United States Debt Default

See Perry vs United States. You are right. The government is obligated to pay ... eventually. Nothing in our law requires when.If by Aug 3 the debt ceiling is not raised and no more bonds can be sold the governments cash reserves will quickly dry up. Even the Treasury of the United States is barred from issuing rubber checks and, because of the Federal Reserve Act, neither can they print money to replenish those accounts.The obligation remains but the Treasury will be unable to pay as expected. That is default. That is the issue. No. The 14th Amendment means Congress cannot unilaterally dissolve a debt it previously entered. It does not keep the government from defaulting on timely payment per expectations.As said, the debt is recognized to remain. Timely payment not having been made the government is in default on the debt as recognized by the Uniform Commercial Code. The government can sell off any of the assets it has to raise cash, including it's stock of platinum, gold and silver bullion. It can sell the Washington Monument and the Vietnam Memorial as well.Note in the section you described the provision that such platinum coins are "legal tender" is missing but is specifically stated in the other coinage sections. This is not an oversight. Platinum is just another asset to the government as is Area 51 or the USS Nimitz.Striking Platinum coins cannot be used to pay our bills. It is not legal tender. It is a bullion sale from the Strategic Reserve. The government would have to sell the coins and use the cash generated to make payments.None of this will soften the economic chills that reverberate around the world come Aug. 4 when the Treasury will have to defer some payments on obligations.

Well, no. When Congress stipulates an expenditure usually they stipulate a timeframe as well. When Congress makes contracts with private parties, those contracts specify when payments are to be made. Those are laws and they do require that claimants be paid at a certain time.I'm sorry, Paul, but you're just 100% wrong here - the Executive branch isn't given unallotment authority. Woe betide us if it did! The next Republican president could just opt out of Federal funding of the NEA, Planned Parenthood, and so on. But Constitutionally the Secretary of the Treasury is obligated to pay those parties whom Congress has legislated must be paid. The fact that Congress also hasn't yet authorized the revenue necessary to make those payments is legally irrelevant; the Constitution doesn't make any provision for Congress being stupid enough to pass two mutually contradicting laws. By its plain reading it pretty clearly does. I'm not a lawyer - as neither, I suspect, are you - but the meaning is pretty clear. You're pretty clearly mistaken about that. If the Treasury mints it and issues it in a denomination of (for instance) ten dollars then it's worth ten dollars. Obviously. If you think there's some part of the law that prevents Tim Geithner from minting platinum coins in enormous denominations to pay debts, then present it. Otherwise what could "issue" possibly mean?Regardless the Constitution is pretty clear, here - Geithner can't pay some claimants and decide not to pay others. The situation outlined where bondholders get their payments but pensioners don't is a legal impossibility - Geithner doesn't have unallotment authority under the Constitution. The Executive branch can't decide not to pay those who Congress has legislated payments.

I did. And "to issue" for the platinum sets is the same as for "numismatic" issues. Commodities. Not legal tender. The problem is not "not to pay" but deferred payment.I am right about this stance, but, let's hope you and the rest of us don't have to learn this lesson the hard way.

No, you just alluded to it. I'm asking you to present the relevant statute. Geithner doesn't have the authority to defer payment, is the problem. Oh, well, if you say so!

Giethner's Letter to CongressThe horse himself knows what he can and cannot do.

Forbes Predicts US Return to Gold StandardI would guess that replacing paper-money with actual gold coins would be... exceptionally silly and pretty much impossible.
However, I think they are talking about a gold-backed standard, where the government sets a price for gold and will exchange money-for-gold at that price. Or something like that, I don't know too much about the workings...My question is, would something like this actually happen?
If it did happen, would it be beneficial to have gold-on-hand? (or is this an 'it depends...' type of question?)I don't really understand the government-exchanging-money-for-gold... part. I mean, what's so special/different about it?
Can't anyone exchange their money for gold at anytime anyway? Why would it be special if the government decided to do it?-A Casually Interested Canadian

Great, I guess, except that's not the statutory limitations I asked you to provide, and Geithner's letter doesn't support your contention in any way.You're in over your head, clearly. Isn't it about time you declared victory and retreated?

As I already stated, I did provide the statute. See my Message 61. It is the "legal tender" language missing from the section you have such a hard time comprehending.Geithner's letter was added in a separate message to strengthen the case that regardless of Congress' actions, if the Treasury does not have the cash in the accounts the Secretary has to delay payments regardless of your errant reading of the Constitution. Apparently so is Geithner and his entire staff of economists, researchers and lawyers (both contract and constitutional law) since the thought of minting some $billion platinum coins and rolling them down to the bank hadn't dawned on them.Maybe you should give them the benefit of your superior reading comprehension of both the Constitution and the US code, send them an e-mail and let them know about their duties and this most easy way out. The country would be greatful.

No, there's no statute referred to by you in message 61 or in any other. You referred to a court case (Perry) but surely I don't have to explain the difference?I see you're taking a page from Buzzsaw's book and referring to evidence "you've already presented" except that you never presented it. Maybe you even believe you presented something - maybe it's like that Jesus thread where people swore up and down that they were presenting evidence for the historical Jesus but were writing in nothing but underscores - and in that case, here's your second chance: pretend that I have no access to message 61 or any previous message or to the rest of the internet, and therefore can't accept links to other messages or allusions to statute as evidence. With that in mind, please present the evidence that supports your legal argument. By which I mean - present it, don't just refer or allude to it. Copy, paste, and put it in a post. The Secretary can only delay payment until the Treasury does have the cash in the accounts. In a situation where the Treasury will never have the cash, which is what we're potentially talking about here, Geithner has no authority to "indefinitely delay" - that is, not ever pay - claimants who Congress has designated must be paid. Well, maybe it hasn't! Had you ever heard of USC 31.5112(k) until I showed it to you? The USC is hundreds of thousands of pages long. Obviously Geithner isn't aware of every single Federal statute - according to the OMB, keeping abreast of Federal law costs the private sector $600 billion annually. It's hardly surprising that Geithner wouldn't be aware of his every legal option when his options are buried deep in United States Code. And it's hardly unreasonable for him - even if he did know about it - to try to work with Congress to resolve the situation instead of simply going over their heads; Geithner may simply be reluctant to buck the traditional authority of Congress in this regard.Doesn't mean he couldn't or shouldn't, though. Indeed, and they might even be grateful too.

You're the one who is supposed to have such stellar reading comprehension here, Frog. Or are you just conveniently overlooking the reference? Message 61

quote:

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Note in the section you described the provision that such platinum coins are "legal tender" is missing but is specifically stated in the other coinage sections.

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Gee. To what section in the US Code could I be referring? No. Go find it yourself. Good god, Frog, what the hell are you arguing about. No one said anything about any "indefinite delay".You're going to lose your "Great Reading Comprehension Award". You are naive as they come, Frog. That is what staff is for and he has thousands of them. Unless you want to posit they are all incompetent fools. Obviously the man and his multi-million dollar staff of experts who have been researching and planning contingencies on this for many months are just too damn dumb to hit on such a stellar scheme. Well, at least you were right about one thing. They might be that indeed.

I'm confused as a bystander. What the hell are you two arguing about?

they pay no taxes?poorer people bear a bigger burden of taxes than the rich. retail taxes, alcohol duty, tobacco duty, gas. They always had and unfortunately always will.To quote It's a Wonderful Life - this rabble you're talking about , they do most of the working and paying and living and dying.To the winners everything - to the rest nothing.

As an ageing economist befuddled with age and beer.To lay the blame at any specific economic event, political party, ideology or even, heaven forbid, economic theory would be folly.It amazes me how many people feel able to give an opinion on economics without the degree, yet will defer to any other (part) qualified professional.There used to be a standard we all adhered to. We provide credentials as proof of our competence to comment.To read the previous 70+ comments this competency is missing. The arguments are peripheral, bordering on irrelevant, and in the most rubbish. Gold standard!!! For fucks sake! Even his own party thinks he's weird. And the other ideas. WTF.One word is enough to sum this up. GREED.

Frog's first thought was that Treasury could just print some bills and haul them to the bank until I reminded him that there is such a thing as a Federal Reserve Act and the Treasury can't do that.Now he thinks Treasury can avoid default by minting some $billion platinum coins and, as he says, rolling them down to the bank. Cept the statute he is arguing from clearly does not label the platinum coins as legal tender.He also thinks that the thousands of experts involved are dumber than he is for not already thinking of this scheme.Then he was going on about how Treasury MUST pay everyone, regardless, having mis-read somewhere in here that delayed payment meant cancellation of the debt in some unspecified way.He's being a crank.

it is not the issuing of coin, or bonds or even declaring the tooth fairy real that is at the heart of the matter.
Who is economically tied to who? We all owe each other, we are all in defecit to each other, deficit spending, borrowing is the spur to economic growth. No deficit no borrowing, no growth. that is the simple equation.
The economy requires input, do not withdraw.