The debt limit scam

I am  continually agog at the gullibility of Democratic politicians and public officials who nearly unanimously insist that just ignoring the congressional debt limit would be some sort of constitutional or political catastrophe. I am not in the least agog at the gullibility of reporters and pundits, who are generally ignorant of the subjects they write about, but at least the New York Times has for once given a platform to somebody who knows what he is talking about. (This is the first time I've tried gifting a NYT article, let's hope it works.) Robert Hockett is a professor of law at Cornell and he has worked for the International Monetary Fund and the Federal Reserve Bank of New York. You would think that Janet Yellen would know as much as he does but apparently not. 

Debate has intensified over whether President Biden might sidestep the debt ceiling in order to keep paying what the nation owes.There are powerful legal reasons and arguments for him to do so. These include the 14th Amendment, which prohibits questioning what we already owe, and the so-called later-in-time rule of statutory construction, which basically means that Congress’s most recent budget legislation trumps any earlier legislated ceiling.

In other words, as a legal matter this is very simple. Congress passed a debt limit, then subsequently passed legislation requiring spending that would exceed that limit. That's it, this is not even a constitutional issue to begin with. But if you don't buy that, the constitution states, unambiguously, that "the validity of the public debt of the United States, authorized by law, shall not be questioned . . .  ." 

Hockett describes the horrific consequences should the U.S. default on its debt. It would irrevocably damage the U.S. and cause catastrophic harm to its citizens. Come June 1, Biden should simply ignore the debt limit and assure that the U.S. continues to meet its obligations. That will put an end to these repeated hostage crises. Members of congress who want to reduce federal spending will then do what they have always done, that is enter into negotiations over the budget and pass such authorizing legislation as can get through the congress and get a presidential signature. 

 Furthermore, it is very important to understand that claims that the national debt and ongoing budget deficits are some sort of crisis or an unsustainable situation that requires urgent redress are nonsensical.  While there is certainly a level of deficit spending that would be unwise, we aren't there. In fact the global economy depends on a supply of U.S. treasury debt to function smoothly. And the deficit is already coming down substantially, thanks to robust economic growth, full employment, and the expiration of pandemic emergency measures. Cutting spending to try to eliminate the deficit would cause massive unemployment and drive it right back up, along with causing immense misery. 

Just ignore the debt limit hostage takers and the deficit scolds. Keep paying our debts, and keep investing in our future and taking care of our people. Don't even bother to negotiate.