Robert Reich, former secretary of labor in the U.S., has called for the government to bypass Congress in order to raise the debt ceiling unilaterally. Reich has urged the government to ignore the faculty of Congress to establish the debt ceiling and stated that the constitution of the U.S. gives President Biden the right of ignoring this debt limit, declaring it unconstitutional — explaining its existence is less significant than the mandate of not questioning the validity of the U.S. public debt. Reich bases his exhortation on the fourteenth amendment of the U.S. Constitution, which declares that “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.” According to him, this enables the president to take unilateral action to raise the established debt ceiling.
What is the debt ceiling and why does it matter?
The U.S. debt ceiling is a legal limit on how much money the government can borrow to pay for its expenses. When the U.S. Treasury needs to borrow money, it issues bonds to investors and promises to pay them back with interest. The government sets a maximum limit on how much total debt it is allowed to have outstanding at any given time. The debt ceiling has been in place since 1917, and it has been modified several times over the years.
The debt ceiling is an important issue because if Congress doesn’t raise it when needed, the government will not be able to borrow the money it needs to pay its bills. This could lead to a default on U.S. government debt, which could have serious economic consequences for the country and the world. It could also lead to a downgrade of the U.S. credit rating, which would make it more expensive for the government to borrow money in the future.
Why is Robert Reich calling for ignoring the debt ceiling?
Reich is calling for ignoring the debt ceiling because he believes that Republicans are trying to negotiate tax cuts that will affect several key benefits directed to vulnerable sectors, including healthcare, education, veterans’ benefits, and others, and use the raising of the debt ceiling for political leverage. According to him, the fourteenth amendment of the U.S. Constitution enables the president to take unilateral action to raise the established debt ceiling.
Is the U.S. going to default on its debt?
Several economists have expressed concerns about the possibility of the U.S. defaulting on its debt, including Peter Schiff, who believes this will happen sooner or later. Bipartisan talks on the debt ceiling issue have been postponed until Friday, but Senate Majority Leader Chuck Schumer stated that House Speaker Kevin McCarthy would not take the possibility of default off the table during the last meeting, forcing a stalemate. If Congress fails to raise the debt ceiling, it could lead to a default on U.S. government debt, which could have serious economic consequences for the country and the world.
What are the consequences of ignoring the debt ceiling?
Ignoring the debt ceiling would be a risky move for the U.S. government. It could lead to a constitutional crisis and undermine the credibility of the U.S. government in the eyes of investors and foreign governments. It could also lead to a downgrade of the U.S. credit rating, which would make it more expensive for the government to borrow money in the future. The U.S. Treasury would likely face difficulties in paying its obligations, including payments for Social Security, Medicare, and other government programs. It would also lead to uncertainty in financial markets, potentially leading to a global economic downturn.
Conclusion
The ongoing debate over the U.S. debt ceiling is causing concern in financial markets and among policymakers. Robert Reich, former secretary of labor in the U.S., has called for the government to ignore the debt ceiling and raise it unilaterally, citing the fourteenth amendment of the U.S. Constitution. However, ignoring the debt ceiling would be a risky move for the U.S. government, potentially leading to a constitutional crisis, a downgrade of the U.S. credit rating, and economic instability. The U.S. government needs to find a solution to the debt ceiling issue before it causes lasting damage to the country’s finances and reputation.
