US Debt Crisis: Will Obama Invoke the 14th Amendment?

“You’ve got to take it seriously, guys!”

With only a couple of days to go before the US officially runs out of money to pay debt interest to the rest of the world, the international financial markets are rattled and investors are buying gold in unprecedented numbers. If President Obama can not come to some accommodation with the Republican party by Tuesday 2nd August, he is faced with only two options; allow the United states to default on debt repayment or ignore Congress and make a Presidential decision to borrow and allow the US to go into even more debt. Neither is a very pleasant option for Barak Obama who is stuck between a very hard rock and an even harder place…

The United States Constitution is an astonishing document, full of worthy sentiments and subtle meanings that have been augmented over the years by numerous “amendments”. Non Americans [like me], are acquainted with only a couple. The notorious Second Amendment that gives Americans the right to possess a firearm and the Fifth Amendment [“No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury”], used by unfortunate American citizens, accused of Communism and hauled before The House Committee on Un-American Activities in the 1950′s. Now we are learning more about another Constitutional Amendment that could have a profound effect on everyone, both within and outside of the United States.

Sarah Palin: The voice of reason [sic]

The 14th Amendment dates from 1866 and states amongst many other things that “The validity of the public debt of the United States, authorized by law … shall not be questioned.” Some people [including ex-President Bill Clinton] consider that the clause means it is unconstitutional for Congress to refuse to raise the debt ceiling – the amount the nation is legally permitted to borrow. Furthermore, that the President is constitutionally permitted to borrow money on his own authority.

This interpretation of the Amendment has never been tested in law and it remains to be seen if, as a last desperate measure, Obama will quote Shakespeare and say “a curse on both your houses” and continue to wrack up new debt to pay for the old ones…

George W. Bush

I have some sympathy for the man who came into the Presidency after George W. Bush managed to overheat the US economy by deregulating everything in sight and allowing a financial environment to develop where false-profits could be made for a few Wall Street brokers, through the development of such financial tools as sub-prime mortgages and the purchase or sale of residual debt. Since 2008, the rest of the world has been picking up the pieces and trying to re-float the world economy.

If President Obama does the unthinkable, the notional “Triple A” credit-rating of the United States will be preserved for a while but at what cost?

“One day, all this will be yours”

You can guarantee that the Republican Party will vote to impeach the President and they will be able to do it as well, for all it needs is a majority vote by the House of Representatives. A House where they already hold a majority of seats. The Senate would of course refuse to convict him but that wouldn’t be the point. It would be an added pressure and embarrassment to the President in the run-up to the 2012 Presidential election.

Personally, I am not convinced that raising US debt indefinitely will do anything more than make it more difficult for the US to pay back its loans but I do believe that a run on the dollar will cause many more financial institutions to collapse and create more unsustainable debt. If that happens, there will be a massive loss of confidence in the dollar , plunging us all down a further step, in what is already the greatest financial crisis there has been since the Black Death.

So, my advice to both the right-wing of the Republican party [who are playing pre-election games with all of our futures] and the Democrats [who today rejected U.S. Speaker John Boehner’s plan to raise the debt ceiling and slash government spending] is, sit yourselves down and come to some sort of agreement balancing increases in the debt limit with some cuts to US services, otherwise we will all suffer the consequences…

 

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About stevehollier

Steve Hollier is the editor of AZ Magazine, an English language lifestyle magazine based in Baku, Azerbaijan. He began his career working for a firm of stockbrokers in the City of London then went on to attend the University of Essex where he was awarded an MA in Sociology in 1984. After a career in arts and cultural development work, he became a freelance arts consultant, writer and photographer.
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One Response to US Debt Crisis: Will Obama Invoke the 14th Amendment?

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