[HN Gopher] U.S. Could Run Out of Cash by June 1, Yellen Warns
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U.S. Could Run Out of Cash by June 1, Yellen Warns
Author : cardamomo
Score : 33 points
Date : 2023-05-01 20:31 UTC (2 hours ago)
(HTM) web link (www.nytimes.com)
(TXT) w3m dump (www.nytimes.com)
| nabla9 wrote:
| there are many ways to avoid default.
|
| (1) discharge petition - bill from committee to a vote.
|
| (2) Fourteenth Amendment Constitution prevents willful default
| until SCOTUS says otherwise. Just keep issuing debt.
|
| (3) High coupon and low principal. 10-year bond with $1 in
| principal and annual $100 coupon will increase debt ceiling
| almost 1000X.
|
| (4) high denominations coin minting
| akomtu wrote:
| These are bandaids. Very soon it will become apparent that the
| US needs to take extraordinary measures to solve its debt
| problem, and such measures need an extraordinary excuse, more
| extraordinary than the recent pandemic.
| kristjansson wrote:
| > (4) high denominations coin minting
|
| Far and away the most entertaining path. Who gets to carry the
| trillion dollar coin from the mint to the treasury? How many
| heist plots will be foiled? How many movies about said heist
| plots will be made? Will there be a elaborate motorcade that's
| ultimately a ruse while the coin is sent by USPS in a plain
| envelope?
| GalenErso wrote:
| It's unlikely the House will pass a clean debt ceiling hike. The
| GOP has not budged since the beginning of the new Congress. The
| MAGA caucus is determined to extract spending cuts at any costs.
| The way I see it, one of three things will happen:
|
| 1) The executive branch will invoke Section 4 of the 14th
| Amendment[1] and direct, by Executive Order, the Treasury
| Department to continue paying interest to bondholders,
| effectively abolishing the debt ceiling with the stroke of a pen,
| and without Congress' approval. This is my preferred option.
| There already exists a strong legal argument that the existence
| of the debt ceiling is unconstitutional. This maneuver would
| allow the White House and Congress to fight the issue in the
| courts without defaulting. The administration could also mint the
| oft-discussed trillion dollar coin, or a couple of them, if that
| loophole still exists.
|
| 2) A few sane House Republicans will cross party lines and vote
| for a clean debt ceiling hike with the Democrats. The Speaker
| would not be able to prevent it, and what happens to Kevin
| McCarthy doesn't matter here. Democrats can introduce a bill and
| force a floor vote without the Speaker's approval (?) Someone
| correct me on this.
|
| 3) Default. Either the US government stops paying bondholders, or
| the Fed buys bonds in default (this is called a technical
| default), or the Treasury keeps paying interest but slashes
| spending in other areas, like Medicare, to pay for it. However,
| there are serious doubts as to whether this "debt prioritization"
| maneuver would be legal and/or constitutional.
|
| Or the administration could cave and give the Republicans what
| they want, but I don't see that happening, because it would
| greatly harm Biden's reelection chances and hand a huge political
| victory to the GOP.
|
| [1] The validity of the public debt of the United States,
| authorized by law, including debts incurred for payment of
| pensions and bounties for services in suppressing insurrection or
| rebellion, shall not be questioned.
| albatross13 wrote:
| You do yourself a disservice by blaming one side over the
| other. Realize this for what it is: a grand play on an even
| grander stage.
| aschearer wrote:
| You are part of the problem.
| Larrikin wrote:
| Both sides are the same is such a tired line.
| albatross13 wrote:
| It's only tired because you're still asleep. Wake up
| mikem170 wrote:
| I've held a view similar to yours for a while, that the
| two parties are the same in many ways, more beholden to
| money and power than concerned about their constituents.
|
| But I'd point out that one real difference lately is the
| whole stolen election thing and the related attempts to
| delegitimize the judicial system. That's some scary
| stuff. That's how democracies die.
| hackbinary wrote:
| Nice, an appeal to a false equivalence.
|
| The conservative obstructionist and scorched earth tactics
| are obscene.
| albatross13 wrote:
| Do you really think the democratic party has any interest
| in helping the common man, either? Do you really think
| that?
|
| The last time your 'democrats' had full control of congress
| (house and senate), they passed the most anti-poor
| healthcare bill you've ever seen; complete with FINES FOR
| PEOPLE IN POVERTY WHO COULD NOT AFFORD, OR DID NOT WANT,
| GOVERNMENT 'INSURANCE'.
|
| Both sides are broken, both sides want you enchained in
| debt and despair. You're a fool for playing into it,
| thinking the horse you're backing is the right one. lmao,
| they're both in the same race homie.
| toomuchtodo wrote:
| https://i.redd.it/qh92pvlfkvd81.jpg
|
| "Both sides" indeed.
| albatross13 wrote:
| > banned ghost guns
|
| I think you may be too far gone, friend. Enjoy your
| reddit screenshots, may they guide your moral compass
| accordingly lmao
| JamesBarney wrote:
| Right now one party is to blame for the debt ceiling not
| being raised.
|
| That might change in the future, and if it does I'll be the
| first one to blame the Democrats. But today, right now, it's
| the Republicans screwing up.
| albatross13 wrote:
| Oh you're so close. Change 'one party' to 'the uniparty'
| and you're there!
| AnimalMuppet wrote:
| The problem with 1 is that, if the Supreme Court rules that the
| debt ceiling limit is constitutional, then the US is right
| then, as of the moment of the ruling, in default. That's an
| _insanely_ risky gamble.
| GalenErso wrote:
| Sure, and what if the court said the First Amendment of the
| Constitution was unconstitutional? The courts can interpret
| the Constitution. They cannot disregard it wholesale. The
| power of the judicial branch is not absolute. It can be
| checked by the other two: the legislative branch and the
| executive branch. And one way for the executive branch to
| check the judicial branch is to disregard judicial rulings
| that are blatantly unconstitutional, just like the judicial
| branch regularly invalidates entire laws and government
| programs. This is not a dictatorship or a coup. It's just the
| balance of power.
|
| "I have directed the Treasury Department to continue honoring
| our financial commitments to bondholders. My administration
| will ignore any rulings, by any court, or judge, that would
| seek to impair all or part of this order, as such rulings
| would be unconstitutional. I will not allow legal
| technicalities or political games to threaten the full faith
| and credit of the United States of America. It it so
| decided."
|
| I would say these words.
| Georgelemental wrote:
| What is the desired end game supposed to be, of successive
| "clean" debt ceiling hikes? How much longer should we be
| spending money we don't have--enough to make inflation even
| worse? Enough that nobody will lend to us anymore and default
| is forced? What's the plan here?
| aschearer wrote:
| Whatever needs to be done must be done during the budgeting
| process. Not when the check comes due. Congress wrote the
| check years ago. Now it's time to pay. If Republicans truly
| want a more balanced budget they should pursue it then. Of
| course, the last time the Republicans passed a budget it was
| far from balanced. Make of that what you will.
| ProjectArcturis wrote:
| Our debt will continue to grow exponentially, along with our
| overall economy and population size. That's the plan.
| ms512 wrote:
| https://archive.is/lsdJS
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