Articles Posted in Tax and Economics

In this second part of a two-part column, University of Toronto visiting law professor and economist Neil H. Buchanan examines recent Republican advice for Donald Trump to focus on “policy" rather than grievances in his presidential campaign. Professor Buchanan expands on the arguments he introduced in Part One, providing examples of Trump’s policy-free rhetoric and explaining why Republicans don’t actually want substantive policy discussions, as their specific policy positions are largely unpopular with voters.

In this two-part column, University of Toronto visiting law professor and economist Neil H. Buchanan discusses recent Republican advice for Donald Trump to focus on policy rather than “culture wars” in his presidential campaign. Professor Buchanan argues that this advice is misguided because Republicans lack popular policy positions, and their call for Trump to “talk policy” actually means inflaming voters’ emotions on select issues like immigration and the economy without offering substantive solutions.

UC Davis law professor Vikram David Amar discusses the upcoming Supreme Court case, Moore v. United States, which involves a tax issue concerning a husband and wife who are shareholders in a company located in India. Professor Amar argues in this column and in his amicus brief, which he co-authored with Professor Akhil Amar, that the tax in question is constitutional, drawing support largely from the Supreme Court’s 1796 case Hylton v. United States.

Responding to an article earlier this month in the Wall Street Journal criticizing spending by state universities, UC Davis law professor Vikram David Amar argues that while public universities have indeed increased spending and tuition, the situation is more nuanced than simply blaming administrative bloat or wasteful spending. Professor Amar contends that higher education today offers a qualitatively different product than it did two decades ago, with enhanced services in career planning, mental health, and academic support, among other things, and that these changes, along with external factors like professorial salaries and underfunded pensions, contribute to the rise in costs.

In this second of a series of columns conducting a postmortem on the debt ceiling crisis, UF Levin College of Law professor and economist Neil H. Buchanan and Cornell Law professor Michael C. Dorf explain why the temporary resolution of the debt ceiling crisis may result in an even higher cost when the issue arises again on January 2, 2025. Professors Buchanan and Dorf argue that the debt ceiling statute can only ever operate as a source of leverage for extortionists or, if neither side blinks, as the means of inflicting terrible damage to the country.

In this first of a series of columns conducting a postmortem on the debt ceiling crisis, UF Levin College of Law professor and economist Neil H. Buchanan and Cornell Law professor Michael C. Dorf point out that President Biden’s debt ceiling resolution appears to have won the politics of 2023 and 2024 and sidestepped another huge crisis. However, Professors Buchanan and Dorf consider whether these short-term victories will have longer-term costs that prove even more extreme.

UF Levin College of Law professor and economist Neil H. Buchanan points out that, if we reach the drop-dead date of the debt ceiling, both options available to President Joe Biden will be unprecedented, destabilizing, and risky. Professor Buchanan argues that Biden’s least bad choice in that situation is to continue to pay the nation’s bills and that doing anything else for the sake of seeming “normal” is more dangerous for the economy and the country.

Illinois Law dean Vikram David Amar comments on the debt-ceiling controversy and argues that the left would be well-advised to engage the merits of these political and constitutional questions, rather than invoking the “the other side is unfairly trying to undo things that have already been decided” argument. Dean Amar points out that in fiscal politics and constitutional law, the status quo is not nearly as easy to identify or rigid as some would suppose, and very few decisions are truly immune from reconsideration, despite the principle of stare decisis.

UF Levin College of Law professor and economist Neil H. Buchanan and Cornell Law professor Michael C. Dorf explain the options currently available to President Biden for handling the impending debt ceiling crisis. Professors Buchanan and Dorf argue that while the best option would have been to announce from the outset that the debt ceiling is unconstitutional, the President’s current least bad option is, if the drop-dead date arrives, to continue to pay the nation’s debts notwithstanding the debt ceiling.

UF Levin College of Law professor and economist Neil H. Buchanan responds to a recent New York Times op-ed by Professor Michael McConnell that purports to defend congressional Republicans’ posture regarding the debt ceiling. Professor Buchanan argues that Professor McConnell’s entire argument is a strawman, fails to engage with the key points it purports to counter, and provides at most only the most inadequate fig leaf for Republicans’ willingness to endanger people’s livelihoods for political gain.

UF Levin College of Law Professor Neil H. Buchanan and Cornell Law Professor Michael C. Dorf point out that if Republicans insist on using the debt ceiling to hold the economy hostage, President Joe Biden will be the one to decide which debts to prioritize. Professors Buchanan and Dorf argue that although the decision of which debts to prioritize should not belong to the President, Republicans give President Biden—or his less virtuous alter-ego “Dark Brandon”—no choice but to decide which debts to pay first, at their own risk.

UF Levin College of Law professor and economist Neil H. Buchanan and Cornell Law professor Michael C. Dorf respond to two types of pushback from proponents of schemes to circumvent the debt ceiling. Though dubious about any such proposal, Professors Buchanan and Dorf express hope that a court would disagree and find an option—such as fallback bonds—permissible, allowing the country to avoid financial catastrophe and a constitutional crisis.

UF Levin College of Law professor and economist Neil H. Buchanan and Cornell Law professor Michael C. Dorf continue their discussion of the assortment of illegal options President Joe Biden has available to him if Republicans refuse to raise the debt ceiling. Professors Buchanan and Dorf argue that because there are no loopholes or escape hatches in the debt ceiling statute, if put into that untenable position, President Biden should minimize the damage and simply issue normal Treasury securities—the “least unconstitutional” option.

In a mix of humor and seriousness, Cornell Law professor Michael C. Dorf imagines how Tuesdays’ meeting between President Joe Biden and House Speaker Kevin McCarthy (with Senate Minority Leader Mitch McConnell) could go. Professor Dorf explores one creative way the two sides might reach a mutually agreeable resolution.

UF Levin College of Law professor and economist Neil H. Buchanan and Cornell Law professor Michael C. Dorf provide yet another reason against the proposal that the government should mint a multi-trillion-dollar platinum coin to avoid the impending debt ceiling crisis. Professors Buchanan and Dorf point out that if trillion-dollar platinum coins are legal to avoid a debt-ceiling crisis, that would lead to the absurd result that they would always be legal as a means of substituting modern monetary theory (MMT) for the entire apparatus of public finance.

UF Levin College of Law professor and economist Neil H. Buchanan and Cornell Law professor Michael C. Dorf explain why the so-called platinum coin option to address the looming debt ceiling crisis is not only a bad idea but also illegal. Professors Buchanan and Dorf argue that the least unconstitutional option, if Republicans insist on crashing the economy via the debt ceiling, is for the Treasury Department to do what it always does: go into the financial markets and raise funds from willing lenders.

Cornell Law professor Michael C. Dorf explains why voters should not expect Republicans to do a better job than Democrats handling inflation and the broader economy, and in fact will likely permanently weaken the U.S. economy and the U.S. as an actor on the world stage. Professor Dorf describes why the current Republicans are different from those in the past, and why they pose a unique threat of holding the entire global economy hostage unless Congress enacts and the President signs their radically conservative agenda into law.

UF Levin College of Law professor and economist Neil H. Buchanan discusses the power and limits of financial markets by looking at three examples: (1) the brief tenure of former British Prime Minister Liz Truss, (2) the markets’ lack of response to the US federal debt, and (3) the possibly cataclysmic consequences if, after the midterms, a Republican-controlled Congress refuses to increase the federal debt ceiling.

UF Levin College of Law professor and economist Neil H. Buchanan offers yet another illustration of why we need not worry about the national debt—the biggest businesses do it. Professor Buchanan points out that nearly every Fortune 500 company carries debt because doing so is good financial management, and if our country were to be running a surplus, that would mean that the government is collecting more in taxes than it needs to cover current spending.

In this first of a two-part series of columns responding to a front-page article covering “non-news” about the national debt, UF Levin College of Law professor and economist Neil H. Buchanan responds to the only substantive claim the article raises. Specifically, Professor Buchanan debunks their claim that higher interest rates will create hyperinflation while the bond market melts down.