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A Constitutional Debt Default

Written by Robert Murphy on October 17, 2013

Nope. Or at least, I have as much authority in saying that, as the bloggers and pundits who claim otherwise. Here’s what the relevant section from the Fourteenth Amendment says:

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.

Remember, the Fourteenth Amendment was adopted in 1868 as part of Reconstruction. Here’s the context to help understand Section 4:

Section 4 confirmed the legitimacy of all U.S. public debt appropriated by the Congress. It also confirmed that neither the United States nor any state would pay for the loss of slaves or debts that had been incurred by the Confederacy. For example, during the Civil War several British and French banks had lent large sums of money to the Confederacy to support its war against the Union.

So when the 14th Amendment says the “validity of the public debt of the United States…shall not be questioned,” it means, for example, that people in South Carolina couldn’t object and say, “Hey, why the heck should South Carolina have to pay taxes to the federal government, in order to redeem bonds that were issued in order to kill our people? That’s crazy.”

The 14th Amendment is not saying, “If for some reason the federal government defaults on its outstanding bonds, this violates the Constitution.”

I mean think about it for a second: There could be an economic calamity making it impossible for the government to pay off its bondholders, regardless of political will. So how can that possibly be an unconstitutional outcome?

(For the rest of the article, click the link.)

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One thought on “A Constitutional Debt Default

  1. Thank you for actually interpreting the Constitution as it is written. Far too many people interpret it as the WISH it was written. Would you care to address the argument that all SPENDING bills must originate in the House of Representatives? I am aware that Article 1, Section 7 states "All Bills for raising Revenue shall originate in the House of Representatives". If there is a provision that requires spending bills to originate in the House I have missed it. Spending bills don't necessarily require additional revenue.