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View Diary: How About We Maybe Don’t Intentionally Cause a Recession by Breaching the Debt Ceiling? (2 comments)

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  •  while the US has (0+ / 0-)

    not intentionally defaulted by failing to raise the limit in the past,  the question of whether appropriations vis a vis spending, and obligations of the government when it runs out of appropriated funds has come up in multiple contexts before.

    The government by and large is not just allowed to say, oppps, we ran out of money, too bad.    The government remains obligated to pay, and the courts would and have ordered it to pay.  There are circumstances in which if the appropriated funds are insufficient, the government can cancel its contracts and therefore its obligations.   But in many cases,  the obligations remain.  The courts, as recently as this past year in the Supreme Court, have said the government can't walk away just because appropriated funds run out.  It further pointed out it isn't up to contractors and others dealing with the government to keep track of the money to see if it is there, that obligation falls on the government.

    So causing default serves no earthly purpose, the bills will be there, the courts will order payment, and Congress will have to act. It appropriated the money, it created the obligations to pay, 'opps' is not an answer.

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