8 ms·

I would like to see Obama start to feel out the possible response in the international financial community to unilaterally raising the debt ceiling so this idio

I would like to see Obama start to feel out the possible response in the international financial community to unilaterally raising the debt ceiling so this idiocy could be done for good. Just knowing he was doing it would probably cause Republicans to cave so they don't have to admit not authorizing their own expenditures is devoid of all logic. I hate politics.

yapcguy 13y ago
Why should the debt ceiling be raised? The debt ceiling has nothing to do with meeting ones obligations to creditors. If the debt ceiling isn't raised, simply prioritize what the country's money is going to be spent on.
- JumpCrisscross 13y ago
  "If the debt ceiling isn't raised, simply prioritize what the country's money is going to be spent on." 1. That could be a form of default. Not on the U.S. debt, but on its contracts. 2. Cash flows are lumpy - that's part of why we have government debt. Even reducing all non-debt payments to zero, the U.S. Treasury will have to default at some point before mid-November. There simply isn't enough money in the U.S. Treasury's account at the Federal Reserve to keep its cheques from bouncing.
  - ericmason 13y ago
    They can always sell off some assets. Welcome to reality.
    - JumpCrisscross 13y ago
      You don't buy the furniture out of a burning house. A fire sale of a country's public assets in the midst of a political and financial meltdown isn't going to find much real demand.
      - jlgreco 13y ago
        The US certainly has assets that other would be willing to buy. As an obviously inflammatory/terrible example: I am sure many corporations or nations would leap at the chance to buy the mineral rights of national parks. How much would the Chinese give us for the right to stripmine Yosemite? A lot I bet. (Obviously that is a horrible idea, we should never stripmine our national parks...)
        JumpCrisscross 13y ago
        You own Blackberry stock. It's your largest holding. You've seen it lose 90% of its value in the last 5 years. The CEO asks if you'd like to buy a cafeteria pass, good for free meals at the company cafeteria for the next 50 years. Most investors would say no. If a company is selling its cafeteria food to stay afloat, chances are (a) there won't be a company tomorrow or (b) it will find some way to repudiate inconvenient contracts, e.g. go bankrupt. Some very smart people bought into an Argentinian oil and gas deal. Then the friendly government became less friendly and their deeds were worthless pieces of paper.
        bilbo0s 13y ago
        What Crisscross is trying to say is... Even if you buy assets from a government in turmoil... what is the likelihood that any new government emerging from that turmoil will allow you to keep the assets you purchased? Historically... the odds have not been favorable to investors.
        jlgreco 13y ago
        This is true, but I don't think we are anywhere close to there yet. If we started selling off land, I suspect there would still be buyers.
      - yapcguy 13y ago
        Au contraire, the best time to find a bargain is from a forced seller!
        13y ago
    - seanmcdirmid 13y ago
      We could sell California to China I guess.
    - bjterry 13y ago
      Obama should sell start selling indulgences. Every non-violent federal offender has a one-time opportunity to have their case dropped for $100,000. I'm pretty sure lots of people could pony up the cash through friends and family, if necessary. As a bonus, save costs on the Justice Department.
  - tdees40 13y ago
    Perhaps more to the point, Obama doesn't have the legal authority to prioritize certain payments. If he doesn't pay something, then he would be in violation of the law. He can't just unilaterally not pay bills. This isn't some little technical problem, it's a real constraint. If the debt ceiling isn't raised, Obama is both (1) required by law to spend certain monies and (2) not allowed to borrow to spend that money. This could provoke a very real constitutional/legal crisis with no clear resolution.
    - fleitz 13y ago
      If he is unable to fulfill his obligations as required by law, I guess the only legal option is resignation.
      - bilbo0s 13y ago
        I think that the depth of the hypothetical that tdees postulates has eluded you... it would not be Obama who has a Constitutional/Legal crisis... it would be the United States. It would be, quite literally, US Law mandating the violation of ... US Law.
        fleitz 13y ago
        Which the president as head of the executive branch is required to execute.
        bilbo0s 13y ago
        Sigh... OK... let's walk your suggestion through. The President resigns. The Vice-President succeeds. The Vice-President is now the President. Now the NEW President is obliged by US Law... to violate US Law. So we enact your solution again... The NEW President resigns... This time the Speaker succeeds... The Speaker is now the President. Now THAT new President is obliged by US Law... to violate US Law. So we enact your solution again... Do you see the problem yet?
        13y ago
- jbigelow76 13y ago
  Because if it's unilaterally raised it ceases to be a weapon.
- 21echoes 13y ago
  > The debt ceiling has nothing to do with meeting ones obligations to creditors. yes, it completely does. the US does not have the cash on hand to continue paying out to its creditors. to continue to pay its creditors, it must borrow more money.
- pekk 13y ago
  The debt ceiling has everything to do with meeting obligations to creditors, and that is why it should be raised. Start with false premises, end up with false conclusions.
JumpCrisscross 13y ago
Obama met with the large banks on 2 October, telling them it might be worse than they expected [1]. Wall Street was pretty chill through the middle of last week [2]. Once it started calling it became apparent that there was little it could do [3]. The expectation appears to be that Obama will prioritise payments after 17 October to avoid a default. Once a critical point is reached he will use "creative accounting," in the IMF's words, to come up with a solution. Him failing at that, the expectation is the Federal Reserve will find a way to credit the U.S. Treasury's account. All these options, it should be noted, involve the selective suspension of the rule of law - the lesser of the evils. [1] http://www.reuters.com/article/2013/10/02/us-usa-fiscal-obama-banks-idUSBRE9910OR20131002 http://www.reuters.com/article/2013/10/02/us-usa-fiscal-obam... [2] http://dealbook.nytimes.com/2013/10/09/complacency-on-wall-street-could-be-worse-than-a-panic/ http://dealbook.nytimes.com/2013/10/09/complacency-on-wall-s... [3] http://www.nytimes.com/2013/09/04/business/economy/business-losing-clout-in-a-gop-moving-right.html?pagewanted=all http://www.nytimes.com/2013/09/04/business/economy/business-...
- patmcguire 13y ago
  Not paying is also illegal, though. So if they don't increase the debt ceiling there's no way not to break the law.
  - jbigelow76 13y ago
    Nobody outside of the US cares about what's legal (in this instance), they just want assurances the inmates aren't running the asylum and the house of cards won't come tumbling down.
rayiner 13y ago
Of all of the unconstitutional things Obama has been alleged of doing, blatantly disregarding the Constitution's allocation of the power of the purse to the House and unilaterally raising the debt ceiling to placate the "international financial community" would undoubtedly be the most egregious. It would effectively be a coup d'état and the right's hand-waving about Obama being a dictator will have become a self-fulfilling prophecy.
- jbigelow76 13y ago
  It's not about "placating" anybody, it's about standing up and walking away from the table instead of playing Russian roulette with your crazy, drunk, suicidal uncle.
- sixothree 13y ago
  I like how you casually ignore the whole 14th amendment thingy.
  - krapp 13y ago
    This isn't about reality, it's about politics.
- jbooth 13y ago
  So you're a lawyer, right? Politically I get what you're saying but legally, with the 14th amendment and all, he has to either illegally prioritize or illegally ignore the debt limit. Maybe ignoring the debt limit has more constitutional standing than reprioritizing the congressional budget. No idea on my end. Personally, if we're prioritizing, I think he should do some math where they pay all treasury bonds, on time and 100%, and then just cut every other expenditure in half (or whichever % works out), across the board. Social security checks, contractor payments, gov't worker payments, etc. Anybody refuses to do work, send the half-paid national guard after them and order them, since we're in crazytown anyways. And tell them to write their congressman. That's possibly the "least illegal" option, and certainly the most politically palatable, as far as respecting congress's self-contradictory legal orders in this mess.

yapcguy 13y ago

Why should the debt ceiling be raised? The debt ceiling has nothing to do with meeting ones obligations to creditors. If the debt ceiling isn't raised, simply prioritize what the country's money is going to be spent on.

JumpCrisscross 13y ago
"If the debt ceiling isn't raised, simply prioritize what the country's money is going to be spent on." 1. That could be a form of default. Not on the U.S. debt, but on its contracts. 2. Cash flows are lumpy - that's part of why we have government debt. Even reducing all non-debt payments to zero, the U.S. Treasury will have to default at some point before mid-November. There simply isn't enough money in the U.S. Treasury's account at the Federal Reserve to keep its cheques from bouncing.
- ericmason 13y ago
  They can always sell off some assets. Welcome to reality.
  - JumpCrisscross 13y ago
    You don't buy the furniture out of a burning house. A fire sale of a country's public assets in the midst of a political and financial meltdown isn't going to find much real demand.
    - jlgreco 13y ago
      The US certainly has assets that other would be willing to buy. As an obviously inflammatory/terrible example: I am sure many corporations or nations would leap at the chance to buy the mineral rights of national parks. How much would the Chinese give us for the right to stripmine Yosemite? A lot I bet. (Obviously that is a horrible idea, we should never stripmine our national parks...)
      - JumpCrisscross 13y ago
        You own Blackberry stock. It's your largest holding. You've seen it lose 90% of its value in the last 5 years. The CEO asks if you'd like to buy a cafeteria pass, good for free meals at the company cafeteria for the next 50 years. Most investors would say no. If a company is selling its cafeteria food to stay afloat, chances are (a) there won't be a company tomorrow or (b) it will find some way to repudiate inconvenient contracts, e.g. go bankrupt. Some very smart people bought into an Argentinian oil and gas deal. Then the friendly government became less friendly and their deeds were worthless pieces of paper.
      - bilbo0s 13y ago
        What Crisscross is trying to say is... Even if you buy assets from a government in turmoil... what is the likelihood that any new government emerging from that turmoil will allow you to keep the assets you purchased? Historically... the odds have not been favorable to investors.
        jlgreco 13y ago
        This is true, but I don't think we are anywhere close to there yet. If we started selling off land, I suspect there would still be buyers.
    - yapcguy 13y ago
      Au contraire, the best time to find a bargain is from a forced seller!
      - 13y ago
  - seanmcdirmid 13y ago
    We could sell California to China I guess.
  - bjterry 13y ago
    Obama should sell start selling indulgences. Every non-violent federal offender has a one-time opportunity to have their case dropped for $100,000. I'm pretty sure lots of people could pony up the cash through friends and family, if necessary. As a bonus, save costs on the Justice Department.
- tdees40 13y ago
  Perhaps more to the point, Obama doesn't have the legal authority to prioritize certain payments. If he doesn't pay something, then he would be in violation of the law. He can't just unilaterally not pay bills. This isn't some little technical problem, it's a real constraint. If the debt ceiling isn't raised, Obama is both (1) required by law to spend certain monies and (2) not allowed to borrow to spend that money. This could provoke a very real constitutional/legal crisis with no clear resolution.
  - fleitz 13y ago
    If he is unable to fulfill his obligations as required by law, I guess the only legal option is resignation.
    - bilbo0s 13y ago
      I think that the depth of the hypothetical that tdees postulates has eluded you... it would not be Obama who has a Constitutional/Legal crisis... it would be the United States. It would be, quite literally, US Law mandating the violation of ... US Law.
      - fleitz 13y ago
        Which the president as head of the executive branch is required to execute.
        bilbo0s 13y ago
        Sigh... OK... let's walk your suggestion through. The President resigns. The Vice-President succeeds. The Vice-President is now the President. Now the NEW President is obliged by US Law... to violate US Law. So we enact your solution again... The NEW President resigns... This time the Speaker succeeds... The Speaker is now the President. Now THAT new President is obliged by US Law... to violate US Law. So we enact your solution again... Do you see the problem yet?
        13y ago
jbigelow76 13y ago
Because if it's unilaterally raised it ceases to be a weapon.
21echoes 13y ago
> The debt ceiling has nothing to do with meeting ones obligations to creditors. yes, it completely does. the US does not have the cash on hand to continue paying out to its creditors. to continue to pay its creditors, it must borrow more money.
pekk 13y ago
The debt ceiling has everything to do with meeting obligations to creditors, and that is why it should be raised. Start with false premises, end up with false conclusions.

JumpCrisscross 13y ago

Obama met with the large banks on 2 October, telling them it might be worse than they expected [1]. Wall Street was pretty chill through the middle of last week [2]. Once it started calling it became apparent that there was little it could do [3]. The expectation appears to be that Obama will prioritise payments after 17 October to avoid a default. Once a critical point is reached he will use "creative accounting," in the IMF's words, to come up with a solution. Him failing at that, the expectation is the Federal Reserve will find a way to credit the U.S. Treasury's account. All these options, it should be noted, involve the selective suspension of the rule of law - the lesser of the evils. [1] http://www.reuters.com/article/2013/10/02/us-usa-fiscal-obama-banks-idUSBRE9910OR20131002 http://www.reuters.com/article/2013/10/02/us-usa-fiscal-obam... [2] http://dealbook.nytimes.com/2013/10/09/complacency-on-wall-street-could-be-worse-than-a-panic/ http://dealbook.nytimes.com/2013/10/09/complacency-on-wall-s... [3] http://www.nytimes.com/2013/09/04/business/economy/business-losing-clout-in-a-gop-moving-right.html?pagewanted=all http://www.nytimes.com/2013/09/04/business/economy/business-...

patmcguire 13y ago
Not paying is also illegal, though. So if they don't increase the debt ceiling there's no way not to break the law.
- jbigelow76 13y ago
  Nobody outside of the US cares about what's legal (in this instance), they just want assurances the inmates aren't running the asylum and the house of cards won't come tumbling down.

rayiner 13y ago

Of all of the unconstitutional things Obama has been alleged of doing, blatantly disregarding the Constitution's allocation of the power of the purse to the House and unilaterally raising the debt ceiling to placate the "international financial community" would undoubtedly be the most egregious. It would effectively be a coup d'état and the right's hand-waving about Obama being a dictator will have become a self-fulfilling prophecy.

jbigelow76 13y ago
It's not about "placating" anybody, it's about standing up and walking away from the table instead of playing Russian roulette with your crazy, drunk, suicidal uncle.
sixothree 13y ago
I like how you casually ignore the whole 14th amendment thingy.
- krapp 13y ago
  This isn't about reality, it's about politics.
jbooth 13y ago
So you're a lawyer, right? Politically I get what you're saying but legally, with the 14th amendment and all, he has to either illegally prioritize or illegally ignore the debt limit. Maybe ignoring the debt limit has more constitutional standing than reprioritizing the congressional budget. No idea on my end. Personally, if we're prioritizing, I think he should do some math where they pay all treasury bonds, on time and 100%, and then just cut every other expenditure in half (or whichever % works out), across the board. Social security checks, contractor payments, gov't worker payments, etc. Anybody refuses to do work, send the half-paid national guard after them and order them, since we're in crazytown anyways. And tell them to write their congressman. That's possibly the "least illegal" option, and certainly the most politically palatable, as far as respecting congress's self-contradictory legal orders in this mess.