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 Replies: 32 / Views: 4,170 |
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Pillar of the Community
United States
4132 Posts |
The weird thing is that it actually might be the only legal option if the debt ceiling isn't raised. It would be illegal to default (14th amendment), it would be illegal to issue more T-bills (debt ceiling), and it would be illegal to not pay for laws that were duly enacted by congress (unilateral spending cuts is not among the powers of the executive). But it is legal for the executive to raise money by seigniorage (and they do all the time when they issue the coins you use every day.)
The debt ceiling is constraint on the executive, but congress is the only branch with the power to set tax and spending levels. So it's a little bit inside-out as an oversight measure, and might well be unconstitutional (although the White House rejected going the 14th amendment route last time around.)
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Pillar of the Community
United States
593 Posts |
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The weird thing is that it actually might be the only legal option if the debt ceiling isn't raised. It would be illegal to default (14th amendment), it would be illegal to issue more T-bills (debt ceiling), and it would be illegal to not pay for laws that were duly enacted by congress (unilateral spending cuts is not among the powers of the executive). But it is legal for the executive to raise money by seigniorage (and they do all the time when they issue the coins you use every day.)
The debt ceiling is constraint on the executive, but congress is the only branch with the power to set tax and spending levels. So it's a little bit inside-out as an oversight measure, and might well be unconstitutional (although the White House rejected going the 14th amendment route last time around.) Yeah, it's a sticky situation. I would either let Congress do their thing or invoke the 14th. A Constitutional Amendment trumps any law Congress passes. But Obama was a Constitutional law professor for 12 years, so he would have a much better idea than I would as to whether the 14th Amendment argument would work. It seems the most reasonable solution is to have Congress grant automatic permission to raise the debt ceiling to meet obligations previously authorized by Congress UNLESS a majority of both houses votes to NOT raise the ceiling. That was discussed previously and seems like a reasonable solution. Playing brinksmanship costs extra money, unsettles the markets, and threatens our credit rating. |
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Valued Member
Australia
216 Posts |
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Bedrock of the Community
13014 Posts |
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Playing brinksmanship costs extra money, unsettles the markets, and threatens our credit rating.
The debt its self, having no budget, and really no long term plan has done more to threaten those things than trying to get some of that done before an increase. Everyone knows itll get raised the only question is by how much. In some ways its kind of a moot point anyway since theres no way we could ever pay off the debt anyway at this point short of just having countries say dont worry about it youre off the hook. On the other side too having no speed bumps would also do far more damage than some posturing to get concessions if 1 person had control over the debt limit by handing that power to the presidency. Congress controls some of the money but the presidency has a large ability to spend money which would basically leave it completely unchecked if they also controlled the debt |
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Pillar of the Community
United States
593 Posts |
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In some ways its kind of a moot point anyway since theres no way we could ever pay off the debt anyway at this point short of just having countries say dont worry about it youre off the hook. That's not true. Our debt as a percent of GDP was higher at the end of WWII than it is now, but we're getting close! We steadily paid it down from 123% in 1946 to 32% in 1981 when Reagan took office with a promise of "trickle-down" economics. From that time until Obama took office the debt as a percent of GDP marched up to 83% with the economy on the verge of another Depression. Stimulus spending, unemployment benefits, tax-cut extensions and other tax holidays piled on debt faster than ever before, but we avoided going into a Depression. Now it's time to have the courage to address the problem. We have a spending problem AND a revenue problem. I don't want to pass this problem to my children or their children. My father fought in WWII and his generation didn't pass the cost of WWII to us. When the Republican Eisenhower was President the top tax rate was 91%. We need a rate of 50% for income over $2 million, treat capital gains as income, and lower the threshold for paying income taxes so more Americans have skin in the game. When I was a kid I had to pay a small amount of income tax on a minimum wage summer job I had. We could raise the ceiling on FICA and lower the rate to offset the modest income tax on low wage earners, but we definitely need to all be in this together! Quote:
On the other side too having no speed bumps would also do far more damage than some posturing to get concessions if 1 person had control over the debt limit by handing that power to the presidency. Congress controls some of the money but the presidency has a large ability to spend money which would basically leave it completely unchecked if they also controlled the debt Congress authorizes all spending. The President has VERY limited authority to spend beyond what Congress authorizes. This is all about the dysfunction of Congress. The debt ceiling debate is nothing but political theater and it does much harm and ZERO good. The spending and revenue debate should happen when Congress takes up budget negotiations. |
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Pillar of the Community
United States
593 Posts |
Quote:Quote: What would a $1 trillion coin look like? Maybe something like this:- http://www.1tonnegoldcoin.com/ Now that is really fascinating! It's one tonne, which I take to be a metric ton or approximately 2,200 pounds = 35,200 ounces. At about $1595/oz AUD, that's a little over $56 million AUD, but I noticed that the denomination was only $1,000,000 (one million). Seems weird to mint a coin with a face value of one million with 56 million worth of PMs. Edited by larsdog
01/16/2013 11:57 pm
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Bedrock of the Community
13014 Posts |
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Republican Eisenhower was President the top tax rate was 91%. Yet we still had debt. Even if that would work no one should be forced to give up that much of their money to the government. Quote:
We need a rate of 50% for income over $2 million, treat capital gains as income, and lower the threshold for paying income taxes so more Americans have skin in the game. Which would be the fastest way to drive money out of the country. Were a global economy now, part of that means money can and will easily move when conditions are no longer favorable compared to other places. Theres a reason people are bailing before their big paydays like the FB guy did and many others. The days of being able to just tax whatever ended when you could get anywhere in the world in under a day. Quote:
Congress authorizes all spending. The President has VERY limited authority to spend beyond what Congress authorizes. This is all about the dysfunction of Congress. The debt ceiling debate is nothing but political theater and it does much harm and ZERO good. The spending and revenue debate should happen when Congress takes up budget negotiations. Thats not entirely accurate. The president has a lot of power to initiate spending, the presidency just has limited power when it comes to sustained spending. The oversight on programs doesn't take place before its approved when signed into law. Yes we would be much better off if the senate would actually pass a budget since its been about 5 years now since they did. But no the debt talks arent the major driving force for any of the credit reactions and none of the rating companies have said it was, the lack of a long term plan is by far the biggest driving force. Since the Senate refuses to attempt budgets the only option is to force it during a debt talk. |
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Pillar of the Community
United States
4132 Posts |
No idea what you mean when you say the president can initiate spending. Spending has to occur through laws, and laws have to be passed by congress. Yes, the president can negotiate with congress over those laws, and suggest laws, but he can't spend money all by himself. That's a power of congress alone (the only power the president has over that is a veto.) Quote:
Which would be the fastest way to drive money out of the country. The fastest economic growth and growth in the standard of living in this country was during those post-WWII years under those very high marginal rates. I wouldn't go back to Eisenhower era rates, but there isn't a lot of evidence that high tax rates on the phantasmagorically wealthy have that kind of negative effect. Quote:
lower the threshold for paying income taxes so more Americans have skin in the game Most of those low-income folks who pay little or no income taxes DO pay quite a bit in taxes, many of them regressive (state and local taxes, sales taxes, payroll taxes, etc.) They do have skin in the game. Only looking at income taxes gives a very distorted picture. They also spend almost all of their income, so tax increases on lower income folks has the strongest negative economic effect. |
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Bedrock of the Community
13014 Posts |
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No idea what you mean when you say the president can initiate spending. Spending has to occur through laws, and laws have to be passed by congress. Yes, the president can negotiate with congress over those laws, and suggest laws, but he can't spend money all by himself. That's a power of congress alone (the only power the president has over that is a veto.) Executive Orders are laws, thats a power of the presidency. Quote:
but there isn't a lot of evidence that high tax rates on the phantasmagorically wealthy have that kind of negative effect.
Off shore accounts are evidence of that, the rich fleeing france when they proposed a 75% rate is evidence of that, theres been several people who have changed their citizenship before taking their company public for lower tax laws as well as companies that have relocated. You dont need to look any further than the different rates in the States, companies are leaving high tax rate states for more business friendly ones, one of the issues California cant figure out for why theyre losing companies. Theres a very fine line where extra taxes increase revenue, but once you get over that point you start costing yourself money. |
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Pillar of the Community
United States
4132 Posts |
Executive orders are extremely limited in terms of how they can allocate spending. At most, they can direct money already appropriated by congress to a particular task, prioritizing one area over another, but they can't allocate new funds.
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Moderator
 United States
188770 Posts |
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Seems weird to mint a coin with a face value of one million with 56 million worth of PMs. So, the American Eagle Bullion Coins are weird?  I am really enjoying the civility of this discussion, but it has shifted from being about the coin and its precious metal content. Normally I would move this to General Discussion, but we already have a more general Trillion Dollar Coin topic there... https://goccf.com/t/138254Please keep this topic about the coin and precious metals, and continue the "other stuff" in the GD topic.  |
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Valued Member
United States
272 Posts |
Well the mint is currently charging 37.48 times face for Platinum Eagles so all we have to do is find some sucker overseas willing to pay $37.48 trillion for one LOL
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Pillar of the Community
United States
3670 Posts |
Interesting they chose platinum over gold. Could this speak of which has a brighter future....
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Moderator
United States
188770 Posts |
No, just that the law allows them to pull this trick with platinum bullion coins, but not gold or silver.
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Pillar of the Community
United States
593 Posts |
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So, the American Eagle Bullion Coins are weird? Now that you mention it, yes they are! I've been so buried in my 7070 that I'm used to coins that were minted with a face value close to the PM content at the time of minting, at least that's what I thought. |
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Replies: 32 / Views: 4,170 |
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Posted 01/16/2013 10:02 pm
