Monday, January 14, 2013
On Debt Ceiling Obama Speaks Loudly But Carries No Stick
Well, that really did it. Obama has loudly declared that he will not negotiate with Congress over the debt ceiling. He was riding high with the trillion dollar platinum coin gambit, only to hand it off to Treasury, which has now nixed it in conjunction with the Fed, even though Laurence Tribe had declared it legal. Tribe had previously declared the other obvious weapon Obama could use against Congress blackmailing him into cutting entitlement program benefits unconstitutional, that is, for Obama to declare the debt ceiling unconstitutional, which it is. But now Obama is left with only some vague possibility of handing out some IOUs, which look less credible than either of the two now gone, or simply cutting a bunch of programs liked by the GOP in order to make interest payments on the debt if the ceiling is not raised. His aides are claiming this gives him a strong hand because the GOP will be blamed if there is a default, but that is not of much comfort to those who are hoping to get jobs in an economy that for the moment is still growing, but might not be if there is a default.