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

210 United States Sovereign Debt: A Thought Experiment On Default And Restructuringposition to Section Four. 117 On that view, protecting the public debtfrom invalidity would offer an effective method of protecting againstactual default.A lively debate about Section Four arose during the 2011 Congressionalimpasse over raising the debt limit. Almost fifteen years earlier,Abramowicz had argued that the federal debt-limit statute was unconstitutionalas a violation of Section Four because it would lead torepudiation of the public debt absent Congressional action. 118 Duringthe impasse, Neil Buchanan also took the position that the debtceilingstatute is unconstitutional under Section Four. 119 However,Buchanan’s position is that “[t]he debt limit is not unconstitutionalbecause it increases the risk of default, but because it would actuallyrequire one.” 120 Laurence Tribe was of the view that the debtlimitstatute is not unconstitutional. 121 However, he conceded thatwhat “makes more sense” is “a more modest interpretation of [SectionFour] . . . under which only actual default (as opposed to anyaction that merely increases the risk of default) is impermissible.” 122Buchanan pointed out that in this respect Tribe agrees with him. 123A willing court could find additional substantial support and inspirationin Perry for adopting a strict textual analysis of Section Four thatembraces “validity” in the normal sense and that supports the constitutionalityof Alternative 2. Perry protected the validity and integrityof the U.S. government’s promise to deliver gold coin by holding theattempt to eliminate the obligation unconstitutional. Like the hold-117 Cong. Globe, 39th Cong., 1st Sess. 2940 (1866).118 Abramowicz, supra note 27, at 578-80. For a more recent effort, see Abramowicz,Train Wrecks, supra note 76.119 Neil H. Buchanan, The Debt-Limit Crisis: A Problem That Will Keep ComingBack Unless President Obama Takes a Constitutional Stand Now, Verdict (July 7,2011), http://verdict.justia.com/2011/07/07/the-debt-limit-crisis; Neil H. Buchanan,The Debt Ceiling Law is Unconstitutional: A Reply to Professor Tribe, Verdict (July11, 2011) [hereinafter, Buchanan, Reply], http://verdict.justia.com/2011/07/11/the-debt-ceiling-law-is-unconstitutional; Buchanan, Borrowing, supra note 26.120 Buchanan, Reply, supra note 119.121 Laurence Tribe, Op-Ed, A Ceiling We Can’t Wish Away, N.Y. Times, July 7,2011 [hereinafter, Tribe, OpEd, www.nytimes.com/2011/07/08/opinion/08tribe.html?_r=1&pagewanted=print; Tribe, Guest Post, supra note 26.122 Tribe, Op-Ed, supra note 121.123 Buchanan, Reply, supra note 119.