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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: tejek who wrote (746450)	10/13/2013 10:07:19 PM
From: TimF	1 Recommendation Recommended By d[-_-]b Read Replies (2) \| Respond to of 1576346

For the common sense part - Not much point in linking to it. Common sense is not something that has an authoritative source. As for the constitutional requirement - Direct to the source - Section 4. The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any state shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void. law.cornell.edu ------- Commentary - The Priorities Laurence H. Tribe is the Carl M. Loeb university professor and professor of constitutional law at Harvard Law School. Updated January 13, 2013, 6:31 PM The 14th Amendment commands that “the validity of the public debt of the United States, authorized by law … shall not be questioned.” If the debt ceiling is not raised soon, however, we may be forced to default — thereby violating this constitutional requirement. Paying bondholders before other bills avoids default and is the approach that does the least violence to the Constitution. One solution to this problem — floated by former President Bill Clinton and House Minority Leader Nancy Pelosi, among others — would have the president unilaterally disregard the debt ceiling statute to prevent this outcome. But as I wrote two years ago, this is no solution at all. It faces an insurmountable legal problem: nothing in the 14th Amendment suggests that the president may usurp the power “to borrow money on the credit of the United States,” which Article I, Section 8 of the Constitution vests in Congress, in order to prevent a default. It also faces an insurmountable practical problem: the legal cloud that would hang over any new bonds would result in a steep increase in interest rates — costing billions. A second approach calls for the Treasury to “prioritize” the payment of bondholders when allocating incoming tax revenues. But prioritization comes at a cost: the very reason we need to borrow is that incoming revenues don’t cover all our spending. So prioritization requires skipping other payments mandated by law — perhaps payments on Social Security, Medicare and defense. From a constitutional perspective, this approach is preferable to outright default, because it would ensure that the 14th Amendment’s basic promise is kept. It is likewise constitutionally preferable to unilaterally ignoring the debt ceiling, because it does not entail the presidential usurpation of a power specifically committed to the legislative branch. Apart from the technically legal but wildly unrealistic device of minting a trillion-dollar platinum coin, prioritization is the approach that does the least violence to the Constitution. nytimes.com ...But this tortured interpretation of the 14th Amendment actually shows why members of Congress — as well as the pundit class — should have participated in the public reading of the entire Constitution earlier this year. If they had done that, they might not have skipped over an essential passage regarding the power to borrow. Article I, Section 8 — the same part of the Constitution that gives Congress the power to tax, appropriate, and “regulate commerce . . . among the states” (long the Left’s justification for any regulation of activity, or in the case of Obamacare, the inactivity of not buying health insurance) — also explicitly states: “The Congress shall have power to . . . borrow money on the credit of the United States.” The 14th Amendment doesn’t affect this power one bit. It applies only to debt “authorized by law,” and as Catholic University Law School distinguished scholar John S. Baker wrote recently in NRO, “Only Congress — not the president — makes law.” What it perhaps does do — based on one Supreme Court case — is require the Treasury Department to prioritize payment of existing debt to bondholders over other spending in the event the debt ceiling isn’t raised. So if the government finds itself short on cash, it has to keep paying the bondholders and find the necessary savings in some other part of the budget. This is exactly what conservatives like Sen. Pat Toomey (R., Pa.) have been trying to codify through legislation. As Michael McConnell, the distinguished director of the Stanford Constitutional Law Center, has put it, “the real effect of Section Four of the Fourteenth Amendment is almost the opposite of what hopeful voices in Washington are saying.” nationalreview.com So the question is, if Congress does not raise the current debt ceiling, will the federal government run out of money needed to pay its existing debts? The answer is clearly No. A reader supplies the math: On average the federal government’s daily expenditures are about $16.7 billion; receipts are about $14 billion, implying an average daily borrowing requirement of about $2.7 billion. So the planned flow of revenues is now about $650 billion less than the planned flow of expenses…about $2.7 billion a [business] day, $650 billion annually. So the “default” scenarios are bogus. Interest on the $16 trillion in debt is covered by a factor of about 10x by revenues! That puts the federal government deep into AAA land. Revenues would have to fall by a staggering 90% to jeopardize interest payments. And, of course, retiring principal by “rolling over” maturing debt can never require an increase in the debt ceiling, since there is no net increase in the nation’s debt, even if the money used to repay the original principal is borrowed. So what will actually happen if Congress doesn’t increase the debt ceiling by approximately October 17? The government’s debt obligations will be paid, but reductions in other spending will start to become necessary. In effect, leaving the debt ceiling as is would function as a spending cut. This is why the Democrats hate the idea so much. They know there is zero chance of default, but they are horrified at the prospect that voters and taxpayers may find out that there is a relatively simple way to bring about spending reductions that would create, in effect, a balanced budget. Hence the hysteria. powerlineblog.com