Author Archives: ragingindependent

The Default is Obama’s Moment?

If the debt ceiling is not raised before default….is that Obama’s moment to issue an executive order raising it himself?  Some think so:

More to the point, such an action would be self-enforcing once issued.  President Obama would look like a strong leader, guiding the nation out of an impending disaster.  And once the debt ceiling was raised, Congress would be put in the position of needing to assemble a majority in both the House and the Senate willing to vote on record to undo the President’s actions, and thus ensuring default.  In other words, Congress would need to take positive action to ensure an economic crisis.  Such an act would be political suicide.

I’d have to agree. Obama would get a boost in the short term looking like the adult in this process and box the GOP in again by forcing them to actively push the nation into default to stop him.  Of course, this would play into the Obama is a dictator meme from many on the right and we’d likely still take a credit rating hit.  But I’d rather have that than a full default.  I think Obama has this as a Plan B he smartly disavowed as to not encourage a default onto his doorstep.  Stay tuned.


“Strategery” – How we are at the edge of default

le·ver·age: influence or power used to achieve a desired result

Much ink has been spilled over the strategy, or lack of, the GOP has employed with the shutdown.  A more fundamental error occurred before the the shut down was put into effect.  Misapplying the concept of leverage.  The conservative factions in the House believed they had “leverage” in causing a shut down and not raising the debt ceiling.  But in determining if one has leverage, the first two questions become: (1) what does the other party want? and (2) what happens if they don’t get it?

Answering these questions reveals the errors in thinking.  Obama and the Democrats want a budget/debt ceiling raise.  But these are defined as congressional jobs.  They are something Congress is expected to do, not something Congress has discretion to do.  Put simply, the GOP House is saying their point of leverage is offering Obama to do what they are expected to do.

To the second question, what happens if you use your point of leverage, when your bluff is called.  Economic catastrophe at worst, at best a serious downgrade of the US credit rating.   The GOP walk away position doesn’t harm Democrats, it harms the country. 

So the GOP leverage was offering Obama to do its job with a walkaway position of economic ruin.  And there is wonder why they may get nothing in return for this position.

Put simply, the leadership in the house should have never conceded the debt ceiling/budget were a point of “leverage” with Obama.  Once that concession was made, it would inevitably lead to what did we get in return questions during any negotiations.  Which is where we are today, a GOP house expecting returns for “leverage” and Obama and the Democrats offering nothing in return since it was an illusion in the first place.

Policy disagreements aside, this is just bad strategy and rightfully deserves to fail.

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