I just want to pass along a comment made on a conservative forum so that readers can get an idea of how they viewed the debt ceiling crisis. Please feel free to deconstruct, as I would like your input:
"...you need to work on your understanding of what "default" means...
Constitutionally, the US is required to pay its debt obligations (and the inflow of taxes is waaay more than enough to pay this)
If Obama tells his Treasury Secretary not to pay the US debt obligations, he will be violating the US Constitution and will be facing impeachment.
Also, Obama will be the one deciding whether to pay your wife's VA pension, not the Republicans."
Thoughts?
This is what the 14th Amendment says:
"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. "
No one can object to saying that payments of the US's loans is payment of the public debt. If you do object to that, then don't bother reading the rest of this because your grasp on reality and the basic meaning of words is so suspect you will not be able to comprehend me.
Assume, arguendo, that Treasury has $1 million cash on hand and is looking at two bills to that came in on the same day: one for $1 million to pay off a bond that is due today and another one of $1 million from Lockheed for a jet engine that is already delivered and mounted in a jet.
SecTreas looks at the balance statement and looks at the two bills. Then he looks at the 14th Amendment.
He has some options:
1. Pay Lockheed and stiff the bond holder.
2. Pay the bondholder and stiff Lockheed.
3. Take the money and run off to Caracas.
4. Split the money between Lockheed and the bondholder.
Right off hand I can't think of any other options, but it IS 5AM and I am on my first
.
He knows what the 14th Amendment says, so he pays the bondholder. And along comes Lockheed and says, "Whoa, wait a minute. The US owes us $1 million. That's a debt from the public, so that is a public debt. I am constitutionally entitled to payment." And if you look at it that way Lockheed might be correct. They extended credit to the US for the cost of the jet engine, and that is no more or less a debt due from the public as that bond.
Now change the scenario. In this scenario you have the bondholder on one side and pension holders guaranteed in aggregate that $1 million on the other. Both sides are clearly constitutionally entitled to payment. But there is only $1 million to pay $2 million in obligations. What's Lew gonna do?
He, and by extension the President, is in a world of hurt. Congress borrowed that money from the bondholder. Congress passed a law authorizing the pensions. But Congress did not put money into the checking account. The only real-time decision that makes sense is to prorate among all the creditors. The bondholder gets half and each of the pensioners get half of their individual entitlements.
And, if you agree that Lockheed, by virtue of holding a credit card authorization so to speak, is a creditor, then in the first scenario you would have to pay half to the bondholder and half to Lockheed.
The next day in comes $5 million and two new bills totalling $20 million. So the Treasury now has $21 million in debts (the $1 million from the day before and the new bills for $20 million.)
His only viable avenue (based on his actions of the prior day) is to split the $5 million among all of the creditors. Logistically this quickly becomes so incredibly complex that no one knows how much is owed and to whom. Just too many creditors and too little money.
And Louie Gohmert and the other fools on the far right want to blame and impeach the President? God save us from people like this. We have enough problems.
