14th Amendment and the debt ceiling?

Originally posted by sh76
Yes, but the argument is that failing to live up to obligations based on debt that already legally exists is unconstitutional. If rolling it over into new debt is required by the old legally generated debt, the 14th Amendment would seem to apply.

But there is enough money coming into the treasury to cover the interest on the debt without incurring more debt. It "just" means a 40% reduction in government spending in other areas, causing a meltdown in GDP, and you know, probably eating our pets somewhere down the road.

Originally posted by sh76
It might not be a winning argument, but it's not grounds for impeachment.

It would also be a gift to the GOP for electoral politics, which I think Obama cares about more than the Constitution anyway.

Originally posted by Sleepyguy
But there is enough money coming into the treasury to cover the interest on the debt without incurring more debt. It "just" means a 40% reduction in government spending in other areas, causing a meltdown in GDP, and you know, probably eating our pets somewhere down the road.

That's economically foolish. You don't prioritize interest on debts over living expenses.

Originally posted by Palynka
...by rolling it over with the emission of new debt. Or else the debt ceiling wouldn't be an issue.

I suspect there are some language issues here: Does “debt” in the 14th amendment mean a nominal amount or the obligation to pay? Both are valid uses of the term; and the mention of pensions might imply that the famers intended the latter. The debt ceiling seems to refer only to the former. The question is whether or not adherence to that nominal limit can be permitted to set up a constitutional violation if actual “pre-existing” debt obligations are “questioned”.

Originally posted by Palynka
I see, so he would be able to emit only up to the amount required for rolling over the debt? If I'm reading you correctly, then this would allow an increase of the ceiling only by the amount of interest to be paid on the newly emitted bonds?

This wouldn't be enough to avoid a strong contraction of expenditure, I think.

Honestly, I don't know what he'd be allowed to do. This is all untested waters.

Originally posted by sh76
Honestly, I don't know what he'd be allowed to do. This is all untested waters.

Yes, and we're just speculating--but so are policy advisors. The phrase "including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion..." might be construed to include, say Social Security payments. Nevertheless, refusal to pay principal amounts in addition to interest, if further debt-financiing is available, might still be "questioning" the full value of the incurred debt-obligations.

As most strict constructionists would, I imagine, point out, the language-intent of the framers at the time is determining. Most non-strict-constructionists would likely agree that it matters to interpretation.

Originally posted by sh76
Presidential acts and congressional acts are overturned as unconstitutional all the time. No President has ever been impeached nor has any Congressman ever been prosecuted for taking an official act that was later declared unconstitutional.

No, but in this case he stupidly said that his lawyers don't think he can do it.

Originally posted by Sleepyguy
But there is enough money coming into the treasury to cover the interest on the debt without incurring more debt. It "just" means a 40% reduction in government spending in other areas, causing a meltdown in GDP, and you know, probably eating our pets somewhere down the road.

That's not the issue. The issue is the credit rating, and the impact on markets. It will be sent into freefall, regardless of how the bills are paid.

Originally posted by AThousandYoung
That's economically foolish. You don't prioritize interest on debts over living expenses.

You know what else is economically foolish? Failing to pass a budget for two years while borrowing over 40% of everything you spend. That will end one way or another eventually, because the math really doesn't care what you or I think we're entitled to from the government.

Originally posted by sh76
Honestly, I don't know what he'd be allowed to do. This is all untested waters.

Like vistesd, so are we. I guess that probably the issue is not clear cut enough for there to be serious repercussions to him if he just ignores the ceiling and invokes this.

Originally posted by Sleepyguy
You know what else is economically foolish? Failing to pass a budget for two years while borrowing over 40% of everything you spend. That will end one way or another eventually, because the math really doesn't care what you or I think we're entitled to from the government.

It's not foolish under the circumstances. Emergencies need to be dealt with.

EDIT - "The math"? The math of what? Paper dollars. Not the math of, say, projectile motion, which is really grounded in reality.

Originally posted by Kunsoo
That's not the issue. The issue is the credit rating, and the impact on markets. It will be sent into freefall, regardless of how the bills are paid.

Newsflash, the credit rating is very likely getting downgraded even if they raise the debt ceiling.

Originally posted by AThousandYoung
That's economically foolish. You don't prioritize interest on debts over living expenses.

It might also be politically foolish.

Originally posted by dryhump
Newsflash, the credit rating is very likely getting downgraded even if they raise the debt ceiling.

But the USA will still have a perfect record of paying debts.

Obama would gain my vote in the next election if he showed the courage to do this. He obviously believes default would be horrible and if he's willing to hang his a** out there to prevent it regardless of possible political consequences I would have huge respect for him.