Obama's Final Loophole: The "Catastrophic Emergency" Clause?

Tyler Durden's picture

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duncecap rack's picture

Wow. If Obama invoked that to borrow more they'd have to set up a cage fighting ring in the capitol.

km4's picture

Obama's a constitutional lawyer and community organizer right ;)

WestVillageIdiot's picture

Has anybody ever checked on the communities that Obama used to work in?  What are the chances they are more organized now than they were before?  Something tells me that moniker is as mistated as calling him a "constitutional scholar".  Then again, he might know the constitution and just not give a shit if he honors it. 

nmewn's picture

"Obama's a constitutional lawyer and community organizer right ;)"

Yeah and we're told he's brilliant at both...lol.

(21) This directive:

    (a) Shall be implemented consistent with applicable law and the authorities of agencies, or heads of agencies, vested by law, and subject to the availability of appropriations;

Whoopsie ;-)

narnia's picture

the whole litmus test of constitutionality has been thrown out the window long ago.  this is more of a, how is obama going to play this corrupt game in the unlikely event it's necessary.  

even though he says he won't, he'd use some excuse tied to the 14th to justify paying interest.  he'd use some existing or amended executive order to keep paying for the war.  then, he'd find some other method to fill in the gap to pay for the remainder of the $1.6 trillion or greater without complementing receipts.

as for your point, i believe he already has appropriations authority on his last chirade with congress.

oldman's picture


Years ago, our understanding was that 'full faith and credit' implied a capacity for the executive to raise taxes under an executive order, if necessary, to pay pricipal and interest of US Treasury securities, but NOT Agency debt.

We never looked up this under the law, it was such a 'given': everyone understood this and never once did anyone object to it under the 'law'. Times and people have changed so that no one is there any longer who would press this issue, imo.

In those days, the mere thought of this not being true was so ridiculous that a fight would have broken out on the bond desk had anyone suggested that it was untrue. Like I said, though, times and people have changed since our 1980/83 crisis, And we had not ever thought about borrowing more than the GDP.

Perhaps, someone with a different idea will pick up the thread---I'm curious about the other side of things, always.

Thanks for your post---it brought the question to mind---we may have just been deceived or deluded        om

GetZeeGold's picture

14 trillion over here.......16 trillion over there. Pretty soon you're talking abiout real money.

This is kinda of a secret.....so don't tell anyone.


July 21, 2011

The first top-to-bottom audit of the Federal Reserve uncovered eye-popping new details about how the U.S. provided a whopping $16 trillion in secret loans to bail out American and foreign banks and businesses during the worst economic crisis since the Great Depression. An amendment by Sen. Bernie Sanders to the Wall Street reform law passed one year ago this week directed the Government Accountability Office to conduct the study. "As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world," said Sanders. "This is a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else."

The audit....right click and save. You now own it. 266 pages of light reading....enjoy. Grab some popcorn.


If a tree falls in the woods.....and the MSM doesn't report it. Did it really happen?

darkstar7646's picture

What happens if that availability of appropriations IS the emergency, however?

nmewn's picture

The three branches of government were setup as equals but with differing roles & responsibilities.

By law, the president does not appropriate funds, the congress does. He can only manage how they are spent from the amounts approved for him to spend. Therefore the president cannot issue an edict (like some insane king) saying he will and can raise revenue (taxes) or issue debt without approval. Especially from his own pen via executive order.

That would be unequal power sharing where he not only takes the money, but he spends it as well, all the while citing a doument that his office (the presidency) created, to say it is lawful.

The other co-equal branch in all this (the court) would blow this out of the water...unless he, as cnc, surrounds the supreme court and congress with tanks & troops, which does (the military) fall under his purview.

Then of course we would be talking about something completely different...lol...where every officer and tank commander will have to re-evaluate their oath to protect the constitution against all enemies foreign & domestic ;-)

derryb's picture

there is no protection from the executive branch as long as they have the power to appoint the judicial branch which has the power to tell the legislative branch to "go f--k themselves" when the presidednt so desires.

nmewn's picture

This falls under advice & consent (Article II, Section 2)...which, if the constitution were being followed as originally written, we would not be electing federal senators as they would be appointed by the individual states instead as intended...probably be looking at a completely different makeup in philosophy. This happened in 1913 with the 17th Amendment.

Oddly, something else happened in 1913...the creation of the federal reserve...it was quite a year ;-)

kall's picture

That's what I would like to know. So far the plan sounds very elaborate but in my opinion it's not focused enough. I am now studying for my masters in emergency management and I have an eye for it, we need to do better than that. When we talk about emergency situations I don't think separate authorities would do a better job than one single focused authority.

derryb's picture

His (and his wife's) licesnse to practice law were revoked years ago. Now he's a shithouse lawyer.

NewThor's picture


8 Billion enter, 6.3 Billion leave.


Elenin - Nibiru - And the Red Cross


A Mickey Mouse Dick in the dirt Play

by the Democratic and Republican Politicos and Corp. of USA/GLOBE MARKET

Anybody seen the new





Whoa. Really? REALLY?

ID BETTER BE NEO + Infinity +1 + Looped 


Frankie Carbone's picture

Bust a deal, Spin the wheel!
Bust a deal, Spin the wheel!
Bust a deal, Spin the wheel!

The wheel choices.

WWIII with China, Russia, and every arab on Earth.

18,000,000% APR on your next auto loan.

FEMA food, shelter, and security for everyone!

Thermonuclear terrorist attack on Des Moines IA but no one can explain how the nuclear blast had exactly the same signature as a US Air Force W-88 nuclear warhead.

War of Northern Aggression Part Deux.

The Northwest Territory and Alaska sold to the Chinese.

Run on cat food at PetsMart.

darkstar7646's picture

I'm not sure it's going to be that many...

GetZeeGold's picture

Blue zone thinking.

"You cannot invade the mainland United States. There would be a rifle behind every blade of grass." - Admiral Isoroku Yamamoto

Put Admiral Isoroku Yamamoto on the no fly list. He seems like a trouble maker.


DoChenRollingBearing's picture

Yes.  Although I do not think it will come to that.  I expect a really SLEAZY last minute deal like we almost always get.

There will be NO spending cuts!  The Tea Party Republicans do not have the political power now.  Maybe in 2012 they will.  But, our problems will be even worse, and THEY would get the blame as the system crashes from Obama / Bankster mishandling, andyes let's use the word: ROBBERY of our country

HungrySeagull's picture

but... but... but... the House of Representatives is the holder of the Nation's Purse and shall dispense of the Nation's Bills and Income each year.

If this Economic Event Horizon passes by us, and this thing goes into effect... Government will stay open and the bills WILL be paid regardless of our debt. If Default is truly not an option.

Doña K's picture

We have had it. Hubby and I are sailing away. perpetual travelling status. 

FEDbuster's picture

"You never let a serious crisis go to waste. And what I mean by that it's an opportunity to do things you think you could not do before."
Rahm Emanuel

There are many whom believe the ultimate goal of Obama is to take control like Chavez or Castro (Hitler, too).  A move like this would help to confirm this theory.  Of course economic collapse would help him move towards this "emergency" ruler position, too.

Zero Govt's picture

Obumma is toast come 2012, so he could only be 'Emergency Ruler' for a year . . .the 2nd August Timothy 'Pinokio' Geithner deadline is a fraud and the Republicans know it... it'll be missed just to further rub salt in the wounds and damn Obummas inept shambolic Presidency 

indygo55's picture

Yes! Thank you for saying that. Uh oh! I hear helicoptors. I think they have your IP address and now mine. Reminds me of that movie "Shudder Island" "RUN!"

mayhem_korner's picture


Good call.  Maybe Vegas ought to be running odds on whether BHO invokes dictatorial control to "prevent" or to "respond to" the economic collapse.  Kind of an under/over thing...

Founders Keeper's picture

[There are many whom believe the ultimate goal of Obama is to take control like Chavez or Castro (Hitler, too).]---FEDbuster

Hi FEDbuster. I agree Pres. Obama has designs to officiate the transition of the US to a socialist nation. 

Interesting though, I've come to think Obama doesn't like his job as much as he'd thought he would.  I don't think he likes being a leader. I don't think it's in his nature. He likes the authority and the fame of being Mr. President, but I don't think he likes the responsibility.  

In fact, I think Obama hates being a leader. This dictotomy may explain his administration's mixed messages, Obama's teleprompter dependence, his non-commital propensity for voting "present," the vacations, and his unfulfilled campaign promises that baffle many of his supporters.

FEDbuster's picture

It seems like he enjoys the perks, but not the work.  Flying on AF1 for family vacations, parties at the WH with the rich and famous, playing golf at top courses with friend for free,  state dinners, etc...  But when it comes time to work he would rather be talking sports than the economy.  College professors have never been known for a high work ethic, so it's not a big surprise to most of us.

Founders Keeper's picture


The only thing marxist/socialist/liberals fear more than conservatives is an honest day's work.

You see this everywhere.

The socialists are scared to death of conservatives.  That is in part why the lib MSM affixes "right-wing"(read conservative) blame on tragic incidents such as the lunatic lone attacker in Norway, or the mentally unstable attacker in Tucson AZ. Ironically, the attackers are often socialist statists.


HellFish's picture

I think bamabi knows he can't become a Chavez or Castro.  His aim is to break (financial, cutural, trust, etc.) as much of the USA as possible.  Hoping for a collapse and a rebirth of the USA as a quasi-communist country.

I think where he miscalculates is that breaking the USA will free many of the producers and conservatives from the current compact and may result in two countries after the collapse.  The productive red states with a conservative bias and the blue states with increased statism.

Fear not.  After 50 years the blue USA will be begging for admission to the Red USA - under our terms.  The USA will be safe for another century or two after the reunion - until the left again makes it's move.

InconvenientCounterParty's picture

"There are many whom believe the ultimate goal of Obama is to take control like Chavez or Castro (Hitler, too).  A move like this would help to confirm this theory. "

You're almost ready to have an objective thought. keep at it. What you didn't propose is how to support the opposing conclusion.

Namely, that Obama is not anything like Hitler or Castro and is just an American that is willing to do what it takes to become POTUS. Not that different from many that have come before.

If you think of objective ways to test the counter argument you will reach elite status on ZH, which is littered with angry, intellectual dysfunction and precious myth.

Sathington Willougby's picture


Yep, super congress to the rescue.  Permanent and vital to the nation's security super congress I might add.

SymforniX's picture

WHY can't they just be simply "The Tea Party"? Jeez... I expect nothing less than the "Pol Pot Democrats" to arise in answer...

CompassionateFascist's picture

Just try it, Zero. Just try it. Can't speak for the others, but I know of one Constitutional Militia Battalion - mine - that will pick up its weapons and head for the District of Corruption w/in 24 hours.

HellFish's picture

How do I sign up?  Please send details.

Founders Keeper's picture

[...but I know of one Constitutional Militia Battalion - mine - that will...]---CompassionateFascist

Hi CompassionateFascist. 

While I appreciate your passion and commitment to our nation's Constitution, I think you may have misspoke. Regarding "---mine---" militia. I think you meant to say the people's militia, or the state's militia, or the county's militia, or the local community's militia.

CompassionateFascist's picture

That's "mine" as in "the one I'm in....".

Founders Keeper's picture

MY misunderstanding. 

God's Speed to you, your outfit, and our nation's patriots.

Carry on.




StychoKiller's picture

Unilateral action(s) by Obamatron will have MORE NEGATIVE EFFECTS than positive ones, world-wide!  You can't please all the debtors/creditors ALL the time!

A Man without Qualities's picture

"You can't please all the debtors/creditors ALL the time!"

I think there is a way, but it involves the destruction of the currency in which the contracts are denominated...

Landrew's picture

Interesting, if O'Bummer has already decided that the 14th would not apply I doubt he would invoke this directive either?

trav7777's picture

The President does not have the legal authority to circumvent or suspend the Constitution.  Simply DOES NOT.

It doesn't matter what stupid shit these idiots write or say or do...they lack the legal authority.  Obviously, if they use extra-legal authority and the military goes along with it, then our government has changed and we live under a junta at that point

cosmictrainwreck's picture

please 'splain me how Exec Orders pass constitutional muster? I think Banksters have already proven "laws" don't mean shit (just change 'em - meh) and all the war powers & shit's all on the books already....just a matter of interpretation, dontcha know?. yeah, we're 1.5 steps (or less) from junta status....

davidgn's picture

REQUIRED READING from a UC Berkeley professor emeritus who has been screaming at the top of his lungs to publicize this issue, to little avail. This is the text of his address to the Commonwealth Club of San Francisco:
"Is the State of Emergency Superseding the US Constitution? Continuity of Government Planning, War and American Society"  http://japanfocus.org/-Peter_Dale-Scott/3448 


davidgn's picture

...or just read Cognitive Dissonance's stuff. He has it covered.

DoChenRollingBearing's picture

Indeed.  One of Zero Hedge's resident geniuses.  NEVER leave us, Cognitive Dissonance!

narnia's picture

so what supreme court justice is going to authorize an injuction on the executive branch?  

isn't the game...  the executive branch can do whatever it wants, constitutional or not for 1.5 - 2 years until enough drug cases clear federal court for this lawsuit to make it to SCOTUS.  your confidence in self-constraint is not supported by reality.

trav7777's picture

scotus can issue cert at any time.  They found a way to get Bush v Gore on the fast track, didn't they?