Tangle - INTERVIEW: Michael Dorf and Neil Buchanan talk with Isaac about the debt ceiling.

Episode Date: June 20, 2023

Today, we are talking with Michael Dorf and Neil Buchanan. Michael is a Law Professor and Scholar of U.S. Constitutional Law who currently serves as the Robert S. Stevens Professor of Law at Cornell Law School. Neil is an Economist, Legal Scholar, and Professor currently working as a Professor of Law at University of Florida - Levin College of Law. Both are considered leading experts on the U.S. debt ceiling.Tickets are officially live (and public!) for our event in Philadelphia on Thursday, August 3rd. Thanks to all the folks who bought tickets — we're on track to sell this baby out! Remember: Our goal is to sell out the venue, and then take Tangle on the road. Please come join us! Tickets here.You can read today's podcast ⁠here⁠, and our latest video on the Trump indictment  here.Today’s clickables: Intro: 00:00 Explaining the basics of the debt ceiling (02:13), Is the debt ceiling effective or even necessary? (05:27), The "least unconstitutional option" (12:04), Breaching the debt ceiling v default (16:40), The 14th Amendment argument: (25:46) Could are credit rating be downgraded again? (29:54), Should we end the debt ceiling? (33:56) Where you can find more from Michael and Neil (36:51)You can⁠ subscribe to Tangle by clicking here⁠ or drop something⁠ in our tip jar by clicking here.⁠Our podcast is written by Isaac Saul and edited by Jon Lall. Music for the podcast was produced by Diet 75.Our newsletter is edited by Bailey Saul, Sean Brady, Ari Weitzman, and produced in conjunction with Tangle’s social media manager Magdalena Bokowa, who also created our logo.--- Send in a voice message: https://podcasters.spotify.com/pod/show/tanglenews/message Hosted on Acast. See acast.com/privacy for more information.

Based on Charles Yu's award-winning book, Interior Chinatown follows the story of Willis Wu, a background character trapped in a police procedural who dreams about a world beyond Chinatown. When he inadvertently becomes a witness to a crime, Willis begins to unravel a criminal web, his family's buried history, and what it feels like to be in the spotlight. Interior Chinatown is streaming November 19th, only on Disney+. The faster money and data move, the further your business can go to a seamless digital future for Canadians. Let's go faster forward together. In life, interact. The flu remains a serious disease. Last season, over 102,000 influenza cases have been reported

across Canada, which is nearly double the historic average over 102,000 influenza cases have been reported across Canada, which is nearly double the historic average of 52,000 cases. What can you do this flu season? Talk to your pharmacist or doctor about getting a flu shot. Consider FluCellVax Quad and help protect yourself from the flu. It's the first cell-based flu vaccine authorized in Canada for ages six months and older, and it may be available for free in your province. Side effects and allergic reactions can occur, and 100% protection is not guaranteed. Learn more at flucellvax.ca. Hey, everybody. Isaac here.

I just want to give you a quick heads up. Today is not a typical weekday podcast. Instead of a reading and riff on the day's newsletter. We're actually going to be bringing you a special edition, an interview I did a couple of weeks ago with an economist and a legal scholar about the debt ceiling and about our debt and about some arguments for and against the debt ceiling. It is a part of a laundry list of interviews that we have been doing both for our podcast and our YouTube channel and also in some cases for our newsletter. Our podcast editor, John, is taking a little bit of a vacation. He's abroad right now and we have somebody tagging in for him for the rest of the week, but we couldn't find a sub for today.

So given that, we thought it would be a fun day to bring you a nice, different podcast, just a little interview. And we're going to be hoping to publish more of these interviews going forward in the future. So I hope you enjoy it. And we'll be back here tomorrow with your regular programming. Thanks for understanding. From executive producer Isaac Saul, this is Tangle. Good morning, good afternoon, and good evening, and welcome to the Tangle podcast, a place

where we share views from across the political spectrum on the big debates of the day. And then you get a little bit of my take. I'm your host, Isaac Saul. And today we are sitting down with Neil Buchanan and Michael Dorff. Neil is an economist, legal scholar and professor currently working as a professor of law at the University of Florida Levin College of Law. Michael is a law professor and scholar of U.S. constitutional law who currently serves as the Robert S. Stevens Professor of Law. Michael is a law professor and scholar of U.S. constitutional law who currently serves as the Robert S. Stevens Professor of Law at Cornell Law School. Both are considered leading experts on the U.S. debt ceiling, which if you're listening to this podcast, you've probably been hearing a lot about recently. And we actually just featured their joint op-ed in the LA Times

in an edition of Tangle. Neil, Michael, thank you both so much for coming on the show. in addition of Tangle. Neil, Michael, thank you both so much for coming on the show. Thanks for having us. So we are recording this on May 30th. Obviously, we have just gotten some inklings, some texts on Sunday of a deal, a debt ceiling deal

to basically suspend the debt in exchange for some very modest concessions on both sides. I think not a sure thing this bill is going to become law. I'm very interested to see what happens. A lot of people are talking about it like it's a slam dunk. I don't think it is. But a lot of your guys' writing has sort of touched on what happens

if we breach the debt ceiling or we risk defaulting. We don't raise the debt ceiling, suspend it. I guess I'm curious maybe to start and just set the table. If one of you can explain what the debt ceiling is, the basics of it, and what it's supposed to do, why it exists in the first place, because I think that's something we've kind of lost sight of. Maybe, Michael, that's a good place for you to start. Sure. So, Michael, that's a good place for you to start. Sure. So the debt ceiling is a federal statute that caps the face amount of U.S. obligations. It has some additional language about exactly how you calculate it, but it's essentially a limit on the total indebtedness of the United States, mostly through bonds. It came about as a result of various statutes beginning early in the country's

history, but it's typically traced to 1917 in something like the predecessor to its current form. The original purpose, interestingly enough, of codifying the debt ceiling was to expand the government's ability to borrow money. Prior to the debt ceiling, there was no general authorization to the executive to borrow money. The Constitution gives Congress the power to borrow money. And whenever Congress passed an appropriations measure, if there weren't sufficient revenues from taxes, there would have to be borrowing authority. And they used to just pass additional borrowing authority with each appropriation. And they got kind of tired of doing that. So they said, you know what, we'll just give the government a general ability to

borrow money and we'll cap it. Now, what purpose that served even then is not entirely clear because the other statutory provisions that authorize borrowing say specifically the government can borrow enough money to make up the gap between tax revenues and expenditures, not anything beyond that. So even without the debt ceiling statute, there is a natural cap on executive borrowing authority set by that difference between revenues and expenditures. In that sense, the debt ceiling doesn't really serve any purpose. The vast majority of countries in the world don't have a debt ceiling per se. But the way it has been used, at least in recent years, is as a kind of vehicle for hostage taking by the minority party in Congress, so far only when

there's been a Democratic president, but it could reverse in some future Congress, to try to extract concessions from the president by holding hostage the global economy. So one historical question, just quick follow-up related to that. My understanding is basically anytime in our history we've approached the debt ceiling, we've just raised it or suspended it. That's basically true. I mean, we've never breached it before. Correct. And Neil, and maybe this is a little bit more on the economic side of things, but I'm interested in your view. I mean, A, do you think that our spending and debt and deficit is in a place where we need to be thinking about how to restrain our spending and do something to address that? And B, if you do, do you believe that the debt ceiling has ever been an effective tool

to do that? I'll take that in reverse order. In fact, when Mike was talking, I was remembering during one of the first big debt ceiling showdowns roughly a decade ago, there was a point at which Senator Mitch McConnell, who at that point, I think, was majority leader, was talking about how the Democrats wanted to not have a debt ceiling. And he said, so debt could go up literally infinitely. And and as Mike was saying a minute ago, gee, you know, you've got all these other countries in the world. None of them have debt ceilings and yet that none of them have infinitely high debt. So, you know, so the idea that the debt ceiling is needed to stop, you know, something from

getting completely out of control is just silly, in particular, because the laws that get passed, right, you know, Congress says you should spend this much money and you'll collect this much money. That is how much the debt would go up, right? Not more than that and not less than that. So the debt ceiling doesn't do anything when it comes to actually limiting debt unless you end up with something that's never happened

before, which is complete cataclysm, which might be coming next week. But to your first question to me, I'm glad you asked, because in fact, my doctoral dissertation was about the very question of deficits and debt. And just by coincidence, I was checking to see if anything had happened on the most recent legislation. New York Times that says that my governor, Ron DeSantis, who some of the readers might have heard of recently, has suddenly decided that he's not going to only talk about culture wars issues. Now he wants to talk about the debt ceiling. And this was his quote, which is directly relevant to your question, Isaac. DeSantis says on Fox and Friends yesterday morning, our country was careening toward bankruptcy. And after this deal, our country will still be careening toward bankruptcy. Now, that is like standard issue debt panic kind of rhetoric.

Right. What the economist Paul Krugman refers to as deficit scolds. what the economist Paul Krugman refers to as deficit scolds. And, you know, it's based on this complete misunderstanding of basically every financial concept out there. Bankruptcy has no business being in this discussion whatsoever. In our current situation, the irony about the Republicans saying, you know, we have to do something about debt, is that the financial markets are begging to lend money to the United States government, right? I mean, if, you know, if Treasury can't borrow money next week, it will be because of this artificial statutory barrier.

And if that barrier weren't there, they would go out and lend money, sorry, borrow money. And savvy financial players would be offering it at rock bottom interest rates. Because up until now, the full faith and credit of the United States government made treasury bonds not only riskless, but treated by financial players as cash, just as good as rock solid cash. And so the idea that, you know, we're careening toward bankruptcy or that, you know, we have this like, you know, big problem, it's just not supported by not by like, you know, a liberal economist like me or a liberal economist like Paul Krugman, but by Wall Street types. They are not charging premiums on U.S. debt, either short-term or long-term. I think they actually are putting their money where their mouths are. Can I add one more thing to that, which is if you disagreed with Neil, if you were

one of these deficit scolds, that still wouldn't be a good reason to have a debt ceiling. But one thing some people sometimes say is, well, no, it would be because the debt ceiling gives people who want to cut the budget leverage to extract spending concessions, as McCarthy has in this potential deal with Biden. The problem with that, however, is there's no logical or actual connection between a debt ceiling and those concessions. As we see in the deal, there are some concessions that have nothing to do with debt. For example, the streamlining of permitting regulations for pipelines and so forth. Conversely, if you wanted to say you want to give leverage to people in Congress

to extract concessions from the president, it doesn't have to be a debt ceiling. You could have a statute that has as a backup, unless you change it, you know, every three or four years, you'll throw 100 people into a volcano. And then you'd say, well, here comes the volcano ceiling. We better do something about it. And then, you know, you would have, I don't know, Marjorie Taylor Greene or Lauren Boebert or Matt Gaetz would say, no, wait a second. We do need to throw the people into the volcano unless we get this, that and the other thing. So, again, the debt ceiling has nothing to do with debt other than the fact that they both have the word debt in them. So I was, you know, pleasantly surprised by, I think, the novelty of the argument that you guys had in your LA Times piece. I mean, I read a lot about various political issues and we cover an issue like the debt ceiling. I spend days just reading arguments from people across the political spectrum. And you basically said,

you know, pick the least constitutional or the least unconstitutional option of all the unconstitutional options Biden would face if we were going to broach the debt ceiling, which was basically just to instruct the Treasury to keep paying our debts and make sure we don't default. I'm curious if you could flesh out why that is the least constitutional option, constitutional option, and I guess also how that would prevent us from facing some of the really serious economic ramifications that we might face if we were to breach a debt limit that didn't get raised or suspended. So I'll take a crack at why it's the least unconstitutional option, and I'll let Neil talk about some of the economic consequences. So most of the discussion you hear about constitutional limits on the debt ceiling involves Section 4 of the 14th Amendment.

Our view is that while that argument isn't bad, it doesn't get to the fundamental problem. The fundamental problem is that the Constitution gives all of the fiscal powers to Congress. Congress has the power to spend, to tax, and to borrow. And the question then arises, what happens when Congress instructs the president to spend more than the total of borrowing and taxing authority, right? There's an inconsistency there. You can't comply with all three laws. And normally, if you have inconsistent laws, there's usually a way to reconcile them, and you'd figure that out, or you say one at the later in time prevails over the earlier in time. Here, because of the weird sequencing, there is

no later in time. Some of the spending the weird sequencing, there is no later in time. Some of the spending and taxing laws are enacted before the debt ceiling was most recently raised or suspended, some afterwards. And so it's just the concatenation of all of these things that makes the math not add up. And therefore, anything the president would do if the debt ceiling becomes binding, that is to say, if we hit it, would usurp one of the powers of Congress. He'd either have to say, I'm going to add some taxes, right? Can't do that. I'm going to spend money. I'm going to not spend money. Congress has authorized. There's a case from the 1990s involving a line item veto says he can't do that. There's a case

from the 1970s involving President Nixon's impoundment of money that says he can't do that. There's a case from the 1970s involving President Nixon's impoundment of money that says he can't do that. So you can't not spend money that Congress has appropriated that would violate Congress's power of the purse. And you can't borrow money beyond the authorization. So we acknowledge that for most purposes, borrowing in excess of the debt ceiling is unconstitutional because it usurps Congress's power. So now the question is, what do you do if you have free, you know, where you're damned if you do, damned if you don't? Anything you do, including nothing, is unconstitutional. Well, you try to minimize the violation.

I'm sorry, I'll just jump in because sometimes people get a little off track on this. There is no doing nothing. So, sorry, Mike, but I just wanted to be clear. Yeah. Doing nothing. What does doing nothing mean? If you don't spend the money you're supposed to spend, that's violating Congress's spending power. So there's no nothing. And our argument then is to minimize the usurpation, you want the president to exercise the least amount of legislative discretion. And that clearly means just continuing to issue debt in exactly the amount you need to cover the shortfall. shortfall. Because if you were to raise taxes, you have to ask the question, whose taxes, how much, how do you apportion that? If you're to cut spending, or as it's sometimes called, prioritize, well, then you're going to be making monumental decisions. Do you give people 50% of their social security checks? Do you stop paying doctors for Medicare expenses? Do you cut veterans' salaries? Do you have a freeze? Do you cut everything by 30 percent? All sorts of decisions that are fundamentally legislative. And you don't have to make a decision like that if you just lend the money, just borrow money.

a little bit squishy about this whole conversation. And I write about this in my newsletter that given how much economists disagree on everything, I, as someone whose trade is really political reporting and Congress, I sometimes struggle to understand these issues even after reading about them all day. But it seems like there's this weird thing that happens where we talk about broaching the debt ceiling and defaulting as being synonymous when it doesn't seem to me that they are the same thing. I'm curious if maybe you could talk a little bit about what would happen if we got there? What actually happens if we get there? Say this deal doesn't go through this week, say Congress drags its feet, say Janet Yellen's right that, you know, June 5th is day X and maybe

this bill doesn't get passed till June 10th. What are we actually talking about if we broach the debt ceiling? And when does the default part of this, which seems to be the thing that's the economic calamity become an actual issue? Yeah, so that actually nicely clarifies what's really at stake. And it gets to the, like, why I interrupted Mike and said there is no nothing, right? Because if the debt ceiling hasn't been increased by what I call the drop dead date, and you reach that date, then the president has to make that that fateful choice, right? And so, you say, you know, if and when the people who don't really know what they're talking about will say, oh, well, you know, obviously the president just can't spend money that we don't have. Like, well, yeah, I mean, we, but any, like I, I spend money that I don't have when I buy a house, right? I mean, you know, that,

that's what borrowing is. And so, you know, there are all kinds of situations in which it absolutely makes sense to borrow money. And so, so to say, oh, well, as of the drop-dead date, all of a sudden the president gets to is forced to ignore the bills that are due, right? I mean, this is another thing. Calling it spending isn't exactly right because spending is prospective. These are bills that are already legally due, right? I mean, for example, if you had somebody who gets a government contract to, you know, he's a plumbing contractor and his bill is coming due on the drop dead date. That's not saying, oh, well, you know, for the next 50 years, we're going to be paying this plumbing contractor once a month.

What you know what that that check that's supposed to go out that day is paying for work already done. Based on Charles Yu's award-winning book, Interior Chinatown follows the story of Willis Wu, a background character trapped in a police procedural who dreams about a world beyond Chinatown. When he inadvertently becomes a witness to a crime, Willis begins to unravel a criminal web, his family's buried history, and what it feels like to be in the spotlight. Interior Chinatown is streaming November 19th, only on Disney+. The flu remains a serious disease. Last season, over 102,000 influenza cases have been reported across Canada, which is nearly double the historic average of 52,000

cases. What can you do this flu season? Talk to your pharmacist or doctor about getting a flu shot. Consider FluCellVax Quad and help protect yourself from the flu. It's the first cell-based flu vaccine authorized in Canada for ages six months and older, and it may be available for free in your province. Side effects and allergic reactions can occur, and 100% protection is not guaranteed. Learn more at FluCellVax.ca. Right. So basically, you know, this is an unpaid invoice on his part. And so for the president to say, well, I'm not going to pay that, that's not cutting future spending, even if you thought that was a good idea.

That's defaulting on people. That's, you know, because certainly the plumbing contractor has, you know, bills that are coming due and he was counting on the cash flow. Right. So, you know, so the economic calamity becomes if the president actually says, no, I'm I there are all those people out there who want to lend us money. Right. All those people on Wall Street and around the world want to lend us money. money, right, all those people on Wall Street and around the world want to lend us money, we're not going to do it. And as a result of that, we're not going to pay, you know, anybody whose bill comes due on as of this date, then it's not just that those people lose out, it's what economists call a multiplier effect, right, which is essentially, you know, the people who were expecting the plumbing contractor to be able to pay them, they then don't get paid, then the people who are expecting that and on down the line, it gets multiplied. So the forecast that you've seen of, you know,

x million jobs lost, and, you know, hundreds of billions of dollars of lost GDP. That's what that's from, is essentially saying, you know, the federal government, it's not just that it's legally on the hook to pay things that it already owes, that it's paying for the existing balance on the credit card, not for, you know, to buy a yacht in the future or something like that, refusing to make those payments affects real people. Whereas if you say, all right, if there was no debt ceiling, we would borrow what we would need to borrow. We do that every day before the debt ceiling comes up. to borrow. You know, we do that every day before the debt ceiling comes up. And now, say next Tuesday, you know, our argument all along has been it would be better if Congress didn't force this difficult choice, the Republicans in Congress didn't force this difficult choice. But on that

day, if the alternative is stiffing a bunch of people and setting forth a multiplier effect like that, the better thing is to just say, yeah, it'll be a real legal and financial market chaos. But it's better than the alternative to just go ahead and borrow the money only as much as is needed. the money only as much as is needed. So just to put a fine point on that, your view is that this multiplier effect is a really large threat and would constitute the calamity that a lot of people have sort of framed this issue as. Yeah. Even the most nonpartisan econometric models that, you know, I mean, have really good, just objectively speaking, good track records in refuses to follow the advice of people like us, then the result will be money that would have gone into the economy to keep things going won't go out in the economy to keep things going. And then all of a sudden the wheels start flying off. lying on. That's a separate phenomenon, of course, from not paying interest in principle due on bonds, which is, I think, what people have in mind in the technical sense when they talk about

default. I mean, Secretary Yellen, I think, has sensibly referred to non-payment of any bills as default, right? But there's a sort of narrower conception of it that says, well, it would only be not paying principal interest to bondholders. And of course, it seems unlikely that that's something the administration would do in a debt ceiling crisis. That is, even if they rejected our advice and said, well, we are going to just, you know, not pay the plumber and the hospitals and all of those people, they probably would still pay the bondholders. But that puts them in an incredibly awkward political situation because it means that you're not paying medical bills,

past due bills for contractors, veterans, but you are paying fat cats who have large portfolios, a lot of it owned by foreign sovereign wealth funds, for goodness sake, right? So that, to be clear, is what people who, you know, choose the conventional wisdom as the alternative are proposing, that you just pay principal interest on bondholders, and then everybody else gets in line and they, you know, get pennies on the dollar. Right. I'll just say that that actually makes it worse, because then what you're doing is you're not only saying that the people who need the money in the immediate sense, the least are the ones who are made whole. The net result is that everybody else gets less than they would get in the most sort of non-manipulated default, right? Like, I agree with Yellen's definition of default. I mean,

so if you don't give the sovereign wealth funds priority, then they might happen to have a payment come due on a day when they get stiffed, just like the plumbing contractor might. But if you give the fat cats the front of the line, then everything else gets worse because the fat cats, in addition to everything else, the money that they get from the federal government doesn't directly go into buying groceries and paying salaries and all those types of things. So, the multiplier effect just gets worse. Michael, I'm curious, you know, one of the things you guys tried to distinguish yourself from in this piece was the 14th Amendment

arguments, which I think, you know, sort of had a moment. I think at that moment, it's kind of died down. But it was very much like that was something coming out of a lot of progressive camps that Biden should, quote unquote, invoke the 14th Amendment. I think in your guys' piece, you had a kind of cheeky line about, you know, the Harry Potter powers that people seem to think we have to do that. So I'm curious if you could flesh out the difference between what you guys are proposing and the 14th Amendment proposition. And also maybe a little bit about, you know, what that 14th Amendment, right? There was still the fact that all three of these powers were assigned to Congress and that anything the president does would usurp one or more of those powers.

powers. Our view, of course, is that the 14th Amendment, while it does create affirmative powers, right, in Section 5, those are also given to Congress, right? There is nothing in Section 4 of the 14th Amendment that gives any additional power to the president, right? Again, the only empowering provision of the 14th Amendment is in Section 5, and that's empowering Congress, not the president. And so we accept and to some extent agree with critics of the 14th Amendment argument who say that even if the president attempts to invoke the 14th Amendment, it doesn't give him additional power to borrow money. That's still a power of Congress. Now, having said that, let me add that Neil and I nonetheless think there is something to the 14th Amendment argument that, in conjunction with our argument, maybe adds

something to it. And here's how it goes. So the language of Section 4 of the 14th Amendment, I'm paraphrasing now because I don't have it in front of me, right, is the validity of the public debt of the United States authorized by law shall not be questioned, right? So what the full-on argument says is, well, if as a consequence of the debt ceiling, we reach a point where the government can't pay its bills, that is a kind of questioning of the validity of the public debt. Because the public debt, according to a case called United States against Perry from the 1930s, means basically all government obligations. And if you pay only some of your bills, but not others, you're calling into question the validity of the debt.

And then the rest of the argument would say, well, if it's the debt ceiling that is causing the questioning of the public debt, then the debt ceiling is the unconstitutional statute. Well, what do we do with unconstitutional statutes? Marbury against Madison says, you set it aside, and that leaves the rest of the laws intact. So that's the core of the 14th Amendment argument. It's that in light of the 14th Amendment, the debt ceiling statute is unconstitutional. As I said, we think it's not a bad argument. The reason why we don't think it's a slam dunk, uh, is because it's not entirely a consequence of the debt ceiling statute that you're questioning the validity of public debt. It is, as we were saying earlier, the combination of the debt ceiling statute and the other laws that create a gap between revenues and expenditures that is

larger than the borrowing authority. So it's not just the debt ceiling statute, but it's not a crazy idea to say, well, the debt ceiling statute is sort of the sore thumb sticking out. And so that's the statute that you have to excise because it's the one that's causing the problem. Obviously, I'm a lawyer, not a doctor. I realize that you don't excise sore thumbs. Yeah, that makes a lot of sense to me. I'm curious, you know, and Neil, maybe this one's a little bit more in your wheelhouse. One of the things that I've seen recently, just in the last few days now, is that there is this sort of murmur that we may be facing a downgrading of our credit, which if I understand that correctly, you know, would effectively make our debt more expensive, which was the opposite of this entire exercise, the opposite of the intended goal, which in my

opinion is one of like, you know, the most cogent arguments against what Republicans have done. And I've written, you know, pretty much in opposition to this tactic as a means of controlling our spending. I'm curious if you could explain why that credit rating matters and also maybe what your view is on the likelihood that our credit rating could actually change as a result of what just happened. Yeah, well, it definitely, it has happened before that the credit rating was was was lowered in 2011 or 12. When one of the first times the Republicans did this. So so it's not hypothetical. It has happened. Why would it happen? Well, credit ratings are there to essentially to, I'm going into the financial markets. I've got some money to lend.

Like any good lender, I want to know how good the credit is of the people I might lend my money to. And so, you know, investors are sometimes willing to take bigger risks. You know, there's a market for junk bonds, right? You know, because if you think that you can beat the market, you might, you know, pick and choose, you know, the next penny stock that becomes, you know, a Facebook kind of thing. So it's not that we don't allow risky assets to be traded, right? It's that we want clarity on what's risky and what's not. And one of the things that comes with, you know, I mean, just think about it, you know, if you ever applied for a car loan or a mortgage or anything like

that. I mean, the analogies to personal finance are often weak when it comes to comparing to the government. But in this case, the analogy is perfect because what you're saying is, you know, I want my credit score to be high because that means the next time I apply for a mortgage, I'm going to get a lower interest rate. That's what the federal government has. They have the highest possible credit rating. They have the full faith in credit and an unblemished record, right? And so when the one and only time the U.S. credit rating was pushed down wasn't even for a breach because we actually didn't didn't go over the the line that day but even getting close the uh the financial agencies that do these ratings said you know this we we i mean like if you open a finance textbook they'll use the term riskless assets as like synonyms for treasury

bonds and they and i then riskless means literally riskless, not like, you know, relatively lower risk. I mean, there is no risk of default. That, you know, that is the idea. And so to, and as long as there's no debt ceiling, there would be no risk of default. And so even if we sneak under the wire this time, and I'm less convinced that we're going to be able to, but even if we do, I think there's still going to be, well, you know, savvy financial people out there are going to say, yeah, you know, I'm still willing to lend the federal, the United States federal government money. But they've got to pay me a little bit better interest than they used to because now I'm not so sure about them. Got it. Michael, before we get

out of here, I want to give you one chance, I guess, to sum up what I suppose is your position that we should, both of your positions, I think that we should get rid of the debt ceiling. And you can correct me if I'm not reading the room well, but I assume that that's accurate. You know, I guess I'm interested in just hearing that argument sort of buttoned up, why you think we should get rid of the debt ceiling, what you think the arguments against it are, and, you know, what that might look like in a constitutional, legal, holistic way that's not the president being forced to ignore it, but Congress actually putting together something that changes the law. Right. So like Neil did earlier, I'll take the last part first. That's very easy,

right? Congress in a statute could simply eliminate the two sections of Title 31 of the U.S. Code, which come right after it in Title 31, that authorize the Treasury Secretary to borrow money, say already as needed to pay the government's bills, right? So if you are a fiscal conservative who thinks that the government spends too much and borrows too much, and typically these sorts of folks think that we can't raise taxes, right? So you don't want to raise taxes. Then in the ordinary budgeting process, use what leverage you have to get less spending, to cut spending, right? You don't need the debt ceiling to do that. Moreover, as we were just saying, it's actually perverse because when you use the debt ceiling as leverage, what ends up happening is you get one of these crises that goes down to the wire, and even if we avert the full-on disaster, the consequence is the potential lowering of the U.S. credit rating.

Even if that doesn't happen, the so-called extraordinary measures that the Treasury Secretary has to use between when the debt ceiling literally hits and when it functionally hits end up costing the government a lot of money. literally hits and when it functionally hits, end up costing the government a lot of money. And so keeping the debt ceiling in place, even for leverage, ends up either increasing borrowing costs or increasing debt in some other way. So the debt ceiling is worse than useless. It's perverse. That's the summary. Michael Dorff, Neil Buchanan, thank you guys for coming on the show. Neil, let's start with you. If people want to keep up with your work, any ways to follow you, anything you're promoting, anything you want to get in front of people before you let you go? Well, Mike and I both jointly and separately write articles on a website called Verdict, which is part of the Justia website, an excellent source. Michael Dorff also does Dorff on Law, and he and I write most of the columns there. I am not a

social media person. Mike is. But if people want to find my writing and don't want to go into a law review, then Dorff on Law and Verdict are the places to find me. And I'm in those places as well. You can follow me on Twitter at Dorfman Law, so long as Twitter continues to exist. The Dorfman Law has a Facebook fans page, and I also post all the content I post, at least for now, continues to exist. Awesome. Michael, Neil, thank you guys so much for the time. I really appreciate it. Our pleasure.

Thank you. Our podcast is written by me, Isaac Saul, and edited by John Long. Our script is edited by Ari Weitzman, Bailey Saul, and Sean Brady. The logo for our podcast was designed by Magdalena Bukova, who's also our social media manager. Music for the podcast was produced by Diet75. For more on Tangle, please go to readtangle.com and check out our website. We'll see you next time. procedural who dreams about a world beyond Chinatown. When he inadvertently becomes a witness to a crime, Willis begins to unravel a criminal web, his family's buried history,

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