9

Section IV of the 14th Amendment to the US Constitution says the validity of the debt "shall not be questioned." Yet, Congress plays politics with the debt ceiling (as put in this Atlantic article, they "point a gun at the national credit rating and scream, 'One step and I'll shoot!'"), and default has been threatened over the course of these battles (thankfully, that's done for this administration, just before another threatened default). The financial market shows evidence that investors "view the credit of banks as superior to that of the U.S. government."

What is the constitutionality of these limits and political games that do seem to cause people to question whether or not the debt will be paid?
Wasn't the point of this amendment to prevent Congress from playing politics with the debt?

  • Key to your concern is the value of one dollar. The value of one dollar is unpredictable and variable and is a red herring. Also, the value of the underlying asset, the dollar in this case, only has to move slightly to enable enormous inflows or outflows of value because financiers operate with leverage. – Ron Royston Nov 14 '15 at 1:02
4

Congress is not questioning the validity of the debt when it refuses to allow more borrowing.

In fact, the only one questioning the validity of the debt is the President, who claims that he would default on our debts if we did not allow more borrowing to take place. Currently, we take in enough money to pay off our debt obligations every month. There's even enough left over to pay for other things, like military and medicare. But there isn't enough to pay all of the bills. The President, by threatening default if he does not get what he wants - unlimited borrowing power - is the only party here who is arguably questioning the validity of our debt. I suspect he could be impeached for that if the Congress wanted to do so, but if they wanted to do that then they could have just avoided the whole question in the first place by voting for a balanced budget.

To illustrate, suppose government spending were composed of Military, Medicare, Social Security, Education, FBI, and Debt Service. What the president says is that if he did not physically have enough money to pay for all of those things (due to his lack of borrowing power, not given by the Congress) he would not prioritize Debt Service first. He would pay for Education, FBI, Social Security, Medicare, and Military and ignore the debt because he did not have enough money left over. Therefor, if anyone has questioned the validity of the debt, it is the President.

  • "What do you mean with they president voting for a balanced budget?" Congress makes the budget and not the president. All of those areas you listed come with legal obligations. – Christian Nov 11 '15 at 12:11
  • If Congress wanted to impeach the president for failing to distribute the funds appropriately, they could have just avoided the whole problem of a lack of funds in the first place by voting to balance the budget. Congress controls the power of the purse. – Mr. A Nov 11 '15 at 12:19
3

Congress is not questioning the validity of the debt.

Congress occasionally refuses to authorize borrowing more. If the government cannot borrow more, it must run a balanced budget. The U.S. government's budget is currently so unbalanced that large spending cuts are required to balance the budget.

In theory, Congress could raise taxes instead of implicitly preventing spending. However, when Congress refuses to authorize borrowing more, it rarely is in a mood to raise taxes by enough to immediately balance the budget.

  • In other words, the debt ceiling is not about the validity of existing debt; it is about authority to incur additional debt. As you note in your last paragraph, Congress is not "in the mood" to raise taxes. That's not the same as saying that spending cuts are required to balance the budget; the budget could be balanced with increased taxes, too, but Congress doesn't want to do that. – phoog Nov 10 '15 at 7:55
  • @phoog or more accurately the elected officials on Congress don't want to raise taxes because they want to get reelected – ratchet freak Nov 10 '15 at 9:03
  • @ratchetfreak whether they are correct about the two being mutually exclusive is another matter, of course. – phoog Nov 10 '15 at 16:20

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.