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"I invoke the 14th Amendment!" - gaming out trying to sell legally questionable bonds to investors [1]
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Date: 2023-05-29
President Biden knows what he is doing. He got a deal in which the only concessions made were ones that were almost guaranteed anyway and even with the relatively small percentage of those adults on SNAP without children who work less than 20 hours a week who would see their benefits lost, he expanded others into the group of those eligible for SNAP to include homeless WITHOUT work requirements and ADDED veterans and increased the age from 49 to 54. Inflation has been reducing and it is NOT 6 percent annually as one poster falsely put, it has gone down for NINE MONTHS IN A ROW and is likely to continue to drop. A CR would have effectively capped expenditures as well at the present level, so that's NOT a loss either. The magicians whose concern for the less than 25% minority of SNAP beneficiaries might be laudable forgot about the NEW PEOPLE ADDED and the CERTAIN CONSEQUENCES when this actually would be played out and the ALL BUT GUARANTEED ruling by a CORRUPT SCOTUS DOMINATED BY SIX (6) RADICAL CONSERVATIVES AGAINST THREE (3) RATIONAL JUSTICES. I'm going with the president on this. THIS ONE WEIRD TRICK is okay as a BULLSHIT marketing ploy, but not for dealing with the world's economy.
Dan Pfeiffer on the Bryan Tyler Cohen show explains the real world to the magicians. Starts 16:27 and ends at 18:32
“At best case, the arguments about the 14th Amendment are a legal jump ball. Put aside the partisan experts, some of them believe it is right, some of them believe it does not, that the debt ceiling is not in conflict with the 14th Amendment, but practically speaking, here is the problem for the Biden Administration if they do this: one is that it lets the Republicans off the hook, it is now the president’s choice to try to avoid default this way, you have now taken the entire fate of World economy and put it in a court system filled with judges as we just saw in the abortion medication case will make insane decisions, ultimately that will wind its way up to the Supreme Court which is a corrupt Supreme Court, rigged by Mitch McConnell and the Federalist Society, but even from a very practical matter, the way you pay your debts is you sell bonds. Right, that's how you get more money, institutional investors-this is like investment funds etcetera and pension funds and foreign countries. How could you sell debt of legally questionable value? Like who would buy that debt? Just remember, pure practical matter and it is not as simple as the president going out and saying, “I invoke the 14th Amendment! “ as if he were a wizard in Hogwarts, it’s not a magic spell. What happens is we crossed the x date, the United States must sell more bonds and when the republicans sue, you respond in court that the reason that you did it is that the 14th Amendment, you believe the debt limit statute is in conflict with the 14th Amendment, and then you put the whole thing in the hands of the court. And so there would just be a massive amount of economic turbulence. And this is one of those things where the people who keep asserting that the president do this with such confidence are a little bit playing sort of the domestic political version of the game of risk and not really reckoning with the real consequences. If you’re President Biden, put aside the politics of who would win in a messaging war over this. Do you want millions of Americans to lose their jobs and the stock market to drop by half on your watch? Like that could take decades to unwind. You’re going to do that on a legal theory that your own lawyers can’t agree on? So I just think it’s not particularly practical even if it seems a bit appealing. “ — Dan Pfeiffer on the Bryan Tyler Cohen show.
Bryan Tyler Cohen then replies, “ So, the way that it would have to be done, it would already be too late to fix it (if the SIX (6) TO THREE (3) SUPREME COURT does what any rational observer would expect it to do) “
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