How Do You Solve a Problem like the National Debt?
The sky is falling! Quick! Run hide under your made-in-China umbrella before it's too late!
As talks over raising the national debt limit falter, a four trillion dollar reduction deficit reduction deal appears to be off the table and a two to two and one-half trillion dollar deal may be the best to be hoped for in time to save the world:
Democrats want to shield popular domestic programs from huge cuts and say that any deal must include increases in tax revenue, including an expiration of Bush-era tax cuts on wealthier Americans.
Republicans -- under pressure from Tea Party conservatives -- reject any increased taxes and want curbs on popular benefit programs such as Medicare, Medicaid and Social Security.
This is apparently because (a) President Barack Obama continues to insist on another trillion dollars in new taxes and (b) according to Secretary of the Treasury Tim Geithner, August 2 is the drop-dead date for a deal and if one isn't struck by then there will be a catastrophe. Obama says that a deal must be struck within ten days from July 10 -- rather like ObamaCare had to be passed quickly so we could see what it said. We the peons still do not know what spending cuts the Obama administration has on the table; why should we? We don't need to know, we just need to acquiesce and reelect him next year. The new head of the International Monetary Fund says that if we don't shape up very bad things will happen. Preventing those bad things will make it necessary to
Greece grease -- right now -- the palms of those who want to keep our welfare state perpetually afloat by taxing the "rich" more than we already do, resulting in lower tax revenues by decreasing incentives to invest in productive (non-governmental) sectors of society. But don't worry! There is method to this madness:
Last November Republicans won the House and landslide gains in many states in large part because of the deep unpopularity of the stimulus and ObamaCare. Mr. Boehner has a mandate for spending cuts and repealing the Affordable Care Act. If Republicans instead agree to raise taxes in return for future spending cuts that may or may not happen, they will simply be the tax collectors for Mr. Obama's much expanded entitlement society.
Relief was finally here. You see borrowing was not really printing money but a new sort of math in which the “people” would be saved from Wall Street chicanery by brilliant new stimulatory theories. Borrowing money “created” more money; spending “money” was stimulus that made even more money. Most of the debate centered around the pitifully small size of the new deficits: a three-year plan to print $5 trillion was deemed conservative or too timid by many of the Obama geniuses. Joe Biden, given his sterling credentials and vast knowledge (re: his call for Bush to rally the people — as FDR supposedly did as president “in 1929″ and “on television” no less) would oversee the trillion-dollar borrowing to ensure it was “shovel-ready.”
Senator Jim DeMint, Republican of South Carolina, said,
The fact is we will pay our debts if it’s the last dollar we have. There are enough assets in Social Security and Medicare to pay the benefits of those programs for several years. Other programs can be funded from tax revenue. There certainly will be disruption....But this is not a deadline we should rush and make a bad deal and do something that cuts benefits from seniors without giving them better choices.
made it clear that she’s against any deal that raises the debt ceiling and would hold House Speaker John Boehner’s feet to the fire if he agreed to one . . . .
"No, we have to cut spending. It is imperative, and I will be very, very disappointed if Boehner and the leaders of the Republican Party cave on any kind of debt deal in the next couple of months."
But she acknowledged that Congress will likely raise the debt ceiling anyway.
She and Senator DeMint are correct.
But how should spending be cut? Reductions in Social Security retirement benefits have been suggested, on the theory that there's still money available there to be used for other purposes and that besides, they are just part of a stupid Ponzi scheme in which participants were apparently foolish to invest. The Social Security system is a stupid Ponzi scheme, but "contributors" to the federal Ponzi scheme -- unlike investors in Mr. Madoff's Ponzi and other such voluntary schemes -- were and still are compelled by federal law to "contribute." For the reasons I stated here, such proposals make no sense. Nor did it make sense to rob the Social Security "trust fund" to pay for things bearing no relation whatever to its purposes:
The compulsory nature of Social Security “contributions” and the purposes for which they were spent — without so much as a “by your leave, Contributor” or even a “thanks a heap, Sucker,” are important differences. The Social Security “Trust Fund” has for years been a giant pig slop for our government to feed at to satisfy the political/ideological needs of our
masterspublic servants. No need to become unpopular by raising taxes; we have the big pig slop.
That made -- and still makes -- no more sense than this:
Something has to be done.
This is something.
Therefore, this has to be done.
Could the "debt crisis" be at least postponed? Apparently so:
According to The Bipartisan Policy Center, the Treasury will take in $172.4 billion in revenue next month. It only is obligated to pay $29 billion in interest on the debt. The Treasury also has to honor hundreds of billion in maturing securities. But for every security it pays off, the total debt the Treasury owes is reduced by an equal amount. So Treasury can borrow that money right back.
Meanwhile, the government has hundreds of billions in other assets. The U.S. owns $370 billion in gold. That would be more than enough money to cover all of the federal government’s scheduled $306.7 August spending. Geithner has refused to sell any of these assets. He told Congress that any sale of U.S. assets “would be damaging to financial markets and the economy and would undermine confidence in the United States.”
As damaging as not making interest payments on the debt?
Half-fast (or something like that) arguments have been offered that the president can just go ahead and pay the national debt unilaterally when and as due -- without causing Geithner to have a conniption fit -- because the Fourteenth Amendment gives him that power. Arguments have been advanced here to counter them.
Left-wing pundits like Keith Olbermann (Current TV), Lawrence O’Donnell (MSNBC), and Katrina vanden Heuvel (Washington Post) practically drool at the recent claim that President Obama can unilaterally declare the debt-ceiling law unconstitutional, break off negotiations with Republicans, and order the Treasury secretary to borrow hundreds of billions of dollars without consulting Congress.
O’Donnell revels in the Eureka! moment as he realizes Obama doesn’t need to negotiate with stubborn Republicans, he can just dictate terms thanks to this “nuclear option.” Vanden Heuvel thinks the president should threaten to deploy it ASAP, “as a last resort,” to save those who have become dependent upon government for their comfort and care.
Claims that the Fourteenth Amendment authorizes the executive branch to ignore the debt limit are not only specious, they are ludicrous. They are reminiscent of the famous biblical quotation whimsically said to demand fratricide: "Cain slew Abel . . . . Go thou and do likewise."
The Fourteenth Amendment directive does permit the executive to do that if you read it upside down in dim light through a fog of silliness. Even then, it permits it only upon the passage by the Congress of appropriate legislation. The amendment provides, in relevant part,
Section 4. 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. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.
Section 5. The Congress shall have power to enforce, by appropriate legislation, the provisions of this article. (emphasis added)
The Fourteenth Amendment vests authority in the Congress, by appropriate legislation, not the president unilaterally, to enforce its provisions. Nor can such legislation be effective if vetoed by the president unless the Congress overrides his veto, just as the executive has no constitutional authority to enforce it without legislation. Hence, the provisions of Article I respecting the powers of the Congress are not affected, including these:
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; . . . (emphasis added)
Although the Fourteenth Amendment is not inconsistent with, and therefore does not displace, Article I, it does displace all inconsistent provisions of the original Constitution as well as all inconsistent amendments ratified before it was. Any amendment ratified subsequently to the Fourteenth, to the extent inconsistent with it, displaces the Fourteenth. Statutes also displace previously enacted federal laws inconsistent with them, but not (of course!) provisions in the Constitution which, as many still recognize, is the supreme law of the land.
As an experiment in reductio ad absurdum, consider whether the Fourteenth Amendment to some extent eliminates the First Amendment provision guaranteeing freedom of speech. Why not?
The Fourteenth Amendment came after the First; if and to the extent that they were inconsistent the Fourteenth would displace the First. The arguments pro and con are much the same; actually, they seem a wee bit stronger vis a vis the First Amendment. The Fourteenth Amendment does not say that it in any way abrogates the First, but then neither does it abrogate Article I nor give the president unilateral power to deal with the national debt while keeping Secretary Geithner happy. It actually denies him that authority.
The First Amendment provides,
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; (emphasis added)
Hence, to the extent that "questioning" the validity of the public debt constitutes exercising the right to freedom of speech, as it obviously does, could it be abridged constitutionally through enactment of legislation prohibiting all speech doing so? That seems very unlikely because the Fourteenth Amendment does not even tangentially suggest that it could be. Does questioning the reasonableness of its magnitude mean questioning the validity of the public debt? Does it mean questioning whether moves by the Obama administration resulting in increases in the national debt and reductions in ability to pay it as and when due by spending excessively on stupid stuff and blocking economic growth were egregiously political, designed to solidify its political base, and whether that put the country in horrible shape? Does it mean questioning whether such frivolities as the vacation travels of Mrs. Obama, her retinue, and others to exotic places unduly burden the solvency of the nation and therefore push us further along the path to insolvency? How about questioning whether forcing us into the red by turning green is a bad thing? If so, it probably also means that asserting, rather than merely questioning, such activities could be prohibited.
What could be simpler? A better question would be, what could be sillier? An even better question, however, would be, what does "questioning" the validity of any debt mean? If I acknowledge the legitimacy of private debts I had previously incurred but don't pay them as and when due because I don't have the funds to do so -- or even because I don't want to and would rather spend the money on a vacation in sunny Spain or beautiful Africa and on chartering a luxurious airplane -- maybe even Air Force One should it come to that -- to go there in comfort with my friends -- I do not thereby "question" the validity of those debts; I just don't pay them. I could, of course, actually question their validity and my debts aren't public debts anyway. My creditors, as well as my friends, could question my sanity, responsibility, and prudence; they might cut off my lines of credit and even say nasty things about me; my creditors might sue me; that might awaken me to the results of my idiocy. Perhaps the Obama administration needs to be awakened to the consequences of its idiocy as well.
Amendments to the Constitution have generally been quite specific to the extent that they have superseded previous grants of constitutional rights and federal powers. The Fourteenth Amendment was neither intended nor written to authorize either the Congress or the president to override the freedom of speech guarantee of the First Amendment. Had it been it would have said so. Words similar to these might have been used:
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. The provisions of the First Amendment that "Congress shall make no law . . . abridging the freedom of speech, or of the press," to the extent that they would permit questioning the validity of the public debt of the United States, are hereby repealed.
Nothing even remotely similar was included. Had it been a purpose to authorize the president to override Article I, it would have said so rather than reiterate that "The Congress shall have power to enforce, by appropriate legislation, the provisions of this article. (emphasis added)." Also, had it been the purpose to authorize the executive, without any act of Congress as claimed, to pay the national debt as and when due, it would have said so. Words similar to these might have been used:
The public debt of the United States, authorized by law, shall be repaid in accordance with Article I of this Constitution as and in the amounts due. Should the Congress fail to act in accordance with Article I in time to permit such payment, the President shall use such available funds as he may deem necessary and proper, previously authorized pursuant to Article I for any purpose, to effect compliance with this provision. Should the President find that such funds are insufficient, he shall appropriate or otherwise acquire such additional funds as may be necessary.
Such language might have been used but wasn't.
A properly adopted and ratified constitutional amendment could do just about anything, no matter how stupid, frivolous, or meaningless. It could declare that thunderstorms are contrary to and sins against Gaia and therefore require that the executive bring original actions in the Supreme Court, or unilaterally declare war, against Thor whenever they occur. That such amendments have not been adopted and ratified testifies to the good sense of the people rather than to the impossibility of doing it.
The nation is in a big mess because our
masters public servants have found it expedient to make the mess. While tilting at windmills, they have "kicked the can down the road" to make it not their problem. Now it is our problem as well as theirs. Unless very substantial spending cuts are made, even for uneconomic "green" ways to displace productive sectors of the economy and even for those favored "entitlements" toward which the beneficiaries have not contributed so much as a penny, the situation will continue to fester and to perpetuate generational dependence on Massa the federal government: an even bigger federal plantation. There will be more Government General Motors bailouts. There will be more expensive and not-even-green mercury reliant light bulbs. Maybe even President Obama's mentor, the Reverend Mr. Wright, would agree the chickens have come home to roost. The answer may be blowin' in the wind, but the solution is neither to provide a free chicken in every pot nor even free pot in every chick.
The solution is not to play more games but to make substantial spending cuts. We could do very well without the nonsense and get to work cutting spending. If we don't things will just get worse and worse and there will be a massive default, when nothing can be done to prevent it.
Oh. Did I mention "Drill baby drill," defund ObamaCare, and all of the other activities of federal departments and agencies that got the country into her current recession and are keeping her there? I should have, but have already done so. In any event, those will be a good start.