The issue is if biden mints the coin the federal reserve has to accept the coin. What are you going do if powell rejects the coin? How will you make him accept it? Powell is a republican at the end of the day... This same court just said yesterday that covid measures were worst than segregation...we're dealing with lunatics
Take a look at CBO projection. Interest alone is expected to hit 1.4 Trillion in 2033 out of expected spending of around 10 trillion, that is 15%, we are expecting 2.7 trillion deficit in 2033. Eventually there will be severe pain for everyone if the morons in Washington do not come together and resolve this issue. Most people in this country expect the US DEBT to grow forever without problem, I expect there will be a point where this assumption will fail and we will hope we are as lucky as the 1920s depression era. The politicians in both parties only care about one thing, how to get more votes, they don't care about anything else really. https://www.cbo.gov/publication/58946
Powell has to accept it - he wouldn't be doing his job. But anyway, the President can remove any member of the federal reserve "for cause" - causing the US to default on its debts is cause, IMO. Here is one thing that Trump and the fascist party understand. There are no guardian founder ghosts who are going to smite you down if you do somethign that makes a senior fellow at Brookings cringe but is otherwise a neutral bureacratic procedural thing.
Uhhh if you look at the biden budget he released last month it cuts deficit by 3 trillion https://www.whitehouse.gov/briefing...Biden has long believed,out, not the top down.
food for thought as a % of GDP, US debt is ~~ 124%. for Japan, it's 226%, and 279% for China. back in 2000, Gordon Chang's best seller, "The Coming Collapse of China's economy" cited China's large debt was the culprit for the collapse. at the time China's debt was ~~ 90@% of GDP. since then, while China's debt has increased ~~~200%, its GDP has increased ~~ 700%. When JFK took office in 1961, the debt to GDP ratio was ~~53%. since then, while US debt / GDP ratio has increased ~~ 140%, its GDP has increased ~~3,900%
they always backload it to the outyears which never materialize, so the deficit never actually goes down
I think there is a good chance of winning the 14th Amendment argument but there are practical arguments against it. For one by the time the court hears it we might already be in default.
In default according to who? You? Judge Matthew Kaczmaryk? (R- Amarillo)? Default and the debt limit are made up things. The President and his officers are not only able to ignore them or avoid them, they are duty bound to do so.
Trump ballooned the deficits by $1000 trillion while in office, giving the very rich a much-needed break. Now, he demands cuts to social programs, law enforcement, veteran care, and much more in order to reduce the debt. Right-wingers have pursued this approach since the time of Reagan. They take away revenue, redistribute it to the top, increase the debt (starving the federal government), and then demand fiscal responsibility. When Republicans take control, the cycle of ballooning the debt and demanding cuts repeats itself whenever Democrats regain control.
The issue is as I've said who is going buy up the debt while the courts are litigating. As soon as biden declares 14th amendment it will get sued in a Texas court. What happens when a federal judge issues a injunction blocking the order? What will happen to markets? What will happen to credit spreads and repo auctions? How long will the case take to get to the Supreme court? Government doesn't control the shadow docket. The 5th circuit which is the appeals court that has jurisdiction over Texas is more right wing than the Supreme Court. I think there's a good chance biden wins it at the Supreme Court but it would take weeks to get there. The markets could collapse in the mean time
There's a free and open multi trillion dollar market for US treasuries - if the US government told a bunch of Trump dipshits on the 5th circuit like jimmy ho to **** off, and the market - which has trillions of dollars behind him successfully telling them to **** off - decided lol, **** that guy - what precisely is the 5th circuit going to do? Arrest the market? Judicial overreach, separation of powers - these things work both ways.
Treasury bonds are the highest grade asset for a reason. If a default was on the table it would cause those bonds to incur a massive premium. The financial world is based upon risk mitigation. The US Court system is rated the best in the world even though we both know it's corrupt. The issue here is it would take weeks for the case to see the Supreme Court. Look at the abortion pill that they banned in Texas. It took weeks for the 5th circuit to uphold the ruling and then Supreme Court to overrule it. A few weeks in the financial world is decades in real life. Having the entire world economy in limbo while it gets litigated would not be good for the country
Judicial supremacy is a construct. The debt ceiling is a fiction created in the 19th c. If Biden (who has good reason to, both legally and substantively) ignored it in this instance, the same way the Trump administration routinely did, and the market, which also has good reason to, pretty much accepted it, ... What precisely would happen? 5th circuit is going to send the Texas Rangers out to occupy the federal reserve? Let them try The pandemic showed that a lot of aspects of "The System" are more or less bullshit, they can cease to exist or you can do things lots of rich fancy people tell us you"can't" do, and things work out just fine (like, paying people money to stay home was a great thing, suspending bullshit rules was a good thing, and we ended up better off by it. The 5th circuit or any courts power stems only from it's credibility. It reached it's debt ceiling limit awhile ago, and it doesn't have any treasuries to sell. I remember we went through a version of this when credit rating agencies downgraded US debt years ago. And guess what happened - nothing
The only way to put an end to the Republican charade we go through every time there is a Dem president and Republican house is to invoke the 14th Amendment. Country won't go into default. The president is declaring default isn't an option, and instructing debts to be paid which is in their authority. If the court put a stay on that, I hope the president would ignore it and pay the debt anyway. We have already seen that Congress can do little here. What is the House going to do? Impeach Biden for paying off our debt and not letting the country go into default? Trump has shown us the President can ignore the courts if they have enough political support in one of the two houses - and Biden does. So use it!
