The debt limit makes no sense. How is it even constitutional? Congress already appropriated the money, hence it's already been authorized to be spent. I think the WH should just ignore the debt limit and spend the money as Congress directed. No need for gimmicks like trillion-dollar coins.
Even if I'm right (and IANAL, so who knows), it would still be controversial and disruptive and so probably not great for the economy, so it would be better if the Congress just abolished it, as you said.
The debt limit makes no sense. How is it even constitutional? Congress already appropriated the money, hence it's already been authorized to be spent. I think the WH should just ignore the debt limit and spend the money as Congress directed. No need for gimmicks like trillion-dollar coins.
That's what I think. Doesn't the constitution say our debt must be honored? Isn't the constitution the highest law taking precedence over all other laws?
Another way to get around it is when the Democrats raise the debt limit, raise it to a quadrillion dollars.
The Democrats have the house, the senate and the presidency. If they don't have the cojones to do what is needed then of what use are they?
meh. It unfortunately promulgates the idea that federal financing works like household financing. Not helpful.
As it stands — and the video’s aim, I assume, is to explain the way things stand, not how macroeconomic policy could change them — this part of federal financing does work like household financing, doesn’t it? If the government has no means of paying for goods and services rendered (whether it got there by setting its own debt limit, or by failing to follow MMT), it defaults on what it owes.
meh. It unfortunately promulgates the idea that federal financing works like household financing. Not helpful.
As it stands — and the video’s aim, I assume, is to explain the way things stand, not how macroeconomic policy could change them — this part of federal financing does work like household financing, doesn’t it? If the government has no means of paying for goods and services rendered (whether it got there by setting its own debt limit, or by failing to follow MMT), it defaults on what it owes.
that's a stretch. It's more akin to someone locking the bank doors and not letting you in, for no particularly good reason.
Anyway, I was mostly referring to the very first slide at 22 seconds. The rest of it is OK, except when it references the original premise of spending taxes.
One White House official told us that the real danger in minting a one trillion dollar coin is the possibility of a long series of Nicolas Cage movies about attempts to steal the coin.
that's a stretch. It's more akin to someone locking the bank doors and not letting you in, for no particularly good reason.
meh.
nope. your analogy indicates you don't quite understand the issue. It's not that the U.S. doesn't have the funds. It's that it's being stopped from using it 's funding ability by an arbitrary blockage. Raising the debt limit doesn't give the government any more funds. It simply removes the blockage.
nope. your analogy indicates you don't quite understand the issue. It's not that the U.S. doesn't have the funds. It's that it's being stopped from using it 's funding ability by an arbitrary blockage. Raising the debt limit doesn't give the government any more funds. It simply removes the blockage.
I thought my analogy accounted for the arbitrary blockage:
If the government has no means of paying for goods and services rendered (whether it got there by setting its own debt limit, or by failing to follow MMT), it defaults on what it owes.
In other words, "federal financing doesn't work like household financing" stops being true the moment the government hits and refuses to lift its arbitrary blockage.
I understand the issue now! “The funds” are unlimited!
How can I get me some?
DB won't believe me, but I get what he's been saying. If he wants to animate a video explaining how things should be, rather than how they are now, the field is apparently open.
Not for nothing, the video's very first words are "The debt limit is a kind of financial weapon of mass destruction chained to the United States government by the United States government."
Not for nothing, the video's very first words are "The debt limit is a kind of financial weapon of mass destruction chained to the United States government by the United States government."
I understand the issue now! “The funds” are unlimited!
How can I get me some?
actually, you, and all of us, get some all the time. When the government spends, the money flows into the economy, available there for all of us to enjoy.
also, I've never said funds are unlimited. Just that we're far,far from reaching the limit.
I understand the issue now! “The funds” are unlimited!
How can I get me some?
I get what you're saying, but in this particular case I don't think it applies as this is about funds Congress already directed to be spent, not new funds.
I understand the issue now! “The funds” are unlimited!
How can I get me some?
I get what you're saying, but in this particular case I don't think it applies as this is about funds Congress already directed to be spent, not new funds.
yes, that's correct. I meant to note that in my earlier response.
I get what you're saying, but in this particular case I don't think it applies as this is about funds Congress already directed to be spent, not new funds.
Didn't mean to cloud the issue. Of course the debt limit is artificial.
I was more referring to MMT and the statement that "it's not that the U.S. doesn't have the funds."
I'm actually quite surprised that the debt limit has not been challenged in the Supreme Court as unconstitutional.
Didn't mean to cloud the issue. Of course the debt limit is artificial.
I was more referring to MMT and the statement that "it's not that the U.S. doesn't have the funds."
I'm actually quite surprised that the debt limit has not been challenged in the Supreme Court as unconstitutional.
I'd imagine having sufficient standing could be tricky -- who would sue? Suppose Biden just ignored the debt ceiling -- I can't see a Democratic House or Senate suing him. And it seems creditors getting paid wouldn't have standing either -- what damages could they claim for receiving money they were promised? Seems like it would be a high stakes strategy though; given the composition of the court, it'd probably be safer for a Republican president to ignore the debt ceiling than for a Democratic one.
What with the debt ceiling about to crash down, I thought this explanation of a way out of this mess might be useful.
It also ties into MMT theory, as it happens. Note the section on taxes.