So now, given Treasury Secretary Yellen's warning, we behold the country is hurtling toward defaulting on its debts, and those few Dems who demanded action during the lame duck session are being vindicated. Democrats who didn't go along with the lame duck moves are now - too late- second-guessing their Milquetoast assumption that pressure can make Republicans raise the debt limit without conditions.
That nonsense assumption has since disintegrated as recognition has finally dawned that Republicans really are the financial- economic terrorists they portray. And yes they are totally willing to allow default, bringing economic catastrophe, if it means they can sink Biden's presidency. Multiple op-ed pieces in the WSJ indeed seem to support that as a primary goal, leading one to ask: If these reprobates truly see this as the only way to oust Biden why would anyone count on the right kind of pressure making Republicans cave?
Meanwhile other WSJ opinionators, like the irrepressible Daniel Henninger (WSJ yesterday, p. A15, Dems Become The Party Of No), continue to peddle the balderdash that the Reeps are the sensible ones, and the Dems are the extremists. According to Henny:
"No single notion has served the Democratic Party better than its assertion that the Republicans are a party of extremism. It dates at least to the 1950s. The details or truth of these charges hardly matter anymore."
Point of fact, there are good reasons for the assertion of Repuke extremism dating from the 1950s, and one name comes to mind from that era: Sen. Joseph McCarthy. That squalid maggot was infamous for destroying hundreds of careers via his House UnAmerican Activities Committee. So the details are important and the truth does matter! It would only not matter to those either ignorant about our recent history or who minimize it - like Henninger.
Which brings us to the brinksmanship of the current Republican House- motivated by the extremists that had a hand in putting Kevin McCarthy in power as Speaker,
The Chaos In The House: A Prelude For What's Coming If "Freedom Caucus"' Gains GOP House Control
It took 15 'rounds' for McCarthy to finally snare the Speaker's gavel and that was only after the extremists (Boebert, Matt Gaetz etc.) finally relented - and that meant he had to acquiesce to their demands. Those demands included not only top positions in assorted committees but also pushing the debt ceiling passage to beyond the default threshold. Thus, there is nothing, nada, no orthodox strategy -that will make these maggots cave.
They are as determined as Al Qaeda or Isis to bring the whole global system crashing down, devil take the hindmost. E.g.
In the words of former Clinton campaign strategist James Carville, quoted in the WaPo:
“When you get to the intersection of sane and crazy, they generally go crazy every time. Why would anybody think they wouldn’t do this?”
Indeed, and Carville added:
“The president would be smart to assume that they will take the insane course, and prepare for it."
But that will require playing three-dimensional chess, not two -dimensional. What "3D -chess solution" is there to negate the hostage-taking effort by the GOP terrorists? Step back for perspective. A 1997 law intended to help the U.S. Mint make money off of coin collectors may yield the solution. Basically, it gives the Treasury Secretary the power to mint platinum coins of any denomination, for any reason. When econ pundits discovered the law amidst the 2011 and 2013 debt ceiling battles they realized this power might be the optimum way to do an end run around an obstructive congress that refused to raise the debt ceiling.
Right now the only 'teaser' method being tried is initiating the “discharge petition” process. This could ultimately force a vote on a debt ceiling increase without the permission of Speaker McCarthy - hoping to get moderate Reeps on board- and narrowly pass the debt ceiling increase. But this is still 2 -dimensional chess so not likely to work against terrorists, traitors and madmen.
That leaves the only valid 3-dimensional option: minting a trillion dollar coin, or two or three. Does Biden have the will, the intestinal fortitude to do that? Say as opposed to believing there is some magical pressure point or threshold at which the GOP "Freedom Caucus" will yield? Let me provide some encouragement. In 2013 even former U.S. Mint Director Philip Diehl agreed it would work and over the years more influential voices have added their support, like financial journalist Joe Weisenthal and NY Times columnist and Economics Nobel Prize winner Paul Krugman.
None of these econ cognoscenti were the original sources for the idea. Rather that credit can be traced to a short comment on financier Warren Mosler’s blog posted May 24, 2010:
"Congress has already delegated to Tsy [Treasury] all the seignorage power authority it needs to mint a $1 trillion coin (even numismatic coins are legal tender at their face value and must be accepted by the Federal Reserve)– the catch is, its got to be made of platinum"
That matter of seignorage in relation to minting the big one was well explicated in a piece by Financial Times columnist Brendan Greely:
Seigniorage has always been a
delicate negotiation between seigneur and subjects. Take too much profit on
coins, and they can begin to lose value. Take too little, and they become too
valuable to circulate. There are, however, two historical precedents
for seigniorage that high: siege coins and tokens.
Under a literal siege, a medieval city could issue scraps of
stamped leather, to be redeemed for coins when the siege lifted. Perhaps this
is what the platinum proof coin would be: a temporary way to deal with
barbarians. But Yellen could also just decide that the coin is a trillion-dollar
asset, full stop, because she says it is. Then, after the Republicans roll away
their trebuchets, she would not have to sell any new Treasuries and buy back
the platinum proof siege coin.
Mosler himself, is acknowledged as a founder of the heterodox MMT or Modern Monetary Theory school of economics. So little wonder in his template, minting a trillion dollar coin, or two or three, to end the debt ceiling standoff and potential financial catastrophe would be no biggie. Sure, the GOOPs will squeal like stuffed pigs, and they may even try to take it to the Supremes, but by then the worst threat will have elapsed because our debts will have been honored. The full faith and credit of the U.S. government preserved.
The White House press secretary Karine Jeanne-Pierre flatly declared that Biden “will not entertain scenarios” that don’t involve Congress lifting the debt limit. But that declaration assumes you are dealing with rational people in good faith, as opposed to insane terrorists yearning for destruction as the price of power.
So the choice becomes quite simple in the end: Do you implement an unorthodox economic 'end around' to spare the nation and world financial catastrophe - including much higher inflation, 45 % stock market crash (now predicted), 8 million thrown out of work and recession?
Or do you assume normality and sweet reason is feasible with self-declared savages and terrorists? Economic and electoral saboteurs who will spare nothing to take Biden down and ensure their orange Traitor regains power next year. In effect, minting the Big One translates into stopping the next coup to take our democracy down and putting it in the unseemly paws of Hitler Jr.
See Also:
by Joan McCarter | May 9, 2023 - 7:23am | permalink
Excerpt:
When President Joe Biden meets with congressional leadership on Tuesday, he’s going to hit a brick wall of resistance from the top two Republicans: House Speaker Kevin McCarthy and Senate Minority Leader Mitch McConnell. The duo are in lock-step agreement: Make cuts that could force a recession, or they will destroy the economy by taking the country and the global economy over a fiscal cliff.
Forty-three Republican senators, including Minority Leader Mitch McConnell, just joined the extremists of the House Freedom Caucus.. They all signed onto a letter spearheaded by Utah Sen. Mike Lee declaring themselves in lockstep with the House economic radicals on the debt ceiling, promising to filibuster any bill that raises the debt ceiling without including “substantive spending and budget reforms.” As we’ve previously reported, those cuts include slashing VA staffing and veterans services.
And:
by Robert Reich | May 6, 2023 - 5:59am | permalink
Excerpt:
Republicans are threatening to destroy the economy if President Biden doesn’t give into their demands. But the Fourteenth Amendment gives him the power to stop them.
Republicans are taking advantage of the “debt ceiling” to try to force deep, painful cuts to programs Americans rely on. If Congress doesn’t raise the debt ceiling, America might have to default on its bills, destroying the credit of the United States and wiping out millions of jobs.
Remember, raising the debt ceiling isn’t about taking on new debt. It’s about whether America will pay its current debts.
This is a key reason why raising the debt ceiling should not be negotiable.
And:
by Joan McCarter | May 4, 2023 - 6:58am | permalink
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