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View Diary: More on Section 4 of the 14th Amendment and the debt ceiling (45 comments)

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  •  I get that (1+ / 0-)
    Recommended by:
    elmo

    but no US Debt holder is going to like the uncertainly introduced by an almost certain lawsuit.

    It would tank the Treasury Market.

    The bitter truth of deep inequality has been disguised by an era of cheap imported goods and the anyone-can-make-it celebrity myth - Polly Toynbee

    by fladem on Mon Dec 10, 2012 at 08:23:17 AM PST

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    •  I think what would tank T Market, and tank it (1+ / 0-)
      Recommended by:
      cynndara

      big time, and maybe for a long time, would be Congress defaulting. That would end the uncertainty -- Congress saying "we ain't going to pay you back as we agreed".

      The lawsuit would be filed to stop O from paying current debt in default by borrowing more money despite Congress' objections. That would help the market, because it would give T-Bill holders hope of getting paid, despite getting stiffed by the Congress.

      “I’m able to fly, do what I want, essentially. I guess that’s what freedom is — no limits.” Marybeth Onyeukwu -- Dreamer.

      by chuco35 on Mon Dec 10, 2012 at 08:35:27 AM PST

      [ Parent ]

      •  If we went there (0+ / 0-)

        it would cause a global depression.

        The bitter truth of deep inequality has been disguised by an era of cheap imported goods and the anyone-can-make-it celebrity myth - Polly Toynbee

        by fladem on Mon Dec 10, 2012 at 08:48:36 AM PST

        [ Parent ]

      •  You don't get to a default (1+ / 0-)
        Recommended by:
        cynndara

        before going through significant pain in other segments. Shutting down the government, ending Social Security checks, etc.

        Politically, that would create so much pressure on the party that is causing the bottleneck, I sincerely doubt you would ever get to the point of a default on treasuries.

        Point of trivia: did you realize the U.S. already did default on treasuries through inadvertence once?

        http://www.mentalfloss.com/...

    •  Good. (1+ / 0-)
      Recommended by:
      chuco35

      Tanking the Treasury market would lead the US into the realization that it doesn't need to borrow money through Goldman Sachs at all.  The US PRINTS money.  The entire business about borrowing is a fiction going back to the times when we borrowed against gold reserves that actually backed the currency.  A fiat currency doesn't need to be borrowed from third parties.

      It's time for some serious re-organization and re-conceptualization about the entire US monetary system.  Tank the bond market.  The world will go on, the US government will still exist, and the only people too much terribly poorer will be the big money-center banks.  Oh, the HORROR!

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