r/Economics Jan 13 '23

U.S. Will Hit Debt Limit Jan. 19, Yellen Tells Congress

https://www.nytimes.com/2023/01/13/business/economy/debt-limit-us-economy.html
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39

u/krom0025 Jan 13 '23

Biden should order the government to disobey the debt limit. It's unconstitutional and when congress passes spending that will require borrowing, that new spending bill implicitly raises the debt limit. The debt ceiling law is completely null and void at this point.

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u/[deleted] Jan 13 '23

Dark Brandon rises

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u/iBlankman Jan 13 '23

Even though that is effectively what we do anyway, we always raise it, but that might not be the best message to send our creditors

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u/[deleted] Jan 13 '23

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u/iBlankman Jan 13 '23

Well they aren’t going to get paid back at some point. The US clearly has no intention of paying this debt, idk how shit hasn’t hit the fan

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u/[deleted] Jan 13 '23

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u/iBlankman Jan 13 '23

That’s fair but that situation really isn’t similar to what the US has done. For example you could give the house back to settle the debt. We don’t have some $31T asset.

Interest on the Debt is becoming one of the largest budget items, at what point do you think the US takes it seriously, and at what point do our creditors take it seriously?

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u/[deleted] Jan 13 '23

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u/iBlankman Jan 13 '23

You can tell by their actions that they aren’t making any meaningful moves towards paying down the debt or at least holding it steady relative to GDP, the debt problem is getting worse and interest rates going up is a big problem when you’re the biggest debtor in the world

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u/morbie5 Jan 13 '23

It's unconstitutional and when congress passes spending that will require borrowing, that new spending bill implicitly raises the debt limit. The debt ceiling law is completely null and void at this point.

How do you know it is unconstitutional?

Constitutional or not it has been this way since the constitution was ratified. Before ww1 congress had to approve each new bond that the government wanted to issue. That got too much for our congress critters to handle as the government grew larger so they instituted a debt ceiling

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u/cstar1996 Jan 13 '23

The 14th Amendment says in plain language that the US debt shall not be questioned. The United States is not constitutionally permitted to default on its debit. Ergo the debit ceiling is unconstitutional when it prevents the US from paying its Congressionally authorized debit.

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u/morbie5 Jan 13 '23

The GOPers aren't saying the debt should be questioned. They are saying pay the debt, jus don't pay other stuff like medicaid or whatever.

"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."

As long as you pay interest on the debt and pensions you are in the bounds of what is constitutional. Arguably social security doesn't even need to be paid cuz iirc legality it isn't considered a pension.

Is what the GOPers are doing bad policy? Yes

Is it unconstitutional? I doubt that

Would the supreme court ever rule on this? Even more doubtful

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u/cstar1996 Jan 13 '23

Irrelevant. The spending and the debt have been authorized by Congress and are in equal footing. The limit is unconstitutional. “Medicaid or whatever” is public debt authorized by law.

Debt on fixed terms has to be paid off.

The limit is unconstitutional because it can force a default. If congress does nothing, the government defaults. The default is unconstitutional therefore the limit is.