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> How would it play out if the Treasury decided to ignore the debt-ceiling outright, and continue to service the national debt? As the article notes, the Treas

by pdonis 3y ago

> How would it play out if the Treasury decided to ignore the debt-ceiling outright, and continue to service the national debt? As the article notes, the Treasury already does things to circumvent the debt ceiling, and nobody cares. The article is just discussing further things that the Fed could do to help the Treasury circumvent the debt ceiling if necessary. In other words, I don't think the debt ceiling issue will ever trigger a Constitutional crisis. (Unless, of course, you think, not unreasonably, that all this circumventing of laws passed by Congress already is such a crisis, but that's a whole other discussion.)

JumpCrisscross 3y ago
> article is just discussing further things that the Fed could do to help the Treasury circumvent the debt ceiling if necessary Not even that. The Fed is saying they'll defer to the Treasury on whether debt is legally issued. (Presumably, until SCOTUS rules on it.)
- pdonis 3y ago
  > The Fed is saying they'll defer to the Treasury on whether debt is legally issued. Yes, while the Fed continues to do various things behind the scenes to make sure that the Treasury can plausibly claim that the debt is legally issued.
  - JumpCrisscross 3y ago
    > while the Fed continues to do various things behind the scenes to make sure that the Treasury can plausibly claim that the debt is legally issued What are you hinting at? The Fed doesn't decide on whether debt is legally issued. It also cannot overrule Treasury absent a court order. It's saying that, absent court advice, if the Treasury issues debt it will treat it like any other. There is nothing behind the scenes they need to do beyond announcing they'll treat them equivalently.
    - pdonis 3y ago
      > What are you hinting at? I'm just restating what was in the article, for example when it talks about "accounting gimmicks" that the Treasury uses to circumvent the debt ceiling. The Fed, as you say, cannot overrule Treasury, so if the Treasury tells the Fed to play a particular role in its accounting gimmicks (which it does), the Fed has no choice but to do so.

by pdonis 3y ago

JumpCrisscross 3y ago

> article is just discussing further things that the Fed could do to help the Treasury circumvent the debt ceiling if necessary Not even that. The Fed is saying they'll defer to the Treasury on whether debt is legally issued. (Presumably, until SCOTUS rules on it.)

pdonis 3y ago
> The Fed is saying they'll defer to the Treasury on whether debt is legally issued. Yes, while the Fed continues to do various things behind the scenes to make sure that the Treasury can plausibly claim that the debt is legally issued.
- JumpCrisscross 3y ago
  > while the Fed continues to do various things behind the scenes to make sure that the Treasury can plausibly claim that the debt is legally issued What are you hinting at? The Fed doesn't decide on whether debt is legally issued. It also cannot overrule Treasury absent a court order. It's saying that, absent court advice, if the Treasury issues debt it will treat it like any other. There is nothing behind the scenes they need to do beyond announcing they'll treat them equivalently.
  - pdonis 3y ago
    > What are you hinting at? I'm just restating what was in the article, for example when it talks about "accounting gimmicks" that the Treasury uses to circumvent the debt ceiling. The Fed, as you say, cannot overrule Treasury, so if the Treasury tells the Fed to play a particular role in its accounting gimmicks (which it does), the Fed has no choice but to do so.