It’s hard to escape the feeling that the vast global sell-off in the markets is related to a sense that something is wrong with the Budget Control Act of 2011. Certainly the more one gets into the act the more glaring is the fact that it has less to do with “budget control” than with evading controls that were established as far back as 1787. That’s when the Founders of America wrote the Constitution that delegates to Congress the power to borrow money on the credit of the United States and prohibits any money from being withdrawn from the treasury of the United States but in consequence of appropriations made by law.

It turns out that the Budget Control Act transfers the borrowing power out of the hands of the Congress and places it — in sharp contradistinction to the scheme of the Constitution — into the hands of the president. When it comes to the next round of fighting over the debt ceiling, it’s not going to be the Congress passing a law and the president deciding whether to veto it. Instead it’s going to be the president deciding to borrow money and the Congress deciding whether it wants to over-ride him. And if Congress tries to do so, the president can veto the over-ride. What in the world would George Washington and James Madison have made of it?

The idea that a legislature mayn’t delegate its powers goes back at least to John Locke. In his Second Treatise on Government, the great Englishman put it this way: “The power of the legislative, being derived from the people by a positive voluntary grant and institution, can be no other than what that positive grant conveyed, which being only to make laws, and not to make legislators, the legislative can have no power to transfer their authority of making laws, and place it in other hands.” Added he: “These are the bounds which the trust, that is put in them by the society, and the law of God and nature, have set to the legislative power of every common-wealth, in all forms of government.”

That the Budget Control Act appears to violate these principles is starting now to percolate in the public press. The Web log American Thinker issued yesterday an analysis, in which William Olson and Herbert Titus, a lawyer and law professor respectively, take apart the section of the Budget Control Act that sets up a “Debt Ceiling Disapproval Process.” It provides that if the president determines by the end of the year that the government is within $100 billion of the debt ceiling, he just needs to send a note of certification over to the Congress and he can go ahead and, within a broad limit, borrow without further ado.

The burden is shifted, so that it is up to the Congress to stop the president from borrowing more. In other words, the Congress gets to veto, in effect, a presidential decision to borrow — though if the president doesn’t like the joint resolution vetoing his borrowing he can veto that resolution. What are the markets to make of a “budget control act” that turns out to be a vehicle for Congress abandoning control of the debt process to the president? Particularly markets that are already jittery about the vast entitlement schemes the Congress has passed leading to runaway government debt and a collapse of our national currency.

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Our own expectation is that the question of delegation at the heart of the Budget Control Act is going to end up before the Supreme Court. We’ll see, but that’s our bet, just as it was our bet that the Obamacare legislation was going to end up before the Supreme Court because of deep constitutional issues. Eventually, we predict, the debate over how to control runaway government spending will return to the core problem, which is the abandonment of sound, constitutional money of the kind to which the Founders were referring when, twice in the Constitution, they used the word dollars. To get to the heart of the problem reformers will have to take a look at the logic of establishing a Federal Reserve that can, with a few clicks of a computer mouse, create dollars and lend them to the government to cover deficits that spending bills create. It turns out that also involves the Congress granting to others powers it was never intended to delegate.