I didn’t call you a single name, Sam Stone, except your name.
You posted errors. You manufactured justifications out of thin air. You ignored every substantive point that people have been throwing at you in favor of irrelevancies and outright falsities. Naturally, the person who points out the errors to you must become the bad guy in your world. It’s easier to ignore information than confront it. And yes, there were facts in my post. Not cited (see below), but they were there.
Ignoring them does not make them disappear.
Fair point. My original post was directed to Sam Stone, who should know as well as anyone I’m good for a cite or ten. But if he’s choosing to feel “snotty” or whatever the hell that post was about, I should still go through the background for others.
The debt limit was instituted during World War I. The best recent history of it comes from James Surowiecki at the New Yorker. His article by itself makes the point that the debt ceiling was intended to make the executive accountable, not Congress, as was fabricated so readily to support the previous fantasy argument. But the article doesn’t get into the underlying reasoning for that, which is perhaps relevant.
There’s actually an interesting story here about debt, one well worth telling. For the British details, you can read Glyn Davies’ classic A History of Money, which is a bit dry for lay readers but remains the best, most comprehensive book on financial development that I know.
The creation of a “national debt” wasn’t just a landmark in the history of finance. It represented one of the last nails in the coffin of unchecked executive power, the original case being the power of the King of England. The English mint was the Royal Mint. Parliament managed to establish its power over taxation, but back when money meant metal, the ability of the monarch to take his cut of seignorage at the mint itself was one last bastion of royal taxation that Parliament had no control over. Charlie One actually managed to finance his own Papist transgressions out of minted Spanish silver, with no need to call on Parliament at all for funding. This got tiresome for the people, and they eventually chopped his head off. Royal and Parliamentary power struggles were give-and-take for a while. They needed a new solution, a better way than a headsman’s axe to keep the king in line.
After a while, they came up with the idea of a national debt. Instead of an unreliable monarchy borrowing money on its own name and then defaulting, money could be borrowed on the credit of Parliament taxation itself, which is to say, on the credit of the whole country instead of one rich household. They did this through the creation of the new institution, the Bank of England. The idea was a smashing success. In addition, this put the power of the purse (this time debt financing, in addition to taxation) permanently in the hands of elected officials. Or rather, what passed for elected officials at the time. Pieces of metal, and the Royal Mint, took the back seat. Seignorage was no longer a viable option for the king to bypass Commons and Lords. The final financial leash was put on the king.
This isn’t a digression. The point was that the national debt was a legislative matter from the very moment it was invented. The king had his own discretion only after the money was raised. After he was given the money, he could by and large do what he wanted with it. There were no government watchdog groups at the time. The punishment for royal prodigality was a future Parliament that wouldn’t cough up any more cash.
The US system was specifically designed to have a similar financial check on the executive. Congress had the power of the purse, and intentionally so. That fact can be confirmed in the ole US Constitution.
Nowadays, we think of Treasury when we think of government debt. We even call them Treasuries. But originally, all sales of bonds had to be approved by Congress. And by that, I mean all frickin bonds. The size of the debt offering, the term, the kind of paper used, and just about everything else was determined by Congress. Power of the purse meant total power over both taxation and the debt. The American executive, based entirely on the British precedent, was fully in hock to Congress, by design. Treasury was completely dependent on Congressional funding, beginning to end. The representatives of the people would raise the money, and the executive would spend the money. And again, the executive had some bit of leeway after the funds were given over. It took a while to build up the bureaucratic structure necessary to oversee all those funds. The lack of oversight was how administrations like Harding’s managed to be so corrupt.
The debt situation changed when World War I happened.
Congress still didn’t have the bureaucratic oversight structure to manage the executive’s funds. But need for funding was intense for the war, and they had no idea how much would be necessary for the fighting. So they allowed Treasury to issue debt itself, delegating their own authority for the first time. This was a big deal! They still wanted a leash on the executive, see? Hence the debt limit, started during the war. The limit was, from the very beginning, an attempt to keep the executive in place. Like the old kings, the executive could both raise funding and spend it on its own discretion, and Congress wanted some sort of cap on that power. This is not a “question that answers itself”. There’s a long history here.
The US government got bigger. The debt limit was increased time and again. This story lasted until the 1970s, when Congress (finally!) started creating comprehensive budgets (again, see Surowiecki). The previous period of executive discretion in the budgeting process disappeared. Today funds are appropriated exactly as Congress says, with none of the royal prerogative left at all in our system. (Bureaucratic prerogative is another story…)
And that was the moment, with the implementation of the comprehensive budget, that the debt ceiling became a dinosaur. It was no longer necessary. Congress took back the power of the purse quite forcefully, by outlining in detail (as they had not done before) what the executive was allowed to spend money on. It all become itemized quite prettily. However, they kept the anachronistic debt limit. Bureaucratic minds are often loath to part with the past. There was no deeper reason than that. Even so, it was realized quite swiftly that it was ridiculous for Congress to budget spending, and then not allow financing of their own budgeted spending. And so after just a few years, the Gephardt rule was created so that the debt limit would increase automatically if Congress budgeted spending that required financing in excess of the previous limit.
This is quite obvious when you think about it. A budget resolution is a legal order to the executive to spend money on a certain thing. And if Congress orders the executive to spend money, and Congress is in charge of allocating the money to be spent, it is only natural that they increase the limit automatically to allow the executive to spend the money that they themselves ordered the executive to spend.
To hammer the point home: This has historically nothing whatever to do with Congress placing a limit on itself. The idea is ridiculous on its face.
Enter the modern political situation. The Gephardt rule was first waived by… can you guess? I bet you can guess. Go ahead. Take a shot at it. I’ll be happy to wait. I bet you can figure this one out.
Ah, yes, it was waived by the GOP Congress during the Clinton Administration. Modern politics. To be fair, they realized fairly quickly how dumb an idea it was. And also to be fair, both parties for a time played an empty game of kabuki with raising the limit, as I outlined in the previous debt limit thread. When it came down to it, neither side at the time viewed these games as anything more than a way for the minority party to gain some empty headlines. Yes, Obama played the game, too, and he was no better than the Pubbies when he did it. Completely petty, but harmless since nobody pressed the issue. For the longest time, both sides got their headlines, but neither side made the debt limit a matter of genuine intense negotiation, because of how fucking crazy that is.
That is, until now. Democrats took Congress again, and again they instituted the Gephardt rule. If Congress ordered the executive to spend money, then Congress would automatically allow the executive to raise the money. The GOP Congress revoked the rule, again, when they took office. And now they’re using a ticking bomb, a financial bomb of unknown strength, as leverage for their negotiations. We know essentially nothing about what might happen. We can hope the thing is merely a squib.
Now we are where we are. Legally, it’s a mess: Congress previously told the executive that they cannot raise any more funds than x. And then, just a little bit later, the current Congress, including the GOP House, ordered the executive to spend more money in excess of x. The executive has been given two apparently contradictory orders. They are legally bound to spend money, and also legally bound neither to tax nor to borrow the money they are legally bound to spend. They can neither swim, nor fly, to the Forbidden Isle. And yet they have also been ordered to pick a flower from the Forbidden Isle. An added twist: Some members of the House GOP have been threatening to impeach Obama if he doesn’t manage to do what they’ve told him he’s not allowed to do. That’s how these “negotiations” have progressed.
To top it all off, the most rabid partisans are actually congratulating the GOP for this utter depravity.
Hmm…I really need to work on my grammar.