Tag Archives: debt ceiling

We Didn’t Default….

But too many of our elected officials were perfectly willing to court disaster.

Eighteen Senators voted to continue the shutdown and to stop paying the nation’s bills. One hundred and twenty-six Representatives joined them, and several–including Todd Rokita and Marlin Stutzman from Indiana–blithely assured their constituents that a default “wouldn’t be a big deal”–all credible economists to the contrary.

The GOP brought the country to a screeching halt for three weeks–and for what? To remind us they disagreed with a law that had been passed by a democratic majority to make health insurance accessible to people who didn’t have it.

According to the Standard and Poor index, the government shutdown delivered a powerful blow to our still fragile economy. By the S & P’s estimate, this childish tantrum cost us $24 billion dollars–dollars that Elizabeth Warren accurately described as having been flushed down the drain for a completely unnecessary political stunt.

“$24 billion dollars. How many children could have been back in Head Start classes? How many seniors could have had a hot lunch through Meals on Wheels? How many scientists could have gotten their research funded? How many bridges could have been repaired and trains upgraded?”

We are governed by spoiled brats.

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The Law and the Debt….

I had lunch with an old friend yesterday–a former law school dean and noted legal scholar–and our talk turned to the current impasse over the debt ceiling. He asked me whether I was familiar with a 1935 Supreme Court case titled Perry v. United States; I admitted I’d never heard of it.

Perry, it turns out, is pretty compelling precedent for the proposition that the United States cannot constitutionally be permitted to default on its obligations. The Court relied primarily on language in Article 1, Section 8 of the Constitution, although it also cited Section 4 of the 14th Amendment. My friend sent me a legal memorandum that he had co-authored on the subject. That memorandum included the following paragraph:

In short, the core holding of Perry is that the constitutional “Power” of Congress “To borrow Money on the credit of the United States” carries with it a concomitant duty to pay ― and not to default. While some members of the Court held differing views on the correct factual resolution of the Perry case, all nine justices, including four dissenters, agreed that the United States could not, within constitutional limits, default on its financial or contractual obligations.

The case has been cited with approval by the Supreme Court several times–most recently in 2005.

My friend’s legal conclusion is blunt: If default would be unconstitutional, then the Debt Ceiling Act is unconstitutional if it is read to require default. Since there are a number of federal statutes that confer power on the President and Secretary of the Treasury to borrow money–statutes that are routinely used when the debt ceiling isn’t an issue– and since an unconstitutional Act is void, those statutes would (again, according to the memo) continue to authorize the President to pay the country’s debts.

Makes sense to me, but this is definitely not an area of expertise for me.

Of course, if the President were to follow Perry and pay the nation’s debts, the Obama haters would immediately move to impeach (they would impeach him for breathing if they could).

It’s hard to envision a successful impeachment for actions taken to avoid an international economic catastrophe–but then, it used to be hard to envision a Congress as insane as this one.

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There Must Be a Pony Here Somewhere

As if the posturing and idiocy of the shutdown weren’t enough, Ed Brayton quotes Ezra Klein on the GOP’s opening debt limit gambit.

The House GOP’s debt limit bill — obtained by the National Review — isn’t a serious governing document. It’s not even a plausible opening bid. It’s a cry for help.

In return for a one-year suspension of the debt ceiling, House Republicans are demanding a yearlong delay of Obamacare, Rep. Paul Ryan’s tax reform plan, the Keystone XL pipeline, more offshore oil drilling, more drilling on federally protected lands, rewriting of ash coal regulations, a suspension of the Environmental Protection Agency’s efforts to regulate carbon emissions, more power over the regulatory process in general, reform of the federal employee retirement program, an overhaul of the Dodd-Frank financial regulations, more power over the Consumer Financial Protection Bureau’s budget, repeal of the Social Services Block Grant, more means-testing in Medicare, repeal of the Public Health trust fund, and more…

House Republicans are walking into the debt-ceiling negotiations with an opening bid that makes them look ridiculous. This looks like an Onion parody of what the House’s debt-ceiling demands might be. It’s a wonder it’s not written in comic sans.

Words fail.

While there have been recent signs that Boehner may be retreating from the Tea Partiers’ insistence on pushing the world economy into depression if they don’t get their way, this opening demand would seem to prove a point often made by people who object to the “plague on both your houses” or “they all do it” constructions so beloved by the media–the so-called false equivalency.

Perhaps over time, we can count on both political parties to be equally irresponsible, but right now, no one can beat the GOP for sheer lunacy.

At their most idiotic, next to this, Democrats look like statesmen.

Excuse Me While I Hit Myself Repeatedly with a Hammer….

A recent post at Maddowblog began with the following observation:

Since so much of the public has no idea what the debt ceiling is, what default is, what bond markets are, or what the full faith and credit of the United States means, polling on the subject just doesn’t tell us much.

The post went on to describe a different sort of poll that proved the point; it asked about the debt ceiling, but phrased the same question two different ways. When asked simply whether Congress should raise the debt ceiling, respondents were pretty evenly split. The second version asked whether Congress should prevent the government from borrowing money in order to pay its debts;  73% of those responding to the question when it was posed that way said such a step would seriously harm the economy, and opposed it. Only 22% approved.

The American people aren’t stupid. When the question is asked using language citizens understand, they resoundingly offer the right answer. The lesson of this–and multiple other examples–is twofold: (1) the public is generally unfamiliar with the language of its own government, with many equating “raising the debt ceiling” with incurring new debt; and (2) polls that politicians reference to “prove” that the American public is on their side of an issue tend to be worthless and/or deceptive.

Thanks to their own extremism and lack of elementary economic knowledge, the Tea Party zealots who have captured one of America’s major parties and the House of Representatives are poised to do substantial damage to the people they have been elected to represent.

Pundits from both Left and Right (even Karl Rove!) predict that the government crisis they are determined to precipitate will create a backlash that can only hurt the GOP, but those warnings are falling on deaf ears. As a friend of mine used to say, you can’t reason someone out of a position they didn’t reason themselves into.

The broad, sane middle of the American public will need to batten down the hatches and prepare for a totally unnecessary period of fiscal and economic misery–brought to us by people motivated by one and only one “principle”–ensuring that thirty million Americans currently without health insurance don’t get access to healthcare.

And to make sure they don’t, they’re willing to plunge the country into another recession.

Excuse me while I go hit myself some more with that hammer….

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Of Debt and Taxes

I haven’t written about the congressional impasse (polite word for food fight) over the debt ceiling, because really, what could I say that hasn’t been said many times by many people? But being here in Split, surrounded by evidence that human efforts at civilization have persisted over thousands of years, I’ve grudgingly recognized that our species has persisted through many periods of collective craziness, many characterized by even more self-destructive psychosis than now.

In other words, humans will survive the current capture of Congress by unreflective fanatics who believe God has instructed them not to raise the debt ceiling. (To be honest, I’m less sanguine about our ability to survive the climate-change deniers….previous generations haven’t had the means to destroy the Earth.)

But even though my brain–such as it is–tells me we’ll get through this crazy time, I have a lot of trouble understanding the emergence of the Tea Party. Not their existence; we’ve always had strains of malcontents–anti-social or anti-intellectual or white supremacist or other odd movements–but their ability to make resentment of taxes a rallying cry and a focus for so many people’s anger. And not anger at a particular tax or tax policy, but at the very idea of taxes. They have somehow convinced otherwise reasonable citizens that taxes levied for the general welfare are somehow illegitimate.

During this trip, the things we’ve most enjoyed are the products of just such taxes–great public transportation, preservation of historically significant sites, museums…Do these troglodytes think such services are supported by magic? Let alone police and fire protection, garbage collection, etc.? Are they really willing to forego the very things that make us civilized–trade with other cultures, which depends upon confidence that we will pay our bills, the myriad services that make our common lives easier and more pleasant, any sense of common purpose–for gated communities and personal gun collections?

Everywhere we’ve been, we’ve met lovely people who are not remotely anti-American but who are mystified and worried by what is happening to our political system.

Me too.

We have another day and a half in Split, then two days in Rome before we head home. I wonder what we’ll find when we get there.

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