On the debt ceiling, even if he chooses not to acknowledge them:
Why not point out that if the Administration does not negotiate with the Republicans, it can still prevent defaults and shutdowns due to the failure to raise the debt limit? Is it because the President prefers a crisis atmosphere, and perhaps even a shutdown to prepare the way for the treasured “grand bargain” on entitlements he has been seeking since at least January 2010, when he appointed the beloved Bowles-Simpson Catfood Commission?
That there may be something to this, is suggested by two things happening this morning. In his address to the Business Roundtable, the President stated his willingness to negotiate with the Republicans on the budget on matters including entitlements, along with his unwillingness to negotiate with them on the debt ceiling. Since the issue of the budget and a government shutdown occurs first, at the end of this month, he is saying that he is willing to do a deal on the budget with entitlements on the table, if the Republicans agree to give him a clean debt limit increase bill.
Then later on MSNBC’s “NOW with Alex Wagner” during a panel discussion also, including Alex Wagner, David Corn, and Ezra Klein again. After Ezra once again repeated his apocalypse now framing of the debt limit crisis, Sam Stein emphasized that Obama and the Administration continue to emphasize a willingness to negotiate over the budget.
Sam Stein: . . . you can see the contours of a deal that would upset both parties but palatable. something like in exchange for changes to social security payments, cpi, chained cpi. you could get a reprieve from sequestration. something like that along the lines where both parties are like, well, we don’t really want to do it, but for the sake of making sure we pay our bills — that’s why the republicans keep going there. they know obama care defunding isn’t going to happen, but there are other hostages.
Alex: why does president obama come to the table at all?
Ezra: i think that’s the kind of deal they would come to the table on. they would consider that a deal over sequestration. i’m not sure if they would do that exact deal, but the two deals they won’t do are the ones the republicans want. they don’t want that sequestration deal. they want an obama care deal or a debt ceiling deal. they won’t come to the table on those. . .
So, Sam Stein thinks the zombie “chained CPI” lives again, and Ezra agrees, but also thinks that the Republicans will not agree to that unless they get the deals they want. So, once again, the right wing, through their intransigence, may save us from President Obama’s continuing insistence that seniors must suffer now, and future seniors must suffer as well, for the sake of an illusory long-term debt/insolvency problem that doesn’t really exist, and that he can dispel at any moment by minting a $60 T coin.
Meanwhile, the four Versailles “progressives” on this panel laugh at the stupidity of the Republicans who are marching to the doom of their party, while refusing to call attention to the fact that this “funding” crisis, and the previous ones since 2010 were and are all kabuki, since the President could and still can dispel the illusion of possible insolvency any time he chooses to use the power Congress has given him to mint that coin. The big $60 T one; just the timid TDC.
8 thoughts on “The president has other options”
The $60 T coin would crash the market, collapse credit ratings and create a catastrophic currency flight, after which there will be impeachment proceedings. His footing under the Fourteenth Amendment to pay just interest on the debt instruments is far more defensible.
Isn’t political theater fun? We do pay these (insert your own insulting expression here) in Washington the big bucks to entertain us right? But let’s not forget that the 1% controls the media. For example, where’s the media’s coverage of the recent offer by Iran to make a deal with the U.S. over its nuclear program? Why hasn’t the media reported that Iran has once again said that it does NOT want to build a nuclear weapon? Perhaps this “news” doesn’t fit into the neo-cons (Zionists) narrative of why we ned to “bomb, bomb, bomb…..bomb, bomb” Iran so they give it short shrift? The Left isn’t going to allow Obama to get a “grand bargin” any more than it allowed him to bomb Syria or make Larry Summers the next FED chief.
The Left didn’t stop Obama from bombing Syria, Putin did. Larry Summers was at the top of Obama’s list but he got a job offer that was going to bump him from the 1% to the .1%. The Left isn’t going to allow Obama to get a grand bargain? Yes it is, because after betrayal once again The Left will vote Democrat across the board, and you can take that certainty to the bailed out bank.
You give Putin far too much credit. Obama could have ignored Putin’s offer to deal. But he didn’t. Obama could have listened to the advice given to him by the Hillary interventionists like Rice and Powers to bomb Syria without going to Congress. But he didn’t. Instead Obama saw both the Left and the Libertarian Right reaching for his throat and he caved in. Your analysis of why Summers withdrew his name is flawed. Summers is already a very wealthy man. What he wanted was power. The Left has never betrayed its core beliefs. That honor goes to pseudo-Progressives and Liberals who misrepresent what they truely believe.
As Princess Leia once implored in an hour of great peril “help me, right wing intransigence, you’re my only hope”.
Indeed, that has been our only hope for the last three years, and it remains our only hope now.
First, the $60 T coin won’t crash the market because it’s not going into the economy all at once but only gradually over 75 years.
Second, the US’s credit rating won’t be important because it won’t be issuing any more debt, and it will be paying down its current debt very rapidly by using the $60 T coin.
Third, there would be no flight from US currency because the US would be rapidly repaying its debt, so why on earth would people draw the conclusion that out currency is weaker?
Fourth, there will be no impeachment proceedings unless the Rs win the Senate in 2014, because they can’t possibly get a conviction or even a vote with a Democratic majority in the Senate. Also, minting platinum coins is perfectly legal according to the 1996 law authorizing the Secretary of Treasury to mint them using whatever face value he deems appropriate. So, what grounds would they use for impeachment. That he took away their toys?
On the other hand, there is plenty they could impeach him for, but they never will because, they too are in favor of those same illegal and unconstitutional activities.
Fifth, his footing on the 14th amendment is much more insecure than his footing for platinum coin seigniorage (PCS), because, even though the 14th section 4 says that no one can question the validity of the debts of the United States, the debt limit law doesn’t question the validity as long as the Executive Branch can use other ways that issuing debt to pay US obligations. So, for example, the very existence of PCS means that any President’s claim that he has the obligation under the constitution to issue further debt to pay interest on the outstanding debt is not a cogent legal claim, because he or she would only have that legal obligation if that were the only way to meet the USs financial obligations.
And sixth, think about it, when a security falls due, it is not enough to pay the interest to avoid default. You must pay back the principal too. So, what you propose would not fulfill the obligations of the United States even if were legal in other respects, which, as I argued above it is not.
Finally, It might be worthwhile before you provide a throwaway comment and opinion on a blog post to do a little bit of research into the area you’re commenting on. I’ve given all the reasons why your comment is wrong in the last link presented above. You obviously didn’t follow the links to look at the supporting documents.
Sorry about the repeated comment. I noticed a typo at the least minute and tried to correct it. Please delete comment 6.
Thanks you for covering this, Susie.
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