Corpania Ideas

CAVEAT! I'm an amateur philosopher and idea-generator. I am NOT an investment professional. Don't take any of my advice before consulting with an attorney and also a duly licensed authority on finance. Seriously, this my personal blog of random ideas only for entertainment purposes. Don't be an idiot.

Friday, July 29, 2011

Give me odds & I'll bet Obama uses the "14th" to solve the debt ceiling crisis

As I've been mentioning for a couple of weeks now, I think it's increasingly likely Obama will use the "14th Amendment argument" to unilaterally raise the debt ceiling to avoid default.

I know my politically savvy, in-the-know friends (who attend Drinking Liberally functions) have rationally argued that since the Boehner(GOP) and Reid(Democrat) plans are so similar they should just come together and strike a deal.

And a month ago, I was buying Cenk Uygur's prediction that the GOP was simply engaging in brinksmanship to get better terms with the ever-cowering Democrats but in the end the corporate-controlled GOP would make a deal since a default would be disastrous for the corporate interests.

But now I think the politics trumps the reasonable policy. The GOP members of congress are terrified of getting primary challenges by some Tea Party nutcases from out of the blue. The Tea Party groups are so extreme they even oppose Boehner's plans (which have unprecedented concessions from the spineless Democrats). So the GOP simply can't approve of any deal even though most (behind closed doors) might admit that they don't actually want a default.

By "letting" Obama use the "14th Amendment plan" the GOP can thus preserve their conservative "purity" with their Tea Party base. Plus, as a bonus, if Obama does unilaterally raise the debt ceiling on 14th amendment grounds then the GOP gets what it thinks is a great campaign point about Obama's "unconstitutional, dictatorial power grab".

On the flip side, Obama's liberal base wants a clean debt-ceiling raise without any concessions/compromises and they don't care how that happens.

Consequently, the GOP would be happy with a "14th Amendment plan" and so would the Democrats.

The only things left to consider would be the ramifications.
PRIMARILY...
*Would the Supreme Court overturn it?*
> I say no for three reasons:
        a) Law Professors say it would be tough for a litigant to prove "standing".
        b) If interest rates don't spike (because there was "no default") then any judge would be loathe to intervene for fear of spooking the now-soothed markets.
        c) Even the right-wing members of the Supreme Court travel in corporate & money circles (not so much with the less-educated, low-brow Tea Party members). So the corporate interests who are terrified of default will influence/put pressure on powerful judges to not intervene/overturn Obama.
     

AND SECONDARILY...
*"Do the politics of using the "14th plan" cut particularly poorly against Obama?"
> I say no for four reasons:
         a) Assuming interest rates don't spike, Obama can effectively argue the necessity of his action (using the counter-factual: "if I hadn't then rates would've spiked").
         b) If rates do spike, Obama can argue that they were caused by GOP brinksmanship which necessitated his use of the "14th Amendment plan".
         c) Obama can make Clinton's argument that the increase in the debt ceiling was for "the dinner we already ordered and ate and therefore had to pay".
         d) The global intelligentsia (from Greenspan to Buffet to the head of the IMF) think that America's "debt ceiling" shouldn't even exist.

Just my quick analysis and long shot prediction.
I could quickly & easily be proved wrong.
But I hope I have the intellectual integrity to keep this post up either way.

We'll see what happens.


.

Blog Archive