History Podcasts

The Power to Borrwo - History

The Power to Borrwo - History

The Power to Borrow

The Congress

"The Congress shall have power ... to borrow money on the credit of the United States."The Congress has the sole power to borrow money for the federal government. Thus, each year, the Congress must authorize the total amount of debt that the United States government may have.


One of the most decisive issues in Congress the last few years has been the questions on whether or not to extend the debt limit. The limit is the total amount that the United States is allowed to borrow. Since the US has been running a budget defict each year is is neccessary to periodically extend that debt limit to allow the US to continue operating the government.


The Power to Borrwo - History

2Kings 4:1-6, “… go, borrow vessels from everywhere, from all your neighbors-empty vessels do not gather just a few…”

Naturally man is selfish knowingly or unknowingly, that is the nature of man. We always come for us, it’s always about what we can get, how to get it and how we are going to benefit from it. Look at even the praise and worship songs today, the lyrics of the majority of the songs have (me, my, I etc).

The text above tells of a woman whose husband is dead and she has two sons. For some unknown reasons, her husband owed creditors who came about to take her sons to be slaves. This was a form of satisfying the debt. She goes out crying to the Elisha and all she can testify is the fact that her husband feared the Lord.

The first question Elisha asked her was. “… Tell me what do you have in your house?…” and the woman’s response is amazing, “Nothing but a little oil in jar “. At times, what you have is all you need to get you started. She is not hiding anything, she is transparent. If we are going to desire blessings from the Lord, we have to be transparent by what we have. I bet she was hoping that the man of God would just call things from heaven and that would fill her house with good stuff but that’s not the response she got. She was told to go borrow vessels from everywhere, from all her neighbors and friends, empty vessels and not few is the advice she get. How can one borrow vessels when there is only very little in a jar, and the vessels borrowed are not even filled vessels, they are empty vessels. Being obedient to the word of the prophets is the beginning of blessings. They borrowed vessels until they could not borrow anymore, after that they went in, closed the door behind them and poured little oil in every vessel and as they did that, God filled all the vessels they poured little oil in. God gives increase.

What I’m I talking about here? Prayers is the little oil that we’ve got and the empty vessels are the people around us who need our prayers. Friends, neighbors, family members need it and the moment we begin to borrow these vessels, we are getting to a place where we just don’t think about ourselves and how we can get more blessings from the Lord but we begin to pray for those who are struggling, have nothing, weak, sick and the like. Some times God allows us to go through some things as a reminder that there are people going through the same. Why pray for them? because you’ve learnt how to approach the throne of grace and you know prayer works and they may not are have strength to. You are the attorney that will represent them in the courts of law, you will fight for them as you know the law, you know what to do that will cause the court to have mercy on who you are representing. You put little oil in those empty vessels, God will fill those vessels ands what He has done for others, He will do the same for you. At times forget about what you are going through, what you don’t have and the like and remember that there is someone out there who’s condition is worse than yours. Always remember to borrow more vessels. Take care of God’s business and He will take care of yours. There is power that flows when one pours little oil in borrowed vessels .
Thanks
Evans


Borrowing Power

Clause 2. The Congress shall have Power *** To borrow Money on the credit of the United States.

BORROWING POWER

The original draft of the Constitution reported to the convention by its Committee of Detail empowered Congress “To borrow money and emit bills on the credit of the United States.” 625 When this section was reached in the debates, Gouverneur Morris moved to strike out the clause “and emit bills on the credit of the United States.” Madison suggested that it might be sufficient “to prohibit the making them a tender.” After a spirited exchange of views on the subject of paper money, the convention voted, nine States to two, to delete the words “and emit bills.” 626 Nevertheless, in 1870, the Court relied in part upon this clause in holding that Congress had authority to issue treasury notes and to make them legal tender in satisfaction of antecedent debts. 627

When it borrows money “on the credit of the United States,” Congress creates a binding obligation to pay the debt as stipulated and cannot thereafter vary the terms of its agreement. A law purporting to abrogate a clause in government bonds calling for payment in gold coin was held to contravene this clause, although the creditor was denied a remedy in the absence of a showing of actual damage. 628

625 2 M. FARRAND, THE RECORDS OF THE FEDERAL CONVENTION OF 1787 144, 308� (rev. ed. 1937).


Congress issues Continental currency

On June 22, 1775, Congress issues $2 million in bills of credit.

By the spring of 1775, colonial leaders, concerned by British martial law in Boston and increasing constraints on trade, had led their forces in battle against the crown. But, the American revolutionaries encountered a small problem on their way to the front: they lacked the funds necessary to wage a prolonged war.

Though hardly the colonies’ first dalliance with paper notes–the Massachusetts Bay colony had issued its own bills in 1690–the large-scale distribution of the revolutionary currency was fairly new ground for America. Moreover, the bills, known at the time as 𠇌ontinentals,” notably lacked the then de rigueur rendering of the British king. Instead, some of the notes featured likenesses of Revolutionary soldiers and the inscription “The United Colonies.” But, whatever their novelty, the Continentals proved to be a poor economic instrument: backed by nothing more than the promise of 𠇏uture tax revenues” and prone to rampant inflation, the notes ultimately had little fiscal value. As George Washington noted at the time, 𠇊 wagonload of currency will hardly purchase a wagonload of provisions.” Thus, the Continental failed and left the young nation saddled with a hefty war debt.

A deep economic depression followed the Treaty of Paris in 1783. Unstable currency and unstable debts caused a Continental Army veteran, Daniel Shays, to lead a rebellion in western Massachusetts during the winter of 1787. Fear of economic chaos played a significant role in the decision to abandon the Articles of Confederation for the more powerful, centralized government created by the federal Constitution. During George Washington’s presidency, Alexander Hamilton struggled to create financial institutions capable of stabilizing the new nation’s economy.


Borrowing Clause

The Congress shall have Power To. borrow Money on the credit of the United States.

The power to borrow money is essential to the existence and survival of a national government. In the Founding era, political leaders expected that in peacetime the Congress would craft the federal government's budget so that revenues equaled or surpassed expenditures. Indeed, the Treasury Department strictly complied with a policy of earmarking all revenues for particular government programs. Nonetheless, the nation could not successfully defend itself militarily without the power to borrow quickly and extensively when the need arose. The Framers therefore drafted the Borrowing Clause without an express limitation.

The Borrowing Clause, however, has a practical corollary. The terms upon which a nation could borrow money depended upon its credit standing. President George Washington's Farewell Address (1796) captures the general sentiment of the times:

Although Federalists and Republicans agreed on the need to maintain the public credit, they diverged considerably on how the borrowing power should be implemented. Indeed, the core differences in the visions of the Federalists and Republicans in the Founding era relate to contrasting views of this power. Alexander Hamilton sought to assure a strong central government by interpreting the Borrowing Clause as authorizing Congress to charter the First Bank of the United States (established in 1791), which maintained federal control over the federal reserves and issued debt instruments that circulated like money. Hamilton viewed large federal issues of debt instruments as an essential stimulant to commerce, providing a source of capital to a capital-poor society, and equally important for revenue collection purposes. The Constitution, however, did not expressly authorize Congress to charter corporations, and the constitutionality of the bank was widely debated.

Thomas Jefferson dismantled much of Hamilton's program. To the Jeffersonian Republicans, a balanced budget reflected a popular desire to limit the size and power of the federal government and to protect states' rights. Jefferson repealed Hamilton's internal taxes (which provided security for the federal debt) and appointed Albert Gallatin as Secretary of the Treasury with a mandate to pay down the federal debt. With a few exceptions, subsequent administrations also prioritized balancing the federal budget, and Andrew Jackson successfully paid down the federal debt in 1835. In this, the early presidents were following the advice of George Washington in his Farewell Address.

Wartime exigencies and economic crises led the country toward the modern interpretation of the Borrowing Clause. A financial emergency that threatened national security during the War of 1812 led to the bipartisan acceptance of the need for federal government control of its reserves through the (Second) Bank of the United States, which was held constitutional in Justice John Marshall’s opinion in McCulloch v. Maryland (1819).

The policy dealing with incurring and repaying debt, however, remained relatively consistent from 1789 until 1917. Congress borrowed money to pay for wars and to sustain the economy during a recession, but it began paying it down upon the return to peace and financial stability. In 1917 Congress granted the Department of the Treasury standing borrowing authority, but for many years Congress continued to manage the incurrence and repayment of debt in substantially the same manner as before. After World War II, changed attitudes, including the influence of economic thinkers such as John Maynard Keynes and the expansion of government-funded entitlements as well as a large standing military force produced sustained peacetime deficits and very few periods of debt reduction. The past few decades have been punctuated by failed attempts at spending and debt limits, and the federal debt has reached unprecedented levels. One attempt, granting the President a line-item veto power, was struck down by the Supreme Court in Clinton v. City of New York (1998).

With respect to a federal currency, the Report of the Committee of Detail (debated at the Constitutional Convention) had given Congress the power to “borrow money, and emit bills on the credit of the United States.” The delegates voted to strike the power to “emit bills,” which strongly suggests that Congress was not authorized to borrow by means of issuing paper money, although it is clear that interest-bearing debt instruments were permissible. The Union’s financial crisis during the Civil War, however, led to the attempt by the federal government to issue and make legal tender a paper-money currency, which was held constitutional in The Legal Tender Cases (1871). Sixty years later, financial problems during the Great Depression led Congress to define what constitutes legal tender. In 1933, a congressional joint resolution prohibited the enforcement of gold clauses in both contracts between the government and individuals and in private contracts, thereby making Federal Reserve notes the exclusive legal tender. The Supreme Court held the resolution constitutional in The Gold Clause Cases (1935).

Legal disputes dealing with the Borrowing Clause today involve two issues. The most litigated issue involves the principle of intergovernmental-taxation immunity. The Supreme Court has held that the Supremacy Clause (Article VI, Clause 2) prohibits state and municipal governments from directly or indirectly taxing the interest income on federal government debt and thereby interfering with the federal government’s power under the Borrowing Clause. See State of Missouri ex rel. Missouri Insurance Co. v. Gehner (1930).

The clause also implicitly requires Congress to maintain the public credit. The Supreme Court has invoked the clause in treating the government like a private party in its contractual dealings by vesting Congress with the power to contract against subsequent repudiation or impairment of its obligations by future Congresses. In Perry v. United States (1935), the Court cautioned that the power to borrow money is a power vital to the government, upon which in an extremity its very life may depend. The binding quality of the promise of the United States is of the essence of the credit that is so pledged. Though having this power to authorize the issuance of definite obligations for the payment of money borrowed, Congress has not been vested with authority to alter or destroy those obligations. However, in United States v. Winstar Corp. (1996), the Court held, among other things, that contractual obligations of the government would be enforced unless doing so blocked the exercise of one of the government’s essential sovereign powers.

Because the Constitution imposes no express limits on the borrowing power, the political branches must decide the issue. As in the Founding era, the question of the extent to which the government should run deficits and maintain a large federal debt are at the essence of contrasting views about the proper scope of the federal government.


Any existing assets you have, such as a share portfolio, investment properties, car/boat/motorbike, or other tangible assets may improve your ability to borrow. This is because they can also demonstrate your ability save and invest money over time.

Once you have found a property, how much a lender will lend you can depend on the value of that property. The lender will find out how much the property is worth by completing a property valuation, which will determine exactly how much money they will lend to you.


The power of steam : an illustrated history of the world's steam age

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Borrowing Power

Clause 2. The Congress shall have Power * * * To borrow Money on the credit of the United States.

Annotations

The original draft of the Constitution reported to the convention by its Committee of Detail empowered Congress “To borrow money and emit bills on the credit of the United States.” 659 When this section was reached in the debates, Gouverneur Morris moved to strike out the clause “and emit bills on the credit of the United States.” Madison suggested that it might be sufficient “to prohibit the making them a tender.” After a spirited exchange of views on the subject of paper money, the convention voted, nine states to two, to delete the words “and emit bills.” 660 Nevertheless, in 1870, the Court relied in part upon this clause in holding that Congress had authority to issue treasury notes and to make them legal tender in satisfaction of antecedent debts. 661

When it borrows money “on the credit of the United States,” Congress creates a binding obligation to pay the debt as stipulated and cannot thereafter vary the terms of its agreement. A law purporting to abrogate a clause in government bonds calling for payment in gold coin was held to contravene this clause, although the creditor was denied a remedy in the absence of a showing of actual damage. 662

659 2 M. Farrand, The Records Of The Federal Convention Of 1787 144, 308–309 (rev. ed. 1937).


The Late 19th Century: 1850-1899

But then the Civil War happened.

Leading up to the Civil War, America fought a war with Mexico to annex Texas and California. That added more than $63 million to the national debt (a little more than $2 billion in 2019 money).

But the bigger picture is, America has never really stopped paying for the Civil War. Whether or not you approve of government debt, those five years were the first time that the national debt truly spiked. Between 1860 and 1866 the debt rose from $64.8 million to more than $2.7 billion, approximately $42 billion by today&aposs standards.

To keep the nation whole, President Abraham Lincoln pushed debt to nearly 30% of gross domestic product and introduced the first income tax in American history. This was the first time America would experience the one-way ratchet of debt that follows each of the country&aposs major wars.

Each major conflict in U.S. history has been accompanied by a sharp rise in debt as the government raises funds to pay for the fighting. This wartime debt establishes a new normal, setting the baseline around which debt will fluctuate until the next major war pushes borrowing higher. In the wake of the Civil War, the U.S. debt rose to more than $2 billion and never dipped below $1.5 billion afterward, although a rapidly growing economy did quickly reduce the debt&aposs share as a portion of GDP after the end of the Civil War.

What is also noteworthy about America&aposs late-19th century debt is the borrowing that didn&apost happen. In 1893, one of the worst depressions in American history began, leading to nearly 20% unemployment by the following year. And then in 1898, America fought a brief war with Spain.

Yet neither of these events triggered the usual cycle of crisis-fueled borrowing. Instead, government debt ticked marginally down in 1893.


The Power of Forgiveness

To forgive someone can be simple. But this simple act can have powerful consequences and may lead to a personal and spiritual transformation. From Ground Zero to Northern Ireland to the Amish countryside, The Power of Forgiveness features Rev. James Forbes, Elie Wiesel, Thich Nhat Hanh, Thomas Moore, Marianne Williamson and others. The film explores this important concept and reveals how forgiveness can transform a person's life.


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