Congress disgraced itself as they allowed a government shutdown that furloughed about 800,000 employees. The government shutdown entered its sixth day today. The “Leaders of the Free World” in Washington looked and acted more than a bunch of spoiled children that don’t know how to work together to find a solution to any problem set before them.
Although the S&P 500 finished slightly lower for the week, the index’s constituent stocks showed some resilience, rebounding on the first day of the shutdown and again on Friday. As a result the index is 0.53% higher than before the shutdown started.
Although Treasury prices rebounded into the earlier downturn in stocks, they slipped slightly during the past week. Long term US Treasury investments look very risky given the possibility that Congress could allow a default. A default could severely shake the confidence of foreign investors in our debt. Since a huge portion of this debt is held outside the US and could be sold when our markets are closed, investors could wake up to a large loss. Or worse yet stay awake and watch it crash with no way to sell.
One thing that Congress should fear is if they allow a default, they could be impeached. A debt default means they broke 14th Amendment to the US Constitution which in part states:
“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.”
A debt default means they broke their oath of office when they broke Constitutional Law, which are impeachable offences.
This could be seen as a crime against the public trust, and being so it is possible they could lose protection from liability for their actions while in office. Generally politicians are protected from liability for their actions while in office as their work is generally considered to be in the public’s best interest. But they can be held liable for debts or losses incurred by others when it is proved that their actions were not in the public’s best interest. For instance they accepted bribes to vote a certain way. The Constitution specifically spell’s out what is in the public’s best interest in the 14th Amendment. If Congress, the President or anyone else fails to fulfill these obligations a court could find them liable for any losses incurred by others.
These court actions would probably start with the 800,000 furloughed government employees asking for lost pay. Estimates for a week’s pay for these furloughed employees are $1.6 Billion. These won’t be the only ones with losses to claim and it could include any and all losses by anyone of $20 or greater as guaranteed by the Constitution, these losses could include any losses in Treasury or stock investments due to Congress riling the markets. The government could claim losses too. Damages could easily reach hundreds of billions.
But they will only have to worry about this if they haven’t already hanged. A debt default could be considered aiding and abetting our enemies, and a treasonous act. Many of our enemies have long claimed they would not defeat America in the battlefield, but instead bring her to ruin financially. I believe Stalin was the first to say this, but many of America’s enemies have echoed his words since including Osama Bin Laden.
We are still fighting the war against terrorism, and although Bin Laden is dead al-Qaeda is alive and well. Al-Qaeda is probably number one on the list of terrorist factions we are fighting against in the war terrorism. The debt default could be construed as aiding and abetting al-Qaeda, whom we are at war against and whose dead leader proposed to ruin America financially. It fits all the requirements for treason.
It isn’t likely a debt default would ruin America financially, but it could leave her vulnerable to attack. Whether or not this attack materializes could be found irrelevant, the potential is there. If any attack materializes during the period of vulnerability and they are tried for treason, they would probably hang.
Impeachment would not likely happen, as they would have to impeach themselves. They could claim diplomatic immunity if they were arrested. The court might decide in their favor on this matter if simply for a Constitutional offense, but probably not for a capital crime like treason. Just the same it could take a recall vote to remove them from office before they could be arrested, tried and hanged.
If things heated up too much, it isn’t unlikely they could impeach a scapegoat, aka the Tea Party. Both parties have pointed to them as a problem in the negotiations and it might get the majority off the hook.
Precedence makes it appear liability could still be pursued even if they remained in office though.
Many of these sources of information were used in this article.
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This article is intended to provoke thought about investment possibilities. Acting on the information provided is at your own risk. You are urged to do your own research, and where appropriate, seek professional investment advice before acting on any information contained in these articles.