Kadan Stadelmann is the Chief Technology Officer of Komodo Blockchain.
The 14th Amendment, the debt limit and
It is the limit of the money that the United States Government can borrow to cover its current legal obligations. Included are Social Security and Medicare payments, military salaries and interest, as well as tax refunds and other obligations.
Fiscal Responsibility Act of 2030 suspends debt limits until 1 January 2025. Treasury Department anticipates that sometime thereafter—say, somewhere between Jan. 14 and Jan. 23– the U.S. government would be required to take extraordinary measures to not default on its obligations. Default isn’t an option.
The U.S. Constitution states that Section 4 of 14th Amendment reads as follows: “the validity of the public debt of the United States, authorized by law…shall not be questioned.” The amendment was passed in 1868.
A Congress adopted Section 4 during Reconstruction after The Union issued federal bonds to finance the Civil War as well as pensions for veterans of the army who served in the war.
At the time, former Confederate slavery owners ran the Democratic Party. The party stated its intention to refuse the bonds if the election in 1868 brought it into control of Congress. Section 4 was adopted by Congress and ratified by the states to prevent a partisan default.
An established debt limit will cap the amount of money that the federal government can borrow to cover its financial obligations. Public Debt Clause of the Fourteenth Amendment requires that federal obligations be met.
The Public Debt Clause You can also find out more about the following: This could happen if the government’s actions undermine public confidence in the debt. The government may not repudiate or default the debt. To determine whether there is considerable doubt, it may be necessary to analyze the economic and political environment as well as the attitudes of debt holders.
Elon Musk, a billionaire businessman from the United States, has revealed how debt in America is spiraling out of control. “We either fix this or go de facto bankrupt,”Musk Postings X.
Musk, whom President-elect Donald Trump named to run the Department of Government Efficiency (DOGE), claims that DOGE can cut an annual $2 trillion in spending when the US national debt is at $36 trillion.
The Federal Reserve raised interest rates in response to the inflationary pressures caused by lockdown.
Bitcoin Is the Best Way Out
Bitcoin offers the best solution to the U.S. debt problem, as bankruptcy is no longer an option.
Musk and Trump appear to have reached an agreement. Tesla has approximately 10,000 bitcoins worth $1 billion in its balance sheet. In May, Tesla also held approximately 10,000 bitcoin worth around $1 billion on its balance sheet. Trump claimed he would use Bitcoin to pay for his debts The debt of a “little crypto check.”
Trump made a promise “strategic national bitcoin reserve” And predicted that bitcoin’s market capitalization would surpass gold’s 16 trillion dollar value. Trump announced plans in December to create a U.S. Bitcoin Reserve.
“We’re gonna do something great with crypto because we don’t want China, or anybody else … but others are embracing it, and we want to be ahead,”Trump Tell CNBC.
Cynthia Lummis is a Republican Senator from Wyoming. has even introduced a bill earlier this year— called the Boosting Innovation, Technology and Competitiveness Through Optimized Investment Nationwide (BITCOIN) Act. According to the Act, the U.S. would purchase one million bitcoins in five years as a way of reducing the 35 trillion dollar national debt.
Within months after Trump’s election, it is very likely that the Bitcoin Reserve will be established. Lummis’ bill mandates that the U.S. buy one million bitcoins at current prices, worth about $16 trillion. Robert F Kennedy, Jr., then-presidential nominee, proposed purchasing 4 million bitcoins, worth approximately $56 trillion.
The U.S. could make a play that would cover its national debt. The U.S. Government can be the first to use Bitcoin in all of the world, and thus secure its status as a global power.
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