Over at the WaPo. The idea here is that because we are unlikely to acctually default on the federal gov’t’s obligations, I worry that some people are tuning out the debt ceiling debate. But there are good reasons not to do so. First, see the figure in the piece–even flirting with the debt limit distorts markets. Second, time spent squabbling over this is time not spent on solving real problems. And third, such dysfunction isn’t an accident; it’s a strategy.
Oh, and pre-empting comments re the “platinum coin” solution, the reason I don’t go there in the piece, along with space constraints, is that Treasury and White House officials have been unequivocal in rejecting that approach, as they do not believe they have the authority to mint such a coin.
I don’t know if that’s legally accurate, but I’ve seen enough scholarly arguments on the other side (arguing the Treasury does have such authority) that if it really came to default, I’d mint the coin in a New-York minute. Yes, the opposition would take legal action, but believe me, the White House is plenty lawyered up.
The last time this came up there was a meeting between President Obama and Speaker Boehner and shortly after there was a deal.
My guess is that President Obama showed Speaker Boehner a trillion dollar coin with Boehner ‘s face on it.
I prefer the admittedly aggressive Constitutional argument that the debt ceiling is a legislative interference with powers — to pay bills incurred for expenditures ordered or authorized by law — that are inherently part of the Executive power. It seems ridiculous to think that Congress may tell the Executive to incur certain obligations and yet has the authority to make it impossible to make the payments for which the government is obligated as a matter of law.
I’d bet something that Alexander Hamilton would have agreed with that in one of The Federalist Papers — if, that is, they could have imagined something as absurd as a law like this.
No gimmicks required. Just say that the United States Government does not have the authority to refuse to pay for obligations legally incurred, and that all bills obligations will be paid, period. Let everyone else tear their hear out agonizing about what that means. The people will back the President who does the “Make My Day” challenge.
Perhaps this standoff is exactly what the country needs right now. Despite the anger of many people towards injustices, very few people are willing to do anything right now.
We need a bit of absurdity to wake people up, I think. I’d like to see this play out. Either default or mint the coin. The main thing is to be very prepared (I mean the adminstration) to explain with authority that all of this absurdity is unnecessary and stupid. Just tell it like it is — the Tea Party doesn’t understand the government, taxes, the budget, economics or anything else. We think they can count, because the debt clock antics seem to weigh on their minds.
It would be interesting to see a study on the taxes paid by Tea Party constituents. I suspect most people pay almost zero in federal taxes and a few ultra-wealthy people pay about 15%. This is the Tea Party demographics.
The Tea Party is the most undertaxed segment of our economy.