14th Amendment

Alan Grayson's e-mail on Moody's warning that it might reduce the US's AAA rating, suggested that Moody's was either threatening a downgrade because it wants to get the Bush tax cuts for the rich extended, or, alternatively, that “Moody's is living in what Aristophanes called "Cloud Cuckoo Land."” He says this because Moody's is upset about the possibility that the US may go over the so-called “fiscal cliff,” even though if it did, it would theoretically result in $560 Billion of deficit reduction annually, without further legislative changes, and it makes no sense on the surface for a rati Read below the fold...

Bob Woodward's releasing a new book, so we are now seeing articles based on it. A few days back, The Washington Post published the ”Inside story of Obama’s struggle to keep Congress from controlling outcome of debt ceiling crisis.” This account is a pretty downbeat one of how our political leaders and President Obama handled the debt ceiling crisis of the summer of 2011. I want to comment on what for me was the most salient point: that during the crisis, the President had no “Plan B” to get around the debt ceiling beyond negotiating a deal with Congress. Read below the fold...

Today the MSM question of the morning for Congressional Progressive Caucus members is a variant of this:

“Which is worse, voting for a debt ceiling increase bill that doesn't raise any revenue and that will lead to major cuts in discretionary programs, and in entitlements including Social Security, Medicare, and Medicaid, or voting to defeat a bill that does that and causing the United States to go into a default.”

So, there it is: a false choice again, being used to make progressives look bad if they say they will vote against anything but a clean debt ceiling deal. Read below the fold...

(Thanks to DailyKos commenter 2laneIA for suggesting this post and the title)

It's only a few days now until August 2nd. Perhaps a compromise on lifting the debt ceiling will be reached before then. Perhaps none will be reached. Perhaps the President will veto a compromise if it doesn't extend the ceiling sufficiently to support deficit spending until after the 2012 elections. If a debt ceiling extension is voted down, or if the President vetos an unacceptably small extension, then what is to be done? I've now run into six primary options the President can select among to avoid default. The six are:

-- Challenging the debt ceiling based on the 14th Amendment Section 4
-- Selective default
-- Proof Platinum Coin Seigniorage (PPCS)
-- Running an overdraft at the Fed Read below the fold...

[Welcome, Naked Capitalism readers! --lambert] Read below the fold...

Dear Dems and Mr. President,

I've been a lifelong Democrat. But now, I don't know anymore. I'm still registered alright; but when I look at your behavior, I think I'm a freely floating voter resource now, and I'd probably respond to a poll as one in that amorphous blob of independents that stands for “the two parties suck; but we don't agree on much else.” I'm sorry about that. I really had high hopes after the 2008 election, that a new period of Democratic resurgence had come, and that the Reagan era had ended. Read below the fold...

Congress provided the authority, in legislation passed in 1996, for the US Mint to create platinum bullion or proof platinum coins with arbitrary fiat face value having no relationship to the value of the platinum used in these coins. These coins are legal tender. So, when the Mint deposits them in its Public Enterprise Fund account at the Fed, the Fed must credit that account with the face value of these coins. Read below the fold...

[Cross-posted under a different title at Naked Capitalism -- lambert]

(Author's Note; Many thanks to lambert strether, beowulf, and Yves Smith for their reviews of this post) Read below the fold...

I've written a lot about jumbo coin seigniorage as a way of getting around the debt ceiling problem over the past 7 months, and others here, Read below the fold...

Today, the MSM noticed that there's an issue of constitutionality related to the debt ceiling. Ryan Grim and Samuel Haass report that some Democratic Senators, including Chris Coons and Patty Murray, have begun to discuss. Read below the fold...

An awful lot of Congresscritters lately have been threatening to refuse the raise the debt limit unless legislative programs whose funding has been previously authorized and appropriated is re-negotiated. Of course, new tea party representatives have been threatening this daily. But, the latest to join the tea-party parade is Senator Lindsey Graham who says:

GREGORY: Let me break a few of those things down because it’s important, the level of detail. Let me start with this. You talk about the budget. You talk about spending. How will you vote on the debt ceiling? Will you vote to raise it which is a vote that will come up in relatively short order?

Read below the fold...

In "All Together Now: There Is No Deficit/Debt Problem,” I warned against the message calling for deficit reduction that the President will probably deliver in his State of the Union Address next month. I argued that there was no deficit/debt problem and that it is essential to reject the President's framing of the issue and move on cope with the real problems of the economy and American Society. That piece stands alone. Read below the fold...

Recently, my friend Marshall Auerback posted an article at New Deal 2.0 about Obama's coming “teachable moment” when the Republicans try to wring concessions out of the Democrats by refusing to raise the ceiling on the national debt. The post stimulated a lot of good discussion about alternatives Obama might have to shutting down the Government in response. Read below the fold...