Matt Yglesias:

[A]t the end of the day if the White House simply refuses to get sucked into a negotiation, the debt ceiling will be raised.

I agree.

Speaking for me only

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    Obama has never met (5.00 / 1) (#3)
    by jeffinalabama on Wed Apr 13, 2011 at 11:36:23 AM EST
    a negotiation he couldn't cave on.

    I highly recommend Glenn's post (5.00 / 3) (#6)
    by Anne on Wed Apr 13, 2011 at 11:44:01 AM EST
    today; this isn't caving, it's political bob-and-weave at a new level.

    Here's a bit of his post (the nut graf):

    Whether in economic policy, national security, civil liberties, or the permanent consortium of corporate power that runs Washington, Obama, above all else, is content to be (one could even say eager to be) guardian of the status quo. And the forces of the status quo want tax cuts for the rich, serious cuts in government spending that don't benefit them (social programs and progressive regulatory schemes), and entitlement "reform" -- so that's what Obama will do. He won't advocate, and will actually oppose, steps as extreme as the ones Paul Ryan is proposing: that's how he will retain his "centrist" political identity and keep the fear levels high among his voting base. He'll pay lip service to some Democratic economic dogma and defend some financially inconsequential culture war positions: that's how he will signal to the base that he's still on their side. But the direction will be the same as the GOP desires and, most importantly, how the most powerful economic factions demand: not because he can't figure out how to change that dynamic, but because that's what benefits him and thus what he wants

    It's never been that he couldn't do it.


    He uses the perception of weakness (5.00 / 2) (#7)
    by observed on Wed Apr 13, 2011 at 11:45:44 AM EST
    to his advantage the same way Bush used the lowered expectations of his intelligence to HIS advantage.
    Bush was no dummy (although he was ignorant of things he should have known) and Obama is no pussy.

    Wait (1.00 / 1) (#9)
    by AngryBlackGuy on Wed Apr 13, 2011 at 11:49:49 AM EST
    Presidents are smart now?
    Bush is smart but Obama is dumb?

    You're all over the place.


    Don't get your panties in a wad (none / 0) (#10)
    by observed on Wed Apr 13, 2011 at 11:51:05 AM EST
    ( to use one of your own lines).
    I said, "Obama is no genius".
    I also said Presidents are not intelligent, generally. It's hard to argue with either of those propositions, don't you agree?

    Obama is clearly intelligent in (none / 0) (#11)
    by observed on Wed Apr 13, 2011 at 11:53:30 AM EST
    some areas, but he seems nearly innumerate on economic policy. For instance, to listen to him discuss the stimulus package, you would never know that there was a general consensus on how big the stimulus needed to be. For him, it was entirely about political process and negotiation.
    That's just bizarre. You can't negotiate away facts on the ground.

    I believed then, and believe now, (5.00 / 1) (#14)
    by jeffinalabama on Wed Apr 13, 2011 at 11:55:51 AM EST
    that the stimulus was just where he wanted it. With Geithner and the Chicago School of Economics advising.



    Never been about anything else IMO (none / 0) (#17)
    by MO Blue on Wed Apr 13, 2011 at 11:56:54 AM EST
    But the direction will be the same as the GOP desires and, most importantly, how the most powerful economic factions demand: not because he can't figure out how to change that dynamic, but because that's what benefits him and thus what he wants.

    And how does that benefit him? (none / 0) (#20)
    by observed on Wed Apr 13, 2011 at 12:00:02 PM EST
    It's not just about re-election.
    I remember several years ago reading about some of the disgusting ways GHWB made money after his term. For instance, he served on the board of a gold-mining companied that literally buried protesters alive.
    What about Clinton? Why is he so filthy rich now?
    In what ways does that money relate to what he did in office?
    With this much money in play, you have to assume corruption, IMO. It's naive to think otherwise.

    Obama never met a possible (none / 0) (#27)
    by Militarytracy on Wed Apr 13, 2011 at 12:27:14 PM EST
    negotiation he could ignore until it got up and went home.  He has ran wildly into negotiations that never needed to happen.  I expect he will again because the thought of a "market uncertainty" of any kind makes Goldman Sachs and Tim Geithner cry, probably Ben Bernanke too.  This is first and foremost the Wall Street Ponzi trickle down White House before it is anything else.

    Hope this isn't OT, but what's the (5.00 / 1) (#8)
    by observed on Wed Apr 13, 2011 at 11:48:57 AM EST
    drinking game for tonight? I'm lining up my shots already.

    I think the drinking game ought to be (5.00 / 1) (#12)
    by jeffinalabama on Wed Apr 13, 2011 at 11:54:20 AM EST
    how blotto one can get this afternoon to keep from kicking in the television screen.

    Excellent suggestion. It's 1 pm now. (5.00 / 2) (#13)
    by observed on Wed Apr 13, 2011 at 11:55:01 AM EST
    It may be too late to start, if I want to get there smoothly,

    ROTFLMAO (none / 0) (#29)
    by Ga6thDem on Wed Apr 13, 2011 at 12:31:51 PM EST
    Yeah, and to make things worse for you, you're looking at moving to LA. We in GA have lots of LA jokes.

    I'll only be 100 miles from Atlanta... (none / 0) (#30)
    by jeffinalabama on Wed Apr 13, 2011 at 12:36:14 PM EST
    but it's still LA ;-)

    Well (none / 0) (#33)
    by Ga6thDem on Wed Apr 13, 2011 at 12:43:12 PM EST
    you can't be too far into LA to be only 100 miles away!

    northern edge, (none / 0) (#35)
    by jeffinalabama on Wed Apr 13, 2011 at 12:45:53 PM EST
    Auburn, or actually a little south of there, on the Lee-Macon county line. Below the fall line, though, so it's historically LA (he stated, with a perverse pride).

    Well (none / 0) (#36)
    by Ga6thDem on Wed Apr 13, 2011 at 12:48:01 PM EST
    being close to Auburn can't be all that bad!

    Alabama is somewhere that I've never wanted to live though my husband likes the Birmingham area. Of course, I've lived in lower Ga too which is a lot like LA I would imagine.


    Yep, pecans, peanuts, and poverty... (5.00 / 1) (#37)
    by jeffinalabama on Wed Apr 13, 2011 at 12:50:33 PM EST
    but a lovely hot and humid countryside.

    And good dirt. (none / 0) (#39)
    by Ga6thDem on Wed Apr 13, 2011 at 12:54:45 PM EST
    We have terrible dirt here in the part of GA i'm in--that horrid red clay that everything dies in. I told my husband there was a reason why 100 years ago moonshiners were all over the place--the soil is so poor that you couldn't scratch out a living farming this crappy soil.

    speech is 1:35 EDT (none / 0) (#15)
    by MKS on Wed Apr 13, 2011 at 11:56:10 AM EST
    Frack me. (none / 0) (#16)
    by observed on Wed Apr 13, 2011 at 11:56:47 AM EST
    I'm teaching then, so I can't play.

    Chug a lug time... (none / 0) (#18)
    by jeffinalabama on Wed Apr 13, 2011 at 11:57:03 AM EST
    set up the shots!

    from politico (5.00 / 1) (#23)
    by Capt Howdy on Wed Apr 13, 2011 at 12:03:03 PM EST
    [Morning Money] hears that House Speaker John Boehner has been reaching out to top Wall Street players asking how close Congress can get to the May 16th deadline (or July 8th drop-dead date) for raising the debt limit without seriously unnerving financial markets. The questioning is not going over well. "They don't seem to understand that you can't put everything back in the box. Once that fear of default is in the markets, it doesn't just go away. We'll be paying the price for years in higher rates," said one executive. Boehner's office last night would not confirm the conversations.

    BINGO! (none / 0) (#31)
    by Militarytracy on Wed Apr 13, 2011 at 12:39:02 PM EST
    and the poor and middle class get a big fat boobie prize and nothing else!  It will be like winning the depression glass raffle prize when you are standing there starving to death.

    wont happen (none / 0) (#34)
    by Capt Howdy on Wed Apr 13, 2011 at 12:44:45 PM EST
    If our stock market was based on market (none / 0) (#38)
    by Militarytracy on Wed Apr 13, 2011 at 12:51:50 PM EST
    fundamentals you couldn't crash it just by having unhappy thoughts.  But everything this administration has done about the economic crisis has only created markets that are only held up by happy thoughts.  It is going to crash sometime, when I don't know....but it is B.S. that the only thing that stands between us and the next Great Depression is happy thoughts.  There is no manufacturing base in the United States, there is no strong middle class, we have nothing holding us up and the Obama administration has further weakened market fundamentals with every single thing they have done.

    Now the Republicans can threaten us a little bit and we will give all sorts of things up to them in order to avoid the possibility of another crash.  And they will do this again next time, and the time after that and the time after that.  This President bought and paid for this reality that he must now attempt to survive though.


    I would think the (none / 0) (#1)
    by Capt Howdy on Wed Apr 13, 2011 at 11:27:32 AM EST
    Chamber of Commerce would not allow their puppets the GOP to default on the debt.

    What are the chances? (none / 0) (#2)
    by Anne on Wed Apr 13, 2011 at 11:34:17 AM EST
    Both sides want to make political hay out of this more than they want to do the responsible thing, which is just to agree - like they have before - to raise the limit.

    [I'm thinking of taking up basket-weaving; it will be good for my blood-pressure, and then, when we all go to hell, I will have a nice basket for the ride - or for what's left of my worldly possessions.]

    Obama wants to get political mileage (none / 0) (#4)
    by observed on Wed Apr 13, 2011 at 11:41:49 AM EST
    out of kicking the DFH's.
    Greenwald writes about that today.
    To answer a point that Andgarden raised,
    Paul Ryan is Obama's  Huey Long.

    Except that Paul Ryan (none / 0) (#22)
    by brodie on Wed Apr 13, 2011 at 12:01:40 PM EST
    wants to Share the Wealth only among the rich and the rest can fend for themselves.  His slogan could be Every Rich Man A King.

    I'm Charlie Brown again (none / 0) (#5)
    by Dadler on Wed Apr 13, 2011 at 11:43:00 AM EST
    And Lucy is holding that football on the grass for me to kick.

    I'm an idiot.

    Stupid question(s)... (none / 0) (#19)
    by kdog on Wed Apr 13, 2011 at 11:57:48 AM EST
    why have a debt ceiling only to raise it once we reach it?  

    And why can't we stiff the countries stupid enough to loan this crackhead nation money?  I mean they should be anticipating that eventually, no?  

    We've gotten so deep in the hole we're past the point of even running to stand still.  Being cut off might be a blessing in disguise...short term there would be serious hardship, but if we radically reprioritize spending suffering could be minimized.  

    Thanks all... (5.00 / 1) (#40)
    by kdog on Wed Apr 13, 2011 at 01:12:28 PM EST
    Couple thoughts....

    Woulda been nice if the founders set a credit limit in the constitution along with a no default rule...but I guess the founders could have never have imagined us being this irresponsible...or a federal government so large, for that matter.  The situation is gonna come to a head eventually...unless its all monopoloy money fantasy on spreadsheets, in which case who cares...borrow till the cows come home.

    If all spending ceases except for interest payments, all we need to do is start a tax revolt, and everyone who is able just has to adopt a sick/old/disabled person and we're golden.  We're keeping our gross so its semi-feasible for every able-bodied worker to pay at least part of the freight for those in need and unable to work.  And no wars, no occupations, no DEA agents kickin' down doors...sounds like heaven!  iow, the good work the government does is being held hostage so they can borrow money to bomb Libya, right?  I say we call the bluff and do that good work ourselves...and watch the dirty disappear.  Yeah its a dream, but a good one!


    What do you want? (5.00 / 1) (#41)
    by Militarytracy on Wed Apr 13, 2011 at 02:29:53 PM EST
    Real markets?  I'm with you Kdog as far as how things go these days with the FED...there is no reward for being a saver now.  The incentive that exists now is to be in debt and find a way to default with as little damage to self.  And anyone who wants to "invest" must now play in a Casino :)  That is because of what our FED has become.  And the reason why we must always raised the debt ceiling is because we have.....a FED.

    Fourteenth Amendment, (none / 0) (#21)
    by jeffinalabama on Wed Apr 13, 2011 at 12:01:13 PM EST
    Article Four, kdog, it's in the constitution. We can't default.

    The theory is (none / 0) (#24)
    by Warren Terrer on Wed Apr 13, 2011 at 12:16:44 PM EST
    that the debt ceiling was enacted to preserve congress's constitutional control over spending at a time when it had no other practical means of controlling how the treasury spent.

    However that has long since changed as the budget process is now heavily controlled by legislation. Consequently the debt limit serves no practical purpose today and is just a relic. Never mind the fact that the US has a fiat currency so that a debt ceiling has absolutely no meaning anyway.

    However no party would dare propose scrapping it entirely as that would be 'fiscally irresponsible'. And they obviously find it useful as a bargaining chip.

    I read a decent article on this subject recently but I can't find it right now. I'll post a link to it if I find it later.


    Given the change from gold (none / 0) (#26)
    by jeffinalabama on Wed Apr 13, 2011 at 12:19:39 PM EST
    to fiat, the debt ceiling is simply a relic. too bad that people don't know this, so the kabuki of debt ceilings becomes soap opera drama.

    Thanks Warren, excellent information!


    The only constraints are self-imposed, (5.00 / 1) (#32)
    by Anne on Wed Apr 13, 2011 at 12:40:37 PM EST
    and that's the box we find ourselves in.

    letsgetitdone explains:

    In addition to mandating a debt ceiling, Congress also mandates that the Government can't deficit spend unless it issues debt in one-to-one dollar correspondence. So, if Congress refuses to raise the debt ceiling, the Executive Branch cannot comply with the mandate about issuing debt. Also, it's the law that the US Government must pay its debt obligations as these fall due, and fulfill the terms of various programs which require expenditures. In fact, as Tom Hickey points out, the 14th Amendment to the Constitution says in part:

    "Section 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. . . . "

    So, in this situation, the Executive has numerous legal mandates in conflict, and the President has the duty to faithfully execute the laws. Why, in this situation, can't the Attorney General argue that Congress's refusal to lift the debt ceiling has created a constitutional crisis and that it is the interpretation of the Executive Branch that the refusal to raise the debt ceiling negates the legal requirement that the Government must issue debt dollar-for-dollar in order to spend? Why can't the AG argue, further, that the Government has unlimited constitutional authority and, in some cases, obligations to spend and create fiat money as long as such spending has been previously authorized by Congress, whether or not the debt ceiling is extended?

    What if, in line with this interpretation, the Executive Branch orders the continuation of all Federal spending until the constitutional crisis is resolved, and orders the Fed to mark up its accounts in line with its directives, so that spending can continue and Treasury Accounts will have positive balances? What if, meanwhile, the Executive challenges Congress to remove the conflict created by its conflicting mandates...


    What would be wrong with something like this? Why should the interpretation be that the US must default on its obligations and shut down the Government? After all, it will probably not even be the explicit will of Congress that any such default occur, but only the will of one or a small number of Senators, who will not let the Congress express its will.

    Would that there could be some discussion of this in the media; the American public is seriously lacking in knowledge about this, and sadly, that seems to be working quite well for our "leaders."


    If it provides No purpose why is Tim (none / 0) (#42)
    by Militarytracy on Wed Apr 13, 2011 at 02:31:19 PM EST
    Geithner losing his mind over it.  Your post is silly

    The debt ceiling exists because, (none / 0) (#25)
    by Anne on Wed Apr 13, 2011 at 12:17:28 PM EST
    Up until World War I, the U.S. government needed approval from Congress every time it wanted to borrow money from the public. Congress would determine the number of securities that could be issued, their maturity date and the interest they would pay.

    With the Second Liberty Bond Act of 1917, however, the U.S. Treasury was given a debt limit, or a ceiling of how much it could borrow from the public without seeking Congress' consent. The Treasury was also given the discretion to decide maturity dates, interest rate levels and the type of instruments that would be offered. The total amount of money that can be borrowed by the government without further authorization by Congress is known as the total public debt subject to limit. Any amount above this level has to receive additional approval from the legislative branch.


    Not raising the debt ceiling would mean, according to the Center for American Progress:

    "The budgetary consequences of this conservative pledge would be catastrophic and far-reaching, forcing the immediate cessation of more than 40 percent of all federal government activities (excluding only interest payments on the national debt), including Social Security, military operations in Iraq and Afghanistan, homeland security, Medicare, and unemployment insurance," the Center for American Progress warned in October 2010.

    "This would not only threaten the safety and economic security of all Americans, but also have dire impacts for the economy and job growth," it continued. "In short, the economic consequences of such a large and precipitous drop in spending would be crushing, and almost certainly result in a severe drop in economic growth and employment at a time when we can least afford it."

    We don't want to go there, kdog.


    We just cut 1% of the budget and people (none / 0) (#28)
    by republicratitarian on Wed Apr 13, 2011 at 12:30:27 PM EST
    went bonkers. Do you think for one minute that politicians want to cut spending?

    IMO (none / 0) (#43)
    by Capt Howdy on Wed Apr 13, 2011 at 02:38:47 PM EST
    this whole debt ceiling thing is wingnut kabuki

    it will be raised.

    Political Games (none / 0) (#44)
    by mmc9431 on Thu Apr 14, 2011 at 09:00:11 AM EST
    It's all smoke and mirrors used to push a political agenda.

    If we were seriously on the brink we'd pull out of Afghanistan and Iraq today. We'd close up all the useless foreign military bases.  We'd stop all foreign aid and eliminate corporate welfare. (The oil industry doesn't need our financial assistance. They seem to be doing quite well).