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The Status Quo and Its Problem on the Legal System of Public Bond in America

  • Public Land Law Review
  • Abbr : KPLLR
  • 2008, 39(), pp.367-389
  • Publisher : Korean Public Land Law Association
  • Research Area : Social Science > Law

李東秀 1

1대구가톨릭대학교

Accredited

ABSTRACT

The Federal constitution unequivocally vests power over fiscal matters in the hands of Congress. But the Constitution provides no specific guidance as to how the nation's fiscal policymaking should be conducted. Accordingly, Congress has shaped its own implicit “fiscal constitution” of statutes, internal rules, and legislative and administrative procedures that govern the fiscal policymaking process. One key feature of this fiscal constitution is the debt limit statute(31 USC §§3101∼3130). Congress's authority over policy concerning the national debt stems from Art. I, Section 8, Clauses 1(“to pay the Debt”) and 2(“to borrow Money on the credit of the United States”). On its face, the first imposes a fiscal obligation on Congress while the second confers broad fiscal authority. From these clauses, we can derive three principle of congressional and debt payment(principle of regulated borrowing, principle of borrowing and debt control, principle of repayment). The debt limit statue plays an important role in the fiscal constitution both by helping congress fulfil its constitutional obligations under the borrowing and debt repayment clauses and by ameliorating many of the institutional problems inherent in the legislative process that produce the national budget and fiscal policy. In order to adequately address both the constitutional obligations and the practical criticisms concerning national borrowing suggested reforms to the debt limit statute and debt ceiling increase procedures should proceed from a few basic principles : (1) there should be greater congruence between government borrowing and its purpose, (2) Congress should be accountable to the public for its borrowing decisions and for the size of the national debt, (3) incentives for, and the likehood of, delays in passing debt limit increases that cause the debt ceiling to be breached should be eliminated or at least minimized, and (4) while there is nothing wrong with national debt and some level of debt financing is necessary and even desirable for government for government project.

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