There are too many things to worry about, the the official demise of #mintthecoin has me focused on the debt ceiling.
Obama has committed to not minting the coin, which I think everyone has to agree is a crazy idea anyway. Tim Duy, for instance, claims that too much was at stake in terms of fiscal and monetary independence for the Fed to accept the coin anyway, so the president and treasury would have been pretty much on their own. That’s fine in a world in which reconciliation is a reasonable bargaining strategy. A shuns extreme strategic choices, convincing B that A is reasonable, so B shuns extreme strategic choices. It’s unclear that that’s the expected result in this case though.
A Politico story quoted House Republican Conference Chair Cathy Rodgers as saying “I think it is possible that we would shut down the government to make sure President Obama understands that we’re serious.”
Unless the noisy and extreme House Republicans take seriously the chance that Obama is willing to pursue strategies as insane as theirs, they have nothing to worry about. Obama’s threats to make sure everyone knows that everything is the House Republicans’ fault are basically a promise to call them bad names. It’s like he actually believes that because several articles have described his having a mandate — it’s in his inventory next to three ultra balls and a hyper potion — he has a cudgel. Unless there’s a sea change in the House Republicans, I don’t know how we’re going to get around the debt ceiling without Boehner breaking the Hastert rule twice in three months, and he’s never winning anything above a county commissioner seat as a Republican if he does that.
So: Boehner can’t afford to cave, and Obama has made a point of caving in advance. Your Medicare is going away! Your social security is going away! Your education funding is going away! Your ACA provisions are sunk!
Krugman is understandably cynical about whether Obama has a backup plan. It seems like he probably doesn’t. Someone get this man a game theory textbook.
The Institute for Old Economic Thinking 