Monday, October 07, 2013

The latest on prioritization of payments in case debt ceiling isn't raised in time

The latest and best on whether the Treasury Department can prioritize which bills to pay comes in a post by Brad Plumer on the Washington Post Wonkblog, . 
I wrote a detailed post on my Retirement blog about this early today.  Generally, I presume that the Treasury can figure out a way to pay bondholders. The president probably can use the 14th Amendment to borrow the funds to pay bondholders if he absolutely has to, even though he won’t admit it yet.   A big question is whether the Social Security Administration is a bond holder on the level of, say, China.  I haven’t seen a face-off on that question, because no one is willing to go there (except the extreme Right Wing, which acts like default would purify the morals of the country and make it docile for a fascist takeover).

Republicans claim that many presidents have negotiated over the debt ceiling. The practice is now being seen as giving in to "extortion" because the Internet makes dissemination of controversy occur much more quickly than in the past.  Democrats talk as if they fear that if they even have a "conversation" Republican demands will escalate back to demanding "cold turkey" on debt.

There are a couple of other news stories floating around that attract libertarian attention.  One is that the city of Richmond CA is taking over some foreclosed properties by eminent domain and forcing banks to accept current market value, not original loans amounts.   And the city of San Francisco shut down some outdoor chess games, apparently enforcing an ordinance related to gambling. 

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