US Government Debt Different - Finance Department - University of ...

Charles W. Mooney, JrIf Wade’s speech offers the central rationale for Section Four,the goal was to remove threats of default on federal debts frompartisan struggle. . . . . The threat of defaulting on governmentobligations is a powerful weapon, especially in a complex, interconnectedworld economy. . . . Section Four was placed in theConstitution to remove this weapon from ordinary politics. 113209Balkin has pointed out that the Republican supporters of SectionFour feared a default or threat of default by the Democrats were theyto return to power following the Civil War. He argues that if only aformal repudiation of public debt would violate Section Four, then“the section is practically meaningless.” 114 In Balkin’s view, individualmembers of Congress who would threaten a U.S. default on publicdebt to gain political advantage are themselves violating SectionFour. 115 He argues that the proper interpretation of Section Fourmust take into account the assurances that the Republicans needed.But, it is interesting that Balkin’s putative Section Four violationwould not be susceptible to any sort of plausible judicial remedy. Indeed,it is Balkin’s interpretation that renders Section Four impotentbecause it envisions a violation without a remedy. How could thatprovide assurances to anyone? Moreover, it is plausible that whenSection Four was debated and adopted, an actual, intentional defaulton valid public debt was not in the consciousness of the legislators. 116Certainly that rings true in what Senator Hendricks had to say in op-113 Balkin, Legislative History, supra note 99. For a critique of Balkin’s description,see Michael Stern, “Threatening Default”: A Response to Professor Balkin, Pointof Order (July 1, 2011), http://www.pointoforder.com/2011/07/01/threateningdefault-a-response-to-professor-balkin/.Stern takes issue in particular with Balkin’sreliance on Wade’s proposal and speech while arguing that a threat of default doesnot amount to a prohibited repudiation. Balkin offered a detailed response defendinghis original analysis, pointing out that the final wording of Section Four wasmore similar to Wade’s original proposal than to Howard’s. Jack Balkin, More on theOriginal Meaning of Section Four of the Fourteenth Amendment, Balkinization (July2, 2011) [hereinafter, Balkin, More], http://balkin.blogspot.com/2011/07/moreon-original-meaning-of-section.html.114 Balkin, More, supra note 113.115 Id. (post-Civil War setting); Jack Balkin, Secretary Geithner understands theConstitution: The Republicans are violating the Fourteenth Amendment, Balkinization(July 8, 2011), http://balkin.blogspot.com/2011/07/secretary-geithner-understands.html(2011 debt-ceiling crisis context).116 This issue is worthy of further investigation.