|Damn, sir, I hope you know what you're doing|
Which brings us, in a somewhat roundabout fashion, to the vaunted trillion dollar platinum coin - the technocratic solution to Republican hostage-taking on the debt limit that would use a specific law originally intended to facilitate the production of commemorative platinum coins to allow the Treasury to directly fund government obligations without increasing the national debt. Everyone knows this was a problematic and less than ideal solution - once the government adopted this kind of funding mechanism, there would be no reason for the legislature to ever raise the debt limit, and global markets would be deeply troubled by this impractical shift in funding the largest democratic government in the world.
But that was never the point. The point is to eliminate any possibility that Congress can use the debt ceiling to hold the American, and even the global, economy at risk in order to get concessions they can't pass democratically - and eliminate it forever. That means no negotiations, no concessions, not one step in their direction until they back down and raise the debt limit, or preferably simply eliminate the whole, pointless exercise. In theory, things will get very hot for the ideological holdouts, with everyone from business leaders to defense contractors to hedge fund managers to wealthy individuals to government employees demanding they put an immediate end to their destructive and un-democratic behavior. But there is simply no guarantee that these intransigent ideologues will back down, or at least that they will back down in time.
The President needed some safety valve, some way of defusing the economic consequences of Republican irresponsibility without surrendering to their demands. If he saw US markets in free-fall and global markets beginning to fail, he could bring the standoff to at least a temporary halt whenever it became necessary. It would have made sense for the administration to keep silent on their options, keeping them in reserve if they became necessary for economic survival, but giving no indications that they were planning to use them. This strategy would actually enable the President to bring maximum pressure to bear, because he would always know he could do so while preventing things from completely blowing up if it became necessary.
But no. Instead the President decided to burn his boats. To the great surprise of the economic community, Treasury released an unequivocal statement on the platinum coin yesterday that took that strategy off the table and left no wiggle-room whatsoever. And I wonder why? It certainly means that the Republicans can't expect the President to act like the adult in the room and bail out the economy if they go ahead and undertake to wreck it. But it also smacks of another case of unilateral disarmament, setting the stage for another epic Obama capitulation. Without a technical solution available, if the President decides to play the role of "the adult in the room" once again, he will have no option available but to once again pay the ransom. The Republican caucus "knows" two things - that the President has negotiated over the debt ceiling before, and that he ALWAYS backs down.
Now the White House has been very clear that they will not make concessions in exchange for a debt ceiling hike, that they won't even negotiate over it. They say they are going to bring an end to hostage-taking in American governance, and that the Republicans will bear the consequences. But the President has made strong statements before, and yet has a well-earned reputation for being a weak negotiator. It may be that he plans to fall back on the 14th amendment as his escape hatch, but it's worth remembering that he explicitly ruled that out during the last debt ceiling crisis. Now that he has burned the boats, his choice is stark. Stand on his (perfectly admirable) principles even as the US economy slides into recession or, once again, surrender to the Republicans' vile tactics and watch the further disintegration of his own credibility and American democratic governance.