Wednesday, January 09, 2013

Flipping the Trillion Dollar Coin on the Debt Ceiling

The discussion on the coming battle over the debt ceiling was raging on the Sunday morning chat shows recently. It is proof that when a Republican is in the White House - like the George W. Bush - there is the constant declaration that the President is overreaching his authority. President Obama used to do some of that declaring himself, loudly and frequently, as a member of the U.S. Senate.  But when it is a Democrat in the White House, the double standard raises its ugly head.  The press is perfectly willing to continue to go along with White House talking points and ignore any pointing out of the fact that the narrative sure does change from both parties. When it is a Republican in the White House, Democrats enjoy blocking everything as the Republicans do now.

Barack Obama has led by executive order more than most other presidents.  He rammed through the largest entitlement program since the 1960's and did it with the support of only one party - his own.  That had never happened before.  His whining now that those mean Republicans in Congress are holding any legislation hostage is a bit absurd.

On the upcoming debt ceiling debate, Democrat minority leader Nancy Pelosi - who led the House of Representatives in 2009 as Speaker of the House and aggressive partner in Obamacare legislation - now says that President Obama should just claim that the 14th Amendment gives him the authority to bypass Congress and raise the debt ceiling by himself.

House Minority Leader Nancy Pelosi (D-Calif.) urged the president on Sunday to drop his resistance to the idea and simply bypass the upcoming debate over raising the debt ceiling by deeming the entire cap unconstitutional.
Appearing on CBS' "Face the Nation," Pelosi offered her strongest endorsement to-date of the 14th Amendment option, which holds that Congress doesn't have the power to use the debt ceiling as a hostage-taking device because the validity of the debt “shall not be questioned.”
Bob Schieffer: You would just go ahead and do it, you wouldn't wait for the Congress?
Nancy Pelosi: I would just go do it. But the Congress has incurred much of this debt. And so what are you saying, we incurred it but we're not going to pay it? If you want to say, 'We are not going to do it so much in the future,' well that's another thing. But you can't say, 'I'm not paying my past debts.'
The 14th amendment option is gaining popularity among Democrats on the Hill. Senate Majority Leader Harry Reid (D-Nev.) urged the president to deploy it when the two were contemplating the contours of the just-completed fiscal cliff debate.
Nancy Pelosi: Well, you ask the Republicans, because we always passed the debt ceiling. When President Bush was president, as he was incurring these massive debts, and the Republicans weren't saying 'boo' at the time. There should be, this is a conversation where there should be no doubt. In fact, if I were president, I'd use the 14th Amendment, which says that the debt of the United States will always be paid.
Or, how about Rep Jerrold Nadler's (D-NY)  suggestion, as told to Politico - President Obama should order the Treasury to produce a couple of $1 Trillion coins and deposit them, thus providing cover for the debate ceiling debate.
 "President Barack Obama should order that a couple of platinum trillion-dollar coins be made and then have the coins deposited in to the Fed and, voilĂ , debt ceiling crisis averted."
Easy peasy, right?  Good Lord.

Any idea from former Enron advisor Paul Krugman is suspect to me, as a general rule.  During the last debate, he was against the trillion dollar coin. He was,  however, correct here:

"It appears to be legally possible . . . to mint a $2 trillion platinum coin, which is ridiculous, but the whole debate is ridiculous, right?"
Now, he appears to have changed his mind and is in support of the action.  He was against it before he was for it.

The scare tactics coming out of the White House will continue on for the next two months.  Republicans will be held up as mean obstructionists to the president's agenda.  Well, that is their job. The opposition party is supposed to stand for their own beliefs as they move forward on behalf of their constituents.  Would our country default on monies owed? No, not solely due to the debt ceiling issue.  That debt is taken care of in revenues coming into the government coffers.  It would be bad for the country's image and for those we want to buy our ever growing debt so that our country doesn't have to completely stand still. 

If President Obama were truly a leader or even a competent negotiator, he would lead by bringing all parties together and showing respect for all sides.  That is not what he does, however.  He is arrogant enough to believe he doesn't have to negotiate.  That is why we are in the state we are in now.


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