Hey, let’s mint that trillion-dollar coin

‘Toon of the Day: The $1 Trillion Wooden Nickel

Resist We Much on January 11, 2013 at 10:39 AM

Under the Constitution, fiscal decisions rest with Congress, which passes laws specifying tax rates and establishing spending programs. If the revenue brought in by those legally established tax rates falls short of the costs of those legally established programs, the Treasury Department normally borrows the difference.

Where does the debt ceiling fit into all this? Actually, it doesn’t. Since Congress already determines revenue and spending, and hence the amount the Treasury needs to borrow, we shouldn’t need another vote empowering that borrowing. But for historical reasons any increase in federal debt must be approved by yet another vote.

Historical reasons???

No, Ferret. Constitutional reasons!

You see, dummy, Article I, Section 8 not only states that Congress has the sole authority to Tax and to Spend, it also contains this nugget:

The Congress shall have Power…To borrow money on the credit of the United States

So, you DO actually need another vote to empower that borrowing.

Resist We Much on January 11, 2013 at 10:52 AM

if the debt ceiling isn’t raised, the president will be forced to break the law, one way or another; either he borrows funds in defiance of Congress, or he fails to spend money Congress has told him to spend.

No, it would not force the President to break the law. He would be forced to make priorities in payment, as required under Federal law, and to negotiate with a duly-elected “group of people.” Unless Mr Obama wants to be guilty of that from which he warned the Supreme Court, he should honour these “duly-constituted and passed law(s).” Anything less would not only be hypocritical and dishonest, it would be an impeachable offence…although I understand that his fellow Democrats would gleefully overlook such behaviour.

Under Federal law and the 14th Amendment, the validity of the public debt must not be questioned and it must be serviced prior to any other payments being made to anyone.

Debt Service:

December 2012: $95,736,594,801.52

November 2012: $25,068,968,472.99

October 2012: $12,922,741,407.27

Total for first 3 months of FY2013: $133,728,304,681.78

In FY2011, tax revenues were a little more than $2.4 trillion. In February 2012, tax revenues collected were $103.4 billion. In March 2012, tax revenues collected equaled ~$171.2. Debt service in February 2012 was $17.4 billion and in March it was $24.7 billion. The same receipts are expected, at minimum, and outlays for debt service are about the same for February and March as they were last year.

IN OTHER WORDS, WE CANNOT DEFAULT ON THE DEBT. BY LAW, THE FEDERAL GOVERNMENT MUST PAY THE DEBT SERVICE FIRST.

Congress has not told the President how large every department must be or how many days per week Federal employees must work.

By the way, Paulie, how will Mr Obama be paying the $11 billion in pay raises that he gave to Federal employees – from Biden on down – via EXECUTIVE ORDER? Congress didn’t spend that!! Barack built that (expense) all on his own!

Resist We Much on January 11, 2013 at 11:12 AM