July 23, 2011

Freedom from Debt Slavery

I am intrigued by the argument, now being voiced by more prominent figures such as Bill Clinton, that the way out of the debt ceiling impasse is through use of a rather obscure paragraph of the Fourteenth Amendment to the United States Constitution. To wit,

4. The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.
When the 14th Amendment is mentioned in public discourse, it's usually about its first paragraph, the one containing the prohibition against denial of due process or equal protection by any State of the Union (the Fifth Amendment already covering these points where the federal government is concerned). The 14th was one of the crowning achievements of Reconstruction; it eventually assured the citizenship of any slave born in the United States, and served, ultimately (nearly a hundred years after its passage in 1868), as the basis for the Civil Rights Movement, as the 14th was the great federal trump card against George Wallace, Orval Faubus and other blights upon American history, who were the ones who gave "States' rights" a very bad name which persists to this day.

Paragraph 4 was not really passed with the current situation in mind, of course, anymore than the Founding Fathers were thinking about gestational trimesters when they enacted the Ninth Amendment. The Constitution is a small island of text, however, surrounded (and inundated) by an ocean of judicial gloss and exegesis (and oceans made of glosses and exegeses rarely occur in nature). The 14th Amendment's "debt" clause (the above paragraph) has only rarely been addressed by the United States Supreme Court, and never in the context of a contest between the legislative enactment known as the debt ceiling (which has only been around since 1974, I believe) and the Constitution. If there is a contradiction, of course, then under the holding of Marbury vs. Madison the 14th Amendment prevails, although with Roberts, Scalia and Alito around, the overturning of even Marbury vs. Madison is a possibility. That would raise some interesting logical paradoxes - the Supreme Court overruling the concept of Judicial Review by using Judicial Review to conclude that Judicial Review is unconstitutional. More or less like figuring out: This Statement Is False. I love stuff like that. Maybe the Supreme Court could meet in a building patterned after an Escher drawing.

Although there has not been much judicial guidance as to the application of the 14th to the debt ceiling, the current learned debate concerns whether the "public debt" that "shall not be questioned" refers to existing debt incurred through Treasury borrowing or is a more general prohibition against denying the validity of obligations of the federal government. Either way, it might offer President Obama a way out if push came to shove.

Under a conservative reading of the first sentence (and Obama, being a preternaturally cautious individual, would certainly prefer to go out on a limb only as far as necessary), the 14th would seem to permit the incurring of additional debt if necessary to carry on debt service on existing debt or to "roll over" outstanding Treasury obligations (since there is never a precise, neat and clean correspondence between maturing debt and how much money you need to handle the redemption). That is to say, the Ponzi economic scheme we now use, whereby we take on additional debt by selling Treasuries to marks and suckers who "invest" so we can use their money to handle the debt from suckers who invested earlier in the inverted pyramid, "shall not be questioned," because it's either who we are or what we've definitely become. A nation with an acquired, vested right to live permanently beyond our means because we're Exceptional. Deal with it, world.

A great cry would of course arise from the humid, fetid trailer parks of this great land, as the Tea Bag contingent of the Booboisie (h/t: H.L Mencken) realize they've been had by this Ivy League hipster, and next thing you know, we'd be embroiled in an impeachment crisis; a Constitutional crisis, as the Supreme Court, naturally, rules against President Obama on the issue; and many other circus-like developments. I can only say: please, Lord, let all that happen. Impeachment would fail, as it did against Clinton, because 2/3rds of the Senate is not going to vote to convict. If the Supreme Court rules against President Obama, O can reach into the mists of history and use that great quote from President Andrew Jackson replying to the Supreme Court's ruling in Worcester vs. Georgia: "Justice Marshall has made his decision; now let him enforce it."

Sure, the quote is apocryphal, and sure, Barack Obama would never say such a thing, but it would be a great "Mr. Smith Goes to Washington" moment. More interesting, anyway, than listening to John Boehner.

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