Why the 14th Amendment Doesn't Solve the Debt Ceiling Problem

Over the last few days, a number of commentators have been proposing that even if the debt ceiling is not raised, the president has the authority to borrow as much money as he wants via the 14th Amendment, which says that the validity of the lawfully incurred debt of the United States "shall not be questioned".  Since a number of scholars interpret this as saying that the government cannot constitutionally repudiate or default on its debt, the president must have the authority to avoid this by further borrowing.

I've always thought this was a long-shot--even if you think the president does have this authority, actually carrying through on it would trigger a pretty ugly constitutional crisis, as the House would almost certainly impeach the president.  That aside, Larry Tribe does, I think, a pretty effective job of squelching the hope that the Supreme Court might eventually find in the president's favor:

The Constitution grants only Congress -- not the president -- the power "to borrow money on the credit of the United States." Nothing in the 14th Amendment or in any other constitutional provision suggests that the president may usurp legislative power to prevent a violation of the Constitution. Moreover, it is well established that the president's power drops to what Justice Robert H. Jackson called its "lowest ebb" when exercised against the express will of Congress.

Worse, the argument that the president may do whatever is necessary to avoid default has no logical stopping point. In theory, Congress could pay debts not only by borrowing more money, but also by exercising its powers to impose taxes, to coin money or to sell federal property. If the president could usurp the congressional power to borrow, what would stop him from taking over all these other powers, as well?

Tribe makes another point, which I've heard from bond traders, but apparently slipped under the radar of most DC commentators: who's going to buy new debt issued without the authority of Congress?

The other day I listened to a sell-side conference call where one of their analysts noted, with charming understatement, "It doesn't seem like that would be very attractive to investors, holding debt that might be declared illegal."  No, it really doesn't, does it?

I'm sure someone would buy it, but presumably they'd demand a discount, which would make it very expensive to roll our old debt into new issues.  This is not a solution.

I am, at this point, moderately convinced that the 14th amendment prevents the government from defaulting on our bonds; we're going to have to choose between our many other obligations, or give all of them a 40% haircut.  But I don't think the 14th amendment is going to help us evade the other problems involved in not raising the debt ceiling.