Not a lot of people know about the so-called “Quasi-War” fought between the United States and France during the John Adams administration, but I think it’s an important episode to recall for the purposes of ongoing debates about the Obama administration’s protestations that the ongoing war in Libya somehow really isn’t a war.

The point isn’t that Obama is right—he’s wrong—but that this is how the game’s always been played. From the administration of the second president ever, we were fighting an undeclared war on presidential authority. And of course Adams’ congressional opponents complained about it. And when they took over the White House, they certainly changed the basic orientation of American foreign policy. But they didn’t really change the practice around this declaration of war business. Instead the new undeclared war was one against Barbary Pirates. Which isn’t to say that congress wasn’t involved in the fight against the pirates. The key point was that congress appropriated funds to send the obtain and dispatch the ships. And from thence onward, despite the fact that we sometimes did get formal declarations of war (World War One and World War Two) and sometimes had a special congressional vote (Gulf War One and Gulf War Two) and sometimes had wars purely on executive recognizance (Civil War, Korea) that congress has always played an important role in the process as the institution that runs the appropriations process.

Which is to say that congressional authorization for the Lincoln administration’s prosecution of a war against the CSA took the form of appropriations and other measures to create the Union Army. And in the case of something like Libya, congressional authorization takes the form of the fact that we just this week had a giant political fight about appropriations in which nobody in the opposition leadership made the slightest gesture in the direction of a “rider” that would prevent the president from prosecuting that war or limiting his discretion in initiating new wars. This is what happens almost every year—congress appropriates funds for a military, and does little to tie the president’s hands in terms of how he uses it. When congress wants to tie the president’s hands—as it did in the seventies when it stopped the Ford administration from continuing involvement in the defense of South Vietnam—congress gets its way. But most of the time congress doesn’t want to tie the president’s hands.

One of the most important things about the health care and education segments of the economy is that part of what customers want is attention. Parents like the idea of small class sizes, and patients like the reassuring face-to-face presence of a doctor with a good bedside manner. But personal attention has the pretty special characteristic of being immune to productivity enhancements. This creates the following trilemma as economy-wide productivity rises:

— One: The wages of teachers and doctors can fall relative to average wages, because teachers and doctors aren’t increasing their productivity as rapidly as the average worker.

— Two: Paying the salaries of teachers and doctors can account for an ever-growing share of national output, because the rest of our output is getting more efficient and teaching and treating isn’t.

— Three: The amount of attention provided by teachers and doctors to students and patients can decline.

It’s not that you need to pick one of those three things, but you can’t pick zero of them. And it’s not that three necessarily needs to mean declining educational and health outcomes. Attention is important to people, subjectively, but it’s hardly the only thing that matters for learning and it’s definitely not the only thing that matters for health. If doctors spend less time with their patients but are able to prescribe more effective drugs, that’s a net benefit. And it’s possible to increase reliance on less-trained kinds of medical professionals who are paid less than doctors but may still be competent to perform attention-paying functions. On instinct, though, people’s preferences are for smaller classes, more face time with doctors, and more of a sense of personalization and customization. I still hear older people sometimes reminisce about the doctors of yore who’d pay house calls, hardly noticing that this inefficient use of medical professionals’ time just reflects low economy-wide productivity.

I find that a frustratingly large share of discussions of these issues involves too much talk of dollars and cents and not enough qualitative talk along these lines. That allows people to avoid saying what they mean. Hold the growth of federal health spending to the rate of inflation? Sounds great! But what does it look like? If the bottom third of the income distribution stops being able to afford to see the doctor, that frees up more doctors’ time to pay attention to richer people. So that’s one possible answer. But if that’s what you mean, that’s what you should say. And if you think we need to increase the relative wages of teachers while further shrinking class sizes and sustain that policy over time, it’ll mean steadily increasing taxes, no one-off increase will undue the Baumol Effect. That’s one possible answer—America is lightly taxed compared to other rich countries—but you owe it to yourself at least to face up to that.

Incidentally, I think the dynamics of a debt ceiling faceoff and the dynamics of an appropriations faceoff are quite different. That’s because a lapsing of appropriations triggers a very specific set of occurrences. When appropriations lapse, it becomes illegal for the federal government to do anything not related to the “essential functions” of human and population security. The key issue here isn’t that the government doesn’t have money. If you’re willing to work without pay temporarily, you’re not allowed to work if you’re deemed non-essential.

This is hugely disruptive and it’s obviously very burdensome to people who rely on government services.

The debt limit is a different kind of thing. When the Treasury lacks authority to engage in new borrowing, all that means is that the Treasury lacks the authority to engage in new borrowing. Nothing else has to happen. Some money will still be flowing in, which means some money can continue to flow out. And the administration has some flexibility in how it handles this. What’s more, the government can ask people to continue to do things in exchange for IOUs. Large defense contractors, for example, don’t live on a paycheck to pacycheck basis. And if Robert Gates calls up an airplane manufacturer and says “look, we can’t pay you this month but keep building the planes and we’ll pay what we owe once the debt ceiling fight is resolved” the guys who build the planes are going to keep on building planes. There’s no dramatic “hostage” moment, there’s just a small-but-growing inconvenience for a large number of people who rely in part on government checks to make a living. That all happens well before the federal government would be forced into a default scenario where it can’t pay off bondholders.

How that plays out in practice seems to me difficult to predict, but it’s not the same as shutdown dynamics.

Once upon a time, “money” referred to coins made out of precious metals. Then circulation began to primarily consist of pieces of paper that were redeemable in exchange for fixed quantities of precious metals. But more recently we’ve shifted to a system of fiat money—a paper dollar is exchangeable for some euro coins or for a little mark on your bank account saying that you have a dollar in there. And in the modern day the vast majority of the money is electronic, rather than physical currency. CAP doesn’t ever hand me an envelop full of bills, they directly deposit the money in my bank account. And the majority of that money flows out again in electronic form—Bank of America takes some to pay my mortgage, Chase takes some to pay my credit card bills, Comcast and Pepco take some to pay my utilities, etc. The physical cash is just a small residual element.

But it continues to play an important role in the macroeconomy. That’s because it’s the main reason for the existence of a “zero lower bound” on interest rates.

The general idea of interest rates is that to the extent that they’re lower, people will be less interested in holding currency in the bank and more interested in obtaining some goods, services, or investments. But if our bank started paying a negative interest rate (i.e., charging you to store money) this mechanism would break down. You’d want to largely “invest” in shoeboxes full of pieces of paper with Ulysses Grant’s face on them. But this is purely an artifact of the existence of the paper money residuum. If we moved to a system in which all transactions are done electronically (debit cards, credit cards, direct deposit, electronic transfer, etc.) then going from 1 percent interest rate to -1 percent interest rate would be no different from going from 7 percent interest rate to 5 percent interest rate. The gains for macroeconomic stabilization (and tax enforcement) could be huge. And it’s only a matter of time before someone tries it. The question is who’ll go first? My bet would be on Singapore, South Korea, or perhaps Sweden.

SK writes: “Do you know of any legal path to getting rid of or disempowering the Senate that would not require Senate approval?”

It all depends on what you mean by “legal” but the short answer is “no.” The longer answer is just to observe that the existing United States Constitution was adopted by means that were, at the time, illegal. Elites felt that the Articles of Confederation were inadequate to resolving the problems of the country, so elites gathered to write a new constitution that contained a ratification procedure at odds with what’s spelled out in the Articles. Then along they went seeking ratification by various states and when they had the number the said was necessary, they declared victory and pushed ahead, installing victorious General George Washington as the new head of state and head of government.

At some point in the future if there’s some crisis, you could imagine something like that happened again. The current constitution of France has a somewhat similar origin in a political crisis followed by an extra-constitutional moment and then a referendum. These things happen, though not frequently.