StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between



Why Is Everyone Suddenly Talking About The 14th Amendment?

05 Jul 2011
Posted by Stan Collender

It's hard not to be impressed with how fast this discussion has gone from underground rumor to mainstream option. From my column in today's today's Roll Call.

Why Is Everyone Talking About the 14th Amendment?
Until about two weeks ago, the 14th Amendment to the Constitution had never come up in conversation during my closer-to-four-than-three decades of work on the federal budget and Congressional budget process.

I'm not exaggerating for effect when I say never: It absolutely wasn't mentioned. In fact, none of the federal budget experts whom I rely on for information, analysis and support — including many of the biggest and most esteemed names in the business — was even aware that the 14th Amendment was applicable in any way to what we do.

That all changed last week when the amendment suddenly became the hot topic among federal budgeteers. Speculation about what it meant and how it could be used by the White House rapidly changed what could happen in the impasse over increasing the federal debt ceiling, which the Treasury Department says will be needed by Aug. 2.

The 14th Amendment is one of three ratified after the Civil War to guarantee individual rights by prohibiting slavery (13th), defining citizens to include all those born in the United States (14th) and guaranteeing all citizens the right to vote regardless of race (15th).

But it was the heretofore largely unknown Section 4 of the 14th Amendment that set federal budget hearts fluttering and minds racing last week. Section 4 states, "The validity of the public debt of the United States, authorized by law ... shall not be questioned." In most situations that would seem self-evident, which is why federal budgeteers were largely, if not totally, unaware of the provision.

But as concern mounted last week about lawmakers' willingness to act before the government's cash situation becomes critical, more attention was paid to Section 4 and the notion that it might make a statutory increase in the debt ceiling unnecessary and irrelevant. A number of Democratic leaders reportedly said the amendment supersedes any legislative limits and allows (or even requires) the Treasury to borrow so that, in the words of Section 4, existing bondholders would not question the validity of the U.S. debt.

If this interpretation of the 14th Amendment is correct, the political implications are obvious and far-reaching: The White House will have a self-executing way around the debt ceiling impasse.

I'll leave it to those with a legal background to interpret the very limited case law on the topic. I'll also let the lawyers hash out whether lawmakers have standing to ask the courts to intervene if the president uses the 14th Amendment to borrow in the absence of a legislative increase to the debt ceiling.

Those two questions may be beside the point in any case. The debt ceiling impasse is as much a political problem as a legal issue, and the White House's use of the 14th Amendment to justify borrowing would likely result in a political, rather than a legal, response.

At the very least, there would be fire-and-brimstone speeches from House and Senate Republicans and GOP presidential candidates denouncing the president and Treasury secretary for borrowing without Congressional approval. Efforts to block President Barack Obama's agenda, including all nominations, would be likely, and fiscal 2012 appropriations, which absolutely require Congressional approval, would be jeopardized.

But the most extreme response might also be the most likely in the current political environment: a threatened or actual impeachment in the House of the president, Treasury secretary or both. This is not idle speculation. A number of people I communicated with this past week thought that the president invoking the 14th Amendment to justify federal borrowing would lead to impeachment proceedings in the House, even if there is little chance that the Senate would ever vote to convict.

There are two ironies in the 14th Amendment scenario.

It would be the second time in the past 16 years that Congressional Republicans' misunderstanding of the debt ceiling would thwart their attempt to use it to force a president's hand. In 1995 and 1996, the Newt Gingrich-led GOP devised a strategy to force President Bill Clinton to agree to big budget changes. Republicans had relied on the long-held and almost mystical belief that an increase had to be enacted by the time the debt ceiling was reached, but that ended up not working when Treasury Secretary Robert Rubin showed that the assumption was wrong.

Having learned from that situation, Congressional Republicans now assume that the truly important deadline is when the cash actually runs out. Based on the 14th Amendment, that, too, could prove to be completely wrong.

Second, Republican "birthers" have been relying on the 14th Amendment to argue that Obama is not eligible to be president. The irony of the White House using that same amendment to frustrate Congressional Republicans would be unmistakable.

 

>>Efforts to block President

>>Efforts to block President Barack Obama's agenda, including all nominations, would be likely, and fiscal 2012 appropriations, which absolutely require Congressional approval, would be jeopardized.>>

How is that different from today GOP efforts? They're already doing all that.


A new level of crazy

Section 4 of the 14th amendment has never been mentioned because nobody has been crazy enough to actually take the full faith and credit of the United States hostage before now. The Republicans on the Hill want to amputate most social spending, and apparently are willing to risk destroying the USG's credit rating in order to get the cuts.


I think that, for all the

I think that, for all the reasons you state, it will only make sense for Obama to invoke the 14th _after_ the cash deadline passes. If markets go into freefall and contractors and seniors seriously think they won't get paid, Obama will be seen as rescuing the nation. If not, he will be seen as playing politics.


Spot on!

jwg - You are absolutely correct. Invoking the 14A now would be an enormous mistake, with major negative repercussions for Obama. Invoking it after the Dow has fallen by 2,000 points, Social Security checks have stopped being sent, and soldiers have stopped being paid would paint Obama as a hero and virtually guarantee that the GOP loses every single seat it gained in the last election plus many more, in the elections to come. I really hate to see these sorts of political games being played, but as far as strategies go, it's hard to beat this one.


14th

It sounds from your intro paragraph that any current misunderstanding or lack of understanding of the debt ceiling, if that's what it turns out to be, is mutual on the parts of the two parties. The Supremes aren't doing anything useful right now; I'm sure they'd be happy to assist.


Why Everybody is Talk'in Bout It

Everybody's Talkin Bout it, but I don't hear a word they're say'in, because the fact of the matter is that the 14th Amendment is just being brought up in an attempt to gain political leverage. My apologies to the late Harry Nilsson.


Tarbaby or Briar Patch?

Let's remember that it is nutty to be reducing spending or raising taxes during this heck of a recession. A lot of this 14th Amendment focus is coming because it is hard to talk Keynesian sense at the moment.

The 14th Amendment gambit could be played as the adult response to a bunch of Washington crybabies holding their breath. "We are here doing the work of the people, working every day to help us all get out of this recession. We can't threaten the momentum of our economy by doing all this crazy stuff, so I'll use the 14th to keep us moving forward. If the House wants to try to impeach me for doing that, bring it on!"

The noise machine will try to tar Democrats with what--not being bipartisan? Dems would have to fight back as the President did last week.


The US already defaulted in spite of the 14th -- twice

Firstly, *if* one takes the 14th amendment as saying it is unconstitutional to default on the debt, then the result is that the govt must service the debt first, prioritizing it over other obligations not so guaranteed by the Constitution.

As there is plenty of revenue to service the debt if payments for Medicare, defense, etc., are cut 40% or so, that takes care of that. It's surely no constitutional reason to ignore the debt ceiling.

Why the Republicans would want to take political credit for shorting Medicare, defense, etc., by 40% is beyond me -- but there is no constitutional reason why they can't commit suicide this way.

Beyond that, the US has already defaulted *twice* on its debt after the adoption of the 14th.

Most recent was the "Gold Clause cases" in 1933 when FDR refused to service US bonds as required by clauses that specifically required them to be paid in gold, instead doing so with fiat money.

When the case got to the Supreme Court five justices, a majority, called the action "default" and "repudiation". (Justice Brandeis privately stated he would never buy US bonds again.) However Chief Justice Hughes' opinion held this to be a wrong without a remedy.

Hughes wrote: "Contracts, however express, cannot fetter the constitutional authority of the Congress ... The question before the Court is one of power, not policy."

Justice Roberts, also with the majority, wrote: "As much as I deplore this refusal to fulfill the solemn promise of bonds of the United States, I cannot escape the conclusion, announced for the Court, that the government, through exercise of its sovereign power, has rendered itself immune from liability."

It's very hard to square those statments and this decision with "It is unconstitutional to default on US bonds because of the 14th Amendment". (See Perry v. US.)

The earlier default was in the Legal Tender Cases after the Civil War, when likewise the govt paid off bonds that had been issued for gold with inflated greenbacks.

That time the Supreme Court *did* hold the action to be unconstitutional -- but on the same day of its ruling President Grant named two new justices who immediately voted to reconsider, and then to reverse.

It was this unhappy experience that caused investors to require that government bonds include clauses *specifically* stating that they would be repaid in gold of specified amount -- if with no more effect on FDR than on Grant.

BTW, in neither the Gold Clause cases nor the Legal Tender cases was the 14th Amendment even an issue -- it was not even worth arguing.

So the idea that the 14th Amendment constitutionally prohibits default on US bonds is more Internet bunkum.

The 14th Amendment means exactly what it says as to the debt: "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."

That was enacted to prevent legislators from Southern states returning to Congress after the Civil War from passing any law stating that debt incurred to fund the war was invalid -- or any law causing the US to pick up the Confederacy's debts, as the 14th continues: "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".

But the fact that a debt is "unquestioned as valid" does *not* mean it can't be defaulted upon, or be unilaterally restructured by the govt (which is default under modern law). The debt of Greece is unquestioned as valid, the debt of General Motors was unquestioned as valid. Nobody ever questioned their validity for a moment.

In fact, for a default to occur, a debt *must* be valid, eh?

BTW, the US also defaulted on its debt in 1790 due to inability to pay ... arguably did so when Nixon closed the gold window (though nobody sued) ... and defaulted on a small number of T-securities in 1979 due to administrative problems that delayed payments due on them -- causing an apparent increase of 0.6% on T-bill rates -- as noted at Tax Vox.

That is four, maybe five, clear defaults, three of them major, with two of them litigated to the Supreme Court where they were upheld (if only after some court-packing in one case).

So much for "it's never happened" and "it would be unconstitutional".


Not all Defaults are the same

In response, your analysis makes no sense if you take the plain meaning of the words "valid" and "default." Valid means legally binding due to having been executed in compliance with the law. Default means failure to fulfill an obligation, especially in connection with a failure to pay a debt or appear in a court of law. So, if a debt is valid, it must be paid. Default means a failure to fulfill that obligation. Those are opposites.

So, if a debt is valid it must be repaid. If there is a default, it means it is no longer considered valid and has not been repaid.

Moreover, your examples look to me like administrative problems. This is not the same as Congress refusing to pay its already incurred debt for which it has already appropriated funds.


Default is default -- and it was in 1933

"In response, your analysis makes no sense if you take the plain meaning of the words "valid" and "default" ... if a debt is valid, it must be paid. Default means a failure to fulfill that obligation. Those are opposites."

You are confusing yourself with the words "must be paid"...

(GM's debt was valid, so it must have been paid. But it was not paid, so it must not have been valid. But if the debt was not valid it was impossible to default upon it...)

... so let's avoid using them.

The definition of default is when a borrower changes the terms of repaying a debt to the detriment of the lender. The reason behind the default is irrelevant -- impossibility (bankruptcy), opportunism (default is less costly than the alternative), politics, pure ornery spite, whatever ... it doesn't matter.

Greece has borrowed euros and promised to pay them back on specified terms. It will default if it..

* Pays back fewer euros than it proimised to repay

* Delays the date when it makes repayment

* Leaves the euro and repays in its own fiat currency drachmas at an inflated exchange rate.

Nobody doubts that Greece's debt is valid, and few doubt Greece will default on it sooner or later, one way or another.

Note well -- the third method of default above is *exactly* what the US did in 1933: borrowing in gold (euros), specifically promising to repay in gold (euros), instead repaying in inflated fiat dollars (drachmas).

The government argued to the Court that *not* doing this would increase its debt by $15 billion (27% of GDP, or $4 trillion today) and this would cause massive tax increases damaging the aleardy poor economy (not so far from the Greek/Argentine/et al, argument). That's the amount by which the govt itself said paying with inflated fiat dollars reduced its contracted debt (at the cost of its creditors).

This was default clear, plain and simple -- just as it will be if Greece does the same thing.

Moreover, your examples look to me like administrative problems. This is not the same as Congress refusing to pay its already incurred debt for which it has already appropriated funds

In 1933 Congress by Joint Resolution absolutely refused to pay its already incurred debt as it had contracted to do. That is default, nothing else. And the Supreme Court very unhappily ruled it could do that, nobody could stop it.

To quote Chief Justice Hughes again: Contracts, however express, cannot fetter the constitutional authority of the Congress ... The question before the Court is one of power, not policy."

And the 14th Amendment section 4 was basically irrelevant to the entire dispute -- so that's that as far as it is concerned.


You're confused

You're both confused. The "14th Amdt" issue is not about whether it is legal to default on existing debt. It's about whether it is legal for a President to issue incremental debt over the last debt ceiling on his own. Default only comes about if the President does not do that. Further the phrase "validity" has nothing to do with actual payment, but is just a legal term that means, in a lawsuit on a Treasury obligation, the governmnet has no defense to the claim, and a judgment should be entered on it. If it doesn't pay the judgment, then the noteholder can go try to attach property of the government to sell to satisfy the note, in theory at least. If it doesn't pay the judgment but Congress passes a law that says the debt is no good as written, then we go into the realm of those cases but there might be a claim for taking of property without just compensation that would be prosecuted in the Court of Federal Claims and could not be devalued by mere legislation.


Confusion abounds

You're both confused. The "14th Amdt" issue is not about whether it is legal to default on existing debt. It's about whether it is legal for a President to issue incremental debt over the last debt ceiling on his own.

Well, being that "the 14th Amdt issue" is completely incoherent regarding Presidential authority to issue incremental debt over the debt ceiling on his own, it is easy to be confused about it!

Default only comes about if the President does not do that

Default only comes if the President *chooses* to pay other routine govt-program expenses ahead of servicing the debt, *choosing* to let the debt go unpaid, choosing default.

If the 14th Amendment section 4 has any effect at all in this case (which is very, very dubious) it can only be through requiring that the valid public debt, secured constitutionally by 14(4), must be paid first from available revenue, ahead of other routine govt spending program obligations not given the same constitutional priority.

As debt service is only about 9% of revenue, there is plenty of revenue to do that.

It follows that *if* 14(4) has any effect, then it must be by constitutionally mandating that Obama *not* default on the debt, whatever else happens. That's *his* responsibility. One could blame the simultaneous 40% cuts to Medicare, the military and everything else on the Republicans or whomever -- but default on the national debt would be *his* fault!

Why would Obama (or any other Democrats) want to read the 14th this way?

As to the apparent argument: 14(4) constitutionally requires payment of the debt ... so if we *choose not to* pay the debt, while paying other routine expenditures ahead it, a constitutionally prohibited debt default will occur ... and since that can't be allowed, the constitution must by implication require that the President increase the national debt "on his own" ... with the explicit constitutional provisions giving that responsibility to Congress being disregarded ...

Aw, c'mon. That's something Cliff Clavin would come up with.


impeachment either way...

impeachment either way...

the house will impeach Obama if he relies on the 14th amendment to avoid default, but probably will also impeach based on the premise that Obama allowed a default to occur in contradiction to the 14th amendment. Because these are mutually exclusive scenarios, the republicans can get away with being intellectually inconsistent by using the 14th amd. for either situation. Unless there is a compromise, there will certainly be an impeachment proceeding in the house.


Get the national debt out of the argument

If Obama really wants to stick it to the Repubs he should take the simple and honest route, like...

(1) Announce to the world's investors that the debt will be serviced in full. Period. There's plenty of revenue to do that. Orders have been given to Geithner. The world is happy. America is responsible.

(2) Announce to the American people that he and the Democrats are happy to negotiate the budget putting "everything on the table" with the Repubs, entitlement cuts, taxes, everything. "Everything on the table". And he is confident that with good-faith negotiation from both sides, no crisis will ever occur.

(3) When negotiations inevitably break down, announce to the American people that he will continue negotiating with everything on the table, but if the Repubs aren't willing to do the same and insist on forcing a crisis, then after the debt and Social Security (which has its own funding) are paid, everything else will be prioritized and cut 40% -- including Medicare, military spending, etc. -- and mean it.

Give Geithner orders accordingly. Let the Repubs know the orders have been given. Tell the American people that use of the debt ceiling to force such actions is totally unprecedented in all American history and completely the result of the "no compromise" Tea Party and Friends who insist on having only what *they* want on the table ... but he will continue to negotiate with them in good faith with everything on the table.

(4) Have his people sit at the table, with everything on it, with arms folded, watching Cantor walk out and back in and out again as he and all the other Repubs run all around looking for a way out of the impossible situation they've put themselves in.

(5) When the final "debt limit day" arrives, enjoy the victory. Either the Repubs give in, compromise, break all their explicit "no compromise" promises to their hard right wing, and start a civil war, *or* they don't give in, Medicare for sick seniors and payments due to our brave military (and to universities and school systems and farmers and every other special interest group that wants its money) all are cut by 40% (for about a week) because Obama meant it -- with the result that the Republicans have covered themselves in gasoline and lit the match.

But what does Obama mean? It's been three years and I haven't been able to figure it out yet.


Where in part 4 of the 14th

Where in part 4 of the 14th Amendment does it say the US cannot default on a debt? Is this stated explicitly or is it an assumption that a valid debt must be repaid? I get it.If it's a valid debt you must by necessity pay on it.
Certainly the states have every right to question the federal debt.
As a matter of fact the debt of the US is invalid and cannot be justified by law because fraud,waste,corruption,gross negligence and irresponsibility are its cause.As an invalid debt that ought not to exist the states certainly can question it as well and do so by also using the 10th Amendment.
What if they cannot pay the debt.Just get the Fed to print money out of thin air.
Are the judgements of Congress as infallible as those of the SCOTUS as they have said in their arrogance.The SCOTUS's decisions are never final when they touch upon the powers and rights of the states.And the state legislatures can overturn a decision at the drop of a pin and if the SCOTUS then lesser courts as well.
Do they wait until the end of the fiscal year and then in law say the debt acquired was justified?
Where does one get the authority to legalize the debt? How does one justify or legalize this debt.It is not a just debt even if Congress authorizes it by law.
Was this an amendment for all time or just for the Civil War? Who is to say?

Does the 14th Amendment preclude defaulting on the national debt?

Posted by AzBlueMeanie:

or

THE 14TH AMENDMENT
AND
QUESTIONING THE NATIONAL DEBT
By Dr Dale Livingston, DLC, JD
The claim that Section 4 in the 14th Amendment denies the questioning of the public debt.

Take your pick.


Uh, Stan...

Brad DeLong says the Clinton Administration was discussing it in 1996. Did none of the Congresscritters you speak with hear from them?


Perry vs the United States is

Perry vs the United States is the court case in regards to the 14th Amendment.

Jim Glass seems to think that the government defaulted in the case. Reading the judges decision, the government didn't default. It paid the bonds at face value, but not the 'gold standard' vale the plantiff wished for.

The judges held that:

"The fact that the Government's repudiation of the gold clause of the bond is unconstitutional does not entitle the plaintiff to recover more than the loss he has actually suffered, and of which he may rightfully complain."

but that

"Plaintiff has not attempted to show that, in relation to buying power, he has sustained any loss; on the contrary, in view of the adjustment of the internal economy to the single measure of value as established by the legislation of the Congress, and the universal availability and use throughout the country of the legal tender currency in meeting all engagements, the payment to the plaintiff of the amount which he demands would appear to constitute not a recoupment of loss in any proper sense, but an unjustified enrichment."


What's default in 2011 was default in 1933.

Jim Glass seems to think that the government defaulted in the case. Reading the judges decision, the government didn't default. It paid the bonds at face value, but not the 'gold standard' vale the plantiff wished for.

You mean, "not the 'gold standard' value that was explicitly written into the bond terms via the gold clauses of the Gold Clause cases"

A default occurs when a borrower unilaterally changes the payment terms on a debt to the detriment of the lender -- that is default. This is not a matter of controversy!

If Greece decides to pay off its euro bonds instead in new fiat drachmas, with the explicit purpose of reducing the cost of payment to itself and imposing a corresponding loss on its creditors, that will be *default* -- there is no doubt about it, and nobody disagrees.

That is *exactly* what the US did in 1933.

If a high Greek court rules that it is OK for Greece to do this, regardless of whatever Greek laws prohibit such default, that won't change the reality of default by *one bit*. And of course the Greek courts *will* make whatever such rulings are necessary to permit the default, should it become politically unavoidable.

Similarly, the US Supreme Court was faced with the fact that FDR had prepared a speech to the nation announcing that he was *defying* the Supreme Court's ruling that it was unconstitutional to for the govt to default on its bonds -- the ruling he expected it to make. You can read the speech.

The President openly defying the Supreme Court, rolling over it, would have been, let us say, a *very bad* constitutional problem ... *very bad* for the Court and the constitutional division of powers.

The Supreme Court hasno power of its own. The Executive controls force, the police and miltary, Congress controls the money. The Supreme Court has nothing but credibility -- it can't arrest the President or Congress for violating the Consitution. It can't do anything more than speak and print words.

The *only* power the Supreme Court has is its political weight with the public -- so the President and Congress don't dare defy it because of the political price they'd pay.

But if a President just elected with a massive majority overtly did exactly that, defied it, and brought the public along supporting him, the Court's sole source of influence would be crippled, if not destroyed.

Of course the Court couldn't let that happen. So it wheedled what many legal scholars consider one of its most bizarrely confusing opinions of all time, to keep it from happening and preserve the constitutional and political credibility of the judiciary as an equal branch of govt.

As the Justices said privately that they would never buy US bonds again.

A default is a default. And you will note that a majority of the Justices used the words "default" and/or "repudiation of debt" when describing what the govt did.

Explicity promising to pay in one money (gold, euros), then escaping a great deal of the cost of the promised payment by unilaterally imposing upon creditors payment in an inflated fiat currency (dollars, drachma) is *default*. Period.

That's what the US did in 1933. One can argue it was good policy, wise policy, unavoidable necessity, whatever.

But that's what the US did in 1933.


Actually a default occurs

Actually a default occurs when the debtor fails to meet his legal obligation to pay.

If the courts had held that the government did in fact owe any additional monies, and the government refused to pay, then they would be in default.

The Supreme Court ruled the government didn't default, because there was no 'economic loss' suffered. You can say that was the wrong decision, and I won't argue with you, as the bonds were specific as to what was to be paid.

But we aren't discussing what 'common sense' tells us the answer is, we are discussing what legal precedent was set.

The legal precedent that was set was that the government will not be allowed to default on it's bonds and it can change the method of payment as long as no economic loss was suffered.


A matter of "preference"

As was inferred briefly above, the whole situation is a matter of preference (if normal rules of debt priority are to be followed). In a normal default (economic insolvency), senior debt holders would get the first share of available funds, and common creditors may split what is left. Entitlements may be obligations but they are not debts. Bond holders will be paid at the expense of entitlement payments.


More from the Perry case: The

More from the Perry case:

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.

We conclude that the Joint Resolution of June 5, 1933, insofar as it attempted to override the obligation created by the bond in suit, went beyond the congressional power.

So, the plantiff had the right to collect on his bonds, but he couldn't show any economic loss in being paid in 'fiat money'

That is why, when the government defaults on its debt, it will be sued lickety split


as for the legal tender cases

as for the legal tender cases (again from the perry case - the dissenting opinion):

The moneys under consideration in the Legal Tender Cases, decided May 1, 1871, 79 U. S. 12 Wall. 457, and 110 U. S. 110 U.S. 421, were promises to pay dollars, "bills of credit." They were "a pledge of the national credit," promises "by the government to pay dollars" "the standard of value is not changed." The expectation, ultimately realized, was that, in due time, they would be redeemed in standard coin. The Court was careful to show that they were issued to meet a great emergency in time of war, when the overthrow of the government was threatened and specie payments had been suspended. Both the end in view and the means employed the Court held were lawful. The thing actually done was the issuance of bills endowed with the quality of legal tender in order to carry on until the United States could find it possible to meet their obligations in standard coin. This they accomplished in 1879. The purpose was to meet honorable obligations, not to repudiate them.

The opinion there rendered declares:

"The legal tender acts do not attempt to make paper a standard of value. We do not rest their validity upon the assertion that their emission is coinage, or any regulation of the value of money; nor do we assert that Congress may make anything which has no value money. What we do assert is that Congress has power to enact that the government's promises to pay money shall be, for the time being, equivalent in value to the representative of value determined by the coinage acts, or to multiples thereof."

Neither show that the government could default on it's debt.


Legislative history of the 14th amendment by John Balkin

Some interesting reading about the discussion in the Senate during the crafting of the 14th amendment, specifically about the sweeping statement of "the debt shall not be questioned".

The nut of it:
Sec. 4 was crafted to prevent the South from saying "Pay fer my own ass-whupping? YGTBKM!", but, it seems that it was recognized that the nations debt could be used in political bickering, and it was thought it might be wise to not make it specific to the Southerners. Balkin builds a nice case that it can not be dismissed as irrelevant quite as easily as many of the pundits are right now.

http://balkin.blogspot.com/2011/06/legislative-history-of-section-four-o...

BTW, I really appreciate this blog. Many thanks....y'all...

DAC




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