Comments on: Default not an option under U.S. Constitution

By: slim56

slim56 — Sun, 03 Jul 2011 20:42:03 +0000

There appear to be more than a few individuals who believe that a government shutdown and hitting the debt ceiling are the same circumstance-however, there IS a difference. In the case of a government shutdown, Congress has not appropriated funds for any number of services, with the exception of Social Security. Social Security has permanent appropriation-even during a shutdown, those payments would be made. Hitting the debt ceiling is another circumstance altogether-in that instance, Congress HAS appropriated the funds, but the Treasury no longer has the ability to borrow the money to pay for the services that have been contracted. Putting things into proper perspective is imperative to the resolution of any problem. People seem to be struggling with this concept as is evidenced by the recurring subject matter and the tone of far too many of these comments. For example, I’ve heard more than enough about the revenue to be realized through the elimination of tax breaks currently enjoyed by America’s wealthiest. This will purportedly result in revenue which has been estimated by various sources to be around $290 billion over 10 years. The reality is that these “tax breaks”-which purportedly target only America’s “millionaires and billionaires”- consist of eliminating the ability of people making more than $200,000 ($250,000 for couples) to itemize their deductions. Know any millionaires or billionaires whose annual haul is in the $200,000 to $250,000 range? Me neither. Bottom line-we can’t afford to be placated with rhetorical solutions when the problems our nation faces are substantial, and the consequences of inaction are both catastrophic and imminent. We need to pay attention to the specifics of proposed solutions instead of allowing ourselves to be caught up in the diversionary tactics of those who stand to lose the most.

By: Mangojulie

Mangojulie — Thu, 30 Jun 2011 17:35:49 +0000

@zotdoc. Dude you are totally confused! When you have EXISTING debts to be repaid, cutting spending DOES NOT give you the money to repay the existing debts UNLESS you cut ANNUAL spending BELOW revenues immediately. This means the ANNUAL budget deficit must be immediately and forever turned into a budget surplus.

Given the current economic conditions, such a cut is current annual spending (over 1.4 Trillion in annual spending would need to be cut) will cause a massive and immediate depression from which we will likely never recover.

We need a LONG TERM plan to reign in spending. Not a knee-jerk kamikatze plan. In the SHORT TERM, we have to set the stage for economic GROWTH.

Frankly, this whole ploy about tying the debt-ceiling to budget cuts is a SHAM. The Congress APPROVED the deficit spending which increased the debt on the one hand, does it make sense that they should now say that they won’t APPROVE the increase in debt that was cause by the APPROVED spending on the other hand.

You would have to be a moron to buy these antics from Congress which are already putting the credit ratings of the US in danger. Or perhaps people don’t have a clue when it comes to simple math.

Keep this up and there will be serious bond market implications WELL BEFORE August 2nd.

By: dnno1

dnno1 — Wed, 29 Jun 2011 23:04:44 +0000

>>"But I see the Constitution also stipulates that, “Money shall be gold and silver.” Gold and silver. Not paper dollars. Intentionally, deliberately, the founders of our nation chose to base its economy not paper dollars created from a printing press, but rare commodities that could not be reproduced at will, to be spent at will.<< That's in Article I, Section 10 of the Constitution and that only applies to the (power of the) States. If you read Article I, Section 8, you would see that Congress has the power to "coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures". In other words, The Federal Government can print money. It is the States that can't.

By: ptiffany

ptiffany — Wed, 29 Jun 2011 20:16:28 +0000

An important point missed in this whole discussion is that even talk of reducing the US credit rating is enough for holders of US debt to run for cover – NOW. The head of PIMCO, the largest hedge fund, stated publicly that they are already selling US Treasuries as fast as possible AND he believes so are other big holders of US debt. Even the hint of default represents higher risk and lowered willingness to support US debt.

We don’t have to wait until August 2nd, since the default for all practical purposes has already started.

This irresponsible wrangling is already causing an enormous amount of damage and has reduced the credibility of the United States. Basically, they are shunning their responsibility under the Constitution to support the general welfare (not the one percent).

By: NewsLady

NewsLady — Wed, 29 Jun 2011 19:34:11 +0000

So default is not an option under the Constitution? True enough.

But I see the Constitution also stipulates that, “Money shall be gold and silver.”

Gold and silver. Not paper dollars. Intentionally, deliberately, the founders of our nation chose to base its economy not paper dollars created from a printing press, but rare commodities that could not be reproduced at will, to be spent at will.

Gold and silver are relics, you say?

If we had stuck to valuing our currency against them, as the Constitution REQUIRES, we would have no deficit today, and no threat of default. No dependency on China and other nations to prop us up by buying bonds. We would have been forced to live within our means, which is exactly what the founders intended.

They knew all about the human tendency to lose control if a power — the ability to print money at will, for example — is not checked by a counterbalance. Gold and silver were the intended heck and balance for the currency, just as the executive, legislative, and judiciary branches were intended to check and balance each other. And so they do.

But we have violated the Constitution by letting the dollar be printed unchecked, and the madness that followed will undo us. Unless we undo it.

By: dnno1

dnno1 — Wed, 29 Jun 2011 19:30:17 +0000

“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 4 of the 14th Amendment to the United States Constitution

It seems to me that we could decide not to legislate any more debt, but we would still have to pay any debt that has been established by law. That means any Social Security, Medicare, Medicaid, and any Federal pensions have to be paid by the U.S. Treasury without any questions asked.

By: Gordon2352

Gordon2352 — Wed, 29 Jun 2011 19:27:19 +0000

Sorry to disagree, but it IS about defaulting on debt which we have legally incurred and owe. Cutting spending is an internal problem which we need to deal with ourselves, without involving our creditors. First, we need to keep paying our bills. These are two separate issues entirely.

By: USAPragmatist

USAPragmatist — Wed, 29 Jun 2011 19:24:40 +0000

@BrainsHere, no it is not about cutting spending, it about the GOP holding the full faith and credit of the USA hostage to preserve tax breaks for the ultra rich. The dems have already agreed to over 2 TRILLION in spedning cuts, while the GOP is balking at only 600 BILLION in revenue increases due to elimination of breaks like the private jet deduction.

Saying something over and over again does not make it true to you FOX news viewers on the right.

By: dpgumby

dpgumby — Wed, 29 Jun 2011 19:24:07 +0000

Unfortunately the question is neither about defaulting on the debt nor cutting spending, it’s about Republicans effort to delegitimize and defeat President Obama.

By: zotdoc

zotdoc — Wed, 29 Jun 2011 18:57:11 +0000

Agree with above poster. Not raising the spending ceiling is not the same as defaulting on our debts. It just means that the administration will be forced to make cuts in spending to have enough money to pay our debts, the debt payments taking priority to spending programs. Everyone would love to keep our current levels of benefits, but WE ARE OUT OF MONEY!