This language mirrors what we have also been hearing from Sen. Pat Toomey (R-PA Looney Bin)

Went ahead and fixed it up for you…

Our gov’t is now a game and no one in the Congress takes it seriously except to win. The country and the citizens be damned.

If history is any guide, President Obama won’t see fit to engage congressional Republicans until the 11th hour.

Umm

Any bill may originate in either House of Congress, except for a revenue bill, which may originate only in the House of Representatives. In practice, the Senate sometimes circumvents this requirement by substituting the text of a revenue bill previously passed by the House with a substitute text.

So the president has to make the first move? Or is it congress?

Oh, this is so confusing. Thank God we have such intelligent Senators who fully understand the process.

rather than plod along the path of Greece, Italy and Spain

but… but… we’re off the gold standard, an Greece, Italy, and Spain aren’t!

Note to Sen. Dick Head: You clueless fucks passed legislation authorizing spending you now threaten to cut by shutting down the government. What’s wrong with this picture?

They will still have some tax money coming in to pay the debt. If not enough…… Well layoffs or partial payments, like oh, SS.

Not exactly gold but same idea. Those countries use a foreign currency over which they have no control

Companies do it with pensions. Why not government?

“. . .Going over the debt limit would technically be a default event . . .”

——–

It’s my understanding that a default would not technically occur as long as the Treasury continues paying interest on the debt and redeeming notes/bonds on time. There would be ample revenue to do that.

Of course selective shutdowns, furloughs, etc. would still be a mess with or without a default. Maybe the credit agencies are chomping at the bit to lower the US rating anyway, and would use anything as an excuse to do so. Even closing the US Park system could suffice?

They’re all about the Tenth and Second Amendments but somehow ignore the Fourteenth.

Meanwhile, the takeaway here is that while the members of the business community may be increasingly alarmed at what the debt limit hostage-taking will do to the economy, they won’t be alarmed enough to yank hard enough on the GOP’s chains to stop them. (And as Jon above noted already, the idea that something that just two years ago was unthinkable and obscene has now become “normalized” is something that should frighten everyone with a functioning brain.)

O if it went on long enough there could be a serious recession. At some point the loss in tax revenue could itself mean there is not enough to pay the debt. But I don’t know that. I don’t want to see another recession or serious cuts to gov services and transfer payments like SSMM. That may

Transgressing the debt limit law itself does nothing. Who is going to enforce it? What is the penalty?

Obeying the debt ceiling and failing to pay interest on the national debt constitutes default.

The problem is the gray area of what happens if the Secretary of the Treasury goes to the market to finance the the additional debt caused by Congress’s failure to legislate enough revenues to cover the money it has appropriated.

The US credit was downgraded in 2011 because the determination was that the President would not transgress the debt limit.

Right now we are in that gray area, where the first response is borrow against the funds for government employee pensions. The world hasn’t ended yet. And Geithner has skipped town, leaving the problem for his successor.

The most likely action by the President at the moment is a staged shutdown of government services. Which ones he picks to suspend determines how much pain there will be.

We are already doing that as of December 31.

Companies do what with pensions?

Yeah, we are just like Italy, Spain and Greece…except for that lit bit about having our own currency.

I agree with the WH: The Fourteenth Amendment does not apply here. Congress is not claiming that we do not owe the money (not questioning the validity of the debt).

I can agree that I owe money and still refuse to pay it.

The flip side

The administration, for the same sort of tactical reasons, would like to maximize the threat of exceeding the debt limit.

What would actually happen if the debt ceiling were exceeded, would be that Treasury would carry on exactly as before the ceiling was exceeded.

No matter what anyone in the administration wants, no matter what anyone in the admnistration thinks, no plan that involves failing to pay every single obligation to spend imposed by law on Treasury, would be practicable. It’s not just a question of the govt being sued for failure to meet legal obligations, any govt official who participates in any scheme that frustrates the law of the land in respect to paying what the US owes, could be personally sued because he or she would have forfeited their usually extensive official immunity by departing from their legally mandated duties.

And if the Treasury will have no choice but meet all obligations, it can only do so by continuing to borrow. It can’t raise taxes, that’s clear. It can’t cut spending, that’s clear. It does have the authority to borrow, and borrow up to the actual debt limit of the US, whatever is needed to pay all of oour obligations.

But if Treasury is going to continue to borrow, it will certainly appear to some people that it is doing so in defiance of the ceiling law. And clearly, some people, including the vast right-wing noise machine, will do their best to convince people that Treasury is engaged in outright Kenyan Usurpation.

If the administration were to just announce the reality that Tresury would ignore the ceiling, that would take all pressure off the Rs to avoid letting the ceiling be breached. They would be reassured that no economic or fiscal disaster would ensue, and that instead the consequences would be all gravy, as they get to leave the administration in the perpetual limbo of an arguable ongoing violation of the ceiling law.

So of course the administration must maintain the fiction that breaching the ceiling means default, pure and simple. They have to hold out the prospect of horrible consequences the Rs would be blamed for, or the Rs will surely seize the opportunity to put the administration in legal limbo.

I think O will do what he feels he has to do.

Law or not, it’s a political problem primarily. The Rs don’t have a way of doing anything about it except bellyache on Fox News. I still have the platinum coin in mind simply because it seems so outrageously clever.

Whether the ceiling is raised or not, it’s still funny money I think.

Well, if it’s a political problem for the administration to even appear to be violating the debt ceiling law, how does adding in this “outrageously clever” loophole — using the paltinum coinage law in ways it was as little intended to be used as the debt ceiling was menat to be available as a means for the House to force default — help with avoiding the appearance of illegality? It seems to me that it adds to the perception problem, it makes our side look like it’s playing fast and loose with yet another law.

Beyond that, using the debt seigniorage provision of the platinum coin law to raise amounts of revenue anything beyond the trivial user-fee levels the law clearly was intended to allow, is a fundamentally bad idea. Letting the amount of money that the president can raise by any means that does not require Congressional approval be anything significant, anything even approaching a trillion, and we’re subverting the fundamental principle that the US only collects and spends money by public law, not by executive action.

Quite aside from not wanting all future presidents to have that power, doing the coin thing would attract a clear and swift SCOTUS slap-down. It would be found unconstitutional, and even sensible people would have to agree that SCOTUS was right and the president wrong about letting presidents raise trillions without going to Congress. You think we have a poltical problem now doing the right thing, ignoring the debt ceiling? Just wait until the day after we not only still have to ignore the debt ceiling, but our side has just been slapped down by SCOTUS for an outright attempt to cheat with this platinum coin thing.

Re: #19

Getting a bit late for me to reply, but. . .

So I have a different take. I don’t see default as a result of the provocative triangulation I was suggesting.

There would be revenue to cover the interest on the debt and redemptions by the Treasury plus, say, half or more of the rest of Fed activity.

Reorienting the rest of those priorities is what the ensuing crisis would be about, not default. Yes it’s a crap shoot, politically radioactive.

What SCOTUS would decide to do isn’t entirely obvious, or else the coin topic wouldn’t be entertained by anyone even in jest.

But I’d agree with your take in that it’s highly unlikely the Prez will navigate that way. I don’t think anyone among the PTB anymore does anything where they aren’t quite cocksure what the consequences will be. That is, they’re all wusses.