Is deficit spending Constitutional?

[doG]

In the spirit of other recent threads I'll raise this issue as well since we spend an enormous quantity of money fighting a drug war that can't be won and now we are faced with a government that wants to spend us into bankruptcy to provide the American dream for those that can't afford it and health care for everyone regardless of the expense. Does this egregious financial irresponsibility somehow "promote the general Welfare" of the citizenry as a whole? Is financing these programs via debt to other nations Constitutional?

[Dudde]

Is letting people live and die homeless or not treating them because they're poor considered constitutional? I wonder why they're poor to begin with:rolleyes:

 

 

it's probably not the best time to start those programs because we've had a ridiculous war overseas for the past decade and our economy just broke it's nose, but it's pretty obvious that not many presidents are willing to actually do anything about it(and probably not many citizens either) and we were all headed under soon anyway, so we might as well try.

 

although in response to the actual question, I'm not sure if it's constitutional per se, I'll have to do some research

[iNow]

If deficit spending is unconstitutional, then so too is our spending on the war in Iraq and Afghanistan (since we've had to run a deficit to fund them).

 

However, the answer is, no. There is no where in the constitution where it says the government cannot spend to fund projects while running a deficit.

[doG]

If deficit spending is unconstitutional, then so too is our spending on the war in Iraq and Afghanistan (since we've had to run a deficit to fund them).

 

However, the answer is, no. There is no where in the constitution where it says the government cannot spend to fund projects while running a deficit.

 

Yes, the wars may very well be unconstitutional, even though authorized by Congress. You evade the primary question though, does deficit spending "promote the general Welfare" or more to the point, would national bankruptcy "promote the general Welfare" of the United States? Further, is it a threat to our own national security for a majority of our debt to be held by foreign nations?

 

BTW, no where in the Constitution does it say the government cannot regulate controlled substances or mandate national health care either. Does the fact that any particular thing is omitted as forbidden automatically mean that it is permitted?

[bascule]

Yes, the wars may very well be unconstitutional, even though authorized by Congress. You evade the primary question though, does deficit spending "promote the general Welfare" or more to the point, would national bankruptcy "promote the general Welfare" of the United States?

 

You seem to be under some sort of delusion that everything the government does must promote the general Welfare. If that were the case, then we'd never go to war. The preamble says that promoting the general Welfare is one of the things the government should do, but sometimes, such as in wars, or other circumstances, the government must do things that are contrary to the general Welfare.

 

That acknowledged, yes, I do believe deficit spending has been used to promote the general Welfare.

 

Do you honestly think the US government is in danger of going "bankrupt"?

[Sisyphus]

What would be the argument that it is unconstitutional? You seem to be implying that it is so because it is against the general welfare, but then, presumably any action you think is a bad idea would also be "against the general welfare," and so you could claim literally anything you want is "unconstitutional" with the same completely subjective rationale. Was there another argument you had in mind?

[timo]

Does the fact that any particular thing is omitted as forbidden automatically mean that it is permitted?

As a layman I would expect that the answer is "yes" for most modern laws and that the lawyers even have a name for this type of law.

 

As a personal comment: I find the idea than health care for everyone was against general welfare somewhat alien.

[doG]

What would be the argument that it is unconstitutional? You seem to be implying that it is so because it is against the general welfare, but then, presumably any action you think is a bad idea would also be "against the general welfare," and so you could claim literally anything you want is "unconstitutional" with the same completely subjective rationale. Was there another argument you had in mind?

 

None. Some seem to think that things which promote the general welfare are Constitutional only because they can be interpreted that way which implies that things may not be Constitutional if they do not promote the general welfare. Bankruptcy is undoubtedly a bad thing for the country so I'm wondering if there is a consensus that it is Constitutional to spend the country into bankruptcy when that would clearly be detrimental to the general welfare.

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Merged post follows:

Consecutive posts merged

Do you honestly think the US government is in danger of going "bankrupt"?

 

Sure, if the deficit continues to grow at the rate it has in the last couple of years. If our notes were called due today the country would be effectively bankrupt. The government cannot just simply print more money to cover our foreign debtors and that's exactly what they are doing by selling treasury bonds to foreign countries so they can print more money to distribute at home for bail outs and such. If the nation cannot afford national health care will the government just sell more treasury bonds to foreign nations to cover the deficit? At point will such practices break our nation and is it Constitutional? Is any fiduciary responsibility required of our government?

 

BTW, I would think referring to any specific member here as delusional would border on an infractable offense. Is such a practice necessary in debate?

Edited November 29, 2009 by doG
Consecutive posts merged.

[swansont]

now we are faced with a government that wants to spend us into bankruptcy

 

a) Now? We've been engaging in deficit spending for a long time

 

b) Do you really think the government wants to spend us into bankruptcy?

 

 

Anyway, lets look at this obscure little document:

 

US Constitution

 

Section 8 - Powers of Congress

 

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

 

To borrow money on the credit of the United States

;

 

(emphasis added)

[padren]

Deficit spending predates the Constitution in this country. The first thing John Adams did (well, achieved) in Holland was to gain recognition of the US as an independent government at The Hague, the second was to borrow five million guilders on it's behalf.

 

If deficit spending was abhorrent to the founders and against the Constitution, I think they'd have had ample reason to be aware of the issue and debate the topic in their time. I am not an expert on the Constitution or the debates of the founders, but I am sure a constitutional scholar would be able to turn up records of such discussions. I am certain though the end result would have been pronounced if it was to be in opposition to deficits on Constitutional grounds.

 

As a point of interest, I wonder what the US debt looked like at the time the Constitution was drafted, relative to the early GNP of those days.

[bascule]

So... case closed?

[Mr Skeptic]

Yes, deficit spending is completely constitutional. Now what about the other **** the government does?

[doG]

So, the consensus is that the government could legally destroy the country with egregious spending if Congress so desires? Are we missing a check or balance here?

[padren]

So, the consensus is that the government could legally destroy the country with egregious spending if Congress so desires? Are we missing a check or balance here?

 

First the question is constitutionality, which is only one subset of the law. We had laws against deficit spending that Clinton introduced that expired under Bush. We easily could have those again. That said - it's not a constitutional law issue.

 

Secondly, the government could (albeit in very bad judgment) declare war tomorrow on half a dozen of the world's most powerful nations - perfectly legal, but very likely to "legally destroy this country" all the same.

 

 

 

 

It's also legal to eat an entire bag of sugar every day, but it is dumb and will hurt you. Likewise, we don't entirely "outlaw dumb" even in politics, we have laws (campaign finance, etc) to prevent egregious abuses and elections to deal with the rest. The check and balance there is with the people who elect the representatives, and that most aren't the sort to say "I wasn't gunna destroy the country, but they just plum made it legal and I gotta scratch that itch."

[CaptainPanic]

In the spirit of other recent threads I'll raise this issue as well since we spend an enormous quantity of money fighting a drug war that can't be won and now we are faced with a government that wants to spend us into bankruptcy to provide the American dream for those that can't afford it and health care for everyone regardless of the expense. Does this egregious financial irresponsibility somehow "promote the general Welfare" of the citizenry as a whole? Is financing these programs via debt to other nations Constitutional?

 

Firstly, there is no direct relation between the expenses you mention and the deficit. It is not as if those expenses are the last straw that broke the camel's back. All expenses are equal, so your question should simply be: "is it constitutional to borrow money?" or "is it constitutional to have a national debt?".

You can then open a second thread, in which you can ask whether it is a good idea to spend money on poor people and sick people? Or you can just reply in one of the threads already open about socialism vs. neglecting poor and sick people.

 

Secondly, why is the "defense" ("offense") budget not in your list? According to this wikipedia website, the expenses for social security, healthcare and defense are about the same. I can understand that you don't want to list all expenses of your government... but your choice of expenses suggests some form of subjectiveness.

 

Finally, you cannot discuss a debt (which is a result from a balance) without including all the money flows. The biggest flaw in your question is that you don't include income. A detb is not necessarily a result of spending too much. It can also be caused by too little income.

Tax revenues are significantly affected by the economy. Recessions typically reduce government tax collections as economic activity slows. For example, during FY2009, the U.S. government collected $2.1 trillion, about $400 billion less than the prior year. Individual income taxes declined 20%, while corporate taxes declined 50%. At 15% of GDP, the 2009 collections were the lowest level of the past 50 years.

 

I believe that you should furthermore include the theories of anticyclic spending. Some say that governments should spend more in bad times, and less in good times.

Edited November 30, 2009 by CaptainPanic

[Sisyphus]

So, the consensus is that the government could legally destroy the country with egregious spending if Congress so desires? Are we missing a check or balance here?

 

If "somebody thinks it will destroy the country" was enough to somehow make it illegal, there would never be any legal course of action. The "check," in the case of "bad but legal decisions of elected officials," is simply the electorate.

[ecoli]

Do you honestly think the US government is in danger of going "bankrupt"?

Of course they'd never go bankrupted, but they could destroy the dollar trying to pay off debts.

 

I don't see this happening any time in the next decade or so, but I do see a sort of trend where it is politically feasible for congress and presidents to spend way more than we have in the treasury.

 

Is the slippery slope that difficult to imagine?

[Sisyphus]

I don't see this happening any time in the next decade or so, but I do see a sort of trend where it is politically feasible for congress and presidents to spend way more than we have in the treasury.

 

Feasible? Haven't we been doing that all along? I think a better question is whether it will ever be politically feasible to run a surplus. Increasing spending and cutting taxes is apparently pretty hard not to do, even in times of prosperity.

[Mr Skeptic]

Well they are just pandering to us, and we do seem to much prefer instant gratification and delaying the cost for later. Not all of us, of course, but many of us. That, and we want to spend the money on the stuff we want before the jokers from the other party spend it on evil immoral stuff. So we elect people who promise to give us the stuff we want even at a deficit.

 

I think it would be good for us to enact a law making it much harder to run a deficit. Obviously we still want to be able to do deficit spending during a war (a *real* war, that has been declared by Congress).

[Sisyphus]

Right, the idea is supposed to be deficit spending during hard times (for temporary stimulus) and emergencies (because we need the flexibility), balanced by surplus in ordinary times to pay off the debt. Unfortunately, the second part means that a bunch of elected politicians have to say "we can't give you what you want, AND we have to raise taxes," and commit to that for the long term. So...

[SH3RL0CK]

Of course they'd never go bankrupted, but they could destroy the dollar trying to pay off debts.

 

As long as China (and other nations) props up the dollar by, among other things pegging their currency artificially low relative to the dollar, the dollar won't be destroyed. It will have value, at least in China. The Euro will become strong relative to the dollar, but this too will be limited as otherwise people will find ways to trade currency for a profit.

 

The question then becomes, if/when/how/why does China (and others) stop doing this?

[bascule]

Is the slippery slope that difficult to imagine?

 

No, but the OP suggested it was legitimately possible for the US government to go bankrupt.

 

It is in nobody's best interest for the US government to go bankrupt, with the possible exception of some developing African nations who can't compete with the US in markets like agriculture.

[Mr Skeptic]

Right, the idea is supposed to be deficit spending during hard times (for temporary stimulus) and emergencies (because we need the flexibility), balanced by surplus in ordinary times to pay off the debt. Unfortunately, the second part means that a bunch of elected politicians have to say "we can't give you what you want, AND we have to raise taxes," and commit to that for the long term. So...

 

Hm, what if the surpluses could be earmarked? "This surplus of X dollars is to be used when the GDP drops by such and such for so long, and it is to be used for Y", for example. Obviously you keep track of who saved the money and what party they were from, so everyone knows who to thank for it when it is needed.

 

Then again the politicians would find some loophole and drain it dry.

[Sisyphus]

Well sure, but politically feasible? "The government has MY money, it's not spending it, and it's not giving it back? Revolt!" Wasn't that the whole rationale of the Bush tax cuts?

[Dudde]

Out of curiosity, is it really that infeasible to push non-permanent tax raises to generate some extra revenue? Or is it just the whole american mindset that limits us from doing that?