Sean Wilentz, a Princeton historian, has written for the NYT today an absolutely must-read essay on the looming debt default crisis, how it would violate the 14th Amendment to actually let the country go into default, and what President Obama should do if Republicans indeed cause this to happen.
Here’s the key part of Section 4 of the the 14th Amendment: “The validity of the public debt of the United States, […] shall not be questioned.” The context for this, according to Wilentz, is the following:
[T]he history of the 14th Amendment […] clearly shows that Congress intended the amendment to prevent precisely the abuses that the current House Republicans blithely condone. […]
[C]onservative Northern Democrats, many of whom had sympathized with the Confederacy, were in a position to obstruct or deny repayment on the full value of the public debt by paying creditors in depreciated paper money, or “greenbacks.” This effective repudiation of obligations already accrued — to, among others, hundreds of thousands of Union pensioners and widows, as well as investors — would destroy confidence in the government and endanger the economy.
In other words, 2013 is 1866 and a political party (this time the Republican Party) once again threatens to repudiate “obligations already accrued,” the effect of which would be to “destroy confidence in the government and endanger the economy.” This was prevented in 1866 by Constitutional amendment, and can be prevented again (according to Wilentz) by President Obama doing two things. First, Wilentz advises the President to tell the country “that the House Republicans are threatening to act in violation of the Constitution, which would expose the true character of their assault on the government.” Second, “he could pledge that, if worse came to worst, he would, once a default occurred, use his emergency powers to end it and save the nation and the world from catastrophe.”
To justify this 14th Amendment strategy, Wilentz points to Lincoln:
As Abraham Lincoln well knew, the executive, in times of national crisis, can invoke emergency powers to protect the Constitution.
Should House Republicans actually precipitate a default and, as expected, financial markets quickly begin to melt down, an emergency would inarguably exist.
Of course, if President Obama raised the debt ceiling by executive order, he would catch hell from right-wing media, and House Republicans might even go through the ritual of impeaching him (as they did with Bill Clinton). But Wilentz notes that “the president would have done his constitutional duty, saved the country and undoubtedly earned the gratitude of a relieved people. Then the people would find the opportunity to punish those who vandalized the Constitution and brought the country to the brink of ruin.”
I want the President to do what Wilentz advises. Back in July, by the way, former President Clinton was asked what he would do in the event of a House Republican debt default, and the NYT reported the following: