If I can’t understand something it bothers me. What bothers
me even more is other people think they know what I don’t know and, therefore,
they think they are smarter than I am. This Blog Posting will do it’s best to
make certain that you, Mr. Smarty Pants, are made aware of what you don’t know
so you can understand that you are as confused as I am.
I am so proud of the above paragraph. I just love it when I
get things off of my chest. My chest feels so much better. How’s does your
chest feel?
************
First let me clarify a few things for you regarding our
current Statutory Debt Limit Crisis...
Ø Those
Talking Heads on TV every night who smugly pontificate about the Statutory Debt Limit as if they know
what they are talking about do not know what they are talking about.
Ø The
Secretary of the Treasury on TV every other night who smugly pontificates about
the Statutory Debt Limit as if she
knows what she is talking about does not know what she is talking about.
Ø Sergeant
Shultz put it quite well when he said, “I know nothing about the American Statutory Debt Limit”...
Winston Churchill said it better than Sergeant Shultz when
he said, “The American Statutory Debt
Limit is a riddle, wrapped in a mystery, inside an enigma".
************
Thanks to the Wall Street Journal I now have proof of all of
the confusion I have pecked out above. Below are the first 2 paragraph of the proof
article...
With the U.S.
Treasury predicted to run out of cash (the “X date”) as early as June 1,
Treasury Secretary Janet Yellen has started warning of an “economic
calamity” if Congress doesn’t raise the statutory debt limit. According to Ms.
Yellen, “whether it’s defaulting on interest payments that are due on the debt
or payments due for Social Security recipients or to Medicare providers, we
would simply not have enough cash to meet all of our obligations.” These claims
are dangerously misleading.
Hitting the X date
won’t cause a default on the national debt. Debt-service payments have a
feature that most other government payments lack: When the government pays off
maturing debt, the amount of debt subject to the statutory limit declines. This
means that the government can “roll over” such obligations—that is, issue new
debt to pay off old debt—without violating the debt limit.
Now do you understand? Glad I could help.
Would our rulers kid us?
Smartfella
************
The entire article is below...If I were you I would not bother to read it.
The Phony Debt-Ceiling ‘Calamity’
The Treasury made a plan to pay bondholders in 2011. It
could do the same with Social Security.
By Conor J. Clarke and Kristin A. Shapiro
May 22, 2023 12:08 pm ET
With the U.S. Treasury predicted to run out of cash (the “X
date”) as early as June 1, Treasury Secretary Janet Yellen has
started warning of an “economic calamity” if Congress doesn’t raise the
statutory debt limit. According to Ms. Yellen, “whether it’s defaulting on
interest payments that are due on the debt or payments due for Social Security
recipients or to Medicare providers, we would simply not have enough cash to
meet all of our obligations.” These claims are dangerously misleading.
Hitting the X date won’t cause a default on the national
debt. Debt-service payments have a feature that most other government payments
lack: When the government pays off maturing debt, the amount of debt subject to
the statutory limit declines. This means that the government can “roll over”
such obligations—that is, issue new debt to pay off old debt—without violating
the debt limit.
A plan to roll over debt after the X date—and thereby ensure
that the debt is honored—is more than theoretical. It is a matter of public
record that the Treasury made such a plan during a 2011 showdown over the debt
limit, when one official explained that “the principal on Treasury securities
that are maturing would be funded by having auctions that would roll over those
maturing securities into new issues, so the new issues would be able to fund
the redemption of the maturing securities.”
For a similar reason, hitting the X date need not stop
Social Security and other payments that come from federal trust funds. The
payroll taxes that are used to fund such benefits are invested in special
Treasury securities that count toward the debt limit. The Treasury has the
authority to redeem these securities to pay benefits; when it does so, debt
subject to the statutory limit declines. Thus paying Social Security
benefits—like paying maturing principal on the public debt—can create headroom
under the limit, making rollover strategies possible. In both 1985 and 1996,
following similar debt-limit conflicts, the comptroller general concluded that
such strategies would be lawful because they wouldn’t “increase the total
amount of outstanding debt subject to the statutory limit,” and thus wouldn’t
“usurp the congressional power under the Constitution to borrow.”
Paying Social Security benefits and servicing the national
debt are not only lawful; they are legally obligatory. Because the Biden
administration can continue making such payments regardless of the statutory debt
limit, and because such payments wouldn’t come at the cost of any other federal
payments, it must do so. Otherwise, the administration would fail its
constitutional duty to execute those statutes faithfully—an argument that would
apply even without the support of the 14th Amendment’s Public Debt Clause.
Most government payments don’t involve rolling over debt.
That includes interest payments on the public debt, because only the “face
amount” of the debt counts toward the statutory debt limit. But on a monthly
basis, interest is a relatively small fraction of incoming tax revenue, and the
government has broad lawful authority to prioritize payments after the X date.
With advance planning, such as what the Treasury undertook in 2011, interest
payments can continue.
More broadly, the government regularly faces situations in
which Congress hasn’t appropriated enough money to fulfill the mandate of a
spending statute, or in which external circumstances render spending
infeasible. In Morton v. Ruiz (1974), the Supreme Court held
that such circumstances don’t deprive the executive branch of the “power to
create reasonable classifications . . . to allocate the limited funds
available.” In 1985 the comptroller general confirmed that such discretion would
extend to the debt limit, opining that after the X date, “Treasury is free to
liquidate obligations in any order it finds will best serve the interests of
the United States.”
The X date still presents uncertainty, and we don’t want to
appear pollyannaish. But the executive branch has both the power and the
obligation to make debt-service and Social Security payments, and it has broad
authority to prioritize the most pressing of the government’s remaining
obligations. For those reasons, it may well be that hitting the X date—and a
short lapse in the government’s ability to raise revenue—looks like a temporary
government shutdown that follows an appropriations lapse.
When the government temporarily shuts down (as it did
repeatedly during the Clinton, Obama and Trump presidencies), some federal
obligations go temporarily unmet. When the shutdown ends, the obligations are
paid. Shutdowns happen because the government runs out of lawful authority to
spend; the X date would happen because the government runs out of lawful
authority to raise revenue.
In one respect, hitting the X date could be less disruptive
than a government shutdown. The Antideficiency Act requires that many federal
functions cease during a shutdown, and most federal employees are prohibited
from working. But there is no analogous limit on federal functions after the X
date—so many such functions could continue even if payments are delayed.
Congress can take several steps to correct misleading claims
about the debt limit, which threaten to spook markets as the X date approaches.
First, the House should subpoena Treasury officials to confirm the executive
branch’s broad legal authority to satisfy the government’s most pressing
obligations after the X date. The House should also confirm the Treasury’s
practical ability to prioritize certain key obligations. Although officials in
2011 explained how a limited prioritization plan could be implemented using
Treasury’s systems, Ms. Yellen warned recently that those “systems are built to
pay all of our bills on time and not to pick and choose which bills to pay.”
Second, the Bipartisan Legal Advisory Group should issue a
statement confirming the Treasury’s legal authority to roll debt over to make
debt-service and Social Security payments after the X date. The group is
composed of the speaker and other House leaders of both parties and “speaks
for, and articulates the institutional position of, the House in all litigation
matters.” With the executive branch and the House united, markets could rest
assured that such payments will continue and that no credible legal challenge
to them will arise.
Ms. Yellen recently stated that if Congress fails to raise
the debt limit, “we will have an economic and financial catastrophe that will
be of our own making.” But if a catastrophe arises, it may be because the
markets take the worst debt-limit scaremongering seriously rather than
appropriately discount it as another negotiation tactic.
Mr. Clarke is an incoming associate professor at the
Washington University in St. Louis School of Law. Ms. Shapiro practices
appellate and constitutional law in Washington and is a senior fellow at the
Independent Women’s Forum. Both served as attorney-advisers at the Justice
Department’s Office of Legal Counsel during the Trump and Biden administrations.
