During the last debt ceiling crisis, there was talk of President Obama invoking the clause in the 14th amendment to the Constitution, which states:
Sect. 4. The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.
He was then loathe to do so because it would open new territory in constitutional law and there would have been a huge legal upheaval. He was fortunately spared from that by reaching a compromise with the Republican bandits that were holding the country hostage at that time. The compromise included the present sequester that at this point has not satisfied the Republicans, who are demanding even more concessions. Fortunately, Obama has recognized that and is no longer willing to concede more to the insatiable extortionists.
At this point, not willing to give any more ground, he is faced with a choice.Either the Republicans cave and agree to a continuing resolution and a raising of the debt ceiling or the entire world economy is thrown into chaos. The latter alternative is completely unacceptable and I think Obama knows that full well. So the choice comes down to a Republican defeat or the invocation of the 14th amendment. This foray into uncharted constitutional territory appears to be the better alternative for reasons explained beneath the curly-cue.
Let's say the standoff goes until, say, October 10th, a point at which world financial markets can be predicted to be in full panic mode. What is Obama to do?
He cannot cave and end the grand experiment of the American Democratic Republic. He cannot allow the world economy to tank due to the ego games of a bunch of psychotic maniacs. He must, must invoke the 14th amendment. Here is what I expect to happen if he does that:
He goes on national television from the Oval Office and announces that in light of an impending world economic crisis he is instructing the Treasurer of the United States to continue to honor the debt obligations of this country based on the 14th amendment, which transcends any other laws that may be in effect to the contrary. Of course, all hell breaks loose.
But the Treasurer sees himself obliged to follow the Executive Order of the President and continues to service the country's debt. Financial markets, while not totally calmed, do not erupt in panic. Much of the nation gives an at least temporary sigh of relief.
But the Republicans explode and threaten impeachment.
At that point, we are put through another melodrama of impeachment by the House. A committee made up of wingnuts will forward Articles of Impeachment to the full House, which will solemnly pass them leading to a trial in the Senate. The country will at that point think that Obama is a hero for saving the country from catastrophe but that will not stop the Republican lynch mob. The trial in the Senate will take its course, but will of course end in acquittal because it takes a 2/3 majority to convict and the Senate is controlled by Democrats. Obama emerges as a hero and the Republicans then get to face the 2014 election.
At that point, a precedent will have been set on the matter of the debt ceiling and we will never have to go through this kabuki dance again.