36 thoughts on “The Consequences Of Default”

  3. 🙂

    These surely are the signs that Judgment Day is nigh:

    Mankind’s dream of high speed government rail service between Chicago and Iowa City tragically dies.

    Chevy Volt rebate checks bounce, stranded owners more than 50 miles from outlet.

    Displaced teenaged policy wonks organize under Supreme Warlord Ezra Klein.

    NPR news segments no longer buffered by soothing zither interludes.

  4. So House holds vote on Reid bill, while Harry Reid actually keeps the fillibuster of his own bill alive to delay a vote until Sunday (I guess he wanted to hit the talkshow circuit), and Obama complains about the House wasting precious days. When Obama is partying on his birthday while government services are shutdown; everyone will be talking about how he wanted the shutdown to happen.

  5. Obama: “Sorry your Social Security check didn’t go out this month because I lied about having a plan and all I could think of to do was reject everything that was sent to me. Here, have some cake.”

  6. Beltway policy experts begin living by own wits; after 45 minutes there are no survivors.

    There really wasn’t much more to be said after this one.

  7. http://www.treasury.gov/initiatives/Documents/Debt%20Limit%20Myth%20v%20Fact%20FINAL.pdf

    and the WSJ article at http://online.wsj.com/article/SB10001424053111903635604576472500261491910.html

    Both are sticking to the story that although unlikely, it is legal for the treasury to choose to pay “other obligations” over interest and repayments on the debt.. I bet Obama would do it too.

    If you’re interested in seeing Rand receive his award, tune in to http://www.spacevidcast.com/ now.

  10. I bet Obama would do it too.

    Obama break the law and others support him? That would be as crazy as not paying bond holders in the auto industry. It could never happen. /sarc

    Where are the tar and feathers? This is amazing and terrifying.

  13. That’s a worrying post Ken. Why did Sen Toomey introduce a bill to give priority to paying the debt obligations if the treasury is already required to? If they’re not, then has that or any other priority bill passed?

  14. That 14th Amendment clause that many left-wingers want Obama to abuse requires it. The debt of the United States shall not be questioned. Contrary to crank left-wing pundits, this does _not_ allow the President to raise the debt limit and borrow on his own authority (that is covered by Article 1 Section 8 — it is the responsibility of Congress). It _does_ require him to pay the debt before all other obligations.

    In any case, choosing to pay anything else before paying interest on the debt would clearly be a _choice_, an entirely unnecessary choice, and thus the responsibility of Barack Obama alone. Neither I nor the general Treasury investor think Obama is that evil. (The interest rates investors demand continues to decline, showing _increasing_ confidence in the debt of the United States as this “crisis” unfolds).

    Obama is an awful President to be sure, but still nowhere near having the capability of making such a destructive choice. But that is the implication of all this “default!” scare, that Obama is such a traitor that he would really take the country down by wholly unnecessarily choosing to default with malice aforethought. Things aren’t nearly that bad, but it’s terrible that most Republicans seem to have been intimidated by this threat.

  15. That’s a worrying post Ken

    Yes it is. You see, these truths were self evident so nobody thought they’d actually need to put them down in writing. But now we’ve got an admin. that is completely blind to these self evident truths (like debt holders get paid before shareholders. That labor is fully compensated by the wages they accept.)

    FBW, is absolutely right. I’d considered that point myself before the link which I thought brought the mindset of the current admin. into more frightening clarity.

  16. The fact that the republicans consider it a threat tells you how lost the elites are. Review Bill Whittle’s what we believe part 2.

  17. So are you saying Toomey introduced a bill for a “no murder on thursdays” law?

    “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.”

    How does that say what you’re saying it says? In three posts I’ve gone from assuming that people haven’t been lying in the last month about the treasury’s obligation to pay debt before paying other obligations.. to being a little confused.. to being worried.. and now I’m outright skeptical.

    Can you show me a law that says Obama can’t tell the treasury to choose to pay entitlements over repayments on the national debt? I’m not interested in whether or not you think it’s the stupidest idea in the world for him to do that – this is Obama, doing stupid things is *what he does* – I want to know what the law is that says he can’t do it. Is there one? Or have I been suckered here?

  18. I think you’ve got it right Trent. Remember, we simple people have to be told by lawyers what the meaning of is, is.

  21. Is anyone else disturbed by this phrase, “super congress?” It looks like the latest deal is an Obama win with false cuts and moving the ball past 2012.

  22. Mr. Obama.

    Listen carefully! We are a group of individuals that represent a small Libertarian faction. We respect your presidency but not the Hollywood liberals that it serves. At this time we have control over your chances for reelection. If you want to wake up in the same bedroom in February, 2013, you must follow our instructions to the letter.

    You will withdraw $1,400,000,000,000 from the Federal Reserve Bank $1,000,000,000,000 will be in $100 bills and the remaining $400,000,000,000 in $20 bills. Make sure that you bring an adequate size fleet of armored cars. When you get
    home you will put the money in a large number of brown paper bags. I will call you
    between 8 and 10 am tomorrow to instruct you on progress in the Debt Ceiling legislation. This will be exhausting so I advise you to be rested as you will have to repeat everything in 6 months. If we monitor you getting the money early, we might call you early to
    arrange an earlier delivery of the money and hence a earlier vote on the Debt Ceiling.

    Any deviation of my instructions will result in an immediate drop in your approval rating. You will also be denied access to prime-time television. The two gentlemen watching over your legislative agenda in the House of Representatives do not particularly like you so I advise you not to provoke them. Speaking to anyone about your situation, such as the David Gregory, Larry David, Barbra Streisand etc., will result in your the Federal government defaulting on its obligations. If we catch you talking to a stray dog, the government defaults. If you alert the Federal Reserve, the government defaults. If the legislation is in any way amended or qualified with a signing statement, the government defaults. You will be scanned for Teleprompters and if any are found, the government defaults. You can try to deceive us but be warned that we are familiar with Chicago politics and tactics. You stand a 99% chance of defaulting on the government’s obligations if you try to out smart us. Follow our instructions and you stand a 100% chance of paying the bills. You and your family are under constant Media scrutiny authorities. Don’t try to grow a brain Barry. You are not the only ruthless propagandist around so don’t think that making another vidio showing Granny pushed off a cliff will be difficult. Don’t underestimate us Barry. Use that good Indonesian common sense of yours. It is up to you now Barry!
    Victory!
    N.R.C.C.

  23. It’s fairly straightforward logic:

    (1) The 14th Amendment requires the President to pay U.S. debts when they’re due: see the Supreme Court language below.

    (2) No constitutional law requires the President to pay for anything else. Some statutory law does, but constitutional law trumps statutory law.

    (3) Therefore the President must pay the debts before anything else.

    Here’s what the Supreme Court said in _Perry vs. United States_:

    The Constitution gives to the Congress the power to borrow money on the credit of the United States, an unqualified power, a power vital to the government, upon which in an extremity its very life may depend. The binding quality of the promise of the United States is of the essence of the credit which is so pledged. Having this power to authorize the issue of definite obligations for the payment of money borrowed, the Congress has not been vested with authority to alter or destroy those obligations.

    Observe that it is _Congress_, under Article 1 Section 8, that has the power to borrow money, not the President. That is why Congress must vote to raise the debt ceiling. But even Congress can’t pass a law to refuse to pay that debt. Much less could the President on his own authority.

    Furthermore:

    The Fourteenth Amendment, in its fourth section, explicitly declares: “The validity of the public debt of the United States, authorized by law, . . . shall not be questioned.” While this provision was undoubtedly inspired by the desire to put beyond question the obligations of the government issued during the Civil War, its language indicates a broader connotation. We regard it as confirmatory of a fundamental principle which applies as well to the government bonds in question, and to others duly authorized by the Congress, as to those issued before the Amendment was adopted. Nor can we perceive any reason for not considering the expression “the validity of the public debt” as embracing whatever concerns the integrity of the public obligations.

    IMHO, even Obama’s _threat_ to default questions the validity of the U.S. debt. He should be impeached for it.

  25. “Mr. Architect”???

    As for Toomey, I’m no mind reader. He may not have done the required constitutional scholarship, or he might have just been trying to score rhetorical points with a “no murder on Thursday” act. In any case, it isn’t relevant for interpreting what the 14th amendment means.

  27. Former Federal Bunny Inspector’s morbid obesity causes plunge through un-inspected, rent-controlled apartment floor, apparently caused by monumental eating binge of now outlawed* Ho-Ho’s, Snickers and Hershey’s Kisses, after losing final appeal of Federal, State and Union disability claims.

    * Title 21, Part 800.66936: Percentage of Sugar and Other Carbohydrates Allowed in Food when Purchased with Food Stamps – commonly known as “Michelle’s Law”

  29. Trent, it’s the same argument about the bill of rights. We have those rights even if we didn’t have any amendment specifying them. None of the first ten amendments actually change anything. But imagine if they weren’t written down. We are supposed to have a limit government with specific enumerated rights and none other. Citizens have unlimited rights but are not allowed to harm others. You can number the governments rights. You can not number the peoples rights. Of course, they’ve added ‘rights’ that aren’t at all such as the right to steal from other citizens (which used to be defined as harm rather than a right.)

    The founders assumed humans to be sinners. But they never imagined the adults would turn over control to the children.

    The courts are supposed to rule with the presumption of liberty and free citizens with a restricted government. They’ve turned that on its head.

  30. ken, I don’t disagree with anything you said but I have no idea why it is relevant 🙂 My confusion was in the terms “shall not be questioned”. It can be interpreted as either “can the government really borrow money?” or as “can the government really refuse to pay back money it borrows?” The supreme court has ruled it is the latter, and that such questions are prohibited under the constitution. That’s good enough for me.

  31. It’s relevant because in order for the U.S. government to function properly certain things are understood such as the historical meaning of things. The general population may or may not understand them, but the courts are supposed to. However, the intellectual virus has willfully contaminated our understanding (what is, is, is an example. Three in a row. Is that a winner?)

    Things that are generally known and should not have to be written down, suddenly do need to be written down because some f–k–g [frankly there isn’t any expletive phrase strong enough] jackass decides to change their meaning.

  32. “shall not be questioned” has a historical meaning which the current admin seems willing to ignore (or just scare granny.) That’s the relevance.

  33. The main function of the “default” hysteria was to scare the Republicans, and alas it mostly worked.

  34. In the Kentucky Constitution it says “The right of the peope to keep and bear arms, in defense of themselves and of their state, shall not be questioned.” So every time a gun grabber questions gun ownership, he’s violating my Constitutional rights.

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