Saturday, July 02, 2011

Constitutional Bluffing

Gerard N. Magliocca

The lively exchanges about the debt ceiling and Section Four of the Fourteenth Amendment raises the following question: Is it appropriate for the President (or any other public official) to use constitutional argument as a bluff?

In other words, suppose that an Administration threatens to invoke a particular textual provision or line of reasoning even though it has concluded that the argument is without merit. The threat generates the desired compromise. No constitutional violation occurs and no binding precedent is created (such as an OLC opinion). Is that a problem?

Here's why you might say yes. There should be a presumption of good faith in constitutional argument. That is what we would say if someone was making a claim to a court. So unless the President has a good-faith basis in his stand, then it is wrong for him to engage in saber rattling, especially if the threatened action would be highly disruptive (defying a Supreme Court holding or a statute, for example) and make brinksmanship more likely in the future.

Here is why you might say no. There is no good-faith presumption for making legal arguments to the media. Likewise, there is no such requirement for statements at the bargaining table or in public comments that are not taking an official position. And if no constitutional violation occurs, that's all that matters.

I raise this issue because what constitutes "off-the-wall" for purposes of bluffing is different from how we would evaluate the merits of that argument. The threshold, I think, is lower, and thus Mark's comparison of this situation with Bush v. Gore may not work.

On that note, have a Happy Fourth of July! The Declaration of Independence, fortunately, was not a bluff.


A good faith presumption of intellectual integrity in politics?

Good luck with that one.

Since you're allowing comments here, let me take the opportunity to say that I don't think Prof. Tushnet has given a very good example of "both sides do it".

The examples he gives are the ACA and the debt ceiling. But those aren't symmetrical. The debt ceiling issue hasn't been a real issue since the Civil War. There are no cases on it since Perry, and the scholarly writing is almost non-existent. It's hardly surprising that new arguments would arise in that context.

In contrast, the commerce clause has been hotly debated for over 70 years. There are hundreds of cases and a vast scholarly output. Even the specific proposal of the mandate has been widely discussed for years (it was a Republican idea in its origin). Thus, for the "activity/inactivity" argument to be made only now is indeed noteworthy.

This certainly is NOT a "both sides do it" situation.

"High politics" using JB's terms would demand that two parties both have the interests of the country at heart, and that each assume that of the other. The demand is no more than that of players respect the political game. Balkin would call it constitutional faith but it makes more sense to refer simply to sportmanlike conduct. When winning becomes more important than playing, democracy fails.

These days conservatives play to win and many liberals think the notion of political "play" is beneath them. "Playing to win" can still mean playing. Similarly bluffing itself isn't the problem, the question is whether bluffing is seen as within the norms of play.

Politics is always vulgar, but vulgarity can become violence to the game itself. At this point it's fair to say that if the democrats are feckless and corrupt, the Republicans are approaching nihilism.

D. Ghirlandaio said...

These days conservatives play to win and many liberals think the notion of political "play" is beneath them. "Playing to win" can still mean playing...

Politics is always vulgar, but vulgarity can become violence to the game itself. At this point it's fair to say that if the democrats are feckless and corrupt, the Republicans are approaching nihilism.

This repeated claim from the left does not appear to me to have any basis in reality.

Precisely what political plays do you think the GOP uses that the Dems do not match or exceed?

For example, in this controversy, the GOP is withholding their vote to increase the debt ceiling until they get incredibly modest spending cuts of roughly $200 billion per year or only 1/8th of the current deficit. This is far, far short of what their constituents want.

In response, the Dem President is threatening unconstitutionally default on the federal debt and/or cut off social security checks (for which there is more than adequate tax revenues) if the GOP does not agree to increase the debt ceiling in exchange for what are reportedly cuts of only $100 billion per year or only 1/16 of the current deficit and a various tax increases.

Which of these positions do you consider to more closely approach nihilism?

The analogy between the ACA argument and the Public Debt Clause also occurred to me, so I understand where Professor Tushnet is coming from. However, unlike Mark Field, I think that the anti-mandate argument has the greater intellectual integrity. As I understand it, the proponents of this argument (whom, by the way, I think will probably lose) don’t believe that the framers specifically intended to distinguish between activity and inactivity. Rather they believe that the framers intended that Congress be able to regulate interstate commerce. If you are not engaged in interstate commerce (which, needless to say, includes not being engaged in anything at all), then Congress cannot regulate you. The Supreme Court, however, has expanded the sphere of congressional regulation to any economic activity that has a substantial effect on interstate commerce. The anti-mandate folks are simply arguing that since the Supreme Court has never considered regulation of inactivity before, there is no particular reason why it needs to extend the interstate commerce power to this situation. It may not be a compelling argument, but it is consistent with their philosophical approach to federalism and with their understanding of the original meaning of the Constitution.

The Public Debt Clause, on the other hand, seems like seizing on a particular piece of constitutional text simply because it might justify a convenient result at this particular moment (the proverbial train ticket good on this day and time only). The people who are making the argument, in addition to never having shown any particular interest in it before, do not seem to be the types who are generally enamored of vested property interests. One suspects that in any other context many of them would have been critical of the Perry court (which, after all, was the same court that authored many of the anti-New Deal decisions that they would decry). In that sense it seems more like the Bush v. Gore situation, in which the Bush camp was criticized for taking an anti-states rights position that they would normally have opposed.

Bart, I'm not as polite as other people here. But I'll humor you this once.

Over 30 years the politics of this country moved to the right, but that seemed to make the professional right even more angry and more extreme. Clinton was a center right politician; Obama has gone beyond past models of Presidential authority -Bush's wars are now Obama's- and both parties are the parties of businessmen and banks. This is where we've ended up:
Madison Wisconsin 2/16/11

Wisconsin needs to be fiscally responsible.

There is no question that these are tough times, and they may require tough choices.

But Gov. Scott Walker is not making tough choices. He is making political choices, and they are designed not to balance budgets but to improve his political position and that of his party.

It is for this reason that the governor claims Wisconsin is in such deep financial trouble that Wisconsinites should view this as a crisis moment.

In fact, like just about every other state in the country, Wisconsin is managing in a weak economy. The difference is that Wisconsin is managing better -- or at least it had been managing better until Walker took over. Despite shortfalls in revenue following the economic downturn that hit its peak with the Bush-era stock market collapse, the state has balanced budgets, maintained basic services and high-quality schools, and kept employment and business development steadier than the rest of the country. It has managed so well, in fact, that the nonpartisan Legislative Fiscal Bureau recently released a memo detailing how the state will end the 2009-2011 budget biennium with a budget surplus.

In its Jan. 31 memo to legislators on the condition of the state’s budget, the Fiscal Bureau determined that the state will end the year with a balance of $121.4 million.

To the extent that there is an imbalance -- Walker claims there is a $137 million deficit -- it is not because of a drop in revenues or increases in the cost of state employee contracts, benefits or pensions. It is because Walker and his allies pushed through $140 million in new spending for special-interest groups in January. If the Legislature were simply to rescind Walker’s new spending schemes -- or delay their implementation until they are offset by fresh revenues -- the “crisis” would not exist.

The facts are not debatable.

Read the whole thing. Look at the list and the sources. It's not even starve the beast, it's rob the beast.

On the shutdown in Minnesota.

This isn't opposition to specific policies, it's opposition to government as such; extremism, fostered by the cowardice of weak (weak-willed and wealthy/ paid and passive) democrats. Successful bullies always demand more. And the more they demand they more frustrated they become. I won't bother going into the psychology, any more than I'll bother going into yours.

The general problem of this sort of debate between "Liberals" and "Conservatives" is that the majority of both are in favor of the economic power that only came as the result of the unification of social and economic life that each in different manifestations both decry.

Both conservatives and liberals now want big capitalism. The only question left is whether big government is its necessary partner.

The lack of intellectual integrity in the opponents of the ACA is easily seen. The mandate was first proposed by Republicans years ago, yet no one ever raised the "activity/inactivity" distinction until after the Democrats passed the ACA. It's that simple fact, not their general constitutional philosophy, which highlights the basic dishonesty of the opponents.

The debate over the debt ceiling, as I already pointed out, is brand new. It never could have arisen before. The remainder of the mls' comment consists of little more than denigration of the motives of those making the debt ceiling argument. That's not an argument.

It's also wrong on at least some of the facts. The Perry case certainly is not one which liberals would ordinarily oppose. Perry held that the claimant was not entitled to recover anything above the face value of the bond, and could not recover the additional amount that gold "would have been worth" had it remained in circulation. That ruling supported the New Deal, as is obvious from the fact that the Four Horsemen dissented.

The historical argument fails on other grounds as well. Those currently supporting the inviolability of the debt are the historical successors of the Radical Republicans who wanted to assure that the debt remained unquestioned. The Confederate Party, now as then, was the party seeking to repudiate the debt. It's the same party alignment, so no inconsistency is involved. Only justice and the Constitution.

Mark- the debt limit issue is “new”? We have had a debt limit since 1917. Before that, there was no limit because Congress had not delegated to the executive any general authority to borrow, so each new debt issuance was specifically authorized by legislation. Moreover, we have had dozens of contested votes regarding the debt limit, at least since the 1960s. We have had several instances, particularly 1986 and 1995, where Congress went well beyond the nominal deadline for raising the debt limit, triggering the need for the Treasury Secretary to take extraordinary actions to avoid default. During the Bush years, most Democrats (including then-Senator Obama) voted against raising the debt limit on various occasions. A few weeks ago an overwhelming majority of the House, including many Democrats, voted against raising the debt limit.

During all of that time, there is apparently not a single recorded instance of anyone in government, not in Congress, not in the executive, nowhere, stating that there is a constitutional duty to raise the debt limit.

Like Professor Tushnet, I don’t claim that the mere fact that no one has raised the argument before means it is meritless. But it is pretty evident that any merit it may have is, shall we say, coincidental.


How very kind of you to humor me by attempting to justify your claim that only the GOP/conservatives "play to win" while Dems/progressives simply roll over.

Your example of Wisconsin to prove the point is amusing.

Here are the undeniable facts:

The Dems goverened against the wishes of their constituents one too many times and were fired en masse in 2010. WI was one of several states where the Dems lost the state government.

This hardly means the WI Dems rolled over to the new GOP government.

Dem legislators fled the state to stop legislative business.

Dem union thugs vandalized the capital and threatened the GOP legislators with death.

Then Dems financed a supreme court candidate to reverse the GOP's legislation they could not stop by fleeing the state and threatening the people's elected representatives.

Please do not insult my intelligence by claiming that the party of what Michael Barone aptly called "Gangster Government" rolls over politically.

Raising the debt limit was always, before this year, seen as kabuki theatre. It was a cheap protest vote by the opposition party, with everyone understanding the game. Only this year did the Republicans (with a big assist from Obama) make it an actual issue.

Mark- I know you are aware of Brad DeLong's recounting of the 1995-96 debt crisis, since I saw you left a comment on his blog. According to DeLong,the crisis was resolved when Secretary Rubin informed Gingrich that he had decided to withhold Social Security checks for the coming month (I assume, since DeLong doesn't indicate otherwise, that Rubin was serious).

Now you can call that Kabuki theater if you want. But, if so, we haven't gotten to the Kabuki theater stage here yet.

Mark Field said...

Raising the debt limit was always, before this year, seen as kabuki theatre. It was a cheap protest vote by the opposition party, with everyone understanding the game. Only this year did the Republicans (with a big assist from Obama) make it an actual issue.

No, the Tea Party voter rebellion dragged the GOP kicking and screaming into something vaguely approaching fiscal sanity. The Dems are playing their usual role as the ruthless defenders of government.

The Tea Party is the self-organized voice of majorities of likely voters who want to stop borrowing to finance the wild overspending of the past decade under both parties. After the Tea Party went RINO hunting in 2010, the GOP has at least for the time being started somewhat listening to their constituents again.

The really pathetic reality of this debt ceiling fight is that the parties are threatening to destroy the good credit of the United States over whether to reduce an utterly insane $1.6 trillion annual deficit by 1/8 or 1/16. The United States will follow in the footsteps of Greece into sovereign insolvency maybe one year later under the GOP plan than under the Dem plan.

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D. Ghirlandaio said:

"Bart, I'm not as polite as other people here. But I'll humor you this once."

I take the "polite" part as a personal compliment, thank you. But on "humor," one doesn't "humor" the clown, especially when, as in this case, the clown is without humor (and make-up). Perhaps you should emulate my politeness in dealing with "Little Sir Echo."

mls salves his recent stint in the woodshed with this:

"Like Professor Tushnet, I don’t claim that the mere fact that no one has raised the argument before means it is meritless. But it is pretty evident that any merit it may have is, shall we say, coincidental."

Perhaps mls has in mind "Constitutional Laches" or the defense of "use it or lose it" to challenge constitutional issues such as have been newly raised with respect to Section 4 of the 14th Amendment. The current Originalism vogue relies to a great extent upon history (much of it "newly discovered") in efforts to support relatively new positions on previously "settled" constitutional provisions. In an earlier comment on another post at this Blog on Section 4, in discussing Abramowicz's 1997 article (published while he as a "mere" law student at Yale) I made reference to Sandy's "The Embarrassing Second Amendment" that possibly served to trigger (pun intended) the brouhaha-haha-haha that led to Heller and McCarthy v. Chicago rehabilitating gunslingers and other yahoos seeking unlimited rights to keep and bear arms. Coincidental? Read the "militia" out of the Second Amendment and read the "Public Debt Clause" out of the 14th Amendment?

I did see DeLong's post, but I don't see Rubin's action as in any way dispositive. He solved the problem politically, which is always the better way. The issue has always before been resolved politically. The constitutional option has been raised recently as an alternative in the event a political solution fails, which is the correct approach.

Against my own better judgment

Walker lied. Your response was to say the majority of people believed those lies. Now they don't; and they haven't since mid february. Either you still believe those lies, or you're lying now to us.

More lies in the news.

On the radical socialism of the democratic party: Clinton hearts Huntsman

I'll repeat the Shag's quote from mls:
"Like Professor Tushnet, I don’t claim that the mere fact that no one has raised the argument before means it is meritless. But it is pretty evident that any merit it may have is, shall we say, coincidental."

Admitting the cogency of a line of argument but questioning the sincerity of the speaker in using it.
That's almost worthy of Bart. Not a way to win a case.

Also I thought the point was that the originalists have been losing recently on the second amendment since the winning arguments refer to personal protection? Living constitutionalism again.

The strength and weakness of democracy is its acceptance of the facts of language. If lawmakers believe that 1+1=3 then it's the law. In a republic the government is representative by design. In a monarchy or a dictatorship it isn't. Neither is a guarantee of reason, but representative governments are more likely to escape the worst of unreason.

Still the rule of law is conservative by design. That's something many liberals don't seem to understand.
If conservative arguments hod won consistently over the past 100 years, we probably would not have troops in 150 countries around the world.

On the Second Amendment, today's NYTimes (7/3/11) has a front page article by Michael Luo "Mixing Guns and Mental Disease - As More States Restore Rights, Process Is Often Haphazard." The article continues inside on two full pages, with photos. Very chilling. I wonder if Justice Scalia read this article that might support some of the Second Amendment limitations he suggested in Heller. Of course, those suffering from mental disease also are concerned with self defense, but .... Some might say that there is a presumption of sanity when it comes to Second Amendment rights (you know whom I am thinking of). but without a meaningful process, where are the safeguards? Read the article.

I will.


"In contrast, the commerce clause has been hotly debated for over 70 years. There are hundreds of cases and a vast scholarly output. Even the specific proposal of the mandate has been widely discussed for years (it was a Republican idea in its origin). Thus, for the 'activity/inactivity' argument to be made only now is indeed noteworthy."

Come on; that's both wrong and misleading. The commerce clause wasn't really hotly debated for 70 years. Between the New Deal era's repudiation of the constitution and Lopez, the idea that there were any limits on commerce clause power was nonexistent.

Besides, the issue isn't the 'commerce clause' in the abstract. The issue is the mandate. Nobody in that time suggested that Congress could regulate nothing at all, so the legal issue was never raised or addressed.

The commerce clause wasn't really hotly debated for 70 years. Between the New Deal era's repudiation of the constitution and Lopez, the idea that there were any limits on commerce clause power was nonexistent.

C'mon David, you know better than this.

Come on, Mark: You know it isn't enough to have won, for the moment, the argument over how much power the government should have. They have to delegitimize the very concept of limited government.

Otherwise someday it might see a revival.

"They have to delegitimize the very concept of limited government."

They? Is this like "them"?

Seriously, the people you reference think the government has certain limits. You just disagree with them on the breadth of the limits.

And, can you tell me if the government was ever "limited," so I can judge when this model time was present? For instance, many think 1915 is a better time in guard to the Commerce Clause.

It wasn't for any number of other matters. The 2A wasn't "incorporated" then, for instance. So, is this "limited government" thing a real thing or a state of mind that never truly existed?

If so, what "they" want can be put in better perspective, perhaps.

Today's (7/4/11) LATimes has an editorial titled "Fourth of July: Words of wisdom from the Founding Fathers" which it introduces with: "This group of mostly white Anglo-Saxon property owners had profoundly differing opinions about governance." Here's one relevant to this post:

The national debt

I say, the Earth belongs to each of these generations during its course, fully and in its own right. The second generation receives it clear of the debts and encumbrances of the first, the third of the second, and so on. For if the first could charge it with a debt, then the Earth would belong to the dead and not to the living generation. Then, no generation can contract debts greater than may be paid during the course of its own existence.

— Thomas Jefferson, 1789

There was no 14th Amendment back then. Perhaps the framers of the 14th Amendment had Jefferson's thoughts in mind when structuring Section; or perhaps not. Quite a bit happened after 1789 to the enactment of the 14th Amendment.

Here's another:


The Constitution

I confess that I do not entirely approve of this Constitution at present; but, sir, I am not sure I shall never approve of it, for, having lived long, I have experienced many instances of being obliged, by better information or fuller consideration, to change opinions even on important subjects, which I once thought right, but found to be otherwise. It is therefore that, the older I grow, the more apt I am to doubt my own judgment of others.

— Benjamin Franklin, 1787

I don't know if America is suffering from "Constitutional Disfunction" ("CD") today, but there seems to be a lot of talk yesterday ("This Week with Christiane Amanpour") and today about "CD." Some want to go back to the beginnings or to some other time in between, the "good old days," and the wisdom of the Founding Fathers. But as the editorial notes, that wisdom was not in lockstep.

There is no "Constitutional Viagra" to cure "CD," including originalism as currently in vogue, even four (4) hours at a time. Looking back historically, "CD" may be a chronic condition, perhaps requiring a pharmo-type warning label to be attached to the Constitution.

Shag (and anyone else who is interested): I have posted another entry in my exchange with Professor Balkin

"Seriously, the people you reference think the government has certain limits. You just disagree with them on the breadth of the limits. "

Yeah, right: "Limits" which are always, no matter how much power they grab, somewhere out on the horizon.
"Limits" which always recede exactly as fast as they claim more. No, the only thing they believe is that they have to claim they believe in limits.

"No, the only thing they believe is that they have to claim they believe in limits."

Who are "they"?

Both sides support "limits" called elections, criminal trials, civil hearings of many types, etc.

Liberals support "limits" such as gay rights, abortion rights, various types of free speech, certain gun rights (even if not enough for you), etc.

Conservatives support "limits" such as gun rights (though not enough for you), various types of free speech, limits on affirmative action, etc.

It's fine to disagree on certain issues, but you are just venting there w/o grasping reality.

What, you mean like the criminal trial you get before the President has you assassinated?

Look, it means nothing, absolutely nothing, to 'support limits' that don't limit you, that don't tell you that you can't do something you WANT to do. And that's the sort of limit I don't see much interest in admitting exists. In fact, 'living constitutionalism' essentially amounts to a theoretical denial they can exist.

Brett suggests a variation on NH license plates:


But if limited government (federal/state) fails to impose limits on the Second Amendment (see the NYTimes article noted in an earlier comment), the conjunction "OR" would be changed to "AND."

I do not wish at this time to comment on mls' "Further Reply to Professor Balkin" other than his statement in the first paragraph:

"It [Balkin's reply to mls' critique] is a powerful effort, but I think the reader will conclude that its power lies more in the cleverness of its author than the merits of its argument."

This is of course a rhetorical technique. I just started reading Lawrence M. Solan's "Lawyers as Insincere (But Truthful) Actors" available via SSRN at:

Part II, which I have not gotten to as yet, "focuses on two sets of lawyers for whom it is sometimes argued that the suspension of sincerity should not apply: government lawyers and law professors." The Internet legal blog atmosphere can be adversarial, including at this Blog. As I continue to read Solan's article this morning, mls' charge of Balkin's "cleverness" will be kept in mind.

By the Bybee [expletives deleted], my favorite barkeeper in my salad days (no, I never was a vegetarian) had at the ready a quip for his many lawyer patrons "A lawyer has a license to steal." [Alas, urban renewal in downtown Boston closed his operation of the then oldest, continuous operating bar (that lawyers could not pass) in Boston to make way for the new City Hall (the architecture of which -I.M. Pei - has driven many to drink). Fortunately he opened a new bar where he could continue to quip while lawyers quenched.]

I haven't read the article yet -I just downloaded it-but if if his article is that simple then he's wrong. It smacks of complaints of politicians "working the ref." But there is no ref.

Read the beginning and conclusion of JB's first post on this. It begins with false humility and ends with a sting. The argument works as a process of epistolary seduction.

MLS is not as skillful and his tone betrays insecurity and anger. And he attacks as a moralizer against rhetoric while responding to JB's gracefully rhetorical but substantive argument with empty rhetoric! Remember we both quoted him accusing JB of insincerity: "You may have a good argument but you don't mean it" etc.

Lawyering is acting, and lawyers are loyal to their trade and to their clients. They're citizens as well, that's the tension. And prosecutors have a double obligation (but who trusts them?) We don't need more sincerity we need less of it. The road to hell is paved with sincere feelings.

Doing these cases,” he wrote, “I began to find myself in a dangerous situation as an advocate. I came to believe in the truth of what I was saying. I was no longer entirely what my professional duties demanded, the old taxi on the rank waiting for the client to open the door and give his instruction, prepared to drive off in any direction, with the disbelief suspended."

Brett answers my reply that the government has some limits by noting that the government only has some limits. And, perhaps, they don't really care about them.

Jane has problems. But, she has a nice smile! Well, sure, but she still has problems. But, I don't really want to focus on them, I just want to point out she has a nice smile. Isn't she lucky?

Pointing out the government still has certain dangerous problems again doesn't negate they have limits. Governments, if given their druthers, would waive criminal trials a lot more than they do now.

Pointing to the cases where they might wrongly waive them to suggest no limits is like saying it's hot out w/o realizing the temperature rises above 75 Degrees.

Your white whale of "LC" also recognizes limits, some that always was present. Still see two senators per, not four in CA, two in Alaska. Any system of interpretation is going to change somehow, at least to recognize past error.

This changes the "limits" somehow. Via "rhetorical technique," we thus determine that there aren't any limits!

"lawyers are loyal to their trade and to their clients"

Discussing constitutional principles is not the same as Rumpole's taxi, that is, a requirement to take the client and defend the client, not provide an evenhanded (or some semblance of it) discussion of the matter. The quote in this context seems a bit off.

"Discussing constitutional principles is not the same as Rumpole's taxi"

Ideally maybe no, but still civil behavior is more important than sincere feeling. mls came close to arguing ad hominem and you're criticizing mls in the same tone. The stakes are high and people have their moral commitments. Except when dealing with Bart, I try to concentrate on theater criticism.

Read the beginning of Balkin's first post.

"This essay does not attempt to answer these questions in detail; I leave that to a future discussion. My goal here is to offer a basic account of the legislative history of Section 4. This discussion, I hope, will be of interest both to..."

Ah objectivity...

He's good.

Also it wasn't Rumpole speaking it was Mortimer.

A smart work around for the debt ceiling. Burn the bonds held by the Fed.
Cancel the US debt to itself.

From my reading of Rumpole, I think he would have a similar sentiment. Of course, Rumpole is a fictional character and Mortimer wrote him too.

I'm responding to Brett here. My tone might not be overly polite, but "ad hominem" is a bit much, particularly since my replies aren't focused on his person but his arguments. Some civility, feigned or not feigned, is a fine principle. I don't disagree.

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Sorry Joe, I responded first to Shag on mls, then to you on Mortimer, then went on as if you were the same person.

The reference to ad hominem was to criticism of insincerity rather than of points of argument. Nothing more extreme than that.

And with Brett and Bart it's a free-for-all.

D. Ghirlandaio said...

A smart work around for the debt ceiling. Burn the bonds held by the Fed. Cancel the US debt to itself.

The "smart work around" linked here is to have the Fed forgive the bonds it bought from the treasury under the two rounds of qualitative easing over the past couple years.

To say this idea is nutty and dangerous is an understatement.

QE was a fancy term for the Fed nearly doubling the money supply by creating virtual electronic dollars and buying up $1.5 billion in T-Bills and nearly as much in bad bank assets to head off what the Fed feared was a round of deflation.

In fact, all the new money created in immediate spike in commodity prices including oil. Businesses initially compensated for the higher commodity costs by cutting back on things like hiring new employees. Now the inflation has reached the CPI, which is increasing at 3.9% and rising.

Our best hope to avoid a repeat of 1970s style stagflation (inflation, stagnant growth and unemployment) was for the Fed to start calling in its bonds from the Treasury to begin soaking up all the extra money. If the Fed instead forgives the bonds as is suggested, that $1.5 trillion will remain in circulation fueling inflation.

The NR author's idea to avoid inflation is to force the banks to hold more of their money in reserve rather than lending it to businesses and consumers, which of course will dry up credit.

Heaven help us from the economically illiterate.

"Heaven help us from the economically illiterate."

try again

BD: "Heaven help us from the economically illiterate."

DG: try again

CEPR on why its a good idea to leave $1.5 trillion in extra money in circulation: "Of course it is an accounting gimmick. We have an accounting problem (the debt ceiling). It cries out for an accounting solution."

As I said, economically illiterate. CEPR is a progressive think tank which supported the Fed's stagflationary debasement of our currency in the first instance. Moreover, our deficit is a government overspending problem, not an "accounting problem" to be solved by printing money ala the Weimar Republic and Peronist Argentina.

My question is how Ron Paul, who I thought was a monetarist, could have come up with this plan?

Care to try again, DG?

You and Mankiw both disagree with Dean Baker, in strikingly different language. If I have to take one of you seriously which should I choose?

Also don't bother reading but look at the charts here and here

Speaking exclusively with The Wall Street Journal, Barton Biggs, managing partner at multibillion dollar hedge fund Traxis Partners, painted a bleak outlook for the developed world with only huge government intervention likely to improve things.

…Mr. Biggs, former chief global strategist for U.S. investment banking powerhouse Morgan Stanley, demanded the U.S. government temporarily return to ideas used in the Great Depression as a way to get the country back to higher growth.

“What the U.S. really needs is a massive infrastructure program … similar to the WPA back in the 1930s,” he says.

The plan would be to employ some of the many unemployed people, jump start the economy, as well as help catch up with Asia, which is building state-of-the-art infrastructure from new mechanized port facilities to high-speed trains.

He suggested financing such building through the sale of U.S. Treasuries.



I have written extensively here, here and hereon what appears to be a new round of stagflation, complete with links and charts.

As for the CBO chart, claiming that raising taxes, slashing Medicare's doctor reimbursement and maintaining Obamacare will eliminate the current $1.6 trillion deficit by the end of a hypothetical Obama second term, did you know that I have sugar sand Pacific ocean front property for sale up here in the Rocky Mountains? I will let you have it for a mere $500,000 if you act before midnight tonight.

DG, CBO uses static model projecting which assumes that raising and lowering tax rates will have no appreciable economic effect. For example, CBO overstated the revenues from the Clinton tax increases by 100% and predicted revenue losses rather than the actual double digit increase in revenues after the 2003 Bush tax rate cuts.

CBO also assumes what the politicians tell it to assume like providing health insurance to 30 million people, 20 million being added to Medicaid, will actually lead to deficit reduction. By assuming that my income will multiply by ten, I can also become a millionaire in short order.

The pièce de résistance of your post was the Morgan Stanley "chief global strategist" calling for even more trillions to go into infrastructure building like in the New Deal. You think MS might just be planning how to get a piece of that action? They sure aren't using the New Deal (or Japan's Lost Decade) as an example of how infrastructure spending creates an economic recovery in the private economy. Indeed, the US private economy did no recover until all the extra government spending stopped after WWII.

Do you ever get the feeling these folks are gaming you?

"CBO... predicted revenue losses rather than the actual double digit increase in revenues after the 2003 Bush tax rate cuts."

I think we're done here.

The second link is a chart from the hacks at Heritage: "Tax cuts played a small role in the loss of 2002-2011 revenue"

Only a small role.
I won't go into what they left out.

So I read Professor Magliocca's online chat and have a question about the following response he gave:

"Some people have wondered whether the President would have the authority to unilaterally raise taxes. (After all, if you think he can issue debt as a last resort, why not raise taxes?) That doesn't seem right, though, does it?"

Is that it? The legal distinction between borrowing money without congressional authorization and raising taxes without congressional authorization is that the latter doesn't seem right? Both involve powers that are explicitly given to Congress by Article I. It doesn't seem right to me that the President exercise either of them. FWIW, it doesn't seem right to Professor Tribe either.

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