About avoiding default on the federal debt:
[E]conomists and investors have quietly begun to explore the options the White House might have in the event Congress fails to act.
The most widely discussed strategy would be for President Obama to invoke authority under the 14th Amendment and essentially order the federal government to keep borrowing, an option that was endorsed by former President Bill Clinton during an earlier debt standoff in 2011.
Wall St. Fears Go Beyond Shutdown
By NELSON D. SCHWARTZ and CHARLIE SAVAGE
The New York Times, October 2, 2013
"Widely discussed," eh? It's funny, the ideas bandied about in yesterday's
New York Times article reads like something you
would've seen on some
rabidly partisan liberal blog
a while ago. How unrealistic and unserious those posts were! And really, who listens to
Bill Clinton anymore? Or to
Rep. Steny Hoyer? Or to
constitutional law scholars (albeit with some disagreement there)? But now, look what we have here:
And in recent days, prominent Democrats like Senator Max Baucus, chairman of the Senate Finance Committee, and Representative Nancy Pelosi, the House minority leader, have urged the White House to seriously consider such a route, even if it might provoke a threat of impeachment from House Republicans and ultimately require the Supreme Court to rule on its legitimacy.
Pfft, impeachment is for personal (Democratic) bullshit like
land deals blowjobs, not for curtailing Presidential power. Remember, pretty much the same Congress that tried to impeach Pres. Clinton previouisly tried to give him the budgetary line-item veto.
The article goes on to entertain other various options for overcoming the debt limit:
- Prioritize debt servicing payments, with a partial federal government shutdown (independently of the budget-driven shutdown)
- Issue IOU's, like California has done in the past decade
- Sell off gold reserves and other assets
- Mint a large-denomination platinum coin
The article still doesn't cover my other favorite option aside from the 14th Amendment, though it may not be applicable this time if the sequence of events was the other way around earlier this year:
- Declare the debt ceiling superseded by other law. In the past, Congress passed and the President signed federal spending bills after the prior debt ceiling law passed, spending that incurred debt beyond the ceiling. Because the spending and the ceiling were in conflict, the more recent spending bills overrode the debt ceiling.
(Wasn't that one also mentioned at Naked Capitalism or the like recently? Couldn't find it. If you have a link, please let me know.)
Here's the thing: despite these fully legitimate ways the President has in hand to void the debt ceiling, most everyone in Washington, DC and in the national press runs around acting as though the debt ceiling is still a viable threat. It is not! The Republicans have no leverage here. And yet, everyone still pretends the Republicans can use it for political blackmail.
Additionally, there's something important to realize here: these politicians don't really care about principles, constitutional or otherwise. They care about what "works," about what tools they can wield to get what they want. Hence you had Sen. Obama standing in opposition to a raise in the debt ceiling in 2006, whereas now Pres. Obama decries such a move.
I'd speculate that, now that the Tea Partiers have taken the threat of default beyond a mere "grand bargain" pressure point over to an existential threat to the national and even global economy, all of a sudden the political and press establishment sees the 14th Amendment option as viable.
I know, I know, Pres. Obama and the administration have to act as though there's nothing they can do, in order to force the Republicans to raise the debt ceiling and all the rest. Not buying it—it doesn't have to go this way. All too often Democrats out-think themselves into inaction, into not using the power they actually have in hand. Also, I tend to oppose strategies that are, at their core, wrapped around lies (especially if it's lying to oneself), because these too-clever-by-half maneuverings harm the public's understanding, can paint us into a bad corner, and at some point may run up against the immovable countervailing force of factual reality.
Life is too short, and we have real problems to deal with, problems like wealth inequality, CO2 emissions, and the Fukushima Daiichi disaster. Let us not waste our precious time and effort fighting phantoms.
Have to say, the "Dr. Frankenstein's monster" aspect of recent developments has me scooping a big ol' heap of popcorn kernels into the air popper:
But as corporate leaders lament, their influence among Republicans has waned with the influx of more populist Tea Party conservatives, who are suspicious of big business for its reliance on federal contracts. In the meeting with financial executives, according to a participant, Mr. Biden said, “It’s a different breed of cat up there.”
:: ::
United States Constitution, Amendment 14
The validity of the public debt of the United States, authorized by law, [...] shall not be questioned.