Is a default on our debts a violation of the consitution?

[BigRedChief]

We pay our debts. It is mandated in the constitution. Congress authorized and spent the money. We have to pay it back. Thats my and our debtors belief.

14th Amendment 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; butall such debts, obligations and claims shall be held illegal and void.

Poll question:
For Congress to default on our debts that they authorized is a violation on the constitution is it not?

[dirk digler]

Originally Posted by mlyonsd

I'd say your original question is true, defaulting on our debt is a violation of the constitution.

Where you're wrong is if we reach the debt ceiling and it isn't raised, we won't necessarily go default. We have plenty of monthly federal revenue to pay our debts.

We won't have enough money to borrow further on things like unemployment benefits, food stamps, military spending, bridges to no where.

But we won't be in default.

It's sad you are tricked by the very people you champion.

Really?

The federal government hit its legal borrowing limit of $16.394 trillion on Dec. 31, and has begun taking "extraordinary measures." The Bipartisan Policy Center's estimate indicates when the Treasury will only be able to pay bills with the daily revenue coming in.

Problem is, there likely would be less revenue coming in than has to be paid out for each of the days between Feb. 15 and March 15.

On Feb. 15, for instance, Treasury will take in an estimated $9 billion in revenue but is committed to pay out $52 billion.

The bills due that day include $30 billion in interest on the debt; $6.8 billion in IRS refunds; $3.5 billion in federal salaries and benefits; $2.7 billion in military active pay; $2.3 billion in Medicare and Medicaid payments; $1.5 billion to defense vendors; $1.1 billion in safety net spending, including for food stamps and unemployment benefits; and $4.4 billion in other spending.

On March 1, Treasury will take in an estimated $20 billion in revenue. But that won't be enough to cover the $25 billion in Social Security payments due that day, let alone the $58 billion in other bills.

[BucEyedPea]

Originally Posted by BigRedChief

I think a self inflicted recession and paying billions more in debt costs is not a good idea.

I don't buy into the idea that govt spending prevents a recession. That's an illusion that masks the real problem. Anyhow, were in the Great Recession already which is really a Depression.

That wasn't your question though.

[HonestChieffan]

Not at all Its a choice. If the President sees default as a cool thing so be it. We do not have to default. Its a decision. We either get the fiscal house in order or we dont. No different than an individual. Let it slide or do the right thing. People do it every day and assume they will get bailed out

[mlyonsd]

Originally Posted by dirk digler

Really?

I don't know how those numbers are created since you didn't provide a link. My only guess is those numbers are figured with no cuts in spending to make them work.

The federal government brings in on average $200 billion dollars a month so you do the math. Over $2T a year.
http://www.taxpolicycenter.org/taxfa....cfm?Docid=200

This guy explains it pretty well. It's from last year's cliff but the math is the same.

http://blogs.marketwatch.com/fundmas...l-not-default/

Again, it's funny watching you guys get totally bent over by your masters.

[dirk digler]

Originally Posted by mlyonsd

I don't know how those numbers are created since you didn't provide a link. My only guess is those numbers are figured with no cuts in spending to make them work.

The federal government brings in on average $200 billion dollars a month so you do the math. Over $2T a year.
http://www.taxpolicycenter.org/taxfa....cfm?Docid=200

This guy explains it pretty well. It's from last year's cliff but the math is the same.

http://blogs.marketwatch.com/fundmas...l-not-default/

Again, it's funny watching you guys get totally bent over by your masters.

Sorry here you go. Just from a few hours ago.

http://finance.yahoo.com/news/debt-c...204100654.html

Prioritizing interest payments means Treasury must choose from more than 100 million monthly payments and would not be able to pay 40% of the dollars owed.

Or Treasury may opt to pay all bills in full but would be late on every payment except those owed to bond investors.
In either case,"the reality would be chaotic," the Center said in its analysis.

Why? everybody who gets stiffed would throw a fit, and Treasury would be put in the awkward position of having to pick winners and losers.

Economically, cutting federal spending by 40% a month - or indefinitely delaying payments - could cause a lot of disruption for contractors due money and individuals waiting on federal benefit checks. And it would add even more uncertainty about the U.S. economy for investors and businesses.

[mlyonsd]

Originally Posted by dirk digler

Sorry here you go. Just from a few hours ago.

http://finance.yahoo.com/news/debt-c...204100654.html

Again, as your article points out as long as bond investors are paid we aren't in default.

The rest of it is just stopping current outlays which includes layoffs and other stuff. I didnt say it wouldnt be disruptive.

[Amnorix]

That line would appear to be to relate to repudiating a debt, as in saying it's not validly owed for some reason. Rejecting the debt.

Defaulting isn't the same thing. Defaulting is an inability or other failure to pay a debt that is owed. Failure to raise the debt ceiling doesn't mean we repudiated the debt, or don't owe it, it's just a failure to pay it (for stupid reasons, but that's beside the point).

So, no, that clause of the Fourteenth Amendment doesn't make defaulting on our debts unconstitutional.

[Amnorix]

Originally Posted by mlyonsd

Again, as your article points out as long as bond investors are paid we aren't in default.

The rest of it is just stopping current outlays which includes layoffs and other stuff. I didnt say it wouldnt be disruptive.

An interesting question is whether forcing Obama to choose between various programs that are mandated by law would force him into making unconstitutional acts. Let's say he decides to defund all military spending, for example. That Constitutional? After all, Congress has approved programs for the military that must be continued, but it has also forced him to pick what NOT to pay for.

Or perhaps all Social Security checks don't go out? Can he do that?

That's more interesting than the 14th Amendment question, which seems to me to be a non-starter.

[Amnorix]

Or, of course, can Obama keep issuing debt despite the debt ceiling? Basically say "look, you have passed laws that FORCE me to spend X dollars. You have passed laws that FORCE me to only collect Y as taxation. Finally, you have passed a law that says I can only borrow Z. Well, Y+Z (tax revenues plus debt) aren't enough to pay for X (programs you have mandated), so you have FORCED me to break one of these laws. I therefore choose to ignore the debt ceiling law, since it runs contrary to the programs and taxation laws you have passed, leaving me stuck with either underfunding programs that you have mandated, increasing taxes unilaterally, or increasing the debt unilaterally. Since you have failed to specify what to do, and the math doesn't add up, I get to choose which law to break (since one MUST be broken) and I choose this one.

It's rather interesting, in a hypothetical way. The fact that we're even talking about this stuff is beyond absurd, and actually frightening in a way.

[BigRedChief]

Originally Posted by HonestChieffan

Not at all Its a choice. If the President sees default as a cool thing so be it. We do not have to default. Its a decision. We either get the fiscal house in order or we dont. No different than an individual. Let it slide or do the right thing. People do it every day and assume they will get bailed out

So the Republicans threaten to kill the hostage if they don't give them what they want but it will be Obama's fault?

Negotiation with hostage takers is never a good idea. Give a mouse a cookie..........

[BucEyedPea]

Originally Posted by mlyonsd

Again, as your article points out as long as bond investors are paid we aren't in default.

Not when they find out their payout is based on a completely worthless dollar that buys little.

Like I said, we are defaulting...in a sense.

[trndobrd]

Originally Posted by go bowe

brc, there's arguments both ways...

some argue that the language includes all public debt, since pensions and bounties for civil war are "included" rather than being the sole kind of public debt...

others argue that in the context of the amendment itself, it clearly refers to civil war era debts and by implication not public debt in general...

i think the constitution has grown a great deal at the supreme court and original intent is a lesser consideration in adjudicating constitutional rights...

imo, the president should seriously consider invoking the 14th amendment and tell congress to shove the debt ceiling...

The debt ceiling is a limit on how much the treasury is authorized by Congress to borrow, not a limit on how much current debt will be repaid.

The 14th Amendment states that debts will be repaid (be it Civil War era or all debts), not that the Congress is somehow obligated to incur additional debt. The idea that the President could 'invoke' the 14th Amendment to require more borrowing is non-nonsensical.

[go bowe]

Originally Posted by trndobrd

The debt ceiling is a limit on how much the treasury is authorized by Congress to borrow, not a limit on how much current debt will be repaid.

The 14th Amendment states that debts will be repaid (be it Civil War era or all debts), not that the Congress is somehow obligated to incur additional debt. The idea that the President could 'invoke' the 14th Amendment to require more borrowing is non-nonsensical.

non-nonsensical? that's pretty bad...

now that you mention it, it is a strange idea isn't it?

i've been reading too much of bucpea lately...