But the White House nixed use of the 14th Amendment yesterday. Furthering their long-standing tradition of giving in before beginning.

This wouldn’t hurt anyone.

It’s against Obama’s principles.

Interesting Mr. Walker and thanks . . . “there’s more confusion in all this kabuki than a mouse can cause in a burlesque show.”

-Foghorn Leghorn (with creative changes)

So far I am led to believe this whole thing is all about enabling the Super Committee to do the dirty deeds sooner or later regarding cutting social/public services spending and programs.

The 14th would eliminate that option of the Super Committee (for now) would it not?

Hard to tell just what the actual GOAL is . . . aside from gutting government and privatizing it all . . .

If there is no deal to screw american people, Obummer has no option, and he will own the debt raise

Here is what it has come down to for Boner: ‘But Boehner said he couldn’t understand why any Republicans would position themselves with Democrats opposing his plan.

“Barack Obama hates it, Harry Reid hates it, Nancy Pelosi hates it,” he said, naming off the Democratic leadership.’

Tell me why every person in America wouldn’t want to spit on this object.

It’s not what you say, it’s what you do, and although Obama has signed and supported many good things, his general trend, at least economically, is less for more. Less benefits for more people. Obviously, this means more for less, as the oligarchs consolidate their power.

I see in my crystal ball huge speaking fees for Mr. Obama in the near future, starting, say, January 21, 2013, after he loses the election for his second term by throwing his base under the bus, but gaining his new base, “headquartered” in the Cayman Islands.

I know I have said this before, but the 14th amendment is not a solution in any way.

REASON: if there is ANY question about the legality of the bonds so issued, NO ONE WILL BUY THEM.

The government gets the money to fund things over the amount received in taxes from the money people send in to buy the bonds. It is not just printed. If a person or organization or country do not wire transfer funds from their accounts to the Treasury, THERE IS NO MONEY TO FUND ANYTHING.

Even a slight question regarding the legality of the issuing of the bonds will render them unsellable. Are you going to put several million dollars into some bonds that there is SOME chance a court might later declare invalid??

It really doesn’t matter how good the basis of legal theory might be. ANY question, no one will buy.

So, don’t even waste time on this. It will never happen.

Obama won’t use the 14th. Then, he might have to drop the Catfood Lovers Commission II. That’s the proposed group of six GOP congressperkies – who oppose all tax increases and want to reduce Social Security benefits and have the sick wait until 67 before they can get a heart operation – and six Democratic congressjerks – who will agree to oppose all tax increases and want to reduce Social Security benefits and have the sick wait until 67 before they can get a heart operation.

Did you ever wish you were entitled by accident of birth to be rich enough to not worry about the stuff that concerns “lesser people?”

wouldn’t invoking the 14th amendment invalidate the debt limit ceiling permanently?

When the 14th is invoked, the Justice Dept. should also subpoena the ratings agency records on all those “AAA” CDO’s/CMO’s from 2000-2008, and let the agency executives clearly know they are under investigation for fraud. They should be made to feel intense pressure to keep hands off downgrades of government debt during the crisis.

John and Bobby Kennedy used just such techniques to intimidate the steel companies during the 1962 steel crisis. They even had agents roust the executives out of bad at dawn, to impress them with the seriousness of the situation. Kennedy carried the day …

Meanwhile, Jay Carney is bragging how the O admin does not “placate the base” or “cater to the base”. Those were his exact words, said two different times. Maybe more, since I haven’t listened to it all. (Press briefing still going on.)

Good thing we elected a *democrat* by an overwhelming majority.
Too bad we didn’t know he was really a reagan worshipping republican.

Why invoke anything, it’s a part of the constitution, the law of the land.

There is nothing adverse to the 14thy amendment in the constitution so the President should preform his Presidential duties making sure Grandma and Grandpa get their checks on the 3rd .

It already does.

one could hope…

I hope more and more people call their representatives and tell them the only acceptable solution is either the 14th or a clean debt ceiling bill -

Of course Obama will do this. His repeated denials by spokesmen makes it all the more likely. That it will end all this fake, silly drama is the part that really breaks his heart, though, because the spotlight will immediately shift to Shark Week, or Missing White Girl #12,345 or Murdering Tot Mom, Where Is She Now?

These people like the spotlight, and XIV gives them, and the nation, a constitutional exit clause. More in sorrow than in anger, blah blah blah, expect it all in another Presidential address on Monday.

If Obama had been President in the forties, we’d all be speaking German today. He won’t use the 14th.

Obama doesn’t have the guts. He’ll take his chances on the economy crashing rather than have to bear the “sharp” rebuke from Republicans if he invokes the 14th. The last thing Mr. Bipartisan aka Sir Cave-a-lot, President Bamboozle, etc. is to upset Republicans.

or Japanese.

Why raise the debt ceiling through executive order? If you’re going to court, why not assert that the tax laws in place and the appropriations that Congress has enacted set the levels of what debt the government requires to borrow.

Why not say that when Congress is delivering contradictory instructions, the President chooses to observe the one with the longest history?

The fact still remains that we are talking about (1) the credit rating and (2) two months of expenditures (unless Congress gets the FY 2012 appropriations or a continuing resolution passed.

What challenging the debt limit does is take honest-to-goodness entitlements in law off the table completely. And no, military spending is still discretionary spending. And forces Congress to deal directly with entitlements and face the wrath of the voters or find the revenues to support the spending they love.

Time to gear up for the appropriations fight. The debt ceiling mess is pretty much out of our hands for now. You can keep calling and adding checkmarks to those For/Against tally sheets, but I have the feeling that most in Congress have an idea of what they will and won’t do. There is either a deal or there is not. And I don’t think that there are many more Democrats than already signed up who will walk the plank for the President.

And I suspect that the Blue Dogs will stand with the Tea Party folks, just for political cover.

Raising the debt ceiling unilaterally could mean the following statement. “I am obligated by the Constitution to ensure that the US government does not default on its obligations. Those obligations exist as the result of Congressional action in the past and present. I will finance any deficit as a result of those Congressional actions by incurring no more debt than is required to pay those obligations. Because Congress has not passed the FY2012 appropriations, I cannot estimate what that level of debt will be. I will work with Congress to see that those appropriations bills are in place to continue operation of the government after October 1 and expect that they will do what’s needed to create jobs, provide the infrastructure we need…blah…blah..blah…win the future.”

Notice that I tried to keep it in character. There could even be an allusion to having to deal with entitlements, controlling Medicare costs…

If August 2 passes without an agreement, the President will have to say something. Either it’s something like the statement on the debt ceiling or it’s a lists of whose payments get deferred until Congress acts.

Quote of the Day:

Luke Russert: “Some pretty amazing Republican on Republican violence this morning.”

I think Republicans would love it–love it–if he invoked the 14th. It would not only rob Obama of a centrist erection, it would give them an impeachment drama. I thought D.C.’s playbook was bigger than it was; turns out I was wrong. Overlooking the obvious, I guess.

They will have to because I just spoke with an Organizing for America rep and when I mentioned the 14th amendment option, she responded by saying that this President knows a lot more than previous presidents about the constitution and he doesn’t think invoking the 14th is constitutional.

Holder? That Justice Department?

This looks more like expecting Obama to use reconciliation to get a public option. if he wanted to keep open that option, why would he tell us his lawyers already nixed it? And remember, he already told us he shops around to get the opinion he wants. see Libya.

you know it is this kind of bullocks that is used to justify endless wars, where the only people that win are the war profiteers.

If you are right about getting out of the spotlight, that means that Congress goes on its August recesss, Congressional Town Halls are all angry shouting sessions diverted by calls for impeachment for using the 14th. And Obama is out of the spotlight until the negotiations over the 2012 appropriations, which puts him back in the same role, same script, same drama.

That doesn’t make sense. Not at all unusual in DC.

If the 14th Amendment applies here, it not only permits — it obliges — the federal government, i.e., in this case, the executive branch, to honor all its public debt.

agreed, since when did the POTUS give a shit about the constitution. didn’t bother him with libya, so if he is now hiding behind it not to use the 14th, the question is why?

Right, he’s a real Constitutional genius./s

Obama is prepared to use the 14th Amendment, but he will follow Wilson Pickett’s advice.

He fears criticism from the right wing echo chamber. He’s worked so hard to win their love and approval he just can’t go there.

I believe the 14th amendment gambit is the best solution for the Democrats and the country. I don’t think Obama will use it until the country actually defaults. He then steps in and claims he couldn’t invoke it until the credit of the US was actually threatened.

This paints the Republicans for what they are. I’ll bet they will try to pass a bill of impeachment in the house. If we get a show trial in the Senate, that will be the last nail in the coffin for the Republican party. They will become a party of southern bigots and crazies. Not too appealing to the rest of the country. They brought this on themselves. This is the result of them embracing racism and the southern strategy. When you lay down with dogs, you get fleas.

discussion context, the TeaParty Congressperson’s staffer using a study group loop to rally against Boehner.
…
and then there’s “we’re gonna hurt some people.”

Martin Bashir asks, aren’t the people hurting enough already/

The only really predictable action is that Obama will capitulate. It is his defining trait. The 14th amendment remedy seems too rational. Congress has already approved all of the budget items via the legislative process, so it seems like a given that the budget ceiling should be raised to pay for what the designated expenditures. It seems odd, in view of the legislative process, that there should be any debate at all about a debt limit. To even have a vote suggests that a small group in Congress or the President can cancel what the Constitution says is the duty of the entire legislative branch. Still, Obama will find a way to screw his base and satisfy Rethugs.

I think the Congressional Dems are telling Obama to use the 14th, not laying the groundwork.

Spot on. Shock Doctrine 101. First they outsource jobs then they privatize assets and then offer cheap labor. Same thing has been happening for a long time.

the push for President Obama to be presidential use the 14th amendment grew significantly today.

You can already see the spin on this if he even does it. “See how strong the President stood up to those nasty right wingers, now vote for us.”

Slightly O/T but sort of surprised there isn’t a post up here about Bill Maher’s rip of Obama last night on LoDo’s show. (HuffPo’s front page link to the story actually says “Maher rips Obama”. I kid you not, rips. Here’s the key line:

“Wouldn’t it be a tragedy if we elect a Democratic president and then four years go by and we never attempt Democratic policies?”

Obama made a statement that his lawyers advised that invoking the fourteenth was not appropriate. Bush lawyers found that torture was justified. Obama’s lawyers say he can’t use something that was clearly written into constitution. Obama needs new lawyers.

This will go to the Supreme Court if Obama uses it. I suspect the Supreme will back the President 8-1. I suspect Thomas will be the sole dissenter because he just doesn’t like black folks. I can’t see the Supreme Court doing anything else with the economy on the brink. If they overruled the President and the economy collapses, it would mark the beginning of the end of the Supreme Court. They already caused considerable damage to themselves with Bush v Gore. A 5-4 party line conservative vote would be disastrous for the court.

“You Keep Me Hanging On” or “Wait Til’ The Midnight Hour”?

The 14th Amendment argument is dubious at best.

The debt ceiling is not specifically mentioned anywhere in the Constitution and refusal to allow further borrowing doesn’t – by itself – violate the Constitution because there are other ways to raise funds (such as selling off assets) that keep unquestioned the validity of the United States’ debt.

That being said, I think the President might try it anyway. Who will stop him? There will be a couple of Republicans who talk about impeachment but not enough to worry about and the Supreme Court will probably stay out of it, too. So with no one to stop him and no negative repercussions, even a dubious Constitutional argument wins the day. The only real danger is to his re-election campaign but hey, he’s in politics… that comes with the territory.

use 14th amendment, hire bush’s lawyers who think prez can do anything (hey we are at war) and watch the scotus try to figure out whether to side with tparty or the corporatacracy….

yeah, Carney is fairly disgusting, almost impossible to listen to. He did douse a cold shower on Clyburn & other Dems who asked Obama to invoke the 14th amendment.

Meanwhile, as an example of just how inside-baseball the whole whip count is going on Boehner’s crazy almost-a-balanced-budget deficit reduction bill, check out the
crazy goings on inside the Republican Study Committee (I thought it was Republican Study “group,” but Russert, Jr. says “committee”).

Holder appears to be just a place holder in his office.

I’m gonna wait ’til the midnight hour
That’s when my love begins to shine

When is the “real” one going to appear? Holder is just as cowardly as Obama.

Time to bitch-slap the Teabaggers-GOP with the 14th.

Fuck ‘em all and the elephant they rode in on.

Markets dropping.

Agreed. But the ratings agencies might be tempted to immediately downgrade US debt in such a case. The Kennedy treatment would be designed to head off such a threat by upping the stakes for them. It’s called “hardball” …

You got THAT right.

The White House continues to state that the president will NOT invoke the 14th amendment.

(Doesn’t “amendment” look like it should have two “m’s” at the beginning. That has always bothered me.)

The 14th Ammendment is not an option but an OBLIGATION. The U.S. Constitution, which Obama has sworn to uphold, requires him to pay the government’s bills. In doing so, he has at least the following three options:

* He can ignore the debt ceiling and keep on selling bonds to pay the governments bills.

* He can repudiate the $1.6T of national debt owed to the Federal Reserve, knocking $1.6T off the national debt, and then sell more bonds. (The Ron Paul / Dean Baker plan.)

* He can mint some trillion-dollar platinum coins, deposit them into the Treasury account at the Fed, and keep on paying the government’s bills from that account, thus by-passing the need for bond sales. (The beowulf/letsgetitdone plan.)

Had to see THAT coming.

Outstanding analysis. Dude, you should have your own column, if not your own TV show.

I like #3. It shows “thinking outside the box”.

LOL, that’s the first I’m hearing of a “Republican Study Group”.
I can’t imagine….

That nust be SOME braintrust.

“The 14th Ammendment [sic] is not an option but an OBLIGATION. The U.S. Constitution, which Obama has sworn to uphold, requires him to pay the government’s bills.”
___

Members of Congress likewise swore the Oath to uphold and defend.

W/respect to the 14th, I know Section 4 is getting all the ink, but there’s also Section 5.

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. But neither the United States nor any state shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

Section 5.

The Congress shall have power to enforce, by appropriate legislation, the provisions of this article.

Republican Study Group

Now that’s an oxymoron if I ever heard one

They could also use the general welfare clause in the preamble. FDR used it to promote SS

“If, as our Constitution tells us, our Federal Government was established . . . ‘to promote the general welfare,’ it is our plain duty to provide for that security upon which welfare depends.”

— Franklin D. Roosevelt June 8, 1934

http://www.fdrlibrary.marist.edu/museum/spexhibitduty.html

Of course we all know SS and the Social Safety Net are abhorrent to Zero … but anyway

The coin minting solution has a certain appeal to it. But that is like paying off debt with cash and sooner, rather than later, there could be too much cash in circulationa and perhaps some inflation. Just asking?

However this gets solved this will not be the end of it. The republicans are not going to pass a budget without stiff cuts. Makes me wonder why all the fuss over this aspect of spending. They are going to have plenty of opportunity to go after many more cuts.

Aw shucks. Thanks.

I like #3. It shows “thinking outside the box”.

Our own guys, beowulf and letsgetitdone, deserve a nobel prize in economics (or something like that) for finding this loophole that allows us to run our economy like a normal fiat-currency economy and avoid all of those interest payments.

Gonna play Cinderella, is he, oldgold?

;~DW

I used to think so. But, the MMT people have pointed out that it doesn’t make much difference whether the assets in circulation are cash or bonds, since there are efficient markets to convert one to the other.

Ultimately, the governments bills are paid from from credit in the Treasury’s account at the Fed. Currently that credit results from the issuance of enough bonds to cover the deficit. The sale of bonds simply swaps money for fancy IOUs for which there is an efficient market. Its the same effect as if the money were raised by selling gold, i.e., selling Treasury bonds or selling gold does not take buying power out of the economy. They do nothing to inhibit inflation.

In the proposal, the credit in the Treasury’s account results from the minting of a jumbo coin that will sit forever in a vault at the Fed. Note that “vault cash” doesn’t count as money in circulation, i.e., M1 or M2.

What causes inflation is too much government spending, which is a matter of “apporpriation,” i.e., authorization to withdraw funds from the Treasury’s account at the Fed.

This is going to go on until the election, one way or another. Even using the 14th will not stop it for long. It will shift it somewhat, but the argument persists. We are incapable of resolving it. And after the election, who knows?

No..I wish that by accident of birth I was one of his kids so I go and stamp on his bare feet.

It sounds pretty convincing save one thing: they can’t issue new bonds without the 14th amendment.So once they credit the sellers account, what happens to the cash? The sellers could presumably use it for something. Won’t that cause inflation?

Meh

I think he’s taking Howlin’ Wolf’s advice

http://www.youtube.com/watch?v=HTAc62476f4

Or the Doors if you prefer

http://www.youtube.com/watch?v=jgzbiX46tl8

Obama needs to use the 14th Amendment. Most would see it as him saving the country and ending the tiresome bickering. He is actually being an ass right now by not using it.

I think Muddy Waters has him pegged

http://www.youtube.com/watch?v=qvf2eg1Dv-A

Or, then again, maybe James Brown

http://www.youtube.com/watch?v=8_ODghRTeyQ

You forget, you have to SELL the bonds to someone. Who will buy them if there is any question as to their legality?

And, any question about their legality would have to go through the courts, because someone is going to sue about it for sure. Until the Supreme Court says it is legal, NO ONE is going to buy the bonds. No one.

No bonds sold, no money. No money, some stuff doesn’t get funded. You are right back where you were.

Now, it is possible that the Democratic National Committee would buy them and maybe Obama’s campaign would buy them.

I agree there are a lot of options. I think Obama should combine #2 and #3 on your list wigwam and use the coins to buy back the Fed T-bills and bring them to the next negotiating session. Then every time the Republicans make another intransigent proposal Obama shreds one. Or maybe he turns to Boehner and say “John, coud I borrow your lighter?”.

Prolly won’t do anything like this because it doesn’t fit the austerity frame he is pursuing to appear all manly with the independents. Too bad for BigO that most folks don’t actually like austerity…

What causes inflation is a money supply too large for the production and trade that is going on. The folks with the excess bucks bid up the price on a good or service, any good or service. This was folks’ experience in the 1970s and it cost Jimmy Carter a second term.

If only. A caning on the floor of the house, a la Preston Brooks/Charles Sumner, I would watch.

No.

The coin minting solution that has been discussed here consists of swapping debt at the Fed for a coin, thus retiring that debt. It is an asset swap, cash for an account receivable (from the perspective the Fed). An account payable for cash (from the perspective of the Treasury). The coin keeps the Fed reserves from going down, which allows the Fed to continue to loan as before. The fact that debt is retired, lowers the total debt accounted as public debt and the estimated interest. No money goes into the economy that would have not gone into the economy before. It really is an accounting maneuver between the Treasury and its agent, the Fed, that buys time for recovery. At which point the Treasury can purchase back the coin (for cash this time) and retire it. Once again, it is an asset swap that does not affect the money supply.

Yep. Of those, I tend toward #3 because it has the least smell of actual default about it and deals with the issue of inflation. In fact the choice of the right metal could make the metallic value of the coin a hedge against inflation. If the Treasury doesn’t buy it back, the Fed could have Treasury melt it and sell it at metallic value on the market.

Bingo!

Thanks for pointing out that Section 5. That seems like a significant barrier.
Still, if he pulled a 14th. it would buy a month or so until the Supreme GOP Court tells him he’s out of line. We could all use that extra time to move to some more functional country, like Somalia.

If there are no current laws on the books enforcing section 4, it is unlikely that a Congress already in stalemate will pass one for the President to sign. Are there any enforcing laws on the books.

Under a court decision against Howard Phillips, when Nixon tried to unilateral rescind the funds appropriated for the Office of Economic Opportunity, the President has to spend funds appropriated by Congress.

If these expenditures exceed a debt limit arbitrarily set by Congress, which law does the President follow in order to satisfy the 14th amendment?

LOL! I love the Foghorn Leghorn quote. And I think you’re right about the goal. The kleptocracy wants to loot ALL public assets, because there’s not much private assets worth stealing anymore that they don’t already control.

I’m sorry, but that’s a foolish question. Obama doesn’t need to follow ANY law; only the 14th Amendment. You do know constitutional amendments take precedence over any statute, don’t you?

Those opposed can challenge it in court, but that would take time, and I really doubt our corporate-friendly Supreme Court would do anything to hurt their sponsors. They’d uphold Obama’s Executive Order.

The power of those who can say, “no!”.

And you’re right, “no” is precisely what Obama is about.

Could we put that to some real down and out blues, oldgold?

Beat me daddy, eight to the bar …

thing’s lookin’ lousy, why it’s all gone to far.

Rhythm been knocked-out and chained to the car

dragged down the highway and punched with a cigar ..

Battered, broken and bloody, it coulda been a star.

Etc.

DW

That is what I was taught – when inflation hits MMT takes the cash out of circulation by raising taxes – good luck with that.

And you’re right, “no” is precisely what Obama is about.

That is not what I meant. I do not think that “no” is precisely what Obama is about.

The “no” was in reference to your inquiry as to whether President Obama was “gonna play Cinderella.” As a literary reference it seems quite off the mark to me.

It’s an asset for asset exchange. The seller winds up with credit in his account, and the buyer winds up with some other asset, e.g., a bond or some gold. But such assets have an efficient market and can be instantly turned back into cash. Also, they can be used as collateral for loans. So they participate in bidding up goods and services, as much as cash does. (That’s what I think I learned from the MMT people: Stephanie Kelton, Scott Fullwiler, and lets get it done.)

This particular trick requires platinum by law: Title 31, Section 5112, Item k.

Exactly. And sufficient demand (taxation) reduces that supply. Also, loans contribute to the supply. So high interest rates discourage borrowing and that supply slowly dries up as the loans are paid off.

It’s important to remember that the “general welfare” clause is not just in the preamble – where, Teabaggers would say, it’s just a meaningless statement of wishful thinking – but it is a specific part of Article I – the Congress and legislative powers – section 8, the “tax and spend” clause (horrors!):

“The Congress shall have Power To lay and collect Taxes, Duties, Imposts and
Excises, to pay the Debts and provide for the common Defence and general
Welfare of the United States . . . .”

So, providing for the general welfare is specifically authorized by the Constitution, in its original text.

With the country about to turn into a pumpkin on August 2nd 2011?

Why, I thought that the Emperor’s transparently elegant finery must surely include some glass slippers?

No?

Perhaps, if fairy tales do not seem to you germaine, then “tall tales” might be a better tell-tail?

How revved up, are you, oldgold, … “looking forward”?

May all your midnights be twelve hours past high noon, and likewise, twelve before.

Peace be unto you oldgold, we’ve all great and human need of it.

DW

O could ask for a declaratory judgement in the face of conflicting laws.

Or could have asked already, by being proactive.

Mr Obama is still voting present! He cannot truly take on the responsibility its not in him. Funny, he has no problem, however, joining the GOP in destroying the future of seniors all over this nation.

I am so ashamed of this government and what it has turned into.
NO longer is this a shining beacon of anything other than political self serving greed and the people are not even part of the equation

Oh, of course. And the fact that he and his allies lied like rugs about it is one of the things that makes us doubt his word on this issue.

I agree with you. If the President pursues this corretly it could insure his re-election and doom the Republicans. This is his best chance to truly prove his mettle, to show that he is more than just a quiet, “can’t we all get along” kind of guy but–instead–that he is fighting for us no matter how much flack he is going to take.

He should aggressively declare that
1) he believes the debt limit is unconstitutional and he does not intend to follow it.
2) he should issue a separate emergency order stating that even if it is later found constitutional, the current situation is such a dire threat to American stability and security that he believes it is necessary to suspend it (this was the argument put for by two legal scholars, Eric Posner and Adrian Vermeule (law professors at U. of Chicago and Harvard respectively).

Then he should assertively tell the American people that he is fighting the corporate interests who are scheming to end Social Security and Medicare as we know it as well as to undermine Veterans Benefits and national security. He should announce a reasonable debt reduction plan, including new taxes, and push it strongly while being open to some reasonable compromises. And he should keep updating the us day by day, until it passes. He should use his “bully pulpit” to give speeches daily. And he should keep this up until he wins!

This can be his finest hour, but only if he makes it so.