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View Diary: GOP: 'How to stop worrying and love government default,' and how the president should respond (225 comments)

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  •  Relevant Graf: (8+ / 0-)
    The whole point of a reserve currency, a debt obligation that is regarded as having essentially zero risk, is that it has regularity, certainty a total lack of surprises. Let's say the President takes the 14th Amendment route, which I guarantee you he won't. Wall Street types could give us the exact amount. But those treasuries would need to be heavily discounted because they would certainly be the focus of a series of lawsuits that would take time to settle since the move is at best constitutionally questionable. How much less will you pay for that 14th Amendment bond since there's a chance the Supreme Court might eventually decide it's invalid and needn't be honored? What risk do you factor in that the President gets impeached over the move and Congress and the next President expressly renounce the obligations? And if you're wondering, is it even remotely possible that on the day those securities go on auction the airwaves won't be filled with House Tea Partiers warning people not to buy them because they're illegal and lack the full faith and credit of the USA?

    So sure you'll buy the treasuries that the US government has been selling and making good on for over two centuries since they come with the full faith and credit of the United States of America. But how much will you pay for the ones the President says he's behind but part of the Congress doesn't? Same with the platinum coin. Even more so with cockamamie ideas about paying some people and not others.

    Most of the people taking a hard line against us are firmly convinced that they are the last defenders of civilization... The last stronghold of mother, God, home and apple pie and they're full of shit! David Crosby, Journey Thru the Past.

    by Mike S on Tue Oct 08, 2013 at 07:34:29 AM PDT

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