“Hint”? When has this administration ever done anything to make anyone think that the comfort of the investment class was the top priority of ALL of its policies???

Isn’t interest on government Bonds paid when they mature or are redeemed? My point is that only a very small percentage of these bonds are redeemed in the short term, which is why they ignored it.

Salary payments to all of congress and support staff should be paid last. see if they like the pain and can walk the walk. Congress has not earned its pay for decades but that is another issue

Unfortunately, as vile as it is, they pretty much have to prioritize bondholders if the Republican crazies win. Missing a payment by one day means that interest rates shoot up, and the feds suddenly have to pay much more to borrow money. Those higher rates will spread to the rest of the economy, and anyone with an ARM might suddenly see a several-point boost in rates.

However, we should not confuse what they say now with what they will do later. Anything said at this point should be considered part of the game of chicken. If there’s an actual meltdown who knows how it will play out.

Your statement assumes that the president has legal power to make such decisions, despite Amendment 27 (saying that Congress’s compensation can’t be changed until an election intervenes).

Bond holder prioritization is not vile but required under section 4 of 14th Amendment.

OOww, pay the Kochs first or they will unleash a salvo from Faux News to dim all the lights.

Boy, this says all one needs to know about the United States of America today.

In today’s USA, with limited resources the chosen priority is that the mostly rich (filthy rich) bond holders get theirs first, while poor senior citizens and disabled Americans and veterans go to the back of the line.

A politician, any politician, should be ashamed to even consider such priorities, yet today’s politicians make speeches about it.

If Obama had balls, he would suspend all payments to anyone in a Republican Congressional District.

But don’t worry it won’t come to that, he will cut SS, Medicare and Medicaid, as that is what he has always wanted to do. Then he’ll whine how those mean old Republicans made him do it.

There is no section in the 14th amendment that says bond holders are above any other legal obligation of the USA. Don’t know where you got this info from, but I’m sure there’s a copy of the Constitution on line. Please highlight where it puts bondholders ahead of other legal obligations.

Hey if SS isn’t paid why are the rich assholes who hold bonds being paid? SS holds bonds too you know.

A fells by name of David Koch put it there and Faux News confirmed it.

I think you answered your own question.

Bond holders are RICH! Ergo: they get paid first.

Silly.

Why would Obama pay the poor first? Don’t you know the first law of this government: the rich get richer, while the poor can go get stuffed.

Well I just read it again and I don’t see where it singles out bondholders above all other obligations. Must be some hidden language there.

It could be over reading these statements, but it strongly seems the administration wants to up the pressure from regular voters while also not overly spooking the market.

This is the whole point if you want to move Congress to do something.

I think that the likely reading of the 14th amendment by our current courts would prioritize bondholders.

Yes there is nothing I have seen that shows the 14th amendment was meant to apply to only a very narrow modern interruption of “debt” as a particular type of financial production. “debt” is money you owe someone not just bonds.

And they got Sarah Palin to read *that section* on the “Nooz” hour.

What other “proof” do we need?? Home and hosed.

I believe they can issue script – basically an IOU for some obligations (for a while anyway) to avoid default and avoid actually making payments. This has been done in CA.

It buys time. Wouldn’t work for SS too well, but for bond holders and defense contractors with large pockets, why not. Promise to pay them what’s owed plus interest in 90 days and let the process work itself out.

The whole point of shutting down the “nonessential” parts of the government is to pay bondholders their interest on schedule and to retire the bonds at maturity.

Also, the credit rating agencies are mostly used as a reference by bondholders.

It’s especially nutty to put bond holders ahead of Social Security. Social Security has never added one penny to the debt and is, as of right now, fully funded and able to meet it’s obligations.

This is insane. The money owed to the Social Security trust fund is a “debt” under anyone’s reading of the word.

Interesting. Particularly when you take into consideration that the Social Security Trust Fund essentially IS a bondholder. So really, what they mean is to prioritize SOME bondholders.

Color me shocked. Not.

The RICH bondholders get to feed at the trough first… always.

Actually I think the Pres can decide how to prioritize the payments. SS and contractor and labor payments are also debts. .i think this is all bluff going on now. I don’t even think the supremes will get involved. But then I haven’t checked in with Faux News today.

I believe they can issue script – basically an IOU for some obligations (for a while anyway) to avoid default and avoid actually making payments. This has been done in CA.

Would that meet the “requirement” under the law of not adding to the debt?? I dunno, it seems like whether it’s a bond or a script, it still adds to the debt, but maybe scripts have some special legal meaning???

Kabuki first, common sense and greater welfare of the general public last. Rich people tell our fearful leader what to do and he does it. The R v. D kabuki is for the MSM so Wolf Blitzer can say dire and impending as often as possible. It’s a show and nothing else; they really don’t care if people suffer and die.

Someday one of our MMT economists will have to explain to me why we have to issue bonds at all. Our money is not backed by any exotic substance like gold or uranium. When we need more of it, we just crank up the magic printing press. No bonds, no deb, no limit. I checked with Megan Kelley.

Hmmmmmmm I wonder where the Fed (and the bank cronies he lies down with) falls in the heirarchy of debts that MUST MUST MUST be paid (while the elderly can get practice eating cat food so the President can practice his acting chops?)

And ruin our pretend game of prioritizing war over the well being of citizens……Yeah, that’s going to totally happen.

My husband was informing me that we actually have laws on the books that are supposed to give us a database from each state on mentally ill people. It’s so vague that the states are left to determine what qualifies as mentally ill(for example Cho was not included because he was outpatient, not inpatient even though he was required by the court to seek treatment) AND it’s underfunded. Why have laws that protect citizens when you can have a bright shiny new drone to kill Pakistanis with.

There was a time when the Treasury issued United States Notes. Too bad we let that one go.

War is sexier —- and more fun.

Couldn’t agree more. What the president and congress don’t seem to understand is that we’ve been through this before. Yeah, it does create a problem. Some people WILL suffer. But certainly not any of them.

Now we have Federal Reserve Notes.

I agree. When the government owes some $13 TRILLION, haven’t we ALL moved way beyond , yeah, we can pay that back.

Reminds me of one time I was shooting free throws with a buddy. 10 cents a free throw. I got in the hole about $25 which I didn;t have. Si I bet himn double or nothing on shall we say several long shots behind the 3-point line. Eventually I owed him (in 1969) over $14,000. The $25 bucks he would have expected me to pay. The $14 large, wwell let;’s say h e reminds me of the det at every HS reunion.

Yeah, not like that’s REAL money.

DUde, I practically fell out of of my chair.

Yeah, this is the right answer.

Deficit Hawks are full of crap when they say these deficits are unsustainable. But the interest payments ARE unsustainable. We spend more on interest a year than we spent on the Pentagon just a few years ago. That’s what’s unsustainable.

That’s why I welcomed discussion of the $1 Trillion coin. That’s how we should finance all of our deficit spending IMO. Then set taxes at a level to keep inflation under control, and done. No interest payments.

I think we should start labelling interest payments on US bonds “entitlements” and see how the Republicans like that.

The Social Security Trust Fund will be treated like a bondholder. It’s the checks to recipients that won’t get distributed because the Social Security staff to do that is not paid out of the Social Security Trust Fund but from the general fund.

Well, the staff that distributes interest payment/bond retirement checks are also paid out of the general fund. What’s the diff?

Thanks that makes sense and if 0 wanted he could have them work but then he wouldn’t get the big scary going down.

OFG they’re friends of 0 that’s all and us on Main Street not so much.

The scrip would not violate the debt ceiling because it wouldn’t constitute a new borrowing of money backed by the credit of the United States. It would merely be a formal acknowledgment of a pre-existing monetary claim against the United States that the Treasury was not currently able to pay. The president could therefore establish a scrip program by executive order without piling a constitutional crisis on top of a fiscal one

It’s actually pretty amusing when you consider it. Our country is hyperventilating over the fact that we largely owe ourselves money. The amount we are discussing “cutting” is essentially what we owe other nations.

I don’t think most people understand how stupid this discussion is in light of the fact that we had no problem “printing up” money for war or when the bankers blew up the economy and owing ourselves the money.

There aren’t going to be any “checks.” They are discontinuing those in March. It’s all done electronically. While I understand that there might be a lag between accepting new applicants, there is positively no excuse for those already on social security not to get paid. It’s a matter of pushing a button.

The difference old rich and powerful white guys ALWAYS get paid. The rest of us, notsomuch.

But hey, let’s pretend that the people who pay out the bonds at the Treasury aren’t paid out of the general fund.

alan, you make all of us Texans proud.
I, for one, will rest better tonight.

Not that I disagree with all the fine suggestions above, BUT, can’t we take out a “reverse mortgage” on ALL the national parks, military bases, and eveything in DC??????? KInda silly lettin tll those real estate assets just sit there.

Bond holder priority is based on Perry v US (294 US 330) and Jack Balkin’s writings on section 4 esp
http://www.cnn.com/2011/OPINION/07/28/balkin.obama.options/index.html
It isn’t clear whether SS payments falls under “public debt” in sec. 4, but US bonds (T-bills) certainly would.

Bond holder prioritization is not hidden in 14th Amendment t comes down to interpretation of term “public debt” US bonds are clearly public debt. Some helpful reading is posted at Balkination blog ubder debt ceiling crisis

I don’t think so.

The Social Security Administration (SSA) is headed by a Commissioner and has a staff of almost 66,000 employees. SSA’s central office is located in Baltimore, Maryland. The field organization, which is decentralized to provide services at the local level, includes 10 regional offices, 6 processing centers, and approximately 1,260 field offices.

It’s part of the $6B administration costs.

Nice contribution. don’t recall seeing you here before or lately.

Should I order you a softball team jersey????

66,000 people. That more than Nacogdoches and Lufkin combined.

Bingo. I have received electronic deposits for 2 years.

Legal arguments aside it boils down to who will suffer first if rich Uncle Sam stops covering our bad checks and the consensus on Capitol Hill is the most vulnerable old people and children first.

This Obama is a real nasty piece of work .When he says he’s not going to let the American people be held hostage this means he’s not going to be a political hostage ,and fuck the people .Clearly if he says veterans benefits and SS checks might not paid ,we are being held hostage to his wannabe manhood politics .Then.as cwaltz noted ,he makes a distinction between bondholders and fleeced bondholders ,SS funders .

I thought the kill lists were his vicarious attempt to be a man ,but now he finds a new group of political detritus to feign a strong leader pretense .He has done less for the poor than Bush for fear of being labeled a welfare prez ,yet not a peep .All welfare goes to Wall St. Anyone who still believes in this system is delusional .

Spot on. Keep saying so.

We should never pay interest n bonds. If we can’t stop issuing them, make the interest nil. The only people really benefiting are the rich.

And you thought I was hyperbolatin’ on that other thread, ncg?

Unlike a sinkin’ ship, when it comes to money, it’s wimmin and childrun last!

Them pollytishuns know that it’s the rich folk that bribes, ‘em, not hoi paloi … fer dog’s sake.

Ain’t this fun?

Why I ain’t seen so much slippin’ and sliding around since the ball-bearing factory on Bald Mountain blew up the night of the ice storm, ’bout sixty Christmases ago … nor heard so much hot air blowviatin’ as is issuing outta Dee Cee, today, since the furnace got jammed on “hot” the mornin’ after the ball bearing storm. Got four inches, we did. Big ones and little ones, and all kinda sizes in between, too.

Well, Happy Blue Year, one and all! Looks like the climate, all around, is warmin’ up right pronto. The nice is meltin’ faster’n the ice cream I left on top of the radio … that fateful day, messed up “Sergeant Preston of the Yukon” hour, big time. But, them was the days, was only two kinds of sneakers in them days, “Keds” and “Red Balls” … and all the moms talked about, that weekend, was how the BB guns we all got for Christmas would shoot our eyes out … and some of them ball bearings was jest the right size, by the way …

;~DW

Let’s not forget those that volunteered to risk their lives and sacrifice them if necessary as well. Nothing says I could care less that you’re willing to fight and die for this country then reneging on paying the military and veterans.

I swear the people in Washington are disgusting if this is how they prioritize.

In order to increase the pressure on House Republicans over the debt ceiling, the Obama administration has begun very publicly talking about all the terrible things that will happen if the limit is reached.

More Kabuki.
If Obama really wanted to put pressure on the Republicans, he would tell Wall Street they aren’t getting a dime if the government defaults.

The suffering Seniors will be an excuse to cave.

From your link:

The opinions expressed in this commentary are solely those of Jack M. Balkin.

Forgive me if I don’t accept that as “official” because I don’t. The 14th amendment does specifically mention “pensions” and those certainly are NOT bonds of any sort, they are a legal obligations of the US government. Likewise, Social Security payments, veterans pensions and disability, are obligations of the US government.

I simply do not see any language in there that says bondholders should be given priority over any other legal obligation of the US. I do, however, understand that there are those who wish that to be so, even if it isn’t.

The validity of the public debt of the United States, authorized by law,…. shall not be questioned.

That’s the 14th amendment’s language. It sounds very clear to me that once something is appropriated by law, and becomes a debt to be paid, it shall not be questioned.

The debt limit statute is unconsitutional IMO. Of course, that doesn’t mean the current “deciders” on the SCOTUS will see it that way. They’ve already shown they can twist the consitution to mean whatever they want it to mean, like Humpty Dumpty in Wonderland.