Signs Indicate That Obama’s Debt Ceiling Gamble May Be Paying Off, claims a headline in the NY Times, and when the downside of a bet may be global economic collapse, you might expect that the payoff would be equally enormous.
Okay, Republicans are way, way down in the polls, and Obamacare may go forward if Obama wins this bet, and maybe best of all we won't have to go through this mess again next season, unless of course the Tea-baggers are just as irrational next year as they are today, and they will be.
The Teabag Party is crazy by definition, the President knows this, and yet here we are, playing chicken with a bunch of crazies, and they are not chicken!
Meanwhile, win or lose, this freak-show is making us look like a pack of monkeys to the rest of the world, and even ourselves.
Did Obama have a choice, that wasn't defunding Obamacare and giving the Teabagger Terrorists everything they ever wanted?
Yes.
The President had a lot of choices, some of them endorsed on both ends of the political spectrum.
Dean Baker likes Ron Paul's plan!
Man bites dog!
Representative Ron Paul has hit upon a remarkably creative way to deal with the impasse over the debt ceiling: have the Federal Reserve Board destroy the $1.6 trillion in government bonds it now holds.
Unlike the debt held by Social Security, the debt held by the Fed is not tied to any specific obligations. The bonds held by the Fed are assets of the Fed. It has no obligations that it must use these assets to meet. There is no one who loses their retirement income if the Fed doesn’t have its bonds. In fact, there is no direct loss of income to anyone associated with the Fed’s destruction of its bonds. This means that if Congress told the Fed to burn the bonds, it would in effect just be destroying a liability that the government had to itself, but it would still reduce the debt subject to the debt ceiling by $1.6 trillion.
Paul Krugman wants to mint a trillion-dollar coin!
Should President Obama be willing to print a $1 trillion platinum coin if Republicans try to force America into default? Yes, absolutely. He will, after all, be faced with a choice between two alternatives: one that’s silly but benign, the other that’s equally silly but both vile and disastrous. The decision should be obvious.
There’s a legal loophole allowing the Treasury to mint platinum coins in any denomination the secretary chooses. Yes, it was intended to allow commemorative collector’s items — but that’s not what the letter of the law says. And by minting a $1 trillion coin, then depositing it at the Fed, the Treasury could acquire enough cash to sidestep the debt ceiling — while doing no economic harm at all.
This still leaves the question of whose face goes on the coin — but that’s easy: John Boehner. Because without him and his colleagues, this wouldn’t be necessary.
Boehner's big fat face on a trillion-dollar coin! It's a beautiful vision!
And now that we've heard from the economic all-stars, I'll add my two cents, and it isn't a coin worth $1,000,000,000,000.02.
Congress cannot even alter so much as a comma in the US Constitution, much less simply abrogate a significant provision like Section 4 of the Fourteenth Amendment.
The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.
This clause cannot be erased by Congress any more than it could be erased by a gang of meatballs in a bowl of spaghetti, and it was
crazy for the President to allow this particular gang of meatballs to drive us to the edge of default, when he could have defended the Constitution so much more effectively by minting one humongous coin or writing off a pile of almost meaningless bonds in the basement of the Federal Reserve.
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BTW I slapped down five HR's on ad hominem attacks in the comments below, and if the creek don't rise and I still have the option tomorrow, I'll slap down five more.
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