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Posts Tagged ‘America’

Monopoly Get Out Of Jail Free Card by dysamoria

The United State’s debt crisis, caused by the legally enforceable maximum “debt ceiling” in the United States is reaching a point where the USA could default on it’s national debt. An unimaginable situation. Financial Armageddon would probably ensue.

The failure by Congressional Democrats and Republicans to reach a deal on cutting discretionary spending and raising the debt ceiling means that President Obama may be placed in a position where he has to envoke the antiquated Section 4 of the 14th Amendment.

Section 4 of the 14th Amendment (ratified on the 9th July 1868) to the Constitution of the United States reads as follows:

The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

The 14th Amendment would therefore allow, by virtue of the words “validity of the United States public debt….shall not be questioned” President Obama to raise the debt ceiling of his own doing, without Congressional approval.

To do so would be a bold step.

Steny Hoyer and James Clyburn, the second and third highest ranking Democrats in the House, and John Larson and Xavier Becerra, the chairman and co-chairman of the House Democratic Caucus, have said they would support Obama if he uses the amendment to avoid a default.

Senator John F. Kerry and Bill Clinton, the former president, have also supported the idea, with Clinton saying he would use the amendment “without hesitation and force the courts to stop me.’’

International debt holders, in particular China ($1tn +) who are the largest holders of US National Debt have expressed concern at the political crisis which has engulfed Washington.

To invoke the 14th Amendment, and therefore bypass Congress would be a drastic measure which would deviate from a longstanding constitutional convention whereby the debt ceiling of the United States is raised by vote of both Houses of Congress.

The 14th Amendment, ratified during the Reconstruction to ensure that the North could overcome Southern opposition to paying down Union war debts, has never been invoked by a president and has rarely been tested in court.

As the saying goes, desperate times call for desperate measures.

The 14th Amendment provides President Obama with a 143 year old “get out of jail free” card. Will he bold enough to use it?

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Picture of Pile of Money - Free Pictures - FreeFoto.com

The Guardian report here that the Tories and Liberals are seeking  a £50,000 donation “cap” on Party funding.

Within that article, The Guardian suggest, that since 2006 Labour would have lost 85% of its funding with such a cap in place, with the Tories losing 50% of their donations. This proposal is being suggested by the “Committee on Standards in Public Life”, on which all of the main political parties are represented. The proposals from this independent Committee are being floated to remove the presence of “Big Money” in British Politics. It is not such an act. It is a cynical and self-serving proposal to damage the long-term interests and standing of the Labour Party.

The Labour Party has historically been funded, to one degree or another, by the Unions. Since Ed Miliband became Labour leader, the Party has become more reliant on these donations. Whether that is a positive or negative thing is a separate issue. Union funding is important for the Labour Party. In contrast, the Conservative and Liberal Democrats are both funded by wealthy individuals and companies, which is also true of Labour to a lesser extent. However, the Coalition parties are able to rely upon a wider base of funding, from numerous wealthy individuals who would be able to donate the maximum £50,000 each.

The Unite union donated £11.7 million to the Labour Party between 2007 and 2010. Unite has millions of members, all of which are ordinary working people, who voluntarily donate a small contribution to the Labour Party. By imposing a £50,000 cap, Labour would have lost millions of pounds of funding from “normal” people, and would cut off the Party’s substantial funding streams.

In the first quarter of 2010, of £12.36m received by the Tories. Some of the donations are below:

£951,000 from David Rowland, an international property developer.

Christopher Rokos, a hedge fund trader, donated £250,000

Lord Sainsbury of Preston Candover, donated £250,000

Lord Ashcroft gave £123,464 in “non-cash” donations to CCHQ

The Tories and Liberal Democrats would lose substantially less if such a cap were in force. By including Unions, and considering them to be corporate entities, the Government is comparing the likes of Unite and Unison to Michael Ashcroft.

How should funding of political parties be resolved? I believe that the proposals of the Hayden Commission should be implemented:-

“He recommended capping spending for political campaigns as well as capping individual donations. He also suggested increasing state funding by £25m a year, linked to public support – he proposed that eligible parties receive 50p each year for every vote cast for them in the most recent General Election and 25p for every vote in the most recent ballots for the Scottish Parliament, Welsh Assembly and European Parliament. He also recommended cutting spending by the largest parties between elections by £20m each”

More gerrymandering from a ConDem Government.

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