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The Best Article you will read on the Debt Ceiling [1]
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Date: 2023-05-10
Robert Hockett is a Professor at both Cornell Law and Georgetown. (Full resume here*) In today’s Times he writes a brilliant Debt Ceiling op-ed: This Is What Would Happen if Biden Ignores the Debt Ceiling and Calls McCarthy’s Bluff:**
The article follows up and expands on a prior piece by Professor Lawrence Tribe, who agrees:
x Here’s an excellent wrap up of the arguments in favor of Biden’s calling McCarthy’s bluff ⬇️
https://t.co/5VpFEN7OM1 — Laurence Tribe 🇺🇦 ⚖️ (@tribelaw) May 9, 2023
First, Professor Hockett outlines the consequences of a default, including this point I haven’t seen made much:
even the serious prospect of U.S. default would quickly raise debt-servicing costs, rendering our deficit larger than it currently is — a consequence dramatically at odds with Republicans’ professed concerns about tying the debt ceiling hike to massive budget cuts.
Then he sets forth the 14th Amendment and “superseding statute” arguments and analyzes why even this Supreme Court is likely to side with the Administration.
However radical some of the Supreme Court’s right-wing justices might be, even they understand the legal precept that the Constitution isn’t a suicide pact. Even less so is the 1917 Liberty Bond Act, in which the debt ceiling is rooted. As a legal matter, this ceiling has long since been superseded by a new congressional budget process that has determined its own ceiling through budgeting since 1974 and was of doubtful 14th Amendment conformity, at least as now interpreted, in 1917.
The 2011 Debt Ceiling negotiations led to the “Sequester,” which was a drag on the recovery and one element in the 2016 result. This can’t happen again.
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Young people get this. Support groups like The Civics Center, who are working hard to register GenZ voters.
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*Robert Hockett is a professor of law at Cornell University, an adjunct professor of finance at Georgetown University’s McDonough School of Business and a senior counsel at Westwood Capital. He worked at the Federal Reserve Bank of New York and the International Monetary Fund.
**I clicked on the “gift” button to share the link, but I’m not sure it will give access here.
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[1] Url:
https://www.dailykos.com/stories/2023/5/10/2168589/-The-Best-Article-you-will-read-on-the-Debt-Ceiling
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