If you haven’t heard, over the weekend, both the Federal Reserve and the Treasury Department ruled out using the platinum coin option to work around the debt ceiling hostage taking by the Republicans. I hope I’m wrong, but I think this will ultimately be a disaster for the elderly and the disabled–that is, Social Security, Medicaid, and Medicare will be cut. The only thing that might save those needy people is Republican overreach.
Taking the platinum coin option off the table leaves us with three options:
1) President Obama declares the debt ceiling limit in violation of the 14th amendment. Because what the Republic really needs is another expansion of the imperial presidency at the expense of the judiciary (even if the current judiciary is full of fucking morons).
2) The U.S. doesn’t make its debt payments. Shortly thereafter, global economic chaos ensues.
3) President Obama knuckles under to Republican hostage-taking with all of the dreadful policy consequences that entails.
So one possible outcome is that Obama holds the line because he believes that the Republicans won’t want to be tagged with crashing the global economy. I don’t think this is likely (though I hope I’m very wrong). Too many in the Republican Party hate most government functions (other than defense spending, chasing immigrants, and getting all up in women’s vaginas). Basically, this is like telling a bunch of pacifist Quakers “Do what we say or we’ll slash military spending!” Umm, they want that. By the same token, movement conservatives have wanted to delegitimize government, and now they have their chance. So if we go down this road it will be ugly.
But the alternative is little better. While the Obama administration claims it’s not negotiating on the debt ceiling issue, do you really believe them? They’ve retreated on so many other issues, why not this one too? If the administration could work out a deal to remove the debt ceiling permanently, it’s pretty clear that they would be happy to cut Social Security and other safety net benefits. Why? Because Obama has always wanted to do that. Meanwhile, Obama will make the straw man argument that he protected Social Security from privatization (even though that wasn’t on the table).
So, at the end of it all, I think Obama will get most of what he wants.
And Grandma will get catfood as an entrée.