I've had it. Invoke the 14th. Enough games. The U.S. CANNOT default.

[Faygo Kid]

Does anyone here think FDR would let this happen? The 14th Amendment says, among many other important things:

Section 4. The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.

I don't care if it "includes" debts of the Civil War, it's clear according to the U.S. Constitution that the debt incurred cannot be questioned. That means the president has a constitutional responsibility to pay the debts we have incurred as a nation. Period.

Can you believe that THIS is the petard upon which our nation has been hoisted? Extraordinary.

I am rather pissed off right now.

[RagAss]

1. Catch 22 for America...he invokes the 14th we go through an impeachment nightmare again.

[cascadiance]

4. If he doesn't follow the 14th amendment to resolve the crisis he might ALSO be impeached!

Don't doubt that the Republicans might not try to do it in that circumstance too. Especially if no agreement is reached and we are in economic disaster.

If he'd be impeached in either situation, I'd rather him pick the one that actually does better for our country and unites our party. Use the 14th, Obama. Pick the right time, but do use it!

[Faygo Kid]

7. They don't have the votes, and this isn't about blowjobs. It's about saving the nation's economy.

As poor as it may be. Let the teabaggers bring it. I think the American people have about had it with them and their Rupert Murdoch acolytes.

Now is the time to be FDR. Showdown. He has the constitutional obligation; call 'em out.

Raise the debt ceiling Sunday, Mr. President. Let 'em sweat.

P.S. They don't have the votes, and if that's the ditch they want to die in for 2012, bring it.

[Maru Kitteh]

13. I couldn't possibly agree with you more.

Bring it.

[Faygo Kid]

15. Thank you for that. I send this; it pretty much sums up my energy to Fight Back right now.

http://www.youtube.com/watch?v=v-KD0bCk9HU

[kenny blankenship]

12. Not even Republican Senators will stand for that nonsense.

He will be acquitted by the Senate and be given a tickertape parade for saving the country from a horde of hateful idiots. Even people who don't like him much anymore or trust him will be celebrating for him.

He will be a hero - literally he will remembered as a hero who singlehandedly saved the national bacon.

Alternately we can give Pukes a deal. Any deal in response to this threat, and they will come back as soon as they can to repeat this shakedown maneuver. Once a year, maybe every six months. Anytime they have the House. Who wants to find out what they'll want next? I sure as hell don't. What we cannot afford is to have major policy of our government being set by what is, in essence, terrorism. Just because it will become routine with EVERY debt ceiling expansion will not make it any less thuggish, or any less than of an assault on Democratic constituencies.

[RKP5637]

2. FDR IMO would have handled everything entirely different having started in 2008. n/t

[kywildcat]

3. and unleash the justice department

on those that put their pledge to an non-elected individual above their oath of office. Treason-McConnell and Boehner. Treason.

[trayfoot]

9. Do it fast while we're still at war!!!!!

[philly_bob]

30. +1

[arcane1]

5. And oddly enough, the teabaggers claim to worship the Constitution

Go figure :shrug:

[Waiting For Everyman]

6. Except that they want to rewrite it first.

They found mistakes they want to fix in it, I guess. They know better, being much smarter than the Founders, and all.

What limitless arrogance.

[kywildcat]

8. nothing to figure-

they worship what serves them in the moment. They are racists who feel comfortable taking the hood off and standing in broad daylight. They' pledged to Grover Norquist to never raise taxes....Norquist-never elected to office-holds the fate of the US in his hands.
I wait with great hope for the day that McConnell and Boehner are investigated for treason. And Norquist for sedition.

[NashVegas]

10. Yeah, Actually We Can

and in the long run, might be better off for it.

[Faygo Kid]

11. Bullshit. It will come out of the hide of the poor, the young and the old.

As always.

[patrice]

14. Re CANNOT > Wouldn't they pretty much have to set aside the entire body of business CONTRACT law in

order to default?

Resulting in more than just a few lawsuits?

I mean, HOW exactly would that work? Do you default, pay some bills, and promise to pay others later, a.k.a. extend your CREDIT/deficit? Or do you default, pay some bills and just say "too bad!" to everyone you don't pay and NEVER make up what you originally agreed to pay, thus violating a legal agreement between you and the payees?

????

[leveymg]

16. There will be no default because the Fed will cover the revenue gap, at least temporarily under its

emergency powers. The Fed has already lent $16T in emergency funds to banks since 2008 under QE2. The Fed can and will cover any losses to banks (and indirectly to the public) from Treasury checks that would otherwise bounce.

Please, see discussion thread at: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x1604107#1604160Plea

[Faygo Kid]

17. What do you mean? That this acceptable? That the U.S. defaults for first time in history, and OK?

That's a Tea Party argument, quite frankly, and I find it unacceptable.

This is NOT how this nation should be governed. What is going on here at DU?

[leveymg]

19. Not acceptable. But we shouldn't be stampeded into accepting a Raw Deal Senate "Compromise"

There is no real looming emergency. Tues. is an artificial deadline. In effect, because the Fed will cover the Treasury checks, there will be no default and no shutdown of the Federal Gov't other than some symbolic functions that Obama and Congressional leaders have agreed to behind closed doors.

It's all been Kabuki theater to frighten people and push cuts to social programs through Congress.

[muriel_volestrangler]

20. That's not how I read what he's saying at all

I think leveymg is saying that the government could write checks for all its obligations, and the Fed could say to the banks "honor those checks even though there isn't enough money in the government's accounts to cover them; we'll lend you the money for it, even though theoretically we don't know if you'll ever get the government to pay for it".

I would wonder, however, if the act of writing all the checks would be held, by the Teahadists in Congress, to be borrowing above the debt ceiling, since it's effectively creating new overdrafts for the government with the banks.

[leveymg]

21. That's a good point. But, the checks are an accounting device - the Fed could do an interbank

transfer for the same amounts without checks being written by the Treasury. The notes would be structured as loans between the Fed and the banks, not new borrowing by the Treasury.

If the Fed wants to cover this, they have the power to do it.

[muriel_volestrangler]

22. But the money has to be directed to the recipients - government employees getting their salaries etc

Normally, the banks would have government accounts with that money in, and they'd debit it from those accounts and credit it to the recipients'. By doing the credit even when the money isn't in the government accounts, and recording how negative that would have pushed the government accounts, they would effectively create an overdraft for the government, which (with some justification, I think) would be said to count towards the total government debt.

Or, if the banks didn't record it as money they expected to be paid back by the government at some time, it becomes a gift to the government from the Fed, via the banks. The Fed would be taking over paying the government's bills, with 'newly created' money, without apparent hope of repayment.

[leveymg]

23. The Federal Gov't will simply issue a list of SS numbers to the banks of persons and businesses

that are scheduled to receive checks, along with a note to cover that amount. In the age of computers and interbank transfers, technically it's not that hard to do a paperless deposit.

As for exceeding the debt limit, unlike the Treasury, the Fed isn't a gov't agency. Legally, this would be a private interbank loan.

It would be a violation of the Fed's Charter to protect the integrity and operations of the nation's banking system for it NOT do something like this if there were any chance of the Treasury bouncing checks or gov't operations being stopped.

[muriel_volestrangler]

24. It's not whether it's physical paper that's the problem

A 'private loan' from the Fed to the banks, if they have to pay the people and businesses the amount of the loan, will only be taken up by the banks if they can, in turn, record that the government now owes them that amount of money. They won't want to be saying "we now owe the Fed X billion" unless they can also say "the government owes us X billion".

[leveymg]

25. The banks borrow hundreds of billions from the Fed every week. How is this different?

And, the Fed regularly injects liquidity into the markets. The banks will get paid - they always do. No skin off anyone's nose.

As for the argument that the Fed can't issue funds that aren't covered by Treasury notes, that's also a fallacy. There weren't $16T in new Treasuries issued to cover QE2.

[muriel_volestrangler]

31. Because the banks then get to use that money as they wish, rather than having to pay people

It's normal business for them - they get some money from one party (the Fed) and agree they will have to pay it back some time, and they then lend it to someone (in which case they get an agreement from them to pay it back), speculate with it (in which case they have some asset they can try and sell), or so on. There's been a risk that a bank will go bust before the Fed gets its money back, and the Fed has been swallowing that risk - lending at practically zero rate even though the risk is not zero, and no-one else would lend to those banks at that preferential rate.

But in this case, the banks would have to permanently send the money on to the people getting the salaries, the businesses whose bills to the government are being settled, or whatever. Those parties won't ever be giving it back; they're not meant to. So, if it is a loan from the Fed to the banks, the banks will, in turn, want something that says "X will pay back the bank" before the banks agree to pay back the Fed. And so the 'X' would have to be the government, it seems to me.

[FBaggins]

18. The 14th says that we can't default... It doesn't say that Congress can't limit additional borrowing

They're two entirely different things.

[elocs]

26. You cannot invoke the 14th until there is no other recourse,

so it's not time yet and if Obama believes he can invoke the 14th he shouldn't talk about it beforehand.

[Faygo Kid]

27. If he had continued to carry that arrow in his quiver, maybe we would have a deal.

Why did he categorically reject using it? I think you get it. He most certainly should NOT have talked about it beforehand.

We are in deep straits here.

[elocs]

28. I don't believe he categorically rejected using it. I think he said he was not yet persuaded.

A cagey answer. He is not going to show his cards before he needs to show them.

[Faygo Kid]

29. A good answer, two weeks ago. We are out of time.

More FDR here would be welcome. Show the cards.