Saturday, May 19, 2012

The Boogeyman Of The Debt Ceiling Crisis Raises Its Head

Earlier this week House Speaker John Boehner raised last summer's boogeyman of a crisis over rasing the US debt ceiling again.  That particular fun and games led to a debt downgrade for the US and a slowing of many markets and the US economy, and as the only way for the GOP to win the upcoming presidential election is for there to be a significant slowdown of the US economy, well, with the rest of the world's economy slowing down, maybe a raising of last summer's boogeyman might just do the trick.

Maybe it will, but probably not, although of course the US economy is slowing and will probably slow some more,  making for a nicely close race coming up, oh joy.  But Boehner's particular scare probably will not play.  The deal made last summer appears to still be in play on this matter.  The official debt ceiling might be breached prior to the election date in early November, but the US Treasury will be able to stretch things out for a few months as last year with its usual tricks.  The "fall off a cliff" fiscal deal cut last summer to end that round of debt crisis will kick in before the debt ceiling is seriously hit.  The jockeying and efforts to cut that short before it arrives is already going on in a major way.

Part of that involves a reported effort by Boehner to put up for votes four different budgets.  One is Obama's official budget.  This one will die easily with possibly zero votes in favor it, given its details.  All such presidential budgets are always DOA and never voted on as such.  This will simply be for a show to embarrass O, although it will not make any impression.  But then neither will the other three, one of which will be Rand Paul's and the even more radical Mike Lee's, both of which massively cut wildly popular programs while engaging in massive tax cuts in the name of balancing budgets (I am unsure of the details of the fourth, although I gather it is another GOP "cut taxes and cut social safety nets" one that will encounter death in the Senate, even if it passes the House).

So, in anticipation of the game that will be played after November, irrespective of the outcome of the election, I suggest that Obama seriously consider what was strongly proposed by many of us last summer, and has been long on the table, proposed even as early as during the Reagan presidency by his then adviser, Bruce Bartlett (and still supported by him): repudiation of the debt ceiling limit as unconstitutional (14th Amendment, if not others).  After the election, Obama can pull it off, and this move by Boehner simply reminds all of us how ridiculous this whole debate is and how this boogeyman needs to have a stake driven into its heart so that it goes to the grave for good.

Just to remind everybody of some basic facts.  1)  The US is the only nation in world history to enact a nominal debt ceiling. 2)  The Constitution mandates the Congress with the approval of the President to pass a budget whose bills must then be paid for.  3)  The debt ceiling is thus simply an extra imposition on top of this mandated responsibility that has never served any other than a symbolic purpose since it was first imposed in 1917, four years after the income tax amendment was approved, and threatens to have the US violate its contracts.  4)  Until last year it was always raised with only minimal questioning because it was obvious that it had to be done as a matter of "good government."  5)  Finally last year, lunatics entered the Congress uninterested in "good government," so the essential stupidity of this nearly-a-century-old law has been exposed in the debt downgrade of last year as lunacy, now possibly becoming an annual ritual in the face of filibustered gridlock.  6)  So, the beast must be killed most expeditiously, and the sooner the better.  This upcoming post-election negotiation will be the moment to do it, and Obama is the man to do it, I dearly hope.


Myrtle Blackwood said...

Print more money then, Barkley?

Mark Paul said...
This comment has been removed by the author.
Mark Paul said...

"The Constitution mandates the Congress with the approval of the President to pass a budget whose bills must then be paid for." Barkley, my copy of the Constitution contains no such provision. It gives Congress and the president the power to tax, spend, issue debt, and repay it. The closest it comes is the requirement to publish a statement of accounts "from time to time."