Should President Obama (alongside Lindsay Graham and John McCain) be wearing an orange jumpsuit?
Welcome to the beautiful and surreal reality of life under American corporatism, under a Congress that churns out thousands and thousands of pages of (often contradictory) legislation a year.
If providing material assistance to al-Qaeda is illegal under the National Defence Authorization Act (2012), and Obama and Congress are sending $25 million of aid to al-Qaeda-affiliated Syrian opposition, aren’t Congress and President Obama violating their own law? Should Obama (or at least the Justice Department) not be using “all necessary and appropriate force” including “the power to indefinitely detain” to prevent Obama and Congress from assisting al-Qaeda? Did anyone in Congress or the Obama administration even bother to read the law that they were signing? Do Federal laws no longer apply to lawmakers?
The only question left from this abrupt and absurd turnaround — from funding bin Laden’s mujahideen thirty years ago, to ten years ago declaring war on al-Qaeda, to today sending them material assistance — would appear to be whether or not Obama will pull a 1984 and claim that “we have always been at war with Eurasia“.
Americans are either celebrating or damning the Supreme Court’s 5-4 ruling that the individual mandate is constitutional.
I find it hard to believe that anyone believed that the Supreme Court would rule any other way. Precedent dictates that the Federal powers of taxation are unimpeachable, and have been so since the New Deal. That’s the state of reality, and I found it puzzling that the individual mandate to purchase healthcare might be deemed unconstitutional when the collective mandate to collect taxes to purchase next-to-everything (including both healthcare and broccoli) has been considered constitutional for the best part of a century.
If America wants to overturn current legal norms America needs to elect different politicians. But with a greater and greater welfare-bound population, it seems inevitable that more and more Americans will vote themselves greater and greater quantities of free stuff.
Yet there is a bigger point to all of this, and it’s nothing to do with broccoli.
If Congress can constitutionally create a mandate for individuals to purchase healthcare, then Congress can create a mandate for individuals to purchase financial securities. Which — given the fiscal cliff that we are about to run off, and the reality that more and more sovereigns are dumping dollars and treasuries — could well be a useful weapon in keeping the Treasury’s borrowing costs low and the bread and circuses flowing.
Here are the GAO’s own figures:
With such a humungous load, it will take a lot of (shall we say) financial engineering to keep borrowing costs low.
The purchase of treasury securities is of course something Japan already mandates of financial institutions. Sure — the Fed and the primary dealers can do a lot of the heavy lifting — but what’s stopping Congress from mandating that patriotic Americans with any spare cash dump it into government securities (or even flagging equities)?
One day, Atlas may shrug. Until that day, Congress just acquired a powerful new funding tool.