The threat of a default is a gun pointed at Wall Street

[eridani]

Baker makes sense, but I have no confidence at all that Obama will do the right thing.

http://www.truth-out.org/saving-social-security-stopping-obamas-next-bad-deal66099

In order to avoid this train wreck, supporters of Social Security and Medicare have to restructure the options. They have to push President Obama to announce in advance that he will never sign a debt ceiling bill that includes cuts to Social Security and Medicare, the country's two most important social programs.

This would be a hugely popular position since not only Democrats, but also independents and even Tea Party Republicans, overwhelming support Social Security and Medicare. Furthermore, the gun, in the form of a potential debt default, is actually pointed at the Wall Street banks, not the public.

This would be a hugely popular position since not only Democrats, but also independents and even Tea Party Republicans, overwhelming support Social Security and Medicare. Furthermore, the gun, in the form of a potential debt default, is actually pointed at the Wall Street banks, not the public.

<snip>

One thing that would not be around the day after a default is Wall Street. The default would wipe out the value of the assets of the Wall Street banks, sending Goldman Sachs, Citigroup, and the rest into bankruptcy. The recovery for the economy from such a situation will be difficult, but the shareholders of the Wall Street banks would be wiped out and their top executives unemployed.

For this reason, the threat of a default is a gun pointed most directly at Wall Street. Given the power of Wall Street over Congress, it is inconceivable that they would ever let the Republicans pull the trigger.

This means that, if President Obama is prepared to take the right and popular position of supporting Social Security and Medicare, he will win. This is both good policy and great politics. The public just has to force President Obama to stand up and show some leadership.

[Rochester]

1. The peanut gallery wants a default!

[some guy]

2. So it seems to me

that when we hit the debt ceiling, we'll be back in the position we were in 2008, when the Bush maladministration brought out their 'the sky is falling' campaign.

I was in favor of letting the banks collapse then, I think I'll be in favor of letting them fail this time as well.

I really hate it that it was a Democratic majority that made the first move to change how SS is handled within the framework of government.

[LooseWilly]

3. Stand up and show some leadership?

Hopefully, by that, you don't mean the sort of pre-emptive negotiating away of positions that has marked most of the Obama "leadership" thus far...

I, for one, refuse to even entertain that possibility. The ensuing disappointment leads to too much anger. Better to just accept incapacity and uselessness of the president's negotiating capabilities... maybe I'll be pleasantly surprised...

Personally I expect Obama to get creative in coming up with something that would otherwise be unthinkable to negotiate away... to negotiate away in order to get the Republicans to agree to what would otherwise be unthinkable for them to not agree to. To uselessly negotiate away something, in other words.

[dd2003]

4. Credit Default Swaps

Would Prevent bankruptcy and with some option trades may even make those banks profitable...If only it were that easy.

[notesdev]

5. If there's a gun pointed at Wall St.

you'll have a bidding war for who gets to pull the trigger

[mdmc]

6. ..

[BzaDem]

7. Actually, rich people would EASILY ride out the storm. The people that would suffer would be people

who aren't rich enough to put their money in foreign banks or gold, who would be able to get a job when unemployment dwarfs that of the great depression.