The Debt Ceiling is the Law of the Land

Daniel Horowitz

Daniel Horowitz

From, By Daniel Horowitz, 10/07/13 – Over the past few weeks, Democrats have indicated that they have no intention of negotiating over Obamacare, opting instead to shut down the government.  They are justifying their obstinacy by asserting that Obamacare is the law of the land.  Well, if that is the game they want to play, we should return the favor with the debt ceiling.  The debt ceiling, pursuant to the Second Liberty Bond Act of 1917, is the law of the land.  And it has been so for far longer than Obamacare.

Throughout this debate over funding Obamacare in the budget bill, House GOP leaders have stressed how the debt ceiling was the more appropriate means of fighting Obamacare.  After all, it was “the next fight.”  But as if on cue, some Republicans are already using the same Democrat talking points about the risk of default.

We are going to hear this erroneous talking point propagated by both parties over the next few weeks, so let’s put the myth to rest.  The only way we default on the debt is if we fail to pay the interest on the public debt.  According to the updated budget projection from the CBO, interest on the debt will be roughly $237 billion for 2014.  Thanks to the short-term revenue benefits of the fiscal cliff and Obamacare tax hikes, the federal government is expected to rake in a record $3.042 trillion from the private economy this year.

Let’s engage in a simple math exercise.  $3.042 trillion – $237 billion = $2.805 trillion.  As long as the Treasury pays the first $237 billion in revenue to the shareholders of our debt, there will be no default, and we will have $2.805 trillion left to spend.  Again, default is taken off the table.  Discussion over.

What do you do with the remaining funds?  You start funding core functions of government and those programs that people are already dependent on.

Social Security (retirement and disability) – $848 billion

Medicare – $505 billion

Medicaid – $298 billion

Defense – $582 billion

Veterans – $83 billion

Those expenditures account for roughly $2.3 trillion.  The remaining half trillion can be prioritized as needed for other functions related to homeland security, national parks, or any other limited function.  Hence, the debt ceiling is a built-in balanced budget mechanism.  If Democrats want to fund other functions of government, they need to commit to a balanced budget.  If they want to fund the HHS and the IRS, they need to get rid of Obamacare.  If they want to fund the EPA, they need to get rid of the war on coal.

The power of the purse manifest in the House of Representatives, in conjunction with the debt ceiling law, reflects democracy at work, especially with divided government.  It’s time we stop peddling the myth of default, and start using our leverage to restore constitutional government and bring relief to those who are losing jobs and suffering from the high cost of living engendered by the harmful activities of the unconstitutional aspects of government.

3 responses

  1. If the un-Constitutional aspects of the current government were removed, we would have a government greatly diminished in size and a less expensive one. I can’t see the fat cat politicians, allowing that to happen, can you?

  2. Senator_Blutarsky

    Jack…………..dont limit things to the “current” govt – it has been going on for longer than we have been around – here is why.

    Wall Street Bosses Run America

    by Stephen Lendman

    They’re more powerful than standing armies. What they say goes. They decide policy. They rule the world. They do it by controlling money, credit and debt.

    They manipulate markets for self-enrichment. Grand theft is official Wall Street policy. Government officials wink, nod, and permit the grandest of grand larceny to persist.

    Financial giants recycle their executives in and out of Washington. They strip-mine economies for profit. They buy politicians like toothpaste. Whatever they want they get.

    They do it at the expense of government of, by and for everyone equitably and just.

    On October 2, 15 financial lords met with Obama. They did so at the White House. They gave him their marching orders.

    They came to assert their demands. They’re uncompromising. They’re ruthless. They want business as usual continued. They want more than ever.

    They want more bailouts. They want bail-ins. They want personal bank accounts, pensions and other assets looted.

    They want more crushing neoliberal harshness. They want America thirdworldized. They want it looking like Greece.

    Budget and debt ceiling debates conceal their ugly agenda. What’s ongoing is a longstanding orchestrated swindle. Bipartisan complicity supports it.

    Social America is on the chopping block for elimination. Another grand bargain plans it. Expect it once current theatrics end.

    The worst of what’s coming could begin in weeks. Harder than ever hard times will follow.

    Obama expressed support for deeper Medicare and Social Security cuts. He’s on board for weakened social protections overall.

    Partisan warfare is more subterfuge than real. Both parties fundamentally agree. They want New Deal/Great Society policies entirely ended.

    Wall Street bosses demand it. They want to feed more aggressively at the public trough than already. They want money gotten used to make more of it.

    They want it stolen from ordinary people to make doing so easier. Obama and congressional leaders are their hired hands.

    They’re complicit. They’re on board to eliminate “unnecessary” social programs. He want them entirely eliminated. They’re dismantling them incrementally.

    Social Security, Medicare, Medicaid and public pensions are prime targets. Planned death is by a thousand cuts. It’s the new normal. It’s by letting Wall Street profiteers control these programs.

    So-called “creeping normalcy” is defined as a way to make major changes seem normal and ordinary.

    Class war in America has been ongoing for decades. It’s worse now than ever. It benefits business and rich elites. It does so at the expense of most others.

    Middle class America is targeted for elimination. Bipartisan complicity plans it. Obama capitulated to Republicans on preserving tax cuts and other benefits for rich elites.

    He gave trillions of dollars to Wall Street crooks and other corporate favorites. Profiteers benefit hugely from ongoing imperial wars.

    Main Street Depression conditions persist. Bipartisan complicity plans much worse ahead. Militarism, favoritism, waste, fraud and other rewards benefit Wall Street and other special interests.

    They do so at the public’s expense. Let ’em eat cakes defines official policy. Ordinary people are increasingly on their own sink or swim.

    Wages no longer keep up with inflation. Benefits steadily erode. High-paying manufacturing and service jobs offshored to low wage countries. Automated production claimed more.

    So-called free markets aren’t fair. They work best for those who control them. Growing numbers of others lose out entirely.

    Technology driven productivity increasingly pressures workers to toil longer for less pay and fewer benefits.

    Marx was right explaining capitalism’s contradictions. They reflect an anarchic, ungovernable system. Today’s monster is far worse than he imagined.

    Powerful monopolies and oligopolies control production, commerce and finance. Wall Street and other corporate bosses demand increasing amounts of surplus from pressured workers.

    They’re looting America. They’re wrecking it. They’re sucking it dry for profit. Predatory capitalism is too corrupted, malignant and broken to fix.

    Institutionalized inequality reflects it. America is more hypocrisy than democracy. It’s a kleptocracy. Criminal gangs pose as political parties. They’re complicit with corporate crooks.

    They’re war criminals. They’re serial liars. They’re scoundrels of the worst kind. America’s real crisis isn’t government shutdown, said Paul Craig Roberts.

    It’s not the debt ceiling. It’s looting America. It’s wrecking the economy. It’s offshoring good paying jobs. It’s lowering the tax base in the process.

    It did so by transferring America’s wealth and overall well-being to China and other low wage countries.

    It did it by permanent imperial wars. They inflate annual spending. Larger deficits followed. They’re “too large to be closed,” says Roberts.

    Money printing madness sustains things as long a possible. What can’t go on forever, won’t. Dollar debasing doesn’t work. Gold and silver prices reflect it.

    Wall Street and Washington rig markets to keep them from going higher. Illegal naked short selling is done to do so.

    It constrains prices even when physical demand is increasing. It bears repeating. What can’t go on forever, won’t.

    Given irresponsible financial/economic policies, expect eventual gold and silver prices to explode.

    Another crisis, says Roberts, “is the absence of intelligence among economists and policymakers.”

    Don’t worry, they said. Offshoring jobs doesn’t matter, they claimed. A “New Economy” with better jobs is coming.

    Monthly payroll data explain otherwise. High paying/good benefit jobs are disappearing. Low paying/poor or no benefit jobs replace them.

    America is being hollowed out in the process. It’s being strip-mined of its material wealth and resources.

    It’s being suffocated. It’s being thirdworldized. It’s headed toward dystopian backwater status.

    Plans are to force feed greater austerity. It’s to replicate Greece harshness. It’s to make America a ruler – serf society.

    It’s to crush trade unionism. It’s to crack down hard on nonbelievers. It’s to make America more than ever unfit to live in.

    It’s to create more severe crisis conditions than now. It’s to do so for greater profits and control.

    Ending what’s ongoing requires replacing duopoly power with responsible governance. It requires rebuilding the nation’s industrial base.

    It’s ending imperial wars. It’s disbanding America’s empire of bases. It’s strengthening social protections too vital to lose.

    It’s putting money power back in public hands where it belongs. It’s making the privately owned and controlled Fed really federal. It’s prohibiting banks too big to fail from existing.

    It’s ending corporate personhood. It’s replacing kleptocracy with real democracy. It’s running free, fair and open elections. It’s getting money entirely out of politics.

    It’s curbing corporate power once and for all. It’s empowering people over money. It’s making crime no longer pay. It’s prosecuting crooks in the suites. It’s protecting human and civil rights.

    It’s mandating universal healthcare and public education. It’s reinvigorating organized labor.

    It’s reinstating progressive taxes. It’s making everyone pay their fair share. It’s guaranteeing a minimum life sustaining income.

    It’s abolishing poverty, unemployment, hunger, homelessness and inequality. It’s ending favoritism. It’s getting rogues, rascals and other miscreants out of government.

    It’s substituting truth and full disclosure for managed news misinformation. It’s replacing media scoundrels with responsible ones to do so.

    It’s consigning Wall Street and other corporate crooks to the dustbin of history.

    It’s establishing government of, by and for everyone. It’s making America what it never was before.

    It better happen soon or else. Roberts calls today’s situation dire and “discouraging.”

    “At this time,” he says, “collapse seems the most likely forecast.”

    Perhaps rebuilding from ruins will change things, he hopes. Perhaps intelligent life exists elsewhere. Perhaps it’s on other planets.

    Perhaps it’ll replace what doesn’t exist on earth. Perhaps it’s the only hope for survival. There may be no other way.

    Stephen Lendman lives in Chicago. He can be reached at

    His new book is titled “Banker Occupation: Waging Financial War on Humanity.”

    1. Senator_Blutarsky

      “I believe that if the people of this nation fully understood what Congress
      has done to them over the last 49 years, they would move on Washington;
      they would not wait for an election… It adds up to a preconceived
      plan to destroy the economic and social independence of the United States!”
      Senator George W. Malone

      “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”
      – Henry Ford

      “History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance.”
      – James Madison

      “Mischief springs from the power which the moneyed interest derives from a paper currency which they are able to control, from the multitude of corporations with exclusive privileges… which are employed altogether for their benefit.” – Andrew Jackson

      “If Congress has the right under the Constitution to issue paper money, it was given them to use themselves, not to be delegated to individuals or corporations.” – Andrew Jackson

      “The bold effort the present (central) bank had made to control the government … are but premonitions of the fate that await the American people should they be deluded into a perpetuation of this institution or the establishment of another like it.” – Andrew Jackson

      “You are a den of vipers. I intend to rout you out and by the Eternal God I will rout you out. If the people only understood the rank injustice of our money and banking system, there would be a revolution before morning.” – Andrew Jackson, 1828

      “A power has risen up in the government greater than the people themselves, consisting of many and various powerful interests, combined in one mass, and held together by the cohesive power of the vast surplus in banks.” – John C. Calhoun, Vice President June 27, 1836

      “If the American people ever allow private banks to control the issue of their currency, first by inflation then by deflation, the banks and the corporations that will grow up around them, will deprive the people of all property until their children wake up homeless on the continent their fathers conquered.” – Thomas Jefferson

      “I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a monied aristocracy that has set the government at defiance. The issuing power (of money) should be taken away from the banks and restored to the people to whom it properly belongs.” – Thomas Jefferson

      “The dominion which the banking institutions have obtained over the minds of our citizens…must be broken, or it will break us.” – Thomas Jefferson

      “Money power denounces, as public enemies, all who question its methods or throw light upon its crimes.” – William Jennings Bryan – US Congressman (1891-1895), US Secretary of State (1913-1915)

      “Thus, our national circulating medium is now at the mercy of loan transactions of banks, which lend, not money, but promises to supply money they do not possess.” – Irving Fisher

      “Commercial banks create checkbook money whenever they grant a loan, simply by adding new deposit dollars in accounts on their books in exchange for a borrower’s IOU.” – Federal Reserve Bank of New York

      “The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks.” – Lord Acton

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