Balkinization  

Wednesday, July 13, 2011

So are we moving toward a "constitutional crisis"?

Sandy Levinson

The New York Times is reporting that "tensions [are] escalat[ing]" in the negotiations to achieve a resolution to the debt limit debate. "Across Washington, officials were weighed down with a sense that they were hurtling toward a crisis." Nate Silver actually uses the magic words in his column that well spells out how much to the right the House Republicans majority is even as compared with ordinary Republicans in the polity, who are willing to accept modest tax increases, let alone non-Republicans, with regard to their fanaticism about "no tax increases" now or ever. Thus he writes that "a failure to raise the debt ceiling at all [would likely] result[]in some combination of a debt default, a government shutdown, and a Constitutional crisis."

So the "Constitutional crisis" would presumably be the achievement of ultimate dysfunctionality, i.e., the inability of the two Houses of Congress to agree on legislation that would allow the United States to get out of this mess. And the dysfunctionality would obviously be caused, at least in part, by our Constitution and its utter lack of recognition of the role that political parties would play in our political system (as Joey Fishkin noted). If this is in fact the case, then why doesn't Section 4 spring back into life as a genuinely attractive option? The President can go on television on July 30 (or whatever the practicaly last possible moment is) and say that he has been advised by (some of) his lawyers that the Constitution is indeed not a suicide pact and that Section 4 does in fact authorize him to take whatever steps are necessary to leave the national debt "unquestioned."

Why, for example, is that argument weaker than Lincoln's argument in the Emancipation Proclamation, which was one of the world's monumental takings of private property in the name of the war power? FDR, in his 1933 Inaugural address, said that we should treat the Great Depression as the equivalent of war and behave accordingly (even as he rejected calls, by Walter Lippmann among others) formally to claim dictatorial powers. Are Eric Cantor and his minions not engaged in a fundamental war against the American economy, and is it really the case, to return to a previous post, that the only response by the President is to accept Prof. Tribe's altogether cogent arguments and accept our being driven over the cliff? (Or, to stick with the war metaphor, he could engage in basically unconditional surrender to Cantor and say that the Democratic Party will simply withdraw from the scene.)

In our Penn essay, Jack and I suggested that the key evidence for a "constitutional crisis," rather than Tushnetian "constitutional hardball" or a Posner-Vermeule episode of "constitutional hardball" is the movement of a significant number of Americans to the streets threatening a measure of social disorder. That isn't happening yet, but I do wonder what will happen, for example, when social security checks stop being delivered or veterans' programs for our "heroes" are shut down because we can't afford to pay for the treatment they need (and most certainly deserve). There was an interesting piece on NPR this afternoon about a town in Rhode Island that is running out of money to pay its pension obligations. A 90-year-old former public servant pointed out that he relies on his $2000/month pension--he gets no social security, I believe, because the local government, like many governments, chose not to participate in the Social Security system--to pay his $1000/month rent plus food, etc. I presume that Eric Cantor believes that the street is good enough as a place to live, asking people passing by for "alms for the poor."

Perhaps the McConnell option, as cowardly and craven as it is, will be adopted as John Boehner, who appears to be relatively sane, persuades enough of his caucus to vote for it and we'll be "saved." But what if not....?

Comments:

Or what if the House and Senate pass a short-term debt limit increase, as Rep. Cantor proposed today? Could Prof. Levinson say about Obama the same things he says about Republicans?

Well, of course not. People may die, but Levinson won't go criticizing a left-winger for being left-wing.
 

Our "Doubting Thomas" likes kicking the can a tad down the road so that we can have a quick replay of the "debt limit" brouhaha with similar results, again and again? As a kid, I recall the entertainment of comedian Eddie Cantor on radio and movies (later a bit on TV). Apparently Eddie's genes have not passed to his namesake Eric, who can be seen sneering and rolling his eyes as he stands aback of Speaker Bo(eh)ner at press conferences. (Bo(eh)ner must be thinking, "Et tu, Brutas?")
 

""that the Constitution is indeed not a suicide pact and that Section 4 does in fact authorize him to take whatever steps are necessary to leave the national debt "unquestioned." "

Exactly what I said before: Nobody starts talking about the Constitution and "suicide pacts" unless they're groping around for an excuse to violate it. You say it's "not a suicide pact", but what you really mean is that it IS a "suicide pact", and as such should be broken.

I'm not really sure why the "section 4" argument needs to be taken seriously after that; Once you start out with an argument for violating a constitution, subsequent claims that extraordinary actions are really constitutional tend to ring hollow.

Really, Sandy, I know you've been complaining about a "constitutional dictatorship", but is an unconstitutional one any better?

Finally, how can you look at a game of chicken in progress, and manage to blame only one of the drivers? Took both parties being stubborn to engineer this, and even now Democrats being willing to accept real spending discipline, instead of fake outyear cuts everybody knows would get repealed before they kick in, would get the debt ceiling raised.
 

Perhaps with unlimited Second Amendment rights that Brett favors, instead of the Constitution being a suicide pact, it is a circular firing squad.

Exactly what does Section 4 specifically authorize the Executive - or Congress - to do? Is Section 4 the equivalent today of Footnote 4 of Carolene Products?
 

Let me step back and ask an abstract question: assume that the President (any president) is faced with a decision with in which he has two choices. Choice A is clearly legal but, in the President's judgment, will likely lead to catastrophe. Choice B is much preferable (again,, in the President's judgment) apart from legal considerations, but clearly violates the Constitution.

Does this hypothetical have enough information to determine what the President should do? If not, what additional information is needed? Apart from what the president should do, what do we think that the president will do? Should it matter whether there is one lawyer in the administration who will advise that Choice B is ok?
 

Sandy:

The President can go on television on July 30 (or whatever the practicaly last possible moment is) and say that he has been advised by (some of) his lawyers that the Constitution is indeed not a suicide pact and that Section 4 does in fact authorize him to take whatever steps are necessary to leave the national debt "unquestioned."

Why, for example, is that argument weaker than Lincoln's argument in the Emancipation Proclamation, which was one of the world's monumental takings of private property in the name of the war power? ....Are Eric Cantor and his minions not engaged in a fundamental war against the American economy, and is it really the case, to return to a previous post, that the only response by the President is to accept Prof. Tribe's altogether cogent arguments and accept our being driven over the cliff? (Or, to stick with the war metaphor, he could engage in basically unconditional surrender to Cantor and say that the Democratic Party will simply withdraw from the scene.)


President Obama seizing Congress' power of the purse to maintain his preferred borrowing and spending? Under this reasoning, Obama could also raise taxes by diktat. Then, of course, he would have to cancel elections to maintain this state of affairs from the voters.

Please tell me you are merely engaging in a provocative stream of thought and are not even remotely serious.

Good heavens Sandy, this is what you expect out of Chavezista Venezuela and not the United States of America.
 

Shag from Brookline said...

Perhaps with unlimited Second Amendment rights that Brett favors, instead of the Constitution being a suicide pact, it is a circular firing squad.

Actually, the Second Amendment was expressly designed as a remedy for situations like Sandy's proposed dictatorship.
 

Don't you just love our yodeler's circular reasoning:

"Actually, the Second Amendment was expressly designed as a remedy for situations like Sandy's proposed dictatorship."

So for our yodeler, it's lock and load and circle the wagons time.
 

Shag really IS a bit obsessive about guns, isn't he? Personally, I don't see their relevance to the present topic, except in the extremity Bart alludes to.

A question: The "section 4" claim is that, faced with a law demanding money be spent, and a lack of legal authorization to collect and/or borrow enough money to accomplish that spending, the President is authorized to exercise Congress's borrowing power. Because, if he didn't, he might otherwise manage the spending level by stiffing our creditors.

But why doesn't this reasoning imply that he could, instead, simply levy taxes Congress didn't enact? Or engage in any number of other activities only Congress has the power to authorize, such as selling federal property?

If the President can usurp one power to meet the shortfall, why not another? Why this particular power?

Why not directly cut to the chase, and just not spend the money we don't have? The Supreme court has ruled that Presidents can't refuse to spend appropriations, but has never so ruled in the context of the government simply not having the money that was appropriated.

That's part of what makes the 'section 4' argument such a joke: The people advancing it don't take seriously it's implications. If valid, it proves a LOT more than they want proved, it makes the President a virtual dictator any time Congress passes spending bills, and doesn't provide enough money to meet them.
 

Shag:

Sandy's suggested dictatorship does not bother you in the least, does it?
 

I still am cynical from past budget battles that this won't end with some sort of compromise, if recent evidence is any signal, with one side being more mature about it. I leave out the (cough) name to try to be less ideological.

Now, I might be wrong. It is above my pay grade. But, thousands aren't dying out there because of this business. This isn't slavery.
And, as we know, Lincoln was wary there too (some constitutional scholars point out various actions by Congress, including confiscation acts, led the way), waiting until Antietam.

Obama needs a "victory" like that to take the initiative. Can McConnell's suggestion be the cigar case with the battle plans?
 

mls seems to be applying the "Ticking Time Bomb" scenario to the debt ceiling issue but applying it only to President Obama - not to Congress. Perhaps mls' hope is that whether Obama does Choice A or Choice B, Obama will not be reelected. Perhaps mls should be more candid in playing with explosive situations.
 

Lincoln suspended the Great Writ, a power explictly reserved to Congress. He ordered newspapers closed for publishing editorials he didn't like. He even went so far as issuing an order to arrest the Chief Justice of the Supreme court, after Taney issued a ruling he didn't like.

To put it bluntly, "Would Lincoln have been willing to do it?" is hardly the first test of constitutional fidelity that leaps to mind.

Oh, and "Why not usurp the power to levy taxes instead?" was a perfectly serious question. Why is it supposed that section 4 only lets the President borrow money without Congress' permission, and nothing else?
 

Brett asks:

"Why is it supposed that section 4 only lets the President borrow money without Congress' permission, and nothing else?"

Perhaps Brett should identify who so supposes. I don't suppose that Section 4 so authorizes the President to borrow without Congress first acting. This is the Section 4 dilemma. We may have a constitutional crisis if public debt defaults result. But this is an obvious political matter that must be addressed by Congress and the Executive. Perhaps Brett shares what I surmise may be deep in the heart of mls with his hypothetical.

By the Bybee [expletives deleted], Brett's:

"Shag really IS a bit obsessive about guns, isn't he? Personally, I don't see their relevance to the present topic, except in the extremity Bart alludes to."

makes me obsessive NOT about guns but about gun yahoos, with the alluded "extremitiy" he shares with our yodeler, a reminder of what Barry Goldwater said on extremism not being a vice for what he saw as infringements on liberty. Maybe there is a liberty right to default on public debt (however defined).
 

Just a quick note that everything Brett says in the first paragraph of his 9:58 comment is factually inaccurate: Suspension of the writ is not "explicitly" reserved to Congress; Lincoln himself did not order any newspapers closed, though some of his generals did; and while he may have written up an arrest order for Taney, he never issued that order (most historians consider the story entirely false).

Now back to the matter at hand. During the Bush Administration the Republicans were fond of making arguments of "necessity" -- we were "forced" to torture KSM because, well, something awful would happen if we didn't. Oddly, they don't seem as eager to make such arguments today, though the liklihood of actual harm is far greater than their psychosexual fantasies in the torture debates.

Assuming there actually is a case of true "necessity" (and it should be strictly defined), here's what Jefferson had to say in a letter to John Colvin written in 1810 after Jefferson had left the presidency:

“The question you propose, whether circumstances do not sometimes occur which make it a duty in officers of high trust to assume authorities beyond the law, is easy of solution in principle, but sometimes embarrassing in practice. A strict observance of the written laws is doubtless one of the high duties of a good citizen, but it is not the highest. The laws of necessity, of self-preservation, of saving our country when in danger, are of higher obligation. To lose our country by a scrupulous adherence to written law would be to lose the law itself, with life, liberty, property and all those who are enjoying them with us; thus absurdly sacrificing the end to the means. … In all these cases, the unwritten laws of necessity, of self-preservation, and of the public safety, control the written laws of [private property]. …

From these examples and principles you may see what I think on the question proposed. They do not go to the case of persons charged with petty duties, where consequences are trifling, and time allowed for a legal course, nor to authorize them to take such cases out of the written law. In [minor cases], the example of overleaping the law is of greater evil than a strict adherence to its imperfect provisions. It is incumbent on those only who accept of great charges to risk themselves on great occasions, when the safety of the nation, or some of its very high interests, are at stake. An officer is bound to obey orders; yet he would be a bad one who should do it in cases for which they were not intended, and which involved the most important consequences. The line of discrimination between cases may be difficult; but the good officer is bound to draw it at his own peril, and throw himself on the justice of his country and the rectitude of his motives.”
 

Mark, I think Taney, (Who I have little respect for, generally.) put it best:

"The clause of the constitution, which authorizes the suspension of the privilege of the writ of habeas corpus, is in the 9th section of the first article. This article is devoted to the legislative department of the United States, and has not the slightest reference to the executive department."

Might as well deny that any of the other powers Article I details are not specifically given to the legislature, and so can be exercised by the President if he sees fit. Article 1 powers are to be exercised by the Article 1 branch.
 

Is there some reason the seigniorage option has been completely absent from the discussion?

The treasury gets money though - among other things - borrowing it, taxes, fees, fines, tariffs, selling things, and coining money.

There is statutory authorization for the Treasury Secretary to coin money in amounts and denominations as he sees fit. The difference between the face value of coins and the cost to produce them is - by law - deposited in the miscellaneous treasury account.

Contra comparisons to the Weimer republic such coinage would be no more inflationary than an increase in treasuries of the same amount on the balance sheet of the federal reserve. Which is exactly what happend in QEI, QEII and is being contemplated for QEIII.
 

I suspect it's because nobody really wants to test whether that "Legal tender for all debts public and private" business will survive the mint producing a run of $1,000,000,000 coins.
 

I'm not sure how far the Taney quote from Brett takes you. Yes, that section does limit the powers of the legislature. It unclear how this means that specific matters cited are purely legislative in nature.

Congress has the power to declare war. This doesn't mean the President can't repel sudden attacks. It is unclear by that provision alone that while Congress is out of session, in a day and age it could take weeks to get them back in session, the President could not suspect h/c in case of rebellion.

There is a provision regarding "vessels" in the section too. Reading it over, it seems to block states, not just Congress, from doing certain things.

Likewise, I'm unsure why Presidents couldn't "grant" titles of nobility which is often something executives/kings do on their own; thus the nobility clause would limit them too.

As he did in other cases, Taney does too much with that one citation, putting aside if his end result was correct or not. Scalia/Stevens suggested in Hamdi that it might have been. FWIW.
 

I suspect it's because nobody really wants to test whether that "Legal tender for all debts public and private" business will survive the mint producing a run of $1,000,000,000 coins.

It can't possibly be worse than outright default. It should at least be on the table for discussion before this whole "all the laws but one" extra-legal tactic.
 

Joe, as usual, makes good points. I'll add that I even agree that suspension of the writ is generally something left to Congress. My point was that, even if one believes that Congress is the proper body, the Constitution is not "explicit" on this subject.

I also agree with Brad. It's a point I've made here previously.
 

Sure, it can be worse that outright default. (Which, again, isn't in the cards unless the administration wants to deliberately engineer one.) Once the social norm that people accept fiat currency breaks down, enforcing it by state power could be impossibly expensive. And even a state which has defaulted finds it useful to have a working currency.

There are more limits on what the government can do, than are to be found in law. People running the government tend to understand that, and avoid pushing boundaries where they risk making the whole house of cards collapse.
 

Once the social norm that people accept fiat currency breaks down, enforcing it by state power could be impossibly expensive. And even a state which has defaulted finds it useful to have a working currency.

The billion dollar coins would sit in a federal reserve vault. There is no functional difference at all between the government lending itself money (via the fiction of the federal reserve) and the government printing money.

If the gold bugs decide it is the end of the world because they can't figure out that printing money via the federal reserve is equivalent to printing money via the treasury, I doubt the rest of us will even notice, except that we'll see even more of those "sell your gold commercials".
 

As Karl Marx noted, all money is "fiat," inasmuch as it has no intrinsic value (save for making gold jewelry) and is "taken on faith" by members of the society as something that can be traded for what is useful, such as food. If we were a different society, we could be seeing a big run-up right now in the "value" of seashells or whatever.
 

On a related note, Minn's Dem governor just announced he is ending his shutdown of that state's government because the GOP legislature did not agree to his tax increases and instead is accepting the GOP spending cut plan.

Take note, Messrs. Obama and Boehner.
 

The Supreme court has ruled that Presidents can't refuse to spend appropriations, but has never so ruled in the context of the government simply not having the money that was appropriated. True, afaik, closest in Cherokee Nation case, when it said that the Treasury had to pay a bill as long as there was money in the till, even though there was no specific appropriation.

That's part of what makes the 'section 4' argument such a joke: The people advancing it don't take seriously it's implications. If valid, it proves a LOT more than they want proved, it makes the President a virtual dictator any time Congress passes spending bills, and doesn't provide enough money to meet them. Being a virtual dictator means that the president obeys substantive Congressional spending bills, and does not observe purely technical restrictions like the debt ceiling. An odd definition of dictator.

If people understood again, as they more or less did before the dark age of macroeconomics, that the government creates money when it spends, and destroys it when it taxes, then they would realize that the US government can never run out of money.
 

As of July 5th the Treasury had $148 billion in funds and it will be more on August 2nd. That is a huge balance and they are thus planning for a delayed debt limit increase.

It should be noted the August 2nd date is arbitrary. That was a date chosen to stop stealing money from government worker pension funds. There might be some sort of technical reason they can site why that day they have to stop but don't believe it. So anyway that $150 billion in Treasury cash means a couple of weeks of all checks being sent.

We can assume that Treasury assumes by that time they will be allowed to enter the market to borrow more, if only on a week by week or month by month basis.

If the limit persists without new borrowing authority then the 10% of GDP that deficit spending accounts for will be removed from the economy. Within weeks we will be in recession. Which will further erode government receipts and a vicious circle of contraction would take hold.

It would all be a crisis of governance, self inflicted. A possible worst case scenario of deflationary debt collapse and depression would render the constitutional issues secondary to most citizens.

A visit to the JH Kuntsler world.
 

"Being a virtual dictator means that the president obeys substantive Congressional spending bills, and does not observe purely technical restrictions like the debt ceiling. An odd definition of dictator."

Where the "subtantive Congressional spending bills" are these things called "statutes", and the "purely technical restrictions" are constitutional in nature. In short, the choice is between violating a law, and violating the highest law of the land.

Really, I've asked this before, to no reply: Logically, what's the difference between the President responding to a budget shortfall by borrowing Congress has refused to authorize, and his responding to it with taxes Congress hasn't authorized? Why is one 'section 4' approved, and the other not?
 

This comment has been removed by the author.
 

There is no debt crisis, there is a political crisis over the debt. Who is responsible for that?
 

Brett:

They really don't care about freedom. All they care about is power for themselves.
 

Our yodeler yokes a companion:

"Brett:

They really don't care about freedom. All they care about is power for themselves."

As I noted in an earlier comment:
*******

By the Bybee [expletives deleted], Brett's:

"Shag really IS a bit obsessive about guns, isn't he? Personally, I don't see their relevance to the present topic, except in the extremity Bart alludes to."

makes me obsessive NOT about guns but about gun yahoos, with the alluded "extremitiy" he shares with our yodeler, a reminder of what Barry Goldwater said on extremism not being a vice for what he saw as infringements on liberty. Maybe there is a liberty right to default on public debt (however defined).

*********

The power of words versus the freedom of firepower.
 

Michael Kinsey's WaPo op-ed "The McConnell debt plan, explained" includes 5 steps, the 5th step being:

"5) Congress will then pass a responsible budget, raising taxes and cutting spending in ways that nobody minds. The economy will take off. Everyone involved, from either party, will get reelected by a large margin. And we’ll all live happily ever after."

Hold your sides while reading steps 1-4.
 

“Really, I've asked this before, to no reply: Logically, what's the difference between the President responding to a budget shortfall by borrowing Congress has refused to authorize, and his responding to it with taxes Congress hasn't authorized?”

I have been raising this point for the last couple of months. Larry Tribe also raised it in his op-ed. The closest anyone has come to addressing it directly is a commenter on my blog, who suggested that perhaps the difference is that the borrowing power is one that Congress can delegate to the executive while the taxing power is not (I believe this is wrong- J. W. Hampton, Jr. & Co. v. United States). Alternatively, he suggested that the difference is that Congress actually has delegated the borrowing power to the executive, and that disregarding a unconstitutional limitation on a delegated power is different than assuming a power that has not been delegated in the first place.

Apart from this effort, the only responses I have received are from scholars on the other side of this debate, who have acknowledged that it is a fair point and that they do not have a satisfactory answer, but observing that unilateral presidential authority to raise taxes seems absurd in a way that allowing the president to ignore the debt limit does not.

Note that if one accepts Jack Balkin’s position this is not so much of a problem. He would say that ignoring the debt limit would be an extra-constitutional assertion of emergency power on the part of the president. Presumably, if the situation called for it, he would argue that the president could also raise taxes.

This position is also supported by Mark Field’s quote from Jefferson, and of course leads into the question of why Republicans were so eager to support presidential assertions of authority in the last administration, and Democrats were so eager to denounce them, and why both sides have done a 180. There is apparently no possibility of a fruitful discussion of this topic here- which will not stop a fruitless one from occurring.
 

The point mls raises is confusing, particularly the portion about the President responding with taxes that Congress has not authorized. Later on in his comment, mls says:

"Presumably, if the situation called for it, [Jack Balkin] would argue that the president could also raise taxes."

Balkin can respond for himself but I think mls' presumption is a leap well beyond what Balkin had said in his posts. It would be difficult enough for a President to " ... respond[] to a budget shortfall by borrowing Congress has refused to authorize ... " as recognized by mls with respect to his understanding that Balkin might approve " ... an extra-constitutional assertion of emergency power on the part of the president ... " and then take the next step of raising taxes. Each of these put the President between the rock and the hard place, but it is not a "ticking time bomb" scenario, or is it? I asked mls earlier if deep down he would like Obama to take these constitutional risks as that might assure his not being re-elected, the goal of the GOP beginning on 1/20/09, but no response.

By the Bybee [expletives deleted], Paul Krugman's NYTimes column today points to the GOP's goal as the crux of the crisis.
 

I should add, whether fruitful or fruitless, the GOP in Congress apparently wants a food fight.
 

Shag:

We shall see. The GOP establishment appears ready to bail with a variation of the awful McConnell capitulation.

Remember Minnesota and don't go wobbly.
 

Bart writes: "Remember Minnesota and don't go wobbly."

The GOP in MN has largely failed to do anything fiscally responsible at all. They successfully borrowed and kicked the can the last time which is what cause the current problem, and now they've done it again, proving in the end their agenda has nothing at all to do with being fiscally responsible. By not compromising, they've also taken on the responsibility for a total failure of governance that will cost more that any responsible cutting will ever save. Their current deal inflicts steep tax increases which this time will be very difficult to hide.
 

Shag- its not that I am ignoring you, but I really am not sure how to answer your question. If I understand it correctly, it is whether my attempt to analyze the legal issues here in a non-political way is merely a clever way of disguising my political objective of destroying the Obama presidency. (I know, you would never accuse me of being clever). I can’t quite figure out how anything that I might say here would put the President between a rock and a hard place.

This reminds me a bit of the accusation that the term “law and order” was merely a “code” for racism. To which the response was to ask what the code was for “law and order.”

I am trying to look at the issues without regard to the fact that some people will like, and some will despise, any particular president. If the answer to the legal question depends on which camp you fall in, we really don’t need constitutional lawyers, do we?
 

Mls again ignores the fact that one side are the instigators of this political ~not economic- crisis.

There is no evidence of republican concern for the deficit as such. There is no record of anything but grandstanding. No recrord of anything but politics. If the threats are nothing but politics as policy how do their attacks square with the debt clause?
 

I don't know how old mls is to try to figure out whether he was around and understood what was going on with the 1968 presidential campaign and Nixon's Southern Strategy regarding this:

"This reminds me a bit of the accusation that the term 'law and order' was merely a 'code' for racism. To which the response was to ask what the code was for 'law and order.'”

Perhaps he is much younger such that for him the term "law and order" reflects the several TV series he may have grown up with.

With regard to the rock and the hard place, if the debt ceiling issue is not timely resolved by Congress and the President acting together, resulting in the need for self-help by the President to avoid default on public debt (however defined), by means of borrowing funds not authorized by Congress and/or by means of enacting taxes that Congress has not authorized, either of which may not be constitutional action by the Executive, that's the place Obama would be. And even if such action saved America from economic and financial chaos, the long-knives of the GOP would be out for his scalp. And if he failed to take such action and economic and financial chaos resulted from such default, the long-knives of the GOP would be out for his scalp. Which means that the debt ceiling limit is a political issue.
 

Brett, you are reversing what the Court has many times said can have constitutional protection. Which is the spending authorizations, earlier Congresses binding later ones.

There are a number of ways to work around the debt ceiling - basically because the political/legislative definition of borrowing is arcane and without economic meaning. Economically, money is a form of debt, but not for these legal purposes. In several ways, Congress has given the President/Fed/Treasury the power to print money, if necessary, to spend as Congress has authorized. Utterly different from the president deciding on taxation, which would not be based on any law.

But the real problem is that we have an anti-FDR as president, who has drunk the deficit-reduction (i.e. drill holes in the lifeboat) kool-aid. See Barack Obama: America's First Tea Party President
 

Clagacus:

But the real problem is that we have an anti-FDR as president, who has drunk the deficit-reduction (i.e. drill holes in the lifeboat) kool-aid. See Barack Obama: America's First Tea Party President

As a Tea Party member, this suggestion is hilarious.

Where precisely is Barack Obama's actual line item budget reversing even a small fraction of his administration's increase in government spending? Probably in the same place as Nixon's secret plan to end the Vietnam War.

Have you ever thought for a moment that Obama is simply lying his ass off to get reelected the same way he did to get elected in the first place? Remember those 2008 promises to enact a "net spending cut" to "halve the deficit" in his first term by cutting more spending that the cost of his new programs?

Judge Obama by what he actually does and not by what he says and what this president is doing is borrowing a record $1.8 trillion to spend nearly 25% of US GDP.
 

I am. Obama's spending is not enough. The cause of the (highly beneficial, but too small) deficits is the decrease in taxation since the GFC. There are hundreds of thousands fewer government workers now than when Obama took office. This is what affects the real economy, not some meaningless budget number.

Of course most government spending is mis-spent on our innumerable welfare-for-the-rich schemes, first among them the military-industrial complex and the parasitic financial sector. In an economy the size of the USA's, with the size of the problems we have, the phrase for Obama's spending and "stimulus" is: Chump Change.

And now with the debt ceiling antics and the deranged idea of cutting government spending and "entitlements" and destroying the last vestiges of the New Deal - the only things keeping the economy barely afloat - there is a very real prospect of a Great Depression.
 

While Tim Rutten's LATimes op-ed "America's Murdoch problem" may be off topic for this thread, his opening paragraph:

"The Anglo-American democracies owe their durability to many attributes, but two of the most crucial involve restraint: No exercise of authority without accountability; no expression of liberty without limits."

may not be. I'm wondering if Rutten has a source for this as opposed to being his independent thought.
 

Calgacus said...

There are hundreds of thousands fewer government workers now than when Obama took office. This is what affects the real economy, not some meaningless budget number.

Sorry, there are over 200,000 new federal workers, about half civilian and half military.

http://www.opm.gov/feddata/HistoricalTables/
TotalGovernmentSince1962.asp

The federal government pays its average worker about twice the compensation package of the average private worker.

http://www.usatoday.com/money/economy/
income/2010-08-10-1Afedpay10_ST_N.htm

Of course most government spending is mis-spent on our innumerable welfare-for-the-rich schemes, first among them the military-industrial complex and the parasitic financial sector.

Sorry, defense is only about a fifth of spending and only a fraction of that goes to paying for weapons. Most are various welfare state programs serving individuals, primarily social security and health.

http://www.concordcoalition.org/learn/budget/
federal-budget-pie-charts

In an economy the size of the USA's, with the size of the problems we have, the phrase for Obama's spending and "stimulus" is: Chump Change.

$4 trillion in borrowing and spending since the beginning of the Obama Administration is hardly chump change. It is the largest borrow and spending spree as a percentage of GDP in American history apart from WWII.
 

"The federal government pays its average worker about twice the compensation package of the average private worker."

No
http://www.factcheck.org/2010/12/are-federal-workers-overpaid/
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As a Watchdog Starves, Wall Street Is Tossed a Bone

A few weeks ago, the Republican-controlled appropriations committee cut the Securities and Exchange Commission’s fiscal 2012 budget request by $222.5 million, to $1.19 billion (the same as this year’s), even though the S.E.C.’s responsibilities were vastly expanded under the Dodd-Frank Wall Street Reform and Consumer Protection Act. Charged with protecting investors and policing markets, the S.E.C. is the nation’s front-line defense against financial fraud. The committee’s accompanying report referred to the agency’s “troubled past” and “lack of ability to manage funds,” and said the committee “remains concerned with the S.E.C.’s track record in dealing with Ponzi schemes.” The report stressed, “With the federal debt exceeding $14 trillion, the committee is committed to reducing the cost and size of government.”

But cutting the S.E.C.’s budget will have no effect on the budget deficit, won’t save taxpayers a dime and could cost the Treasury millions in lost fees and penalties. That’s because the S.E.C. isn’t financed by tax revenue, but rather by fees levied on those it regulates, which include all the big securities firms.

A little-noticed provision in Dodd-Frank mandates that those fees can’t exceed the S.E.C.’s budget. So cutting its requested budget by $222.5 million saves Wall Street the same amount, and means regulated firms will pay $136 million less in fiscal 2012 than they did the previous year, the S.E.C. projects.

Moreover, enforcement actions generate billions of dollars in revenue in the form of fines, disgorgements and other penalties. Last year the S.E.C. turned over $2.2 billion to victims of financial wrongdoing and paid hundreds of millions more to the Treasury, helping to reduce the deficit.
------
 

It's mostly Bush's debt Bart. And Obama's continuation of your wars.

You demand tax cuts in wartime. The president may take the republicans seriously, but that's less reason to take him seriously.
 

D. Ghirlandaio said...

BD: "The federal government pays its average worker about twice the compensation package of the average private worker."

No http://www.factcheck.org/2010/12/are-federal-workers-overpaid/


The Obama Administration weakly spun the USA Today report two ways:

1) Noting that money paid into the pension system on behalf of current workers is actually going put again to pay retirees. So what? You still owe the current workers the pension which is part of their compensation package.

2) Claiming that bureaucrats are better educated that the private workforce. This is the Administration's excuse for grossly overpaying them, not a rebuttal to the fact they are paid twice as much.

D. Ghirlandaio said...
It's mostly Bush's debt Bart. And Obama's continuation of your wars.


Nonsense. The Dems did not pass a FY2009 budget until April 2009 during the Obama Administration with an over half trillion increase in spending over the Bush budget request. If you remove the 1Q of Bush FY2009 request that was spent during the tail end of the Bush Administration, this leaves the remainder of the Bush request and all the extra spending the Dems larded the budget with for Obama. Then you attribute to Obama the FY 2010 and 2011 deficits for a total of $4 trillion.
 

Cato: Defending Obama Again

" ...the 2009 fiscal year began on October 1, 2008, and the vast majority of the spending for that year was the result of Bush Administration policies. Yes, Obama did add to the waste with the so-called stimulus, the omnibus appropriation, the CHIP bill, and the cash-for-clunkers nonsense, but as the chart illustrates, these boondoggles only amounted to just a tiny percentage of the FY2009 total — about $140 billion out of a $3.5 trillion budget."

Look at the chart, putz.
 

DG:

Your citation attributes all the FY 2009 spending to Bush apart some of the Dem add ons.

FY 2009 was supposed to begin on Oct 08, but the Dem Congress refused to enact a budget and allow the voters to see their spending plans before the election. There was no budget to attribute to Bush except his own $3.1 Trillion spending request. The Dems could have cut spending in their 4/09 FY2009 budget, but instead increased it. The Dems own their 3/4 of the FY 2009 budget.

The TARP was simply an appropriation and not spending. Bush's part of TARP was primarily loans to the banks, GM and Chrysler. These loans have almost all been paid back. Thus, Bush has very little net TARP spending - the initial flows into Fannie, Freddie and AIG.

In contrast, Obama spent over 60 billion nationalizing GM and Chrysler, poured something over 250 billion in maintaining Fannie and Freddie along with a variety of other spending. Very little of that will ever be repaid.

Thus, even Cato can be utterly wrong.
 

Once again you ignore what you want to.

enough.
 

Bart: I said government, including state and local, not just federal. That's what counts economically.

Government health spending is directed toward enriching the wealthy, with health care provision as an afterthought, with the result that we have the worst and least efficient health care system in the world. The subsidies to the financial sector are stupendous, and mostly off budget.

A government selling bonds denominated in its own currency is usually called borrowing, but it simply is not borrowing as that word is used in private transactions. It is the government doing the private sector the needless favor of exchanging one form of its debt, currency, for another, bonds. This is not what happens in private borrowing.
 

Calgacus said...

Bart: I said government, including state and local, not just federal. That's what counts economically.

Fair enough. However, I would not credit/blame Obama for state and local government layoffs. Indeed, Obama pissed away the better part of half a trillion dollars bailing out state governments so they would delay reducing the compensation for and/or lay off Dem public employees.

Government health spending is directed toward enriching the wealthy...

Nearly every large health care provider is a publicly owned company whose stock is owned by nearly every pension fund and diversified 401K/IRA.

A government selling bonds denominated in its own currency is usually called borrowing, but it simply is not borrowing as that word is used in private transactions. It is the government doing the private sector the needless favor of exchanging one form of its debt, currency, for another, bonds. This is not what happens in private borrowing.

Government borrowing is just deferred taxation with interest, which hardly does the taxed private citizenry any favors.

There are two substantial advantages to borrowing in your own currency - (1) your trading partners bring back the dollars they just earned selling you goods and services and then invest it in your government and (2) you can gradually inflate your debt away.

The first grants you a substantial advantage in international trade.
 

We need a better class of bart-buster. The us does not have the worst health care system it has the most ineffecient and cruellest system of any advanced democracy. We spend more for less.
Bart wants freedom and effenciency as he wants low taxes and war. The answer to his comments abour democratic goverment employees is in my link on the SEC.
As for the states, let's do Wisconsin
http://host.madison.com/ct/news/opinion/editorial/article_61064e9a-27b0-5f28-b6d1-a57c8b2aaaf6.html

Bart you're a fucking idiot.
 

D. Ghirlandaio said...

We need a better class of bart-buster...Bart you're a fucking idiot.

Are you auditioning for the role?
 

D. Ghirlandaio :The US does not have the worst health care system it has the most ineffecient and cruellest system of any advanced democracy. We spend more for less. I'm distinguishing the system from the inputs. We have a system that is much less than the sum of its parts. If we exported our way of doing things to Somalia, I think we could easily manage to lower life expectancy there. :)

Bart: Government "borrowing" is not deferred taxation - unless you call all forms of money "deferred taxation". In this case, send all your dollars & bonds to me, and I will bear the burden of the future taxation. :) Government "borrowing" is merely the government allowing the private sector to accumulate tax credits (=dollars) usable in the future, at a discount. It's just a swap of one form of money=govt debt: dollars, for another: T-bonds. It is merely a tool to set risk-free interest rates. "Borrowing" + "QE" equates to printing money, which would be the sensible way to deficit-spend in the first place. There is no danger at all of inflation from deficit spending in today's economic climate. Indeed the evidence tends to be that deficit spending with "borrowing", raising interest rates, is if anything inflationary compared to "printing money".
 

Calgacus said...

Bart: Government "borrowing" is not deferred taxation - unless you call all forms of money "deferred taxation". In this case, send all your dollars & bonds to me, and I will bear the burden of the future taxation. :) Government "borrowing" is merely the government allowing the private sector to accumulate tax credits (=dollars) usable in the future, at a discount. It's just a swap of one form of money=govt debt: dollars, for another: T-bonds. It is merely a tool to set risk-free interest rates. "Borrowing" + "QE" equates to printing money, which would be the sensible way to deficit-spend in the first place. There is no danger at all of inflation from deficit spending in today's economic climate. Indeed the evidence tends to be that deficit spending with "borrowing", raising interest rates, is if anything inflationary compared to "printing money".

The wealth of a country are the real and personal goods and services voluntarily consumed by the people.

Money is simply a means of exchange representing the wealth of a country. It is not analogous to debt.

Government does not create wealth. It takes money on the form of taxes or borrows money to be paid back at interest with future taxes.

If the government borrows in its own currency, it can reduce its debt by debasing the currency. However, this is an indirect tax on anyone who owns currency - primarily the citizenry.
 

Inflation = taxation. Wow. Can we use "taxation without representation" as an excuse to march on the oil companies now?
 

As a kid growing up in Boston (Roxbury District) in the 1930s-40s, I used to enjoy reading Neal O'Hara's Boston Traveler's column "Take it From Me" that included from time to time a "Thoughts While Shaving" segment. I was a little shaver at the time who did not shave but I enjoyed this feature. Perhaps if O'Hara were with us today, he might have had this thought while shaving:

"If Congressional members were to forgo compensation, might that result in 'representation without taxation'"?

The irony is that with taxation we are not getting that much representation.
 

Someone is finally getting serious. Sen. Tom Coburn is offering a budget with $9 trillion in savings including tax reform lowering rates and knocking out corporate welfare.

http://thehill.com/homenews/senate/171905-coburn-set-to-unveil-plan-to-slash-spending-and-raise-hundreds-of-billions-in-new-tax-revenues

This might actually get the budget back to something close to balance as opposed to merely reducing the deficit as does the Ryan plan.

Mr. Obama and the Dem Senate Budget are welcome to offer their own plans sometime before August 2.
 

Jack Balkin's "Spare Change" Treasury Plan B post calls for just two coins. I suggest a third coin to throw into the fountain as in that pop song of yesteryear and wish that the GOP Congress would get its act together.
 

Shag:

A "GOP Congress" will have to wait until the GOP takes the Senate in 2012.

Meanwhile, the GOP House is the only body with its act together and issuing line item budgets.

There has not been a Dem Senate budget in 2 years and last year's Obama budget increasing spending was such a joke it went down 97-0 in the Senate.

Mr. President, time to lead with an actual line item budget cutting spending now or just get the hell out of the way and sign what the GOP sends you.
 

Obama just issued a veto threat of the GOP House bill to raise the debt limit with cuts, future spending caps and a balanced budget amendment. In the veto statement, the President actually said that a balanced budget was a threat to the dignity of seniors.

Welcome to the reincarnation of Juan Peron.
 

Our yodeler's shrillness has an Evita quality, perhaps resulting from hot tea channeled via a rubber bottle.
 

Shag:

You think Michelle O can sing Don't Cry for Me America?
 

If the Republican Congressmen were even slightly serious about a balanced budget amendment, they'd be urging the states to call for a constitutional convention to produce one. They know darned well the chances of getting one out of Congress are essentially zero. That part of the proposal is entirely theatrics.
 

Agree with Brett's last comment.
 

I wholeheartedly agree with the last sentence of Brett's comment. But the constitutional convention route can be quite difficult and perhaps treacherous. I seem to recall that Sandy had a post some time back on this route. Perhaps someone can flag it to check out the commentary at that time. I recall I had a few comments. I located in my pile of finished reading Michael B. Rappaport's "Reforming Article V: The Problems Created By the National Convention Amendment Method and How to Fix Them" available via SSRN at:

http://ssrn.com/abstract=1748854

and appears in 96 VA. Law Rev. No. 7, 1509 (Nov. 2010). Rappaport recognizes the fear of a runaway convention. This may be a major concern for a balanced budget amendment by means of the convention route.

Getting enough states to agree upon the form of such an amendment can be quite difficult. Surely each state would consider how it might be impacted. Some states receive more in federal funds than federal taxes paid. Other states pay more in federal taxes than receive federal funds. Rappaport's bottom line is set forth at the very end of his article (p.1581):

"While the national convention amendment method is broken, a strategy exists that might allow this method to be used one time to pass the state drafting procedure. If the nation ever does decide to employ this strategy and enact something like the state drafting procedure, this may help to restore the federalist character of our Constitution and political system."

Perhaps Sandy has some thoughts on Brett's suggestion.
 

It has been more than 24 hours since our yodeler's comment:

****

Bart DePalma said...
Shag:

You think Michelle O can sing Don't Cry for Me America?

3:19 PM

******

I want to make sure to preserve this comment by our yodeler as the countdown of his work of "friction" gets closer. By my recollection there are 55 days to go. I have pointed out on numerous occasions that our yodeler has demonstrated his enmity for Obama beginning with his inauguration on 1/20/09. He has been vile at time. Now, he cements his enmity with his remark on Obama's wife. So when the magic publication date comes, I want to make sure potential and actual readers of his work of "friction" will be aware of his enmity for Obama, pure hatred. Now, Obama's wife. I was in law school during the Army/McCarthy hearings and this from attorney Joseph Welch to Sen. McCarthy comes to mind:

Mr. Welch: "You've done enough. Have you no sense of decency, sir, at long last? Have you left no sense of decency?"

Yodeler, pick on Obama, pick on me. But ....
 

Shag:

Since you are interested, the edited transcript is scheduled to be returned to me tomorrow.

I have no personal enmity towards Barack Obama. My take on him is that he is the most successful President on the left since FDR.

If this were Europe, it would not at all be controversial to note and analyze Mr. Obama's socialism and socialist policies. Indeed, Obama would be an open socialist in a country like France.

Only in America does the left find it necessary to conceal its socialism. Why? Is it fear of retribution in a Red Scare or a simple political calculation that open socialism is even less successful with American voters than open progressivism? That would be a topic for another book.
 

Brett said...

If the Republican Congressmen were even slightly serious about a balanced budget amendment, they'd be urging the states to call for a constitutional convention to produce one. They know darned well the chances of getting one out of Congress are essentially zero. That part of the proposal is entirely theatrics.

How do you figure it would easier to get 2/3 of the States than it would be 2/3 of the Congress to enact such an amendment?

The states are basically federal government dependents and they know a federal balanced budget means cutting off much of the federal gravy train they use to avoid their own state balanced budget amendments.

Unfortunately, the United States is going to have to reach or cross the Rubicon of sovereign insolvency before a BBA has a serious chance of passage.

That day may not be too far off given the pathetically inadequate responses to the debt crisis coming from this President and Congress.
 

Bart, if you haven't got enough states to ratify, you haven't got enough states to originate. So if a convention won't work, an amendment is irrelevant.

You'll never originate an amendment to limit federal power from Congress. Congress has no interest in limiting it's own power. The states, OTOH, do have some interest in that direction.
 

Brett said...

You'll never originate an amendment to limit federal power from Congress. Congress has no interest in limiting it's own power. The states, OTOH, do have some interest in that direction.

I think the best way to sell this is to argue behind the scenes during an election year that Congress enacting the BBA would look great to the voters and the states would never ratify it anyway.

Then once you are past the Congress, start working on the states. arguing essentially the same thing.

Then when you are down to the last few states, some very large Tea Party rallies raising hell outside the legislatures might just be enough to push it through.

Indeed, 2012 might be a real good year to push this hard with 20 Dem senators up for reelection in states with very unhappy constituents ready to fire them.

First, the GOP needs to offer a legitimate amendment with caps on spending and borrowing with an override with a reasonable 3/5 of Congress or a declaration of war.

Oh well, one can day dream stuck in the back of the express train to sovereign insolvency...
 

"think the best way to sell this is to argue behind the scenes during an election year that Congress enacting the BBA would look great to the voters and the states would never ratify it anyway."

The Republicans already perfected the fake constitutional amendment drill back in '95: What you do is bring multiple versions to a vote, so that everybody who has to can vote for the amendment, without any risk of any one version getting enough votes for the states to have a chance to ratify. That's how they managed the balanced budget and term limits amendments back then, because they didn't want to risk their actually being ratified by the states, and that's how they'd probably do it today.

Let the amendment get out of Congress, and whether it becomes part of the Constitution ceases to be in their control. That's why they'd never let it get out of Congress. Not that there's much risk of that, given the number of seats the Democrats have.

No, I stick by my position: If they were at all serious about the amendment, they'd be asking the states to hold a Convention. They're still playing a bait and switch with their base.
 

With this from our yodeler:

"Only in America does the left find it necessary to conceal its socialism. Why? Is it fear of retribution in a Red Scare or a simple political calculation that open socialism is even less successful with American voters than open progressivism? That would be a topic for another book."

sounds like his next work of "friction" may be:

"REHABILITATING SEN. JOE McCARTHY"

As for our yodeler's lame claim that he has "no personal enmity for Barack Obama," one has only to go back to Balkinization archives from 1/20/09 to his recent attack on Mrs. Obama for his comments hoisting himself with his own petard.
 

The argument is made that most if not all states are subject to balanced budgets by constitution or otherwise; therefore, the central government should be similarly limited. But can a central government function efficiently if so limited? If the answer is "yes," then what would be the wording of a balanced budget amendment acceptable to a convention? Can the wording anticipate future situations that need be addressed? If not, then perhaps another convention would be necessary.
 

It may be kinda late in the day for this thread, but on the subject of a balanced budget amendment, whether initiated by Congress or a convention, take a peek at Walter E. Dellinger, III's NYTimes op-ed "An Amendment That Could Not Be Enforced" addressing a currently "popular" form of such an amendment which provides for judicial involvement in case of disputes.
 

Let me step back and ask an abstract question: Suppose the President (a President) is faced with a decision about where he has two choices. A choice is clearly legal, but in the evaluation of the president is likely to lead to disaster. Choice B is much better (again, in the decision of the President), apart from legal considerations, but it is clearly unconstitutional.

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