Everything Is Stupid

The debt ceiling: The issue on the minds and lips of not just Americans, but people around the world, as the US government gets precariously close to defaulting on its debts. It is becoming increasingly obvious to the masses that our current economic model is unsustainable, but most of us continue to hope that things hold out just a little bit longer, as if we could somehow prepare ourselves for a complete economic collapse.

I can’t quite tell what’s holding the government back from just making the decision. It seems like the type of thing that would be simple enough for people whose jobs exist solely for the purpose of keeping in operation an unsustainable system – even if they are too jaded to do the job well. There have been a few wacky ideas thrown around, like having the President attempt to defend the country against debt collectors using the 14th Amendment of the Constitution, which states that “the debt of the United States shall not be questioned,” which as it turns out probably isn’t a great idea.

Yale Constitutional Law professor Jack Balkin reports on CNN that what this does not mean is that a jaded president can just say “we’re good for it, the check’s in the mail!” and avoid collection. He explains:

Like Congress, the president is bound by Section 4 of the 14th Amendment, which states that “(t)he validity of the public debt of the United States, authorized by law . . . shall not be questioned.” Section 4 was passed after the Civil War because the framers worried that former Southern rebels returning to Congress would hold the federal debt hostage to extract political concessions on Reconstruction. Section 5 gives Congress the power to enforce the 14th Amendment’s provisions. This does not mean, however, that these provisions do not apply to the president; otherwise, he could violate the 14th Amendment at will.

Section 4 requires the president not to put the validity of the public debt into question. If the debt ceiling is not raised in time, there will not be enough incoming revenues to pay for all of the government’s bills as they come due. Therefore he has a constitutional obligation to prioritize incoming revenues to pay the public debt: interest on government bonds and any other “vested” obligations.

New interest has been growing around the internet for an idea sprouted from the fact that the limits placed on the Treasury Department are based solely on paper money, which allows for the option of minting two platinum trillion dollar coins for immediate deposit into the Federal Reserve account. Sound crazy? Maybe! But not against the law, according to Balkin:

Sovereign governments such as the United States can print new money. However, there’s a statutory limit to the amount of paper currency that can be in circulation at any one time.

Ironically, there’s no similar limit on the amount of coinage. A little-known statute gives the secretary of the Treasury the authority to issue platinum coins in any denomination. So some commentators have suggested that the Treasury create two $1 trillion coins, deposit them in its account in the Federal Reserve and write checks on the proceeds.

The countdown to meltdown is getting close to its end, with less than 48 hours until we know what the heck is going to happen. I’m not quite prepared for a complete devaluing of the US dollar (it’s already trading low compared to dollars from my Canadian home).

Of course, the jaded suits in congress could just sit down and agree on something that will stave off the inevitable collapse of the North American financial system for at least a few more years! I have an apocalypse to plan for, people! I don’t have time for this, too…