Three-Ring Circus

18 January 2023

 

Cogito Ergo Non Serviam

Debt Ceiling Crisis Looms

The US has a limit to the amount of debt the federal government can accumulate. This is economically and politically stupid. It makes no allowance for emergencies or sudden revenue shortfalls. At the same time, Congress authorizes spending at defined levels in each appropriations bill regardless of revenue levels. Finally, the Fourteenth Amendment says the full faith and credit of the US government is not to be questioned. In other words, these three things cannot really coexist if anyone is really paying attention. It would be ideal if this fight over the debt ceiling, which the government will hit tomorrow, were the last. That will require the Democrats to get back control of Congress.

The idea behind the debt limit is that it will force government to live wihtin its means, whatever that is. It has never achieved anything like reduced spending. Instead, it results in turmoil in the markets every so often and sometimes a government shut down. It should go.

The fascist wing of the Republican Party, however, seems to want to go over the fiscal cliff. The Treasury can undertake "extraordinary measures" to push the crisis off to August. Then, the US will fail to pay its debts in full and on time. Given the role the US dollar plays in global trade, that would probably result in a global recession or depression. Yet the fascists seem to think that is preferable to the US government honoring its checks.

The Biden administration has proposed a simple bill to raise the debt-limit, and Speaker Kevin McCarthy (R-CA) has said that will not do. He wants to link domestic spending cuts to the debt limit. The administration should not even return his calls on this one. Peeling off enough GOP members to pass a debt limit increase is likely if the alternative is an economic disaster. A good dozen of the Wall Street Republicans exist, and they can be counted on to save the day in August, but not before.

Ideally, the administration will take the debt limit to the Supreme Court. The argument is easy enough. There is a debt limit that Congress established, and when Congress votes to exceed that limit, it is implicitly raising the limit. Therefore, if Congress spends more than the debt limit would allow, the spending authorized take precedence.

In addition, the Fourteenth Amendment, Section Four reads in part:

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.

It is crystal clear. If the Congress authorizes debt, it must be paid, end of discussion.

It will take the GOP dominated Supreme Court almost no time at all to toss out the debt limit as unconstitutional. The alternative is that they will crash the economy, and their rich backers will not like that one bit. Upholding the debt limit would cost the billionaires a chunk of their cash.

That said, the House Republicans will open a three-ring circus, and there will be a great deal of sturm und drang about it all. They will raise hundreds of millions from their myopic backers, and they will negotiate in bad faith. A handful of them want to go off the cliff. If that happens, it will be the end of the Republican Party, and while it is tempting to let them, the cost is too great to the poor of the world.

So long as the administration stonewalls the House, all will work out.

© Copyright 2023 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Ubuntu Linux.



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