What do you suppose would happen if Congress does not raise the debt limit later this month?
The U.S. Treasury would be unable to pay U.S. obligations including interest on the national debt - so no one would lend money to the U.S. government, payments to Social Security and Medicare recipients would cease as would salaries and pensions to government employees, financial markets would freeze up, banks would shut down and people would lose further jobs. The United States would be thrown into its most dangerous crisis since the Great Depression.
If the president does not violate the debt limit and borrow more - raising the credit limit on the governments gold card - he will have to choose among these unsavory obligations, paying some and defaulting on others. If the debt ceiling is not raised, the government will be forced to balance its budget.
Oh shudder the thought. You mean the government would actually have to prioritize its expenses and keep its spending under the amount of revenue it collects, just like ordinary Americans have to do in their everyday lives?? Oh wow, what a novel idea!
Not likely to happen; a far more likely scenario is that Obama will borrow money above the current debt limit so that he can continue to make payments and avoid the political fallout that would ensue - plunging this country even further down the economic toilet in the process.
Common sense dictates that opening a new charge card in order to pay the interest on your pre- existing, already maxed out credit card is a recipe for a bankruptcy in your near future. It is only a matter of time until this house of cards falls down upon itself and our once great country will suffer a depression that will make “The Great Depression” of the 1930’s pale in comparison. Perhaps this will happen on Obama shift or maybe it will push it out to some future administration but the inevitable will eventually happen.
I’m predicting that Obama will take one of three possible outcomes:
He can argue that there are inconsistencies among the statutes because appropriations statutes order the President to spend and do not give him the authority to cut spending. He cannot legally comply with the debt ceiling and the appropriations rules; therefore Congress will have forced him to act unconstitutionally. New legislation would be introduced to correct the inconsistencies.
Another way the president could borrow money, even if Congress did not raise the debt limit: he could borrow money under Section 4 of the 14th Amendment, which provides that “The validity of the public debt of the United States, authorized by law shall not be questioned.” But the 14th Amendment does not give the president the power to borrow money in order to service the debt—indeed, Section 5 gives Congress, not the president, “the power to enforce, by appropriate legislation, the provisions” of the Amendment. And it is Congress, not the president that possesses the power to borrow under Article I of the Constitution. The amendment does not empower the president to lift the debt ceiling because the president can service the “debt” from tax revenues; he can disregard obligations to pay Social Security, Medicare, and the like, which are not “debt.”
Third, the president can declare an emergency and justify borrowing by citing reasons of state. The president could invoke his “executive powers” under Article II of the Constitution contending that he did it for the common good because Congress has plunged the nation into a crisis. An assertion of emergency however would lack plausibility until after the markets had already started to collapse.
He does best by exercising his emergency powers but keeping quiet about it for the moment. If he claimed that power now, Republicans could both press ahead with the showdown secure in the knowledge that a financial crisis will not take place, and accuse the president of asserting dictatorial powers. But if the debt ceiling is not lifted, he would have no choice but to act—with unpredictable consequences for the future of our constitutional system.
Share on Facebook
Share on Twitter
I'm busy working on my blog posts. Watch this space!