Weekend Open Thread

Welcome to your weekend open thread. I hope you’re having a fabulous weekend. I’m preparing for travel to Boston, so don’t expect me to be around much next week. You’ll have to play nicely among yourselves.

You might have seen this already but a new Gallup poll shows a sharp rise in negative views of the Tea Party.

Gallup began tracking Americans’ views of the Tea Party in March 2010, when 37% had a favorable and 40% an unfavorable view. Those views stayed roughly the same through January of this year, but have now turned somewhat more negative. The April 20-23 USA Today/Gallup poll finds favorable opinions of the Tea Party movement dropping to 33%, from 39% in January, and unfavorable opinions rising to 47% from 42%. Twenty percent of Americans say they haven’t heard of the Tea Party or have no opinion of it.

Bruce Bartlett has an intriguing idea on the debt limit, just go around Congress. I wonder if Obama will try this.

The debt limit is statutory law, which is trumped by the Constitution which has a little known provision that relates to this issue. Section 4 of the 14th Amendment says, “The validity of the public debt of the United States…shall not be questioned.” This could easily justify the sort of extraordinary presidential action to avoid default that I am suggesting.

Some will raise a concern that potential buyers of Treasury securities may be scared off by a fear that bonds sold over the debt limit may not be backed by the full faith and credit of the United States. However, given that the vast bulk of Treasury securities are 3-month bills that will turn over many, many times before this issue ever reaches the Supreme Court, it is doubtful than anyone will be concerned about that. And the Federal Reserve could assure investors that it will always be a buyer for such securities.

People smarter than I am tell me that the Treasury has an almost infinite ability to avoid a debt crisis. I hope they are right. But I am hypothesizing a situation in which the Treasury reaches the end of its rope and a day comes when it needs $X billion to pay interest and it has less than $X billion in cash. Under those circumstances, when default is the only possible alternative, I believe that the president and the Treasury secretary would be justified in taking extraordinary action to prevent it, even if it means violating the debt limit…

Republicans would scream like stuck pigs about this. This could be better than the alternative, a catastrophic default or a debt ceiling vote every month or so. Besides, Republicans are huge hypocrites about this – one provision in the Ryan budget is a hike on the debt ceiling (necessary to pay for tax cuts).