The Debt Ceiling

Regular Member Posts : 7317 Join date : 2014-07-29

1-22-2023

The Debt Ceiling Law is Unconstitutional and Void.

We are operating in a fictional world in which a myth is driving policy and markets. Review of relevant laws and the Constitution reveals this.*

On one hand:

The law supporting the “Debt Ceiling” derives from the 1917 “Liberty Bond” Act, passed to facilitate and control payment for US entry into World War 1, but ignored until Newt Gingrich resurrected it for blackmail purposes in the 1990s.

On the other hand:

The 14th Amendment to the Constitution states:
"The validity of the public debt of the United States, authorized by law ... shall not be questioned."
All appropriations laws now in effect direct Congress to incur public debt to purchase and pay for everything the federal government does.

So the 1917 law conflicts with both the Constitution and scores of laws passed in the 2010s and 2020s directing payment of everything appropriated by the federal government (social security, defense, infrastructure, minor stuff like that).

So No. 1 — the 1917 Law is unconstitutional because it questions to validity of US public debt as prohibited by the 14th Amendment.

But even if that were not so, if the 1917 law prohibits payment for Congressionally appropriated programs, it conflicts with every law authorizing those programs.

What do you do when two laws conflict? This article by the great Robert Hockett, Stop the Charade: The Federal Budget Is Its Own ‘Debt-Ceiling’ lists a bunch of reasons why the appropriations laws must prevail over the 1917 law. Here are just two:

Stopping payment for spending already incurred under current law based on a supposed 1917 Law leads to an absurd result: Under fundamental law, if “there is literally no possible rational interpretation, the putative ‘law’ in question [i.e., the 1917 Act] is treated as a nullity.”
In conflicts of laws, the more recently passed laws take precedence: “where two legislative enactments appear to conflict, the later enactment will be read as implicitly repealing the earlier one – at least as applied in any manner that yields conflict.”

President Biden and the US Treasury are bound by the more recent law and the law that leads to the only rational result. President Biden can tell the House,
“The Law and the Constitution bind me to pay for debts Congress has appropriated. We intend to pay these debts as directed by law.”

This puts the burden on the House to get a Court to enjoin the federal government’s payment of debts lawfully incurred by acts of Congress. (These laws include those directing payment of salaries of federal employees, including judges and members of Congress.)

The only reason for Biden not to make this announcement is to reap the political benefits of the House publicly screaming for cuts to social security and entitlements and “threatening” to take us all hostage. But this risks disturbing markets and other unintended consequences.

Subject: Re: The Debt Ceiling Sun Jan 22, 2023 4:37 pm

I wonder if I can convince Visa that the credit limit on my card is unconstitutional Very Happy

Regular Member Posts : 7317 Join date : 2014-07-29

oliver clotheshoffe wrote:: I wonder if I can convince Visa that the credit limit on my card is unconstitutional

It would depend on which law you present Visa;

The law supporting the “Debt Ceiling” from the 1917 “Liberty Bond” Act, passed to facilitate and control payment for US entry into World War 1
or
The 2010s and 2020s directing payment of everything appropriated by the federal government.

Which will it be?

Regular Member Posts : 7317 Join date : 2014-07-29

How Biden could kill the debt ceiling....

There are at least four ways a president could nullify
the debt ceiling without Congress.

Biden can use executive power to defuse the debt ceiling
by-
Invoke the 14th Amendment
Some legal scholars have argued that Section 4 of the 14th Amendment, which specifies that “the validity of the public debt of the United States, authorized by law ... shall not be questioned,”
renders the debt ceiling unconstitutional, as it threatens the validity of the US’s public debts by creating the possibility of default.
or
getting around the debt ceiling by having the Treasury Department create a “special-purpose entity” to issue new securities, distinct from traditional Treasury bonds, that can pay for government expenditures.
Because they’re not Treasury bonds, these securities would not be subject to the debt limit.
or
Mint the coin
back in 2010, an existing law gives the US treasury secretary the power to issue platinum coins of any value she wishes.
The treasury secretary could issue, say, a platinum coin worth $2 trillion, deposit it into the Treasury’s account at the Fed, and use those funds to sustain the government until the debt ceiling is raised.

How will this play out?
don’t know — though time is running out.
Exciting, huh-

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Regular Member Posts : 7317 Join date : 2014-07-29

1-30-2023

Texas Republican says GOP will hold the debt ceiling hostage even if it's dangerous to do so.

Rep. House GOP Budget Chair Jodey Arrington (R-TX) explained to CNBC on Monday_
that the Republicans have no choice but to hold the debt ceiling hostage,
even if it means destroying the economy.

Squawk Box host Andrew Sorkin asked the House GOP Budget Committee chairman, "The question that I'd ask you is whether you think this debt ceiling is going to be used as a bargaining chip in a way that could turn dangerous?"

Arrington made it clear:
"I believe it will and I believe it has to."

His colleague, Rep. Chip Roy (R-TX) has already said that he wants to use the debt ceiling crisis to usher in border security spending.

The House was already dealing with its own infighting after the far-right side of the House demanded dramatic cuts to Social Security and Medicare.

President Joe Biden has demanded a "clean bill,"
with no conditions attached, saying that if Republicans want to negotiate cuts they can propose their own plans and bills, but that the country shouldn't be held hostage in the interim.

\u201cThere you have it\u2026\n\n@andrewrsorkin: \u201cThe question that I\u2019d ask you is whether you think this debt ceiling is going to be used as a bargaining chip in a way that could turn dangerous?\u201d\n\nHouse GOP Budget Chair @RepArrington: \u201cI believe it will and I believe it has to.\u201d\u201d

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» Kevin McCarthy Slapped Down Over Debt Ceiling
» Democrats brace for debt-ceiling fight
» Treasury Chief Warns of ‘Catastrophic’ Problems Over Debt Ceiling..
» 11 Republicans Join Democrats To Break Debt Ceiling Filibuster.
» Warnings of economic catastrophe come as Congress prepares to debate debt ceiling