We’re starting to see articles about the rivalry between Speaker John Boehner and his Number Two, Eric Cantor. I get that Majority Leader Cantor has aspirations to hold the Speaker’s gavel some day. But I think there is less here than meets the eye. I don’t think Cantor is really more conservative than Boehner. What he’s doing is pandering to the craziest elements of his party. Obviously, if he positions himself to the right of the Speaker, he’s going to be more popular in the caucus. On most issues, this Bad Cop/Good Cop routine can work quite well for the Republicans. But on the debt limit it has created a crisis. What Boehner needs is for Cantor to talk some sense to the Tea Partiers, but Cantor is doing the opposite. This leaves Boehner with few options. As Dana Milbank notes, the Speaker may need nearly 100 Democrats to vote to raise the debt limit in order for it to pass. How he is supposed to get them?
Boehner gave a weak smile as he approached the lectern for his hastily arranged news conference Wednesday afternoon. He did not dispute an estimate presented to him by Fox News’s Chad Pergram that 80 to 120 House Republicans — a third to half his caucus — would oppose an increase in the debt limit with or without a tax increase. And he declined a request to name a concession his own side could support.
“I agree with the president that we cannot allow our nation to default on our debt,” he said. “But to prevent a default, a bill must pass the Congress, and a bill that doesn’t meet these tests” — that is, a bill with a tax increase — “can’t pass the House of Representatives.”
Normally, a speaker would twist arms until he won support for the grand bargain he had negotiated. But in this House Republican caucus, leaders are followers.
Boehner can afford to lose 22 Republican votes. After that, he must pick up one Democrat for every additional GOP defection. If he loses 80 Republicans, he’ll need 58 Democrats, if he loses 120 Republicans, he’ll need 98 Democrats. Instead of preparing his caucus for reality, he’s letting Eric Cantor do all the talking in the negotiations with the White House.
So, I guess the only thing left to talk about is how we all get rich off everyone else’s misery. Where should we put our money?
Gold and silver.
And once again, my representative proves to be the douchiest member of Congress. I hate that fucker. I will never forget that speech he gave to me in 2005 after I received a nomination for the Air Force Academy. He only cares about himself.
Or maybe he’s a savior:
http://www.washingtonpost.com/blogs/ezra-klein/post/wonkbook-why-liberals-should-thank-eric-cantor/2
011/07/12/gIQAiV4RAI_blog.html
Platinum for QE3, Treasury Style
Don’t know if you saw this. Turn a bar of platinum into a coin (Treasury) labeled $1 trillion. Transfer the bar to the Federal Reserve in payment of the Treasury account. Write down the debt by $1 trillion (Treasury). The new reserve allows the Federal Reserve to buy back government debt from private and foreign owners. Purchase back that debt with another $1 trillion coin. Rinse and repeat. When good times return, buy back the platinum bars and return to Treasury reserves.
Now, Seabe, poke holes in this scheme. What it does is defer debt payment until the economy is better, does it in a non-inflationary manner, and does not affect intragovernment transfer creditors. And it implements the 14th amendment without prejudicing the budget debate. That is, it releases the hostage.
Or am I way in outer space in understanding how this is supposed to work.
Heh, this is well above my pay-grade. Best to ask someone who’s on the up in up with the legality of such a thing.
On the political side…I’m not so sure I like it. Well, I suppose I wouldn’t like anything on the political side of these things.
Treasury legally can issue coinage, i.e currency with a value more than the worth of the material.
Treasury pays the Fed with assets. A pallet of $100 bills would be an asset. Therefore a high-value coin would be an asset.
Treasury can determine when to call in debt.
Treasury makes the determination of whether a transaction is accepted by the Fed.
The last point is the legal gray area–as to what circumstances.
But if it’s legal, would that have the anticipated effects on the money markets. See the details in the article.
I think Bernanke will be glad to agree with Geithner. After all, Wall Street has spoken and those two Goldman alumni surely listened.
Here’s an earlier statement of the logic:
Coin Seignorage and the Irrelevance of the Debt Limit
I’m not seabe, but the flaw I see in that plan is that trillion dollar coin becomes awfully tempting in the eyes of a criminal.
I mean you couldn’t actually get a trillion dollars for it, but the right collector might pay quite a lot for a trillion dollar coin.
As for whether the economics of it work out – I’m not sure how necessary this part is: “When good times return, buy back the platinum bars and return to Treasury reserves.” but I do know that relying on the “when times are good do the right thing” idea with the US structured the way it is is not something I’d want to count on. We don’t seem to work that way in this country.
It’s really a platinum bar with a stamp, but your point is good.
The first point about the tempting target for thieves was just a gag – I meant to have a smiley next to it.
The other point is the important one – we can’t count on people in the future doing the right thing ever. Remember we just got done with a bastard who, when faced with a fucking SURPLUS in our budget demanded that we cut taxes and start deficit spending rather than pay down the debt. And out trotted old Alan Greenspan to rubber stamp that idea and say paying down the debt was a bad idea because it could lead to more government spending.
Repeal the debt ceiling law and the burden is back on Congress. They tax. They appropriate. That’s what authorizes the debt.
As for buying back the coins, I don’t know how relevant it would be to leave it on the books as belonging to the Fed as far as the economy is concerned. From the Fed’s books, it’s an asset and one that is valued at the market price of platinum at the least. Hold it long enough and the metal value might equal the face value.
That’s the tack to take. The 1923 debt ceiling law is unconstitutional because it violates the fourteenth amendment or, another theory, the latest spending bills always supercede it because they implicitly create debt which the fourteenth amendment says connot be dismissed, hence the spending bill prima facie overrode the latest debt ceiling bill.
By my count the last time there was a Republican majority (108th), the debt ceiling raise was accomplished with a scant 47 words. Simple, clean, and probably the last stop on this runaway train. Also one of the few means to a politically acceptable impasse that will not be resolved until November 2012.
The rest of this dance of the idiots is just plain bullshit.
First of all. You have money? In investments? Credit union CD would be best between now and January 2013.
Now to the numbers Boehner starts with an automatic loss of 68 Tea Party votes in his caucus. That leaves him 172 votes if everyone else walks the plank with him. Those 172 include folks like Broun, not exactly in the debt-raising mood.
Pelosi starts with 26 Blue Dogs who don’t want to vote for raising the debt ceiling without cover from the Tea Party Crowd (the source of their likely opponents) and don’t want to vote for cutting Social Security, Medicare, and Medicaid without cover from progressive Democrats.
And Obama’s bottom line, minimal as it is, is “let’s not have to do this again before the election”.
Whether it’s off a cliff depends very much what Geithner, Bernanke, and Obama do on August 2 and the days thereafter. This might be a case in which a President distributing the pain and holding harmless folks who didn’t cause this crisis will be politically the best move.
Obama better be preparing the markets for his post August 2 plan. And remind himself that the only part of the military budget that is not discretionary are pensions and the VA. (And that there are a lot of Republicans sucking government contract salaries in defense contractors.) Josh Marshall has gone looney on his desire to cut the big three.
Read more:
Very cute. Boehner channeling Cantor.
August 2, here we come. American electorate, you are about to get shock therapy for your illusions about the federal budget.
If Obama caves now, he will be harassed with debt ceiling for the next year.
And once again except for a few items, all military spending is discretionary. Get those engines at Bagram and Camp Victory started.
Josh Marshall has gone looney on his desire to cut the big three.
This is pretty shocking to me. Josh thinking only Medicare, Medicaid and Social Security are big enough to make the difference on meeting the interest payments. I mean, what gets spent every day we’re in Iraq? Or Afghanistan? What kind of payments are being made every month to Haliburton and other military contractors? How about siccing the Justice Dept. on Wall St. and seizing the gold bricks out of the financial crooks?
Maybe Josh has done the math and I haven’t paid close enough attention to the slices of the pie chart. But it seems like cutting the Congressional payroll ought to be at the top of the list of unnecessary expenditures… not immediately making senile grandma move in with her adult children and killing poor sick people.
At this point I’m assuming that Boehner is planning on Obama using the 14th amendment to avert a global panic and then figuring out a way to blame Democrats for the ensuing government shutdown that that route will entail.
I honestly can’t see any other way out of the corner he’s boxed himself into. He’s got to be relying on Obama pulling his bacon out of the fryer because he hasn’t left himself a path out of this mess.
That’s what I’m thinking, too. Obama gets forced to use the 14th amendment clause and starts cutting stuff like paying Congressional salaries, Haliburton et al, pulling back foreign aid, bringing home the troops, etc., whatever it takes to keep paying the interest on the debt without hurting, ya’know, actual poor people. The Rethugs start screaming, “Dictator!” And the House drafts Articles of Impeachment…
The serious flaw in their plan is the ring-wing-nuts go violent-shooting-crazy instead of passive-aggressive-crazy. Then we get martial law and, all things considered, I want Obama to be my dictator, not some Rethug a couple years from now.
“Their plan” referring to Obama and the Dems?
Heck, no! I’m referring to the Rethug plan to make Obama look like a dictator–ya’know, the very one I describe in the immediately prior paragraph. Jeez.
I asked because I see nothing but good for the Dems resulting from such a plan. FDR did just fine being called a dictator when he stood up for the real people. If this is a GOP plan, it has to be their worst ever — they just end up making Obama and the Dems into heroes and themselves anti-American conspirators.
I guess the question is, are they willing to take the huge risk of alienating the mainstream for generations as long as they placate their minority crazyass base?
Cantor will make the next move. He will declare that they need more time…they will not be rushed into making some secret deal…we need to wipe the slate clean and start all over. Thus, proving the GOP never had any intention of reducing the deficit.
The only remaining move is a straight up vote on a clean raise of the debt ceiling, nothing else. A straight party-line yes vote from the Dems, and we’ll see if the Reps have the guts to single-handedly throw the United States into bankruptcy. If they don’t, problem solved for now, and the Dems get yet another chance to make good after 2012. If they do, the crisis is dealt with from the Executive Branch as best it can on an emergency basis, and 2012 becomes another chance to transform the economic/political “common sense” in America.
That’s really the only option. I am guessing they will continue these sham negotiation meetings up until the last minute and then pass a clean debt ceiling increase bill with Dems and just a handful of Reps in both houses.
Debt ceiling bill has to originate in the House.
Who controls the House?
It ain’t happening. It won’t be brought to the floor.
It can be introduced. It’s an easy, understandable, sell to the public. If the GOP, with no turncoat Dem support, blocks the simple solution, they’re finished and they know it. Obama becomes the hero by putting the Executive Branch in charge and mitigating the GOP-caused damage as best he can.
Do you really think these stupid bullies have the guts to let that scenario play out? They lose either way, but lose for generations if they push the US into bankruptcy. There will be no covering up their culpability if there’s a bill introduced to avert the disaster and they sit on it. I don’t think they can stand up to the pressure.
To answer Boo’s question: put your money in one of the derelict storefronts in some deep-red county and start a prosperity gospel church.
And start telling the faithful that the Republicans really worship the Hindu god Ganesh.
Nah, I’ve changed my mind on this. We aren’t going to actually default. Here’s what will happen.
First of all, nothing will happen until the markets start to tank. On this point, your analysis of the impasse is correct.
When they do start to tank (maybe this week, maybe next) they will pass some kind of deal that everyone can agree with. Which is: somewhere over 1 Trillion in cuts, and no tax increases. Obama has already agreed to this, so no point in haggling.
Some progressives and the Tea Party folks will vote against it, but most dems and enough Republicans will vote for it. The Dems will vote for it because they will be scared sh*tless about the impending financial catastrophe. The Republicans will vote for it because – hey, it’s a trillion dollars in spending cuts and no tax increases…pushed through with mostly democratic votes…pretty sweet!
And…by the way…I haven’t been an Obama basher, but where does he get the idea that raising the medicare age to 67 is anything but political doom? There are many things that the general public understands, but everyone knows that they get medicare at 65. You can cut medicare in many ways; this would be the dumbest.
Art. I know where you can get in on the ground floor with an up-and-coming artist…
read somewhere (on tpm) last night that Cantor has invested 20,000 betting on usa default. may be just a joke.