Thanks Jon, the least bad option for the bottom 99%.

I would go so far as to say a trillion dollar coin would be pretty good outcome considering the alternatives

The 14th amendment option works for me (despite the fact that it’s probably illegal). But coin seigniorage seems to be an excellent, and maybe better, alternative.

http://www.correntewire.com/coin_seigniorage_a_legal_alternative_and_maybe_the_presidents_duty

Btw, Jon, Yves Smith has a post today saying that Aug 2 is not the drop dead date. It’s august 10.

http://www.nakedcapitalism.com/2011/07/team-obama-fiddles-while-debt-ceiling-fires-burn.html

But if he employs the 14th Amendment, will Obama still have the opportunity to take a knife to Social Security and/or Medicare, Medicaid?

Can’t see him going for the 14th, if Obama doesn’t get a chance to whack the safety net.

Obama needs to ask for a clean bill to raise the debt ceiling (or to eliminate it altogether) before invoking the 14th amendment. Why is everyone skipping that step? Invoking the 14th amendment does not allow him to unilaterally make spending cuts or implement the Grand Bargain he is searching for.

I’m thinking this is a ploy by Congressional Democrats to put pressure on the Nutaggers to shut the fuck up and pass an agreeable bill.

I think if it came down to really pulling the trigger on this, they’d wimp out. Again.

I have never seen Hoyer distance himself so far from this President before

they must be scared shitless about having to vote for cutting the safety net – finally

“The President has always said that while social security is not a major driver of the deficit, we do need to strengthen the program and the President said in the State of the Union Address that he wanted to work with both parties to do so in a balanced way that preserves the promise of the program and doesn’t slash benefits.”

Debt ceiling deadline is actually August 10th now. See for example Yves Smith:

http://www.nakedcapitalism.com/2011/07/team-obama-fiddles-while-debt-ceiling-fires-burn.html

Not that that’s going to stop the ginned-up crisis now that the media are in full disaster mode. :-(

I worry that the use of the 14th Amendment option will lend credence to the notion of the
.
Super-Congress.
.
I don’t even like the name “supercongress.” It evokes associations in the brain of
.
SuperMan, the Man of Steel,
.
and softens the brain of the authoritarian follower so they allow fascists to gain power.

Breaking: Debt ceiling is now the day after election day, 2012…oh wait.

The program is and was plenty strong. It had a surplus of 2.6 trillion. The problem isn’t the Social Security program. It’s the dolts in Congress who spent the surplus on other things.

Have pigs suddenly grown wings?

It would be much better to invoke the 14th amendment to trash the debt ceiling altogether. Saying that “Congress enacted the tax laws that limit revenue and Congress made the appropriations”; that is what determines the deficit and the debt. My responsibility is to finance the deficit that Congress has created. An arbitrary debt ceiling violates the 14th amendment. I could pick and choose who to pay in order to stay within the debt ceiling. Instead, I have decided to obey the will of Congress as expressed through tax laws and appropriations.

If Steny Hoyer is on board with using the 14th amendment to increase the debt ceiling unilaterally, that means that the Blue Dogs are on board with it as well.

Of course, Hoyer’s advocacy could be part of the pressure on the GOP to compromise. Or pass a clean debt ceiling bill.

Nope, but they’re sitting in a tree thinking about it.

my fear is that something will pass over the weekend in the middle of the night and it will be just AWFUL. we will be told that O had NO CHOICE(tm) but to sign it or face losing a meaningless A in in some BS credit report.

why?

The super congress is a new structure not in the constitution – indeed one congress can not order the next to do anything, so on its face it is illegal.

The 14th is the 14th – been in the Constitution for a long time, has a 1935 decision that says in effect that the debt limit can not stop the issuing of bonds needed to finance payments where payments are all obligations passed by Congress – not just interest on old bonds.

Now Scalia and Thomas and Alito are owned by the Corporations and therefore will twist words to get the out come the corporations want – but why would the corporations want turmoil in the bond market?

actually the problem is they spent the money and cant ever pay it back. kind of like you graduate high school and you find out your parents spent your college fund on a hot tub.

The language of the Constitution strongly suggests that the 14th amendment provides a solution. However, the Supremes would predictably come down on the side of the Rethugs. If so, then what? Does that mean an instant default due to an illegal extension? What are the consequences? Would the Supremes invoke past practices (stare decisis anyone?) as part of their rationale to limit such an interpretation since the debt limit has actually been voted on by Congress nearly 100 times? Their previous decisions are not comforting. Is there a constitutional scholar around? Oh, right. However, all this is predicated on a President who can actually make a decision. Not promising.

Yes, but the surplus will be gone in 2036.

Then SS will be cut by 25% (unless someting is done).

That $2.6T surplus is part of the $14T total debt. Defaulting on the Social Security Trust Fund would lower the debt to $11.4T. I wouldn’t be surprised to learn that the Trust Fund is the largest single holder of US government debt.

Yes, O should tell Congress to send him a clean bill to sign. However, we all know that shock doctrine cuts to SSMM won’t get done if a clean bill is signed. It is still far preferable to other options, though.

yep – link floating around the twitter last few days shows Trust Fund is largest US Debt holder at roughly 2.7T (approx 20%)followed by Treasury, China, and U.S. Households in that order

Do you know the size of the workforce in 2036? The youngest members of today’s population will be 25 then. How many workers will be under 25? They haven’t been born yet.

And if the GOP has their way there will be no immigrants to add to the workforce to increase the number of workers-to-seniors. BTW, immigrants always tend to be a younger population.

Or the number of people over 65 or whatever the Social Security eligibility age is by then? If you cut Medicare, there will be fewer of us geezers. The last Boomers were born in 1961. At a retirement age of 65, they retire in 2026. Thereafter the growth rate of the outflow of benefits declines.

There is a lot of possible errors in estimation in the 2036 date. And anyway, the fund will still be able to pay out even if the surplus (and any compounded interest) is gone. Which really is a problem that the folks in 2032 will have to face, not us.

US households?

That would be the college savings for the affluent, would it not?

It’s the conclusion of the Social Security Admin.

Conclusion

Under the long-range intermediate assumptions, annual cost for the OASDI
program is projected to exceed non-interest income in 2011 and remain
higher throughout the remainder of the long-range period. The combined
OASI and DI Trust Funds are projected to increase through 2022, and then to
decline and become exhausted and unable to pay scheduled benefits in full
on a timely basis in 2036.

The heck they can’t pay it back. For example, they could raise taxes on those that they lowered taxes on back during the Bush years for starters. They could get rid of the wars costing us trillions. They don’t want to pay it back. There’s a huge difference between can’t and don’t want to. Anyone who has dealt with children recognizes that difference easily.

Only in absurd upside down Washington DC would it seem to make sense to attack a program that has not only not contributed to the deficit but has run a surplus and might some day down the line run a deficit while ignoring the trillions of dollars on programs that actually caused the deficits.

Why does Obama continue to urge compromise??? A clean, one sentence, 14th Amendment raising of the debt ceiling seems the best thing to do. Can’t wait until the new baby freshman repugs get voted out because they have no mature problem solving skills.

Uh what’s your point. In 2036 we might all be dead.

The first step to problem solving is to actually identify the problem accurately.

The wars and Bush tax cuts are the immediate problem. They’re costing the Treasury trillions.

After we handle those problems then we worry about stabilizing a program that might or might not have a problem years from now.

It’s crazy.

Projections that far out, particularly in light of how volatile our economy is, are pure fantasy and speculation.

Meanwhile tax cuts on the upper income brackets that we know are bleeding our treasury now are somehow off the table.

No sense of prioritizing.

Yes, but the surplus will be gone in 2036

Big fucking deal. Wake me up when it’s 2030. Really, what’s your point?

Agree. I think he’d rather tank the nation’s, perhaps global, economy since he ight not get such a great crisis ginned up again to allow him to attack SS/MM.

By then, there’s a new congress or new president or both.

Unless Roberts wants to fast track such a situation.

I’d rather have clarity than go through this over and over.

And I way rather not let Obama have another “crisis” to gin up to let him go after the great social safety net programs of the Democratic Party, passed when the party had Democrats from the Democratic Wing of the Democratic Party in it.

And here’s a little stinger, from Harry Belafonte:

http://apnews.myway.com//article/20110729/D9OPF19G0.html

Wondering why Obama ran on one set of promises to acquire votes, then insists on ‘compromise’ that has nothing to do with the reasons the majority of voters put him in the White House. What does it mean when one says, our security has been ‘compromised?’ Compromise means exposed to danger in the American Heritage dic.tion.ary. Obama seems to want to compromise to save any political capital he may have. I can’t think of anyone who who is interested in a liar, or in someone who is not loyal to the ones who brought him to his present situation. Why compromise with terrorists? First rule: Don’t bargan or negotiate with terrorists. Obama’s inflated military will tell Obama that is a very important rule.

Using the 14th would mean that he’d recoup a liiittle of the belief that he WANTS to get something meaningful done. So far, that is very much in doubt.

I’ve wondered from time to time how the long term bonds even got issued? They pay a lot more interest. Why would the fed/treasury issue them? Are they putting investments out there for some wealthy people? Does anyone know who holds the long term bonds?

You are correct. SS is the largest creditor: http://www.businessinsider.com/who-owns-us-debt-2011-7#.

As I understand it, long term bonds lock in relatively lower (for the Treasury) interest rates when the interest rates are historically low. Offering long-term bonds now would be a good thing for the Treasury. Someone who just wants security of principal and not an interest income stream would invest in long-term bonds. Governments with too many dollars in their holdings already, for example. They just need a place to park cash for 10, 20, 30, or whatever the period is, years.

Other than that, I’m like you. I would like to know what the bond structure is relative to what categories of investors are buying them and why.

Or he could tell Holder to start investigating the criminals who left office in 2009 for war crimes and looting the Treasury and watch how fast the GOP forgets about fucking with the economy and starving old people while they all lawyer up and start covering their asses.

mattcarmody–like your idea on the DOJ investigating all the war criminals who looted the treasury.

Just for the record, roxster, the post you so kindly linked to, is also, under a slightly different title here:

http://my.firedoglake.com/letsgetitdone/2011/07/18/why-matt-yglesias-and-felix-salmon-are-wrong-about-a-legal-way-to-circumvent-the-debt-ceiling-impasse/

The Government could pay back SS using Proof Platinum Coin Seigniorage (PPCS) as outlined here: http://my.firedoglake.com/letsgetitdone/2011/07/20/beyond-the-debt-ceiling-the-30-trillion-plan-for-ending-borrowing-and-the-national-debt/

So, there’s no need to default on that. Even if Obama wanted to do that, a Law suit questioning the default on grounds that PPCS is available would prevent him from doing so. No doubt Obama can degrade SS in various ways; but he cannot default on the bonds SS is holding.

If Obama does not take this obvious step then he will be using the phony debt crisis to cut the social safety net, especially Medicare and Social Security, in the quest for his billion dollar campaign. A debt crisis is a tool to accomplish political goals that could not be accomplished any other way. Of course, he’ll blame the Republicans as he does so.