The Debt Ceiling Abyss Is at Hand

It looks like the debt ceiling impass will go down to the wire. Will Biden invoke the 14th Amendment? One day he says he won’t, the next day he says he’s thinking about it.

Matt Egan at CNN reports that the Wall Street people aren’t worried about default.

Debt ceiling-inspired selloffs have been almost nonexistent. The Nasdaq is still up by a staggering 22% on the year. And CNN’s Fear and Greed Index of market sentiment is nearing “extreme greed” mode.

Perhaps this indifference is because investors have seen this drama before. They know how it ends: with politicians waiting until the last minute before giving in and finally raising the debt ceiling before disaster strikes.

Maybe it’s going to take a stock market plunge to get the tycoons up in arms about it, Egan speculates. Let’s hope it doesn’t come to that.

To complicate matters, Trump has been urging House Republicans to not give an inch. Obviously he wants to destroy the economy so that he can blame Joe Biden and be POTUS again. Any Republican who allows the debt ceiling to rise is going to get slimed by the MAGAs. Although given the results of recent elections, that might not be a bad thing for a candidate.

Ezra Klein, whose opinion I respect, says the 14th Amendment plan won’t work. But Robert Reich, writing in The Guardian, says just go for it already. He recalls that in 1985 Congress agreed to raise the debt ceiling only after the Reagan Administration had started to raid the Social Security fund to pay debts. (I did not know this.) And then Reich points out that the crazies running the House aren’t bending at all.

Which is why it’s critical for Biden to continue paying the government’s bills and for the treasury secretary, Janet Yellen, to continue using every bookkeeping scheme imaginable to find the means to pay those bills.

They must never declare an “X-date”, and never default.

If Kevin McCarthy and his band of radicals don’t like this, let them take the Biden administration to court.

Let House Republicans argue in the courts that the 1917 act establishing the debt ceiling has precedence over section 4 of the 14th amendment, which requires that the “the validity of the public debt …. shall not be questioned.”

I’m with Reich on this one. But if the 14th is invoked Janet Yellen had better be prepared to borrow money asap before Clarence Thomas and the boys of SCOTUS try to stop her.