The Obummer administration has once again circumvented the Constitution in dramatic fashion ... this time by end-running this cherished document's provision about Congress setting national debt limits. It has enlisted the help of the Federal Reserve Bank of New York to enable it to ignore statutory spending constraints. I have in the past wondered that the government seemed to keep operating when theoretically it should be shut down ... see: Verklempt. Now we find out how this fiscal trick was played in cahoots with the supposedly "independent" Federal Reserve Bank ... see: Daily Caller Article.
Basically, together with the New York Fed, Treasury Secretary Jack Lew worked out an accrual schedule of not paying government bills while continuing to "spend" far beyond the debit limit that had be set by Congress FOR NINE MONTHS. So, the day that the debt ceiling was once again upped, our national debt jumped $339 billion ... IN ONE DAY! (See: USA Today Article.) This financial slight of hand proves two things:
1) The Obummer administration has been circumventing the Constitution by using the scheduling of payments of government obligations so as to allow actual total spending to far exceed what the statutory debt ceiling would otherwise allow.
2) Obammer's government "shutdowns" have been public relations stunts to embarrass the Republican Congress into giving it free rein over its sprawling spending. In other words, our founding fathers notion that the "power of the purse" gives Congress a balancing power has been neutered by this administration's financial accrual jiggering ... with the help of the Federal Reserve Bank.
Maybe Rand Paul's notion that the Federal Reserve Bank needs to have some of its power cut back makes a lot of sense. It also might be worthwhile for a law to be enacted restricting the administration's accrual spending.
Afterward: As smart as they were, I'm not sure that the framers of the Constitution knew the difference between cash and accrual accounting.
After afterward: In order to restore our federal balance of powers, we might even need an amendment to the Constitution that decrees that the entire federal government use the cash accounting method.
