On April 19 I called here for an abolition of the debt ceiling, http://econospeak.blogspot.com/2011/04/abolish-debt-ceiling.html , a call noted on May 23 on a NY Times blog, with my arguments since repeated by former Reagan-Bush Treasury official, Bruce Bartelett (although without citing me), http://www.stlbeacon.org/voices/in-the-news/11523-what-happens-if-we-dont-raise-the-debt-ceiling . The furor has been intensified by major public discussions of the possible unconstitutionality of the debt ceiling based on part d of the 14th Amendment, with even such heavies as Harvard Law Professor Laurence Tribe weighing in that it is unconstitutional. On Wednesday, President Obama was asked about this, but declined to comment. Yesterday, George Madison, Chief Counsel of the Treasury Department wrote to the NY Times saying that it is a legal limit, but that Congress must raise it. However, some are noting that the constitutionality issue has not been directly addressed and that Obama and Geither may be leaving the door open just a crack for a declaration of its unconstitutionaity if it comes down to it, but avoiding doing so now out of fear of weakening the negotiations with Congress, http://m.gawker.com581953/obama-nixes-the-lets-just-call-the-debt-ceiling-unconstitutional .
Well, the rumors of what they are willing to give (cuts in social security?), along with the prospect that this game will be played again in the future (talk about moral hazard), suggests to me that the administration had better be prepared to play the game fully now. Indeed, the debt ceiling has been ignored since its imposition in 1917 precisely because it has always been nearly routinely raised (including ten times since 2001, most recently in Feb. 2010). It is completely incoherent to have budgets passed mandating spending and taxes that breach the debt ceiling and then demand that it be enforced by somebody other than Congress that did the mandating. The administraion should prepare to declare the debt ceiling unconstitutional and do so in order to save the world economy, not to mention Obama's own reelection.