tag:blogger.com,1999:blog-2761684730989137546.post514926189551701527..comments2024-03-29T07:30:30.121-04:00Comments on Mike Norman Economics: Could the debt ceiling issue destroy gold?mike normanhttp://www.blogger.com/profile/03296006882513340747noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-2761684730989137546.post-49434163369426184102011-05-05T18:56:38.716-04:002011-05-05T18:56:38.716-04:00Crake - there is a hierarchy of government obligat...Crake - there is a hierarchy of government obligations. The Treasury would be writing law if it did not pay some government obligations preferentially to all other payments. The Supreme Court has said that while it is not clear exactly which government obligations are constitutionally protected, there is no doubt that some are, including especially bonds - national debt payments. Bonds are considered property, and so are protected by the 5th Amendment, and there is the 14th Amendment clause reinforcing this. Contracts with private entities, even if no congressional appropriation has been made, can be protected, and the Treasury has been ordered to pay by the courts. The Toomey proposal seems to be superfluous.<br /><br />IIRC, there was a 1960s case that rights to SS payments are not property and so don't fall in this constitutionally protected category. In a way, that is a good thing, because a government defaulting on SS checks first would soon face the wrath of an enormous enraged population of voters.<br /><br />But the main thing would be to have people in power interested in protecting the interests of the real economy and the general population, rather than a bloated financial sector, and we don't seem to have that.Calgacushttps://www.blogger.com/profile/06031818010224747000noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-88688507815705934432011-05-05T16:41:58.115-04:002011-05-05T16:41:58.115-04:00This comment has been removed by the author.Crakehttps://www.blogger.com/profile/07995319378514270093noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-79117118242491033062011-05-05T16:41:30.199-04:002011-05-05T16:41:30.199-04:00Related:
This is a good article: http://blogs.reu...Related:<br /><br />This is a good article: http://blogs.reuters.com/felix-salmon/2011/05/05/is-there-a-real-risk-of-the-us-defaulting/<br /><br />From reading it, I wodner: Is this author a MMTer? For example, the author points out that we have an either-or choice between: (1) spend only what we receive in taxes or (2) have a growing economy. <br /><br />He raises the point that if we do not put default on interest payments on the block, the republicans can get what they want (cuts to government spending) by holding firm on not raising the debt limit but if we put everything on the chopping block, we call their bluff on defaulting on debt. So, do we take interest payments off the chopping block and let them force spending cuts via not raising the ceiling? <br /><br />Also, as a someone, in a reply, pointing out, if the Treasury makes some payments whole (like interest payments) while cutting other outflows like Social Security or Medicare or other payments, then the Treasury is making legislative decisions, which might not be legal. (The Treasury might be required to reduce payments equally across the board, not pick or choose which get paid and which do not – legislators need to do that.)Crakehttps://www.blogger.com/profile/07995319378514270093noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-5196635619976105012011-05-05T01:53:33.933-04:002011-05-05T01:53:33.933-04:00Treasury secretaries typically come out of either ...Treasury secretaries typically come out of either Wall Street or Texas, Geithner is like Hank Paulson-- just in town for a while for his (comparatively) unpaid government internship. No way would he hammer his friends like that. <br /><br />On the other hand, I can totally see John Connolly or James Baker effin' with the market like that... just to be mean. Back in Houston, they'd get laughs with that story for years. :o)beowulfhttps://www.blogger.com/profile/14987548132065830204noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-78815843651977800852011-05-04T22:38:14.960-04:002011-05-04T22:38:14.960-04:00Even better, go long puts in Gold and Oil, very qu...Even better, go long puts in Gold and Oil, very quietly. Then open up the SRI and Fort Knox on the same day. <br /><br />but at the rate Silver is going, they won't even have to do anything.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-22126762052233738362011-05-04T20:41:03.779-04:002011-05-04T20:41:03.779-04:00I don't Geithner was a trader. His background...I don't Geithner was a trader. His background is in government work...Detroit Danhttps://www.blogger.com/profile/03718490473585220856noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-9422433821244029932011-05-04T16:03:07.857-04:002011-05-04T16:03:07.857-04:00He's juts bluffing I suppose. But it would be...He's juts bluffing I suppose. But it would be great to see the gold buggy deficit hysterics hoist on their own metallist petard.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-19858602899680190112011-05-04T15:55:14.692-04:002011-05-04T15:55:14.692-04:00Wasn't Geithner a trader at Goldman or somewhe...Wasn't Geithner a trader at Goldman or somewhere?mike normanhttps://www.blogger.com/profile/03296006882513340747noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-70162864987554447462011-05-04T15:22:32.196-04:002011-05-04T15:22:32.196-04:00Ha ha, Tsy could quietly short gold futures and on...Ha ha, Tsy could quietly short gold futures and once positions are set, offer all 8,000 tons at market.<br /><br /><i>Were the government actually to begin understanding itself as a market-based, profit-maximizing enterprise, determined to bring down the deficit by whatever means present themselves, can there be any doubt what it would do?<br /><br />It would sell gold. Oh, it would sell lots of gold. It would put Fort Knox on eBay. Mr. Obama could film the TV commercials.</i><br />http://online.wsj.com/article/SB10001424052748703837004575013373812096744.htmlbeowulfhttps://www.blogger.com/profile/14987548132065830204noreply@blogger.com