Buy Obama Bonds: The ‘Least Unconstitutional’ Option
October 15th, 2013
The State is bleeding money, and using a partial shut down as a kind of tourniquet. But that’s a temporary solution, and they’re constantly searching for something, anything, that can save them from their own insurmountable debt, but only until the end of their term. The latest ridiculous attempt to suture this spurting gash is the so-called “Obama Bond.”
This would be a bond issued by the president unilaterally in an attempt to avoid a debt default. There’s just one problem. Presidents can’t legally issue bonds without congressional authorization.
So, that’s it right? If the President doesn’t have the authority, that’s a deal-breaker. Presidents don’t do unconstitutional stuff… not so much. Fortune‘s Roger Parloff explains the tenuous justification they’re using to argue that they can do this, and if the government shutdown continues until the debt ceiling deadline on October 17th any justification will due.
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Republicans have said that they will not agree to lift the debt ceiling unless the White House bends on Obama’s healthcare law. The White House and Senate Majority Leader Harry Reid have said they won’t negotiate over the debt ceiling. So there’s a crisis brewing.
Here’s the problem. Nobody wants to buy ambiguously legal bonds that might get invalidated because they might lose their investment. Whether or not investors get their money back could literally depend on who is in office.
It’s not Obamas only unconstitutional option.
Obama could unilaterally raise taxes. If he robs Americans directly, without congressional approval, maybe he could make the money that way. Not that congressional approval makes it any more palatable to me, but it would make for some interesting trials if people refused to pay taxes that were barely legal anyway. I guess that’s the same as the income tax fundamentally.
Obama could unilaterally just ignore the debt ceiling issue. Sure, he can’t legitimately issue debt without congressional approval, but national debt is unpopular, and Congress doesn’t want the responsibility of actually doing anything. Maybe the debt ceiling will end up treated like declarations of war, where the constitutional process is ignored, and no one is willing to do the job of reining in the president.
The Obama Bond is being called the “least unconstitutional” of the president’s options.
In other words, it’s unlikely they’ll stop the president from issuing bonds not authorized by Congress. If he does, it means he’s prioritizing the debt ceiling over risking a default. But it also means throwing another financial instrument into the pile of State controlled investment options, which could have all kinds of unintended consequences.
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