Burn the Boats

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Damn, sir, I hope you know what you're doing

There is a story, likely mostly apocryphal, told variously of Greek, Viking and Spanish warriors.  In this story, the commander feels that there is no option but complete victory, so to eliminate any thoughts of "live to fight another day" from the troops, he orders the boats to be burned after the soldiers are landed.  Knowing there is no return path for them, they fight with the focused desperation brought about by being stranded in the enemy land, with the only valid options to win or die.

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.
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Afghanistan Endgame

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A thief and a murderer

There has been essentially no reason for US and NATO troops to continue occupying Afghanistan for quite a number of years now.  You could tell this was the case by the convoluted and incoherent explanations of the "necessity" of that occupation from Washington.  It was a simple calculation - the political risk associated with withdrawal has always been greater than the political cost of the occupation, so the President had no incentive to end US military involvement in that blighted country.

But now, things have shifted significantly.  President Obama's political career is, for all intents and purposes, over.   He'll govern for four years, and then assume the ex-President Statesman role that we like to bestow on our political leaders at the end of their tenure.  Political "risk" takes on a more abstract meaning at this point, meaning risk to the party in general and its standing in Congress rather than direct political risks to the President himself.  Additionally, underlying the predictable American apathy towards international matters is a pretty powerful drumbeat of disgust and dissatisfaction with America's great Afghan adventure, being, as it is, well into its second decade.  Even Americans can see that there is no cohesive national Afghan identity, the government is weak and corrupt, the people tribal, unsophisticated and narrow minded, and that violence is a permanent, endemic feature of the culture.  They see no reason for their country to waste lives and resources in such a place.

The risk was always one of a post-withdrawal terror attack on US soil or interests, leaving the President and his cabinet open to accusations of negligent weakness and unnecessary vulnerability.  But between the soured public opinion and the President having already won reelection to his second term, he has a great deal more freedom to limit the US role and withdraw at least most of the troops than he did even just last year.

So what happens then?  That depends on the strategies adopted by the US, and to a lesser degree, on those implemented by the Karzai government in Kabul.  The US has a long term military interest in Pakistan, a much more dangerous Islamic global player than Afghanistan has ever been, so they will likely want to retain access to Afghan bases.  For that matter, President Karzai cannot remain in office even for a month if he is abandoned by the Americans, so while there is a basis for a (fairly cynical) agreement between them, there is also the possibility that Washington would rather let Karzai fall and deal with his successor - depending, of course, on who that might be.  There will be negotiations with the insurgent factions, including Mullah Omar's original Taliban, the Pakistani ISI and various Afghan tribal warlords who will want their seat at the table.

Sooner or later, however, Afghanistan will descend into a state of civil war, as shifting alliances and weapons flows are matched and countered.  There will almost certainly eventually be a Pashtun Taliban-type government with strong Sunni fundamentalist principles and a powerful opposition led by the Dari-speaking tribes of the North.  Assuming that something along those lines more or less comes to pass in the next couple years, the whole bloody exercise will have been for nothing, returning smoothly and without notable progress to the pre-2001 status quo.

Contained within the Afghan (and Iraq) debacle will be an important lesson about the limits of military power in a modern, globalized era.  The US would be very well suited to keep her troops at home.  It appears that at this point we've learned the lesson, but choose to implement it in a perverse and vile fashion.  We'll keep the troops at home and murder foreigners in their homes and cars with lethal flying robots.  Of course, I expect the backlash to that to be very unpleasant, so it might have a very short shelf life.  Or it might be seen as the only solution to world full of lethal flying enemy robots.  One probably should not indulge a particularly high set of expectations.
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Cuts Like a Knife

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DoD - Defending the Money Since 1940

The Republicans in Congress insist on reducing the deficit with deep cuts in federal government spending rather than raising government revenues to accommodate the spending Congress has already authorized.  Now, while the insistence on spending cuts alone, with an utter refusal to consider various schemes to increase revenues, is a ludicrous ideologically-driven policy position, it is clear that, where it can be done in a manner that makes sense, spending cuts are immensely preferable to tax increases.  Taxation is an onerous, if necessary burden on people and families, and to whatever extent the government can supply the services demanded by its constituents with a lower tax regime, the better it will be for all.  While defining a budget deficit as strictly a "spending problem, not a revenue problem" is a transparent ruse that wouldn't fool a third-grader, it makes sense to examine spending closely before turning to revenue increases.

In America, however, we have huge spending programs that could be cut significantly but that are entirely off-limits to the discussion.  The largest, by far, is the Orwellian-named "Defense Budget".  We have very little to defend against.  There are no conventional military threats to the United States - the only real defense programs we actually need are the very large scale - strategic deterrence - and the very small scale - the threat posed by trans-national extremist political groups.  On the one hand, the US could maintain its strategic deterrence with something on the order of 100 nuclear warheads, divided between submarines, land-based ICBMs and cruise missiles.  On the other, terror groups are a problem best managed by intelligence agencies and law enforcement, so the military's involvement could be limited to special operations strike capabilities.

Certainly, any talk of significant reductions in defense spending are unrealistic in today's political environment, so talk of a 75% or greater reduction is pure fantasy, but it's an important exercise to think about it, as it quickly becomes apparent that it could actually be done.  Everywhere you look you see ridiculous levels of excess.  The US has 10 active nuclear-powered aircraft carriers, with three more under construction.  If the US had only three Carrier Groups, it is true that it would greatly curtail an aggressive global posture, but that would not increase the threat of attack on the United States, and other nations would take up the slack, actually contributing to the American economy with advanced weapons sales.

When you heard the talk in the recent "fiscal cliff" negotiations of a trillion dollars in spending cuts over ten years, it is helpful to realize that could be accomplished with a 100 billion dollar annual reduction in the Pentagon budget.  For that matter, fully HALF could be accomplished with 50 billion dollar annual cut, and much of the balance could be found in wasteful and pointless Homeland Security programs, from much of TSA's security theater to counter-terrorism aid to local governments.

The point is that, in the next 20 years, health care spending, particularly on the elderly, can be expected to increase to something on the order of 10% of GDP.  We can also expect a large and growing pool of permanently unemployed/unemployable people as more and more jobs are done by intelligent machines instead of humans.  As such, the current ideological resistance to a higher tax/higher services society will necessarily break down in the face of the actual consequences of life in a modern technological society. Many things that are inconceivable today will suddenly become very conceivable in the mid-term future.  It is often said that America's ongoing budget problems exist because we refuse to face the "hard choices".  Today this is mere rhetoric, but it won't be long before the real hard choices start to manifest themselves.
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America's Next Economic Crisis - A Continuing Series

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These days it's much harder to write a ransom note.
You have to cut the letters out of the screen..

America's appalling inability to govern itself has come to manifest itself in a series of crises, where the lying and posing and intransigence lasts right up to, or typically even shortly after, the last possible moment, whereupon some band-aid agreement is reached that defuses or at least postpones the crisis without addressing any of the larger issues.  The fact that our political leadership fully recognizes this dysfunctional dynamic is evidenced by the fact that these serial crises are entirely artificial in nature, unnecessary artifacts of the attempts of a failed institution to force itself to act.  Last week, a basic question of tax policy took our nation's economy to the brink, before being resolved in a simple and rational adjustment to the tax law.  Of course, Congress still found itself paralyzed and unable to solve the other half of the "Fiscal Cliff" crisis, the sequestration cuts that were intended to create an artificial crisis in the first place.  These pointless, irrational across-the-board cuts were merely postponed for two months, leaving them to become part of the next unnecessary, artificial crisis, the much steeper economic "cliff" represented by the debt ceiling.

If there's any anomalous artifact of America's massive failure of governance that leaves other nations shaking their heads in wonderment it is the debt ceiling law.  It's not enough that Congress controls the purse strings, being the sole government body that can authorize spending and the collection of sufficient revenue to cover the spending they order.  To a large degree, the Executive Branch merely exists to administer the spending ordered by Congress.  And of course, being not just a single dysfunctional body, but rather two dysfunctional bodies with opposing majorities and substantially different constituencies, Congress has long found it impossible to responsibly raise sufficient revenue to cover their appropriations.  This does not relieve the various agencies of government from their obligation to carry out the spending legislation passed by Congress, so they are left with a revenue deficit they must cover by borrowing money.  But of course, Congress didn't stop there.  They passed yet a further law, this one placing a hard cap on the amount of debt the government can issue.  This puts the government in the impossible position of being legally obligated by Congress to spend money they are legally prevented by Congress from raising.

And, inevitably, we find ourselves at that point again.  The Republicans in Congress, unable to pass their unpopular, destructive and toxic legislative agenda any other way, are now going to hold the entire global economy hostage, promising to wreck it if they don't get their way.  Unfortunately, President Obama has consistently felt he was obligated to play the role of the "adult in the room" and give in to these sorts of ultimatums in order to prevent serious damage to the economy.  But even as the Republicans believe he will once again acquiesce to save "the hostage", he seems to recognize the long term risk to America's well being, not to mention his own legacy, brought about by his willingness to negotiate under these terms, and is loudly promising a flat refusal to negotiate to raise the debt ceiling.

So what happens next?  Well, the American government still has its regular sources of revenue.  The funds that the Treasury is blocked from raising are those required to close the deficit, the difference between what is to be spent and the revenues available.  If we assume the deficit this year is a trillion dollars, that would mean a shortfall of about 80 billion dollars a month, or about 6% of GDP.  That's HUGE, and the President will have to figure out who gets paid and who doesn't.  If a US default is considered the worst outcome, that can be avoided.  And it would only make sense that the President would allocate funds in such a manner as to bring the maximum pressure to bear on Congress to simply raise the debt limit.  That would mean issuing IOUs to defense contractors, government vendors and consultants, and furloughing non-essential government personnel.  It would mean an immediate cut-off of aid to states, and a sharp reduction in government programs.  All these people, organizations, institutions and corporations would then be expected to loudly and clearly demand that Congress raise the debt limit immediately.  If history is any guide, about the time these types of extraordinary actions become necessary, Congress will recognize they had once again waited until the last second to act, and they will agree to raise the debt ceiling for another year or two.  Once again, the crisis will be averted, but the problem will not be solved.

What happens if Congress can't come to an agreement, and things start to get ugly?  In theory, the President has a couple of options, both of which are fraught with risk.  First, under the 14th Amendment which prevents the government from legally defaulting on its debts, the President could simply declare the debt ceiling unconstitutional and order the Treasury to issue debt in spite of the law.  The problem is that the bond markets would see that as a different class of debt, bonds with a large asterisk next to them, and would likely insist on a higher rate of return for them.  And if, ultimately, the Supreme Court ruled against the President, what would happen to those bonds and their bondholders?  Second, there is a unique provision in US law for one particular type of currency.  Here we have Subsection (k) of 31 USC § 5112 "Denominations, Specifications, and Design of Coins":

(k) The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.

Under a literal reading of this section, the President could instruct the Treasury to mint a couple of trillion dollar platinum coins and place them on deposit with the Federal Reserve, which would serve as a replacement source of revenue.  The problem here is this would remove any pressure to raise the debt ceiling from Congress, and might, in the end, serve to permanently institutionalize the debt limit at the current level.  This would turn a gimmicky stopgap funding measure into the primary source of revenues to cover deficit spending, and would have unknown effects on the global economy.

At this point, we cannot know how it will all turn out.  We can safely assume that any solution will come down to the very last possible moment, and will likely be partial and temporary in nature.  In this case the President is faced with more than a political problem - the "weaponization" of the debt limit is far too dangerous to the American, and for that matter, the global economy to be allowed to continue to exist.  The President should not agree to ANYTHING in exchange for raising the ceiling - but he should consider nothing short of the elimination of the debt ceiling law entirely.
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Happy New Wars!!

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Travel the world, meet new people
and kill them

Well, another year behind us and none of the conflicts from the last year are resolved.  The violence and brutality continues in Syria, Afghanistan, Pakistan, Palestine, Mexico, Congo, Sudan, Nigeria, Somalia and all the other local hot spots that most Americans couldn't find on a map.  But fear not, even as these endless conflicts take lives and ruin even more lives, we can expect a host of new violence in 2013.

The big one is Iran.  The economic pressure from the sanctions is increasing, and the Iranians are going to have to try to formulate a strategy to get out from under the most onerous of them.  And virtually any strategy is going to involve raising the stakes, and that will always carry a risk of uncontrolled escalation.   Israel has also invented an imaginary red line determined by the amount of 20% enriched Uranium the Iranians stockpile.  Never mind that this is FAR from weapons grade, Netanyahu has drawn this line, which is expected to be reached, or crossed, in June.  Now, as I have said before, I don't believe Bibi and his advisers actually WANT to launch an attack on Iran.  They are much better off politically and diplomatically with Iran as their own personal boogeyman, that designated 'existential threat' used to justify otherwise intolerable political, military and economic policies.  But things are getting very real for the Iranian regime, and with all the rhetoric a conflict seems almost inevitable.

Another big one is Iraq.  Iraq is both imploding and exploding in a variety of ways.  PM Malkiki's heavy handed political consolidation, including the elimination of Vice President Hashimi and the marginalization of the other Sunnis in the government has resulted in intense friction with other groups. There is a standoff with the Kurds over oil contracts and the status of Kirkuk, and a budding alliance between the Iraqi Kurds, the Syrian opposition and even, most surprisingly, Turkey.  In the meantime, the institutionalized mis-treatment of the Sunni population has brought tens of thousands into the street in protests this week, closing the main road north.  The last time there was a civil war between the Sunnis and the Shiite government, it took the might of the entire US armed forces to put it down.  If Maliki finds himself fighting not one, but two civil wars, one in Anbar and one in Kurdistan, he's in for a rough time.  But it will be bloody, and like everything else in that blighted land, carries the risk of regional escalation.

Then of course there's Mali.  The Tuareg separatists took the northern half of the country for their homeland, and the Jihadi wackaloons took it from them.  Now they're doing what Jihadi wackaloons always do with their own country, running around beheading and stoning and mutilating people, destroying historic statuary and basically making everybody around them miserable.  So behind French demands, the UN has authorized a force gathered from regional African states to invade Northern Mali and return it to the control of the Government in Bamako.  Of course, the fact that the government in Bamako has changed four times in the last year is problematic to this undertaking, as is the questionable willingness of Mali's neighbors to contribute troops, but sometime this year we can expect to see a decent little local war in the Sahara.

Then there's  a couple of long-shots, not really likely to become shooting wars in 2013, but worth noting because of their massive potential global consequences.  First is a few disputed uninhabited rocky islands in the East and South China Seas, rich in resources and variously claimed by China, Taiwan, Vietnam, Japan and the Philippines.  China is the dominant military power in the region, but under a variety of treaties, agreements and commitments  the United States is almost certain to get involved if things turn hot.  It's interesting that much of the Chinese military developments of the last decade seem specifically designed to control those bodies of water, especially to keep the American Carrier Groups out.  Then there's the real black swan event, the eruption of a revolution or civil war in China.  China is a huge, virtually ungovernable nation with a wildly diverse population, a vast interior full of poor, restless people and tremendous corruption preserving a terribly un-equal system.  The current national government is opaque and inefficient, not at all suited to the demands of governing the largest nation on earth in the 21st century.  It is a veritable certainty that China will explode at some point - the question is whether that will happen in 2013.  While it seems unlikely, we've seen in the events of the Arab Spring that these things can go from isolated demonstrations to full-blown revolution with startling velocity.

Beyond that, there are a lot of hot spots that, while not necessarily poised for imminent warfare, bear watching closely this year.  They include Mexico, Venezuela after the passing of Chavez, Nigeria and our old friend Egypt, which may only be getting started on the path to chaos.  There is also the crisis that hasn't begun, the near-certainty of somebody doing something stupid in some corner of the world, with larger nations rushing in to stake their claim on their fair share of the killing.  We live in a time of endless warfare, and when no conflicts ever end, the violence only grows and spreads.
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Downloading Death

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Cody Wilson - He wants to kill you

Meet Cody Wilson.  Cody's probably insane, but he's leading an under-the-radar movement that might just make everything we thought about a dystopian future of endless warfare downright optimistic.  You see, Cody thinks going to the store and buying a gun, even in America, is a process with too much friction.  He wants to see true universal firearms availability - so he started a company, Defense Distributed, to produce an open-source downloadable gun.  That's right, downloadable.  The idea is that there will be a variety of tested, verified designs hosted on his site in the appropriate format to load directly into a 3D printer.  Anytime you need a gun, you download the one you want, print it and start killing.  No pesky transaction records, and your only cost is the printer and the ammunition.  We truly live in amazing times.

Now, we're not quite all the way there yet.  While any high-end 3D printer is capable of producing a device with the complexity and tolerances of a gun, the materials used are typically plastics and light ceramics that are not nearly robust enough to survive the heat and pressure associated with modern ammunition.  The record for service life, as far as anyone knows, is a .223 rifle Cody produced that fired six rounds before becoming unusable.  Even so, the writing is on the wall.  It's not a technology problem any more, merely one of material science, and that happens to be one of the areas Americans have historically excelled in.

So the interesting question is not if this is possible or how it works or how much it costs.  Like aerial robotic murder and cyber-destruction of real physical installations and intrusive remote surveillance, this is another example of an evolutionary technology that has profound implications on the world of the near and medium-term future.  What will a world be like where guns are instantly available as a single-use disposable item, when anybody can produce a deadly weapon without any human intervention or regulation, when any dispute can become a gunfight with one mouse click?  Nations with restrictive firearms laws will have no choice but try to regulate ammunition, and nations with liberal firearms laws will find those policies resulting in yet another dimension of madness and bloodshed.

If I may get slightly technical here, consider the now infamous AR-15.  The AR is comprised of two main parts groups called the upper and lower receiver groups.  The upper receiver group contains the barrel and is not considered a firearm, so it is not legally controlled.  Anyone can order them over the Internet and own them.  The "gun" is the lower receiver, which contains the action, trigger group and chamber.  This is worth mentioning because it may be much easier to print a lower receiver only, and then it is a simple matter of mating it to an upper with the regular steel barrel.  There is, of course, no reason why that downloadable lower receiver can't have a selector for full auto fire - that's nothing but a different mechanical arrangement.

I don't know about you, but I look into the future I see a place of violence and death.  Just as ethnic, sectarian, tribal and class hatreds become the primary drivers of human interaction and greed and inequality leads inevitably to hunger and hopelessness, we have a series of powerful, deadly technologies becoming available to anyone, many of them inexpensive and simple to produce.  With intelligent, autonomous drones bringing sudden death from the skies and printable guns supplying neighborhood-level uprisings, it's very hard to imagine how one might ever feel safe in this world we are creating.
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It's the Debt Ceiling, Stupid

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Well, the same concept, just not nearly
as rational this time

Are you tired of hearing about the Fiscal Cliff?  Good.  You should be.  The fiscal cliff is a sideshow, a self - imposed artificial crisis created by too many politicians trying to make deficit spending into some kind of existential threat in order to accomplish the goals of their individual economic and social agendas.  Let's be clear here - the debt does not represent any sort of near term threat.  It is largely money owed by Americans to other Americans, and because of the very low Treasury yields of the last few years the cost to service the debt is actually falling, even as the debt is high by historical standards.  A nation with its own currency, whose debts are denominated in that currency, simply cannot be "broke".  It is not possible for the very government that prints the currency in the first place to "run out of money".

The interesting thing about the fiscal cliff is that it is strictly a problem in Keynesian economics.  If you refused to believe that stimulus spending could help the economy grow, there is no basis for you to then claim that austerity will cause the economy to contract.  To believe either one is to believe both, and it is by that hypocrisy (along with the one where the debt is the biggest crisis we have ever faced but raising taxes isn't an allowable solution) that we can clearly recognize the malicious intentions behind the fear mongering of the fiscal cliff.

There is no cliff - at some point Congress will agree to reset tax and spending policy and they will do so retroactively.  There will be some short-term shrieks of panic and false outrage as markets overreact to the change to "the baseline", but at the end of the day it is just an opportunity for grandstanding and the making of grand pronouncements and dire threats, which is what our political leadership today substitutes for actual governance.  So, nothing to worry about, right?

Whoa.  That, it turns out, is hardly the case.  The fiscal cliff is an artificial problem, but we have a different, self-inflicted problem that is very, frighteningly real.  It's called the Debt Ceiling.  Think about this.  Congress is responsible for "the purse", that is, all spending and revenue collection.  The fact that congress has historically found it difficult to carry out this role responsibly has led to a number of problems, one of which is deficit spending.  So, in an attempt to impose the very discipline the legislators were unable to demonstrate willingly, they passed a law putting a hard cap on the amount of debt the United States could legally carry.  For years, this was seen as an opportunity for the minority party to rail against "spending" before the limit was raised.  It really served no purpose but to create the conditions for a few scolding speeches.  It wasn't like anybody would seriously force the United States government to default on its debt, right?

Then came Rush Limbaugh, Fox News, the tea party and the intellectual decline of the Republican Party.  And suddenly, the very same political caucus that brought us the Bush tax cuts, two unfunded wars and Medicare Part B was holding the entire American economy hostage in order to drive very deep spending cuts, claiming a new found fear of large deficits.  At a time of political and economic weakness, the President capitulated, but severe economic damage was done nonetheless.

This time will be different.  The President realizes that by agreeing to negotiate with a gun to the head of the American economy he created a monster, one that will perpetually reappear on a regular basis unless the entire hostage-taking construct is eliminated.  He cannot allow a weaponized debt ceiling to remain intact, no matter what the consequences.  The Republicans in the House are dangerously ignorant of real-world economics, and the hatred their constituency feels for Obama will drive them to new levels of intransigence.  It is on this matter of raising the debt ceiling that they believe they have leverage over the President, and both sides see this as the defining fight of a generation.  Neither can afford to lose.

Interestingly, the President has a number of technocratic solutions he could fall back on if the standoff became uncomfortable - from invoking the 14th amendment to authorizing the Treasury to mint several trillion dollars in platinum coins (this is by far my favored solution).  But even before that, the federal government can keep paying it's debts as they come due and continue sending out social security checks, while paying defense contractors, government employees and other vendors with IOUs.  This would certainly create a widespread demand that a solution be found, with everyone from CEOs to FBI agents to Park Rangers demanding immediate action.

It's hard to see how it's all going to play out, but it's going to be very loud, very messy and quite probably destructive to lives and families.  It's completely pointless, as there is no reason to even consider deficit reduction at this time, and the political and ideological reasons for pretending otherwise are vile.  But it's the real action in town.  Forget the fiscal cliff - that's just the opening band, some locals with day jobs.  The main act will take the stage sometime around March 1st.  And that's when the real bleeding starts.
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