The Worried Dollar by N.A.
The Worried Dollar by N.A.
I just listened closely to the President's speech on CNBC on the continuing shutdown and the fast-approaching debt ceiling.
He squarely believes the Republicans are holding the country hostage, and they are. Of course, this doesn't mean he is off the hook, since there are a number of things he can do, not only enumerated in articles like mine, written last January, when we went through this last time, and which cites economists and constitutional scholars, but also more recently the suggestions that he simply ignore the debt ceiling on constitutional grounds (it's maddening, to me at least, that only the 14th Amendment is cited and not also the equally precedent-setting Article 6: "All Debts contracted and Engagements entered into, before the Adoption of this Constitution, shall be as valid against the United States under this Constitution, as under the Confederation." Clearly, the founders - most of them big bond holders - intended for the government to pay its debts, always and completely. It was, argues Woody Holton in "Unruly Americans and the Origins of the constitution" one of the main founding principals, and was passed even before the Bill of Rights!)
Of course, they also believe all regulations suppress thousands of businesses that would otherwise spring up and provide jobs for the unemployed, despite overwhelming evidence that lack of regulation provides a criminogenic environment that encourages rent-seeking and destabilizing fraud and speculation. They're not particularly concerned about the government's debt rating being downgraded, because they don't want government borrowing in the first place, so making that harder does not bother them.
John Boehner has the votes to override the unrepresentative Tea Party faction, but chooses not to put the budget to the floor for a vote, so fearful is he of losing his speaker-ship to a Tea Party upstart like Ted Cruz, or even being "primaried" out of office.
So, who will blink first? Is Obama just setting us up for a Grand Betrayal - what he calls a Grand Bargain - where he slashes all kinds of social programs in exchange for the extortionate Republicans releasing the American People as economic hostages?
I don't know, but it makes great Kabuki Theater.