Paul Craig Roberts: The President Can Just Ignore the Debt Ceiling Limit; Will Republicans Make Congress Superfluous?

July 23, 2011

KINGSTON, NY — The drama of it all! Will Congress refuse to raise the debt ceiling, forcing the US government to default and, thereby, immediately turning the "world’s only superpower" into a Third World country subject to an IMF austerity program? The markets are poised to explode upward in jubilation or collapse in despondency. Only in America could such fantasy dominate the news.

Does anyone really believe that the US government would default on its debt?

The debt ceiling/default "crisis" is nothing but political theater. The Republicans are employing scare tactics in their attempt to destroy the social safety net. The Democrats are playing along with the assault on "entitlements," because it is what the majority of their large contributors want.

The presstitutes dish out the fantasy as if it were reality.

The US government will never default on its debt, because the government can print an endless stream of money to redeem its bonds.

The Republicans would love to gut Medicare, Medicaid, Social Security, food stamps, unemployment insurance, education, and any and everything that benefits ordinary people. But do they want to gut their wars?

Do they want to gut American financial hegemony over the world?

Do they want the US dollar replaced as world reserve currency and oil to be priced in a different currency than the US dollar?

Of course they don’t. And if the Republicans are not smart enough to have figured out these consequences of their refusal to raise the debt ceiling, someone will tell them before it is too late.

But in truth it matters not whether the debt ceiling is raised. The Bush regime, with the complicity of the federal courts and Congress, established that the president has essentially unlimited powers not bound by law when the country is at war. The president does not have to follow the Constitution or obey statutory law. He can ignore the laws against spying on Americans without warrants. He can ignore the laws against torture and against indefinite detention without presenting charges in a court. He can even ignore the War Powers Act. Obviously, the president can also ignore the debt ceiling limit.

If banks are too-big-to-fail, so is the US government. All Obama has to do is to declare a national emergency, set aside the debt ceiling limit on national security grounds, and continue to issue debt. If the Federal Reserve were to resist, which it never would, Obama would simply nationalize the institution. If US presidents can take over the steel industry, or bring the industry to heel with the threat, it can take over the Federal Reserve.

If Congress fails to raise the debt ceiling, the only consequence would be the further erosion of Congress’ diminished power. Obama would say, and the public would accept, that Congress was unable to do its share of governing and had left the troops without supplies, the dollar unprotected, and was casting away American power.

The final result would be that Congress, having already lost the power to declare war, would lose the power of the purse. Henceforth budgets would be determined by the executive branch, which would also determine the proportions of expenditures covered by taxes, by borrowing, and by money creation.

The Republicans would have made Congress irrelevant like the Roman senate under the caesars.