Krugman: Mr. President, Use Your Platinum Ca... Um, Coin

Krugman:

The thing is, the coin option sounds silly, but it clearly obeys the letter of the law. As far as I can tell, none of the other options — other than outright surrender — has the same virtue. Failing to pay debt service would be a breach of contract. Paying contractors, and maybe Social Security recipients, in scrip would violate the law, which says that they should be paid — not given IOUs. Deciding that the president has the right to ignore the debt limit after all would avoid these legal breaches at the expense of another breach.

Indeed, what else would be legal and would work? That's why Obama can be counted on NOT to do it... :-(

(Krugman provides some details here.)

UPDATE: Treasury says they won't do it. WTF happens now? And who gave an executive department the authority to override a presidential order? Stranger and stranger...

Robert Reich: Three Cliffs, None Of Them Fiscal

Robert Reich lists three looming "cliffs" facing America, none of them the much-talked-about "fixcal cliff." They are these:

• The child poverty cliff,
• The baby-boomer healthcare cliff, and
• The environmental cliff.

Each of them, says Reich, requires immediate attention, and each is being neglected by the powers-that-be in favor of an utterly ridiculous "crisis" fabricated by our wealthy leadership and more likely to harm than help the public at large. I don't know about you, but even in my heyday I never had an income of $250,000 in any one year. And that's who would be helped by any "grand bargain": it would help the very rich become even richer. Enough already!

Mr. President, About That Alleged 'Fiscal Cliff'...

Over the Fiscal Cliff

... here's some advice from Robert Reich: let the automatic tax restorations take effect, then pressure Congress to restore ONLY the lower- and middle-class tax cuts, allowing pre-Bush-era taxes to settle again on the very wealthy. The mechanism is already in place; indeed, it's automatic if Congress does nothing before 1/1. It's true that Repub's could refuse to restore any tax cuts unless they can restore those for the wealthy, but that's bound to be a politically untenable position for them.

Will it work? Reich calls it "bungee-jumping over the fiscal cliff," and describes it as follows:

...

Obama’s only real bargaining leverage comes from the fact that when the Bush tax cuts expire at the end of December, America’s wealthiest will take the biggest hit. The highest marginal income tax rate will rise from 35 to 39.6 percent (for joint filers), and the capital gains rate from 15 to 20 percent.

This will happen automatically if nothing is done between now and then to change course. It’s the default if Republicans won’t agree to anything else. It’s Obama’s trump card.

So rather than stoking middle-class fears about the cliff, the White House ought to be doing the opposite – reassuring most Americans they can survive the fall. To utilize his trump card effectively, Obama needs to convince Republicans that the middle class is willing to jump.

...

It's time Obama took advantage of a manifestly strong position. Next year will be too late. Do it now, Mr. President!