Friday, October 18, 2013 - A day that will live in infamy.
For the first time in history, the United States of America is prepared to default on the National Debt.
We had paid back our Revolutionary War Debt to the penny. Despite the incredible cost and brutality of brother-on-brother violence during the Civil War, President Lincoln considered national default unthinkable. And even though our debt at the end of World War II peaked at more than 100% of our Gross Domestic Product (the sum total of all economic activity in the USA), Presidents Franklin Roosevelt and Harry Truman never missed a single payment deadline.
Now this. Friday morning. The day after.
President Obama grimly announces that due to the apocalyptic wishes of the Tea-Party wing of the Republican Party (more than half of which in a poll just three days earlier supported national default), the United States of America, the richest country on earth, is legally unable to pay its debts as they come due. The Attorney General, after carefully examining the law and finding no legal grounds to prioritize bondholders over any other US debt-holders authorized by law, instructs the Treasury Secretary to pay debts on a first-incurred basis as money is available from daily tax receipts. And for the first time in American history, just as social security checks are stopped, bondholders do not get paid the money they are owed on short-term Treasury Bills.
The Dow falls 700 points in one hour, forcing the New York Stock Exchange to halt trading. Interest rates skyrocket, as bondholders quickly sell every Treasury Bill they can at 90 cents, then 80 cents, then 70 cents on the dollar. China cashes in $1 trillion in T-Bills, causing interest rates to hit 10% then 20%. Ted Cruz gleefully declares,”The Apocalypse is here. This is what happens when Republicans stick together. President Obama must resign now. If he does not, we will continue the default until he does!”
The President of the United States is stunned that he called the Republicans’ bluff and they weren’t bluffing. He is stunned to find out Speaker John Boehner really did care more about his job than the well-being of the American People. He is stunned that even after this catastrophe, Boehner still won’t let the majority of the House of Representatives vote on the Senate’s repeated attempts to raise the debt ceiling. Blinking back tears and frankly still a little bit in denial, the President retires to the Oval Office all alone. He angrily knocks all the papers off his desk, leaving only his personal, dog-eared copy of the Constitution, the one he kept in his pocket when he used to teach Constitutional Law. He almost absent-mindedly flips through it.
And then he remembers something.
Quickly, he turns to the Fourteenth Amendment of the Constitution and re-reads Section 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.
Sure, that Amendment was passed after the Civil War to pay Union debts. But the text does not solely refer to that situation. And wasn’t there a Depression-era case that said Congress had no authority to default on the national debt? The President jumps up quickly to grab an old law book on an Oval Office shelf, nearly tripping over a startled Bo curled at his feet. Yes. There it is! Perry v. United States (1935), where the United States Supreme Court rejected the Government’s contention that: “Congress can disregard the obligations of the government at its discretion”:
“We do not so read the Constitution. [When Congress] has borrowed money under the authority which the Constitution confers[..., Congress is] without power to reduce expenditures by abrogating contractual obligations of the United States…. Congress has not been vested with authority to alter or destroy those obligations.
“The Fourteenth Amendment, in its fourth section, explicitly declares: ‘The validity of the public debt of the United States, authorized by law, … shall not be questioned.’ While this provision was undoubtedly inspired by the desire to put beyond question the obligations of the government issued during the Civil War, its language indicates a broader connotation. We regard it as confirmatory of a fundamental principle which applies as well to the government bonds in question, and to others duly authorized by the Congress, ….. Nor can we perceive any reason for not considering the expression ‘the validity of the public debt’ as embracing whatever concerns the integrity of the public obligations.”
The President slams the law book shut and sprints to the Rose Garden, nearly tripping over Bo again, who yelps excitedly. He declares a news conference will occur in 60 seconds, barely giving resident cameramen enough time to turn around to film him as every TV station breaks in to its regularly-scheduled programming:
“I, Barack Obama, by the power vested in me by my oath to uphold the Constitution of the United States, do hereby declare that the validity of the public debt of the United States, authorized by law, shall not be questioned. The debt ceiling is unconstitutional. I instruct the Treasury to immediately pay from borrowed funds all public debt legally owed as it comes due.”
The Dow shoots upward. Interest rates decline sharply. The Premier of China buys back his American bonds. The run on banks ends. Senator Cruz shakes his finger angrily to the cameras, “You have not heard the end of me, you dictator!”
Epilogue from a History Book, c. 2050:
The United States of America would never default again. On October 18, 2013, the day after the great Tea Party Default of 2013, the United States officially made clear that it will always pay its debts, as then-President Obama became the first American President to legally invoke Section 4 of the Fourteenth Amendment. In June 2014, the Supreme Court in Cruz v. Obama ratified the President’s decision by an 8-1 vote (Scalia, J., dissenting), holding that Section 4 of the Fourteenth Amendment and the Court’s legal precedent of United States v. Perry rendered the debt ceiling either unconstitutional (five-justice majority) or a non-justiceable political question (concurrence of three justices).
There is an unconfirmed report that soon after the Supreme Court ruling, Chief Justice Roberts told one of his law clerks: “You think I’m going to be blamed for the nation’s first default and a worldwide economic crisis? Hell, no!”
This guy explains it well:
This op-ed was published last week at Politix.Topix.com (before President Obama called for intervention):
Auschwitz. Bergen-Belsen. Buchenwald. Treblinka.
Rwanda. Cambodia. Darfur. Armenia.
Mass murder. Genocide. Ethnic cleansing.
Syria. Seriously. Syria.
When I hear pundits – on the left or the right – say that the death of hundreds of thousands of non-Americans does “not affect our national interest,” I shudder.
When I see thousands of children gassed in Syria in 2013, I’m reminded of the millions of children gassed in Europe just two generations ago.
When I hear the story of nine Syrians imprisoned in a box six-feet-by-two-feet long for two weeks, gasping for air, with seven of them dead by asphyxiation, and the other two barely alive, hallucinating, and having to sleep either standing up or on top of corpses of what once was their fellow human beings, I’m reminded of the gas chambers themselves.
When I talk to the brave fighters in the Free Syrian Army, left to die by “Western interests” because helping them leads to “complexities” that may cause “practical difficulty” for “Allied militaries,” I’m reminded of the brave fighters of the Warsaw Ghetto, somehow miraculously killing a few Nazis as the vast majority of them go down to certain death. Meanwhile the Russian army, their erstwhile allies, sits on the other side of the river, waiting for them all to die. I’m reminded of the American military, also supposedly allied with the victims in the death camps, able to do tens of thousands of sorties over Germany and Poland but unable to find the time to bomb a single guard tower or gas chamber at Auschwitz.
When I think about our interventions in Libya (which I supported, because the people were rising up against a dictator that threatened to massacre them all) and Iraq (which I did not, for they were not, at least not in 2003), I’m worried that the United States will be perceived as only intervening for oil and never for humanitarian reasons. Even worse, I’m worried that these perceptions may be right.
I’ve been consistent. I angrily called my members of Congress when the people of Sarajevo were slaughtered and loudly advocated for our intervention in Kosovo. An intervention, by the way, I’m exceedingly proud of. We stopped genocide with no American ground troops or loss of American life.
I angrily called my government to stop killings in Rwanda. And I did several radio shows advocating for intervention in Darfur. We could save hundreds of thousands of lives, I cried. We did nothing.
I opposed our invasion of Iraq. The crimes committed by Saddam Hussein occurred when Saddam was supported by Presidents Ronald Reagan and George H.W. Bush, but these horrible murders, including gassing of innocents, had long stopped by 2003. I don’t willy-nilly want the USA to invade any country with a terrible dictator. We had learned in Kosovo that ground troops are often unnecessary. If the Iraqi people were not rising up against their dictator in 2003, why were we involved?
While I supported our invasion of Afghanistan, that was for self-defense, not prevention of mass murder. As soon as the regime harboring al Qaeda was toppled, we should have left.
I advocated for intervention in Libya and was proud of my country, finally and all-too-reluctantly, stopping a Libyan government poised for mass murder, with relatively little cost and no American lives lost in six months of fighting. The lesson of Libya seems to me to be that an allied “no-fly” zone, coupled with desperate Libyans on the ground fighting for their lives, will often have success.
And not just success on the ground. In the subsequent Libyan election, the grateful Libyan people did something remarkable in the Arab world: they rejected both a brutal secular dictatorship and an Islamist theocracy, preferring instead a secular democracy. If only Egypt and the rest of the Arab World chose that option! And don’t give me that nonsense that the attacks in Benghazi somehow rule out our Libyan success. (Just because the Libyan government may be too weak to handle all the terrorists in their midst, one awful incident does not mean that our help to the people of Libya was a mistake. After all, we could not prevent 9/11 either.)
And now we come to Syria. Two years ago, I angrily went on television to denounce the Syrian government’s murder of 3,000 pacifists. On radio and TV, I repeatedly warned that doing nothing would lead to the massacre of tens of thousands more. I warned that al Qaeda would come in. I argued, and continue to argue, for a “no-fly zone.” I did not say it would be easy, but I knew we could do it. And I warned that “doing nothing” is a choice. A choice we should not make.
Some people believe that if you ignore a problem, it will go away. Crazy, immature thinking. Like a baby who believes you are gone when you cover your eyes. Or like an ostensible adult who tells himself if he just ignores the cries of a drowning man or a woman being raped, the problem will somehow be resolved.
How many more will be murdered until we open our eyes and our soul?
200,000? 1 million? 6 million?
How many more people have to be murdered before our “national interest” is affected?
How many more have to be massacred before our conscience is affected?
Where are our national leaders?
Where are our religious and moral leaders?
I know that many Americans, on both the left the right, do not want us to be the “world’s policeman.” They remind us, quite accurately, that we have internal needs. (They forget that most of our internal problems are self-inflicted.)
But if you do not think the world needs a policeman, you have your eyes closed.
Indeed, as the eyes are the windows to the soul, your soul is shut down as well.
Auschwitz. Bergen-Belsen. Buchenwald. Treblinka.
Rwanda. Cambodia. Darfur. Armenia.
First they came for them, and I did not speak out.
Then they came for me, and there was no one left to speak for me.
Mark Levine is a talk radio host in Washington, D.C., and frequent television commentator. A graduate of Harvard College and Yale Law School, Levine was formerly legislative counsel in the House of Representatives, serving then-Rep. Barney Frank (D-Mass.) on matters before the Judiciary, Homeland Security, and Financial Services committees. He is a fellow with the Truman National Security Project.
Made my second appearance on the Daily Show Monday night.
Unlike last time, it wasn’t a speaking part this time. In fact, I was making dinner and listening to the show and missed it! It’s only a few seconds. It occurs at 45 seconds in and I’m in the lower right box while the guy in the lower left box is speaking about Medicare being the “third rail of American politics.” Still, it’s nice to be back.
My first appearance was much better!
Jon Stewart Mocks Me for “Nagging Corporations”
(My clip is at 2:50)
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