I’d like to point out a word that many people don’t understand or the media uses against us, the general public. The word is default.
This word is being thrown around by our leaders and media personalities constantly, but is it really accurate or is it just fear-mongering? With all this debt ceiling talk about to “resolve” itself, I would like to share with you something you may not know about our Constitution.
“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. 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.
Section 5. The Congress shall have power to enforce, by appropriate legislation, the provisions of this article.”
This is article 4 and 5 of the 14th Amendment of the U.S. Constitution.
Let us all take in this article. Read it again. Look for key words like “public debt”, “shall” and “shall not”, “the congress”, “authorized by law”. What exactly does it mean?
There are many who inaccurately portray this article as authorization for the President to just keep borrowing money for whatever we need in fiscal year 2014. The reason article 4 in the 14th amendment was written was to protect the public, not the government. This is why this area of the constitution is referred to as citizenship rights and equal protection. It was specifically written as power granted to the citizens of the US, not as a government power. The term “shall not be questioned” means “can’t be ignored”. So the public debt we owe and has been acknowledged by law can’t be wiped clean or not paid back based on the whims of the government.
This protects the public by making sure the government does not spend whatever they want and then essentially bail themselves out. This does not mean we need to pay for future spending, only debt we have incurred. This also does not give the President authority to borrow more money for future expenditures, like say a budget for fiscal year 2014 which has not been approved yet. There is a fundamental difference between expenditures and debt.
Our debt interest payment is roughly $20 billion dollars per month. Our revenue in 2013, according to the U.S. Treasury, http://www.fms.treas.gov/mts/mts0813.pdf , ranges from $122 billion to $406 billion per month. It is important to note that all of our DEBT can be paid with this revenue, but not all of our expenditures and purchases we plan to make. Please understand that the 4th article of the 14th amendment means we must pay back public debt first and foremost before any other expenditures. Whatever is done with the leftover money after the debt payment(interest/principle) is paid is up to congress to decide how they distribute it as it is their duty to authorize such future spending.
I just want to clarify that to default would mean we can’t pay the interest payments($20 billion monthly) on the national debt, which in total currently stands at:
Have a lovely day.