The debt limit is based on paying for things we’ve already appropriated through budgeting. If we don’t raise the debt limit, we’re telling people, “Oh that widget we ordered, we’re not paying for it.”
It’s like if you order a bunch of stuff on Amazon with your credit card and then decide not to pay the bill. Not increasing the debt limit is what a deadbeat does. You should be against it.
But you aren’t against it, because your news sources told you to hate it, because a Democrat wants to increase it.
What part of this do you have trouble comprehending?
If you hit your credit limit, you can’t spend any more on the card. Congress, however, has the discretion to raise the limit and spend more. You and I can’t do that with our Visas, but Congress apparently has the idea that credit limits are meaningless and they raise them at will, INSTEAD OF STOPPING THE GODDAM SPENDING!
Point of fact: I can call my credit card companies today and raise my credit limits on my cards. They’d be more than happy to, in fact, and have often done that unbidden.
You are wrong. Congress can continue to spend even when the debt limit has been reached. The debt limit in no way prevents Congress from passing spending bills.
Thank you for saying so, and I agree. Neither S&P nor Moody’s is the final authority. They do, however, constitute evidence for the soundness of US debt. The S&P downgrade is a legitimate warning bell. If this ever went to court, the quality of that evidence would have to be weighed (before the case was thrown out on a technicality).
Woah. Of course S&P has no decision authority. But they do make an independent nonpartisan evaluation of the soundness of US debt which is directly related to its “Validity”, as the 14th amendment puts it.
Ok. Now let me add some caveats.
I understand that S&P has the reputation of the stupidest of the 3 ratings agencies.
Moody’s sensibly evaluates US debt as an investment: their rating cooresponds to the odds and magnitude of financial losses. S&P does something different: they rate the probability of default alone. So actually the 2 ratings are pretty consistent. Thanks to the rise of irrationality and hyperemotionalism in the Republican Party, the odds of a default event are no longer zero. That said, I agree with Moody’s that the financial penalty associated with that is likely to be super-low. And AA+ is nothing to sneeze at.
It might be reasonable to look at what the bond market says, though this is hard because they are evaluating default risk as well as interest rate risk. That said, US bond prices are at near-record highs now.
Let’s look at the language: 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. … The language goes beyond “No default”. It says essentially that the debt should be above reproach – AAA in other words, IMHO. *
Again, the Supremes aren’t going to wade into this. But the Republican House is acting in ways both sanctimonious and highly irresponsible. Furthermore and separately, the constitutional cudgel is a valid one, albeit also qualified.
Setting constitutional issues aside, I’ll top Bricker’s point. I agree it is dishonorable to gratuitously play games with the credit of the United States government. I also think that a worthy goal of state government is to attain a AAA rating. Now that isn’t always possible. But I see it as one metric of responsible and sensible governance. That California rating has crashed from AAA to A- is a reflection of its government’s dysfunction. I see that Louisiana’s AA- beats the Golden State. And those state governments who can deliver AAA during the worst recession in post-War history (eg Minnesota, Maryland) deserve acclaim.
I guess I should discuss some of the economics of this.
If you slash spending and cut the budget deficit during a downturn, it’s a recipe for disaster. We learned that in 1937. Austerity only works if you are a smallish country that cuts it budget while it depreciates its currency leading to an export boom. That’s not viable for the US in 2012: our economy is too big and the world is in a slump.
Hey maybe me and the standard macroeconomic textbooks are wrong. But the economy is neither Republican or Democrat: it just is. Bad policies have bad outcomes.
Anyway, I’d be a lot more impressed with Clothahump if he railed on deficits during the Bush years. Those unaffordable tax cuts are part of our medium and long run deficit problem, which is very real. Over the short run though, higher budget deficits are appropriate. And yes, I have the same stance during recessions when Republicans are in office.
The costs of US debt are 2 fold. One, there is solvency risk, which is modest but not zero for the moment, given our current debt/gdp ratio. Second, if we were not in a slump, federal spending would crowd out investment. But with interest rates at record lows, that effect does not apply. During recession, higher spending can actually stimulate investment, as businesses anticipate greater demand for goods and services.
The credit limit on a credit card represents the maximim amount of money Visa is willing to lend me. The U.S. federal debt limit obviously is NOT the maximum amount of money its creditors are willing to lend it, since U.S. treasury bonds continue to be in high demand. We don’t really even know what the U.S. government’s maximum credit card balance is, but it’s way, way higher than it is now.
The federal debt ceiling is more akin to a person deciding there’s a personal limit to what they’re willing to put on the Visa card, one that is well below the limit. Hell, I don’t even know the limit on my Visa… I think it’s $16,000. But that’s far above my acceptable debt ceiling. I never get close to it because I’d panic if I did. My “Debt ceiling” is, in effect, more like a thousand bucks.
What Congress is doing is exactly akin to me ordering three IPads six months ago, at a cost of $2000, and then showing up at the store today to receive them, and when the guy at the store hands them to me, saying “I have no cash and I refuse to allow you to put more than $1000 on my Visa.”
Well, I’d say it’s more like you sending your executive assistant to the store with Direct Orders not to come back without the three iPads, and not to put more than $1000 on your Visa, just so you can bitch about how bad your assistant is in hopes your bosses might fire him.
Obviously you’ve thought a bit about what Congress should stop spending money on. Care to tell us what your preferred budget would look like, what current spending would be omitted (I won’t even bother asking what revenue increases you’d look for; we already know), and how the result would become balanced?
Or, as is most likely the case, are you simply so fascinated by Megyn Kelly’s boobs that you haven’t thought beyond whatever she tells you to think?
No, as I explained in an earlier post, " …shall not be questioned…" is a term of legal art meaning that it may not be challenged in court.
I pointed that the same phrase appears in the Speech and Debate clause.
It does not mean that the debt should be above reproach. It means that the debt cannot be disavowed; it must be honored… because it cannot be questioned AT LAW.
Geeze, read any one a zillion Speech or Debate Clause cases, say, US v Johnson.
The Supreme Court held the Speech or Debate Clause stops “judicial inquiry into the motivation for a Congressman’s speech and prevents such a speech from being made the basis of a criminal charge against a Congressman for conspiracy to defraud the Government by impeding the due discharge of its functions.”
It prevents a Congressman from being sued for slander or libel for anything he says on the floor of his House.
Where the hell did you get the idea that it just means the local constabulary? Have you read a single case dealing with the clause?
Clearly a member of Congress can be “questioned” by anyone, including the “local constabulary”, in the usual lay sense of the word. So a police officer – like anyone – might lawfully say, “Congressman, why did you say those stupid things in your speech in Congress last week?”
So – equally clearly – that’s not what the word means in this context.
Ignorance fought. Salvage operations on the tatters of my argument commenced.
Bricker: I’m inclined to take you at your word. FWIW, I think my views may have reflected an Atlantic piece Garrett Epps, Professor of Constitutional Law and Creative Writing at the University of Baltimore that I read last summer. It doesn’t mention credit agencies though and my current take is that my S&P line is implausible. It does however point to some constitutional ambiguities which while unfortunate don’t really prop up my argument. So I retract. Our National Debt 'Shall Not Be Questioned,' the Constitution Says - The Atlantic
Elvis, were you born an ignorant asshole, or do you take lessons at it? Do you even bother to look at the money the U. S. Government pisses away on illegal, unconstitutional things?
A great starting place would be closing down federal agencies that have no constitutional mandate for existence. We could start with the EPA, the Department of Education, the Department of Energy, and the Department of Housing and Urban Development just for a toehold in the major offices. There are hundreds of smaller departments that we could whack and never miss. And we cut every friggin’ federal government welfare program.
We’ve got only two ways to go: increase government revenues or decrease government expenditures. This addresses the second. The first will be addressed by the improvement in the economy that will occur when the private sector sees that something is being done to rein in the federal government’s spending us into oblivion.
The debt limit places no legal constraint on Congress to restrain spending.
You just don’t get it.
Congress has the credit card, and makes the purchases with it. The President has the checkbook, and is expected to pay the credit card bill when it comes due.
By not raising the debt limit, Congress is trying to prevent the President from paying the credit card bill, all the while passing more spending legislation and increasing the debt on the credit card.
No one is breaking the law; Congress is just acting irresponsibly by not allowing the President to pay the bills they racked up.
In fact, given the usual alternative of people simply walking away or obstinately repeating their claims, it’s a freakin’ ray of sunshine to read. Thank you very much.
My only comment about Epps’ piece is that he ignores the lines from Perry that destroy his claim:
The entire discussion in Perry is focused on Congress’ power to borrow money. Not on Congress’ appropriations power. Never has the 14th Amendment meant that Congress must keep to the promises it makes by appropriation. It’s the promises Congress makes when it borrows money that the Constitution commands be honored.
Being upset about the amount we’re spending makes excellent sense. But being upset about paying for it, after we’ve decided to spend it, is utterly misplaced.