, and he did not rule it out. It could happen, and while I hope it’s not necessary, it’s a lot better than defaulting.

Raising the debt ceiling (or ignoring it) would give the politicians a chance to get off their ideological high horses, negotiate a budget in good faith, and get the country moving toward financial stability. Will they take the chance? That’s up to you. Write and tell them what you think.

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