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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsKrugman predicts debt-limit disaster
Paul Krugman took to his New York times blog on Friday to warn that aggressive blunderers among the GOP leadership were increasing the likelihood of the United States failing to lift the debt-limit by the Oct. 17 deadline.
Arguing that GOP leaders fundamentally misjudged the situation (and Obamas incentives), Krugman writes that Republicans have backed themselves into a position where they dont know how to back down. Obama, for his part, cannot concede without destroying his own credibility and betraying the fundamental norms of governance.
Krugman then tries to predict what he calls the ultimate endgame of the crisis, writing that despite what many believe, a market freakout will not compel Republicans to raise the debt limit. [G]iven their behavior so far, why would you believe this? Krugman writes. I can easily see Ted Cruz making a speech declaring that the freakout is all Obamas fault, and that what the markets really fear is socialism or something and the base believing it.
The award-winning economist goes on to write that, ultimately, he believes an extraordinary action on the part of the president will be needed to resolve the crisis, but that Obama cannot communicate his willingness to take such an action yet because he has to demonstrate (Republicans') utter irresponsibility.
He ends on a down-note, however, worrying that White House lawyers may be unable to concoct a legal rationale to allow Obama to ignore the debt limit. If so, he writes, God help us all.
http://www.salon.com/2013/10/04/krugman_predicts_debt_limit_disaster/singleton/
Skinner
(63,645 posts)The software removed it because of the square brackets. Change the square brackets to parentheses so it'll show.
"demonstrate (Republicans') utter irresponsibility."
Agschmid
(28,749 posts)cali
(114,904 posts)LuvNewcastle
(16,858 posts)Obama will have to do something extremely unusual to keep the government functioning and keep the economy from crashing. I'm curious about what the President's endgame strategy is, but Krugman is right, Obama can't discuss it before he takes action. At that point, I don't care what he has to do, I'll support whatever action he deems necessary.
Lasher
(27,638 posts)Pasting square brackets = no joy.
Edit: Oh, I see some guy named Skinner already pointed that out.
cali
(114,904 posts)Lasher
(27,638 posts)Them there square brackets, they can get you doing some head scratching.
n2doc
(47,953 posts)Seems to me keeping the US solvent is far more important than justifying torture. Regardless of current law, the precedent has been set that the president can 'adjust' the interpretation of law to his liking. So use it.
Jim__
(14,083 posts)From his blog:
My bet now is that we actually do go over the line for a day or two. And what ends the immediate crisis is not Republican action but a decision by Obama to declare himself not bound by the debt ceiling. He cant even hint at this possibility until the thing actually happens, because he has to keep the focus on the Republicans, and he has to make them demonstrate their utter irresponsibility before he can take any extraordinary action.
But maybe Im wrong; maybe Obamas lawyers have concluded that theres really nothing he can do. If so, God help us all.
I think the last paragraph is an attempt to maintain Obama's cover.
Barack_America
(28,876 posts)So we can settle the matter once and for all that the debt ceiling cannot be used as a political ploy...unless, of course, we get a teabagger President, in which case there's no help of us all anyway.
FarCenter
(19,429 posts)1. The Second Liberty Bond Act of 1917 that establishes the debt ceiling;
2. The Federal Reserve Act that prohibits the Fed from lending directly to the Treasury; or,
3. The 14th Amendment of the Constitution that holds that the debt of the United States government, lawfully issued, will not be questioned.
They have to break a law.
Read more: http://pragcap.com/why-the-debt-ceiling-is-actually-irrelevant
I'd bet that Obama will not break the 14th Amendment and will break the Second Liberty Bond Act of 1917.
muriel_volestrangler
(101,367 posts)It's an absurd solution, but it's an absurd problem. As far as I know, no-one has found a legal problem with it yet.
2. Selling gold out of Ft. Knox to raise funds. Patterson says this would spark a panic in the gold market, plus it would only raise $350 billion, which isn't much under the circumstances.
3. Minting a $1-trillion platinum coin. This is technically legal, under an old law designed to allow the minting of commemorative platinum coins, not legal tender. This choice is favored mostly by people who like weird things.
Patterson calls option No. 1 a "nonstarter" for several reasons. It would breach the separation-of-powers clause, which leaves borrowing authority to Congress. It would depart from a century-old precedent that treated the debt limit as a real thing. And it would subject the president to litigation and maybe even impeachment, which would itself lead investors to question the validity of any debt issued above the limit.
http://www.latimes.com/business/hiltzik/la-fi-mh-morass-20131004,0,6430635.story
'Nonstarter', a panic in the gold market to not raise much, or 'weird'? When the going gets weird, the weird turn pro. Mint a few, and you have some flexibility in the amount, and the way you get rid of them when Congress finally stops the far right from strangling law-making.