“Damn it…let’s print some money (or cash in on some seignorage) and be done with it!”
I’m not buying it and neither is Felix Salmon. First of all, the debt limit includes debt the gov’t owes to itself. That may not make sense, but IMHO neither does the whole ceiling concept itself—in other words, I’d be happy to raze the debt ceiling.
So regardless of whether the money comes from new investors, the Fed’s digital printing press, or seignorage (essentially the profit the Fed claims from minting currency), the Treasury simply can’t borrow more than $14.3 trillion until the ceiling is raised. Or razed.
Baker/Paul (again, that’s just a weird combination) is different, because they retire gov’t debt. We’re still bound by the same ceiling, but we now have more borrowing room.
Then there’s the 14th Amendment, which, as I’ve written before, seems to speak mainly to paying creditors. My read is doesn’t help us in paying Social Security, the military, or to send out the 70 million checks due to go out Aug 3.
I don’t see any way around this other than House R’s grow up really, really fast.