the Constitutiution and the debt ceiling

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LKL
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02 Jul 2011, 3:47 pm

Article 1, section 8:
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;
To borrow money on the credit of the United States;
To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;
To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;
To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;...

This seems pretty clear. Congress has control over the purse strings; congress is supposed to be the power that pays the U.S.'s debts.

Article 2:
No person except a natural born Citizen, or a Citizen of the United States, at the time of the Adoption of this Constitution, shall be eligible to the Office of President; neither shall any Person be eligible to that Office who shall not have attained to the Age of thirty-five Years, and been fourteen Years a Resident within the United States.
I don't bring this up to stir up birther controversey, but to point out that a clause initially worded 'at the time of the adoption' has been taken to mean, 'now and in perpetuity.' Presidents can't just be 14 year residents; they have to be born citizens.

Article 6:
All Debts contracted and Engagements entered into, before the Adoption of this Constitution, shall be as valid against the United States under this Constitution, as under the Confederation.
Here's my point. It's in the constitution that we, the U.S, shall pay our debts. Raising the debt ceiling isn't just so that we can get further into debt in the future, it's so that we can pay the debts that we already owe. If congress does not raise the debt ceiling, are they in contempt of their oath to support the constitution? At that point, can the senate or the president take over and raise the debt ceiling by fiat, to keep the country from being in violation of its own constitution?

Discuss.
(all constitution quotes from http://www.usconstitution.net/const.html)

ruveyn
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02 Jul 2011, 4:09 pm

LKL wrote:

If the debt ceiling is raised we can borrow more money to pay back the money we borrowed. It is the sort of thing a credit card junkie would do if he could extend the borrowing limits on his credit card indefinitely. Eventually foreign nations like China will stop buying our i.o.u. when they are convinced we can no longer pay them back.

A word about that strange clause on Article 2. That was put in their to permit Alexander Hamilton who was born on the Carribean to become President if he ran.

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psychohist
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02 Jul 2011, 4:48 pm

LKL wrote:

I don't bring this up to stir up birther controversey, but to point out that a clause initially worded 'at the time of the adoption' has been taken to mean, 'now and in perpetuity.' Presidents can't just be 14 year residents; they have to be born citizens.

You're parsing it wrong. You have to meet two requirements. The first is that you have to be either a citizen of the U.S. by birth - a natural born citizen - or a citizen of the U.S. at the time of the adoption of the constitution. The second requirement is that you be a 14 year resident. The second requirement excludes those who are born as U.S. citizens, but live most of their lives overseas.

Quote:

Here's my point. It's in the constitution that we, the U.S, shall pay our debts. Raising the debt ceiling isn't just so that we can get further into debt in the future, it's so that we can pay the debts that we already owe. If congress does not raise the debt ceiling, are they in contempt of their oath to support the constitution? At that point, can the senate or the president take over and raise the debt ceiling by fiat, to keep the country from being in violation of its own constitution?

The debt ceiling does not need to be raised to to pay the debts the U.S. owes. Current tax revenue is enough to pay the debts. Staying under the debt ceiling just involves cutting other government expenditures more than some people want to - for example, furloughing nonessential government employees, as happened when this came up before in the 1990s.

Jacoby
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02 Jul 2011, 6:39 pm

lol, debt we haven't created yet isn't debt. That's just future spending. It only applies to debt we already owe. As in we can't just say we don't owe the 15 trillion. This is honestly one of the most pathetic arguments I've ever heard. These people will straight up try to bend the meaning of the constitution to support whatever their cause is and completely ignore it when it doesn't. Eat me Geithner.

Not passing a new debt ceiling would one of the greatest days in American history. We will never default, we would finally have to cut spending.

also

"No State shall make any Thing but gold and silver Coin a Tender in Payment of Debts"

LKL
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02 Jul 2011, 7:45 pm

psychohist wrote:

LKL wrote:

[/quote]
Ok, I take your point wrt. 14 years; however, the point wrt. the first sentence still stands. It's still 'now and in perpetuity.'

Quote:

I don't claim to understand it all, but every single economist I've heard speak on the subject - even conservative ones- say that it is, in fact, largely to pay what we already are obligated to spend. I'm probably getting nuances of terminology wrong.
http://www.economist.com/node/18866851? ... d=18866851
http://thehill.com/blogs/on-the-money/b ... us-damage-
http://www.economist.com/blogs/freeexch ... ricas_debt
http://www.economist.com/blogs/freeexch ... bt-ceiling

Regardless of who you think should flinch first, it sure looks like 'defaulting on our obligations' is the alternative to 'raising the debt ceiling,' ant that 'defaulting on our obligations' would be very bad.

LKL
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02 Jul 2011, 7:46 pm

Jacoby wrote:

l"No State shall make any Thing but gold and silver Coin a Tender in Payment of Debts"

The states don't make any 'legal tender' at all, metallic or otherwise.

ruveyn
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02 Jul 2011, 8:43 pm

Jacoby wrote:

And when the Old Folks don't get their Social Security checks they will go to the government buildings and beat the government workers to death with their canes and walkers. Old Duffers will bring their golf clubs and make a political statement with them.

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ikorack
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03 Jul 2011, 12:43 am

ruveyn wrote:

Jacoby wrote:

And have a heart attack halfway through knockin' out their fifth youngin'

psychohist
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03 Jul 2011, 12:59 am

LKL wrote:

Regardless of who you think should flinch first, it sure looks like 'defaulting on our obligations' is the alternative to 'raising the debt ceiling,' ant that 'defaulting on our obligations' would be very bad.

I clicked on your fourth link first, and it says nothing about default. It says "the government would likely opt for immediate, massive cuts", which is exactly what some people think is needed.

blauSamstag
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03 Jul 2011, 1:44 am

psychohist wrote:

LKL wrote:

I clicked on your fourth link first, and it says nothing about default. It says "the government would likely opt for immediate, massive cuts", which is exactly what some people think is needed.

It's a reckless game of chicken that is already costing us.

John_Browning
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03 Jul 2011, 3:42 am

blauSamstag wrote:

psychohist wrote:

LKL wrote:

I clicked on your fourth link first, and it says nothing about default. It says "the government would likely opt for immediate, massive cuts", which is exactly what some people think is needed.

It's a reckless game of chicken that is already costing us.

Of course it's wreckless, the government can always find all the money it needs for it's pork-barrel spending right here. They can feel free to take all they need and never worry about defaulting on the debt no matter how high they run it up....

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LKL
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03 Jul 2011, 5:55 am

psychohist wrote:

LKL wrote:

I clicked on your fourth link first, and it says nothing about default. It says "the government would likely opt for immediate, massive cuts", which is exactly what some people think is needed.

Sure. Here's the relevant passage (bolding mine):
In the current issue of The Economist, there is a rather disheartening look at just what might happen if talks fail. The distressing answer is that no one really knows, but that financial market havoc is almost sure to result. In a May post here at Free exchange, a colleague wrote that in the event of a temporary breach of the limit, the government would likely opt for immediate, massive cuts in order to prevent an outright default. Quite apart from the financial market implications, that would represent a hugely contractionary force on the economy, probably sufficient to send it back into recession. And in the case of actual default? Keep in mind that investors around the world have gobbled up American debt in recent years as a safeguard against trouble elsewhere. If that rock of safety suddenly became vulnerable, well, September of 2008 would probably look like a picnic in comparison.

...Now, the probability of an actual default isn't very high. But the cost of default is catastrophic. So even if the odds of default shift from very small to slightly less small—from say 2% to 5%—that shift represents a substantial increase in the potential economic downside looking forward. And that, in turn, could lead to greater precautionary measures from banks, businesses, and households.

Because failure to raise the debt ceiling would be so nasty, that very possibility could cause serious economic damage even if the odds of an actual default never approach 50%. This, once again, is why Congress should tread extremely cautiously. Its only responsible course of action is to pass an increase in the debt ceiling without any further delay, and certainly without any further dramatics.

happylappy
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03 Jul 2011, 1:20 pm

We really don't know how much money the United States owes. Since theres no law to audit the fed.

psychohist
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03 Jul 2011, 10:57 pm

LKL wrote:

Sure. Here's the relevant passage (bolding mine):

The passage still says that what would happen would be "immediate, massive cuts" and that a default would be prevented. Immediate, massive cuts might well still be a good thing.

As for the "financial market havoc", that might be a good thing too. After all, trying to prevent "financial market havoc" through the banking bailouts turned out to be a very bad thing, except for the rich fatcats that were bailed out.

LKL
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04 Jul 2011, 12:32 am

Well, if nothing else this thread has shown me that the problem is far worse than I thought it was. Massive financial havoc 'might well be a good thing.' Ooooookay.

marshall
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04 Jul 2011, 1:33 am

psychohist wrote:

LKL wrote:

Sure. Here's the relevant passage (bolding mine):

So conservatives really do want to destroy the economy? Why don't you just cut out unemployment benefits as unemployment rockets to 30% or higher? Maybe your children will get shot in the streets in the chaos that ensues.

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