Article 1 - The Legislative Branch

Source:

Bill Seeks to Let FDIC Borrow up to $500 Billion. March 6, 2009
http://online.wsj.com/article/SB123630125365247061.html

Constitutional Connection:

Article 1, The Legislative Branch, Section 8, Clause 2
(Clause 1) " The Congress shall have Power......"
(Clause 2) "To borrow money on the credit of the United States...."

Explanation of Connection:

            Senate Banking Committee Chairman, Christopher Dodd, is moving to allow the Federal Deposit Insurance Corp. to temporarily borrow as much as $500 billion from the Treasury Department. This would give the FDIC access to more money to rebuild its fund that insures consumers' deposits, which have been affected greatly by a string of bank failures. There have been recorded, 25 bank failures in 2008 and 16 as of March in 2009. Some bank failures have a bigger impact on the fund than others. These failures can cost the fund as much as $10+ billion and as little as $100 million or less.


            This article from the Wall Street Journal clearly demonstrates Article 1, Section 8, Clause 2 of the U.S. Constitution. Congress is given the right to borrow money if needed on the credit of the United States. If Congress feels that there is a significant enough reason to borrow any money on behalf of the U.S., they may. This is one of the many revenue rights they are given. In this article, Congress looks to borrow $500 billion from the Treasury Department, in hopes of to help the FDIC rebuild its fund that insures consumers' deposits.


            I do feel that it is necessary sometimes for the U.S. as well as other nations to borrow money in order to fix a problem in their country that they do not have the sufficient funds to fix themselves. However, this right can be abused, and many argue that the U.S. has already abused this right by borrowing trillions of dollars from China. Also, the U.S. currently has a line of credit with the Treasury of $30 billion. So, I do agree that this right can be easily stretched and abused, and I feel that in order to limit this power bestowed upon the Congress, rules must be laid down that declare under which situations Congress may borrow money and how much. We must keep in mind that when we borrow money from other countries, their is a limit that we must respect. That limit has not been respected with China, and this can easily cause conflict and/or war.