Reuters is reporting that Treasury Secretary Timothy Geithner is weighing options on how to manage the nation’s money if the debt ceiling isn’t raised.

I guess it’s no secret now, huh? Except the article doesn’t say he has a plan, just is weighing options, and the options are all options I’ve seen discussed in public here and there. According to Reuters, here are the options:

• Whether the administration can delay payments to try to manage cash flows after August 2
• If the U.S. Constitution allows President Barack Obama to ignore Congress and the government to continue to issue debt
• Whether a 1985 finding by a government watchdog gives the government legal authority to prioritize payments.

Matt Yeglesias says that there are questions about the legality of all of these options, but of course not paying debts isn’t exactly aboveboard, either. “All the federal government’s spending obligations are spelled out in appropriations bills or laws providing for mandatory spending,” Matt says.

So, in other words, if the debt ceiling isn’t raised the Treasury Department will be walking on questionable legal grounds no matter what it does.

They’re looking at the constitutional option, they’re looking at old memos about payment prioritization, they’re looking at the attitude of the New York Fed, etc. Reuters portrays this as somewhat at odds with the fact that “Senior officials, including Treasury Secretary Timothy Geithner, have repeatedly said there are no contingency plans if lawmakers do not give the U.S. government the authority to borrow more money.” But the right way to understand this is that Geithner really doesn’t have any great tricks up his sleeve. Obviously, if Congress doesn’t do the responsible thing, something or other will happen. The U.S. Treasury won’t just vanish into a puff of smoke. But anything they do will be legally controversial and probably damaging to American credit.

And yes, already a Republican congressman is saying that if the White House goes with the 14th Amendment option, the President should be impeached.

I’m seeing conflicting stories about what might possibly be on the table as we go to the wire. I just hope that whatever is given away can be taken back by a future Democratically controlled Congress.

Update: Joseph Stiglitz —

I was among those who hoped that, somehow, the financial crisis would teach Americans (and others) a lesson about the need for greater equality, stronger regulation, and a better balance between the market and government. Alas, that has not been the case. On the contrary, a resurgence of right-wing economics, driven by ideology and special interests, once again threatens the global economy—or at least the economies of Europe and North America, where these ideas continue to flourish. . . .

. . . Do we really need another costly experiment with ideas that have repeatedly failed? We shouldn’t, but increasingly it appears that we will have to endure another one nonetheless. A failure of either Europe or the United States to return to robust growth would be bad for the global economy. The failure of both would be disastrous—even if the major emerging-market countries have attained self-sustaining growth. Unfortunately, unless wiser heads prevail, that is the way the world is heading.