Comments on: Treasury will always be able to make its debt payments

By: Gordon2352

Gordon2352 — Thu, 28 Jul 2011 14:10:21 +0000

By the way, Social Security has been legally defined as “property” by the Supreme Court in Mathews v. Eldridge, 424 U.S. 319, and hence a legal debt obligation to the US government.

Failure to do so would deprive Social Security recipients of their “property” without “Due Process,” which is a direct violation of the US Constitution.

Are you including Social Security in that calculation?

By: Gordon2352

Gordon2352 — Thu, 28 Jul 2011 13:58:54 +0000

Your headline is disingenuous to say the least. You left our one very important word: “bond.”

Unfortunately, that is not the only kind of “debt” the US is obligated to pay.

Also, I’m not sure the US creditors would necessarily agree that treasury bond debt takes precedence over their debt.

Now, if your are talking about debt taking precedence over government salaries and benefits, resulting in mass layoffs of government employees, I can buy your argument.

Nice try, but your story gets a failing mark for your lesson in journalism today, and that is because it lacks “truth.”

By: Thorvald

Thorvald — Wed, 27 Jul 2011 19:13:52 +0000

“So, Treasury makes the interest payments but does not have enough money to pay for other goods and services, which is exactly what the Tea Party has been arguing.”

- Huh? Well, yeah — that’s what a deficit implies. Not exactly a Tea Party discovery.

By: VinnyCatalano

VinnyCatalano — Wed, 27 Jul 2011 18:57:04 +0000

So, Treasury makes the interest payments but does not have enough money to pay for other goods and services, which is exactly what the Tea Party has been arguing.

By: ErnieD

ErnieD — Wed, 27 Jul 2011 17:56:56 +0000

TurboTax Timmy is probably making a list of who is naughty (Republicans) and nice (Democrats), checking it twice, and preparing for which line items in their districts will not be paid and which will be.

By: xuinkrbin

xuinkrbin — Wed, 27 Jul 2011 16:03:45 +0000

Unfortunately, a.soffronow, a failure to miss any payments will lead to a downgrade of confidence in the ability of the US to pay its legal obligations (not just debt payments), which would be quite damaging to the US economy.

By: xuinkrbin

xuinkrbin — Wed, 27 Jul 2011 15:59:00 +0000

I agree, KenG_CA. Article 2, section 3, clause 4, requires the President “shall take Care that the Laws be faithfully executed”. Between the debt ceiling and the spending bill, the spending bill passed in the spring came later, suggesting a sort of override of pre-existing laws to the contrary. I believe, instead of halting spending, the President is in fact *obligated* to direct the Treasury to keep borrowing for this reason.

By: a.soffronow

a.soffronow — Wed, 27 Jul 2011 15:56:43 +0000

Finally some sanity on this issue. I’ve been rolling my eyes at pols and commentators saying the U.S. will default if the debt ceiling isn’t raised, when in fact there is absolutely no chance of that happening.

By: KenG_CA

KenG_CA — Wed, 27 Jul 2011 15:47:00 +0000

In the absence of a deal to increase the debt ceiling, the president can direct the treasury dept to continue to honor all of its debts, regardless of the laws. It’s his obligation to make sure the government does not default. I’m sure there are those who will disagree, but that doesn’t mean the president can’t do what he wants, it only means those people can sue the government for not abiding by the part of the constitution that they believe strips him of this power. Then that lawsuit can work its way through the courts. If they don’t fast track that case, it could be well after the next election before a decision is handed down from the Supreme Court.

Because Congress has authorized all of the spending and all of the tax cuts, the president is obligated, as chief executive, to ensure that the government pays its bills. Congress is obligated to pass a law enabling him to do so. There is no reason why there has to be additional legislation attached to the debt ceiling mod.