Mr. Obama, in today's press conference, has given a coherent reason why he does not bite on the 14th Amendment option, but I'm still not persuaded it's not the least bad of the options.
He said that any T-Bills issued under his authority would be discounted by the market by the value of the probability that the SCOTUS would void them for violation of the debt ceiling. That is, the government could raise money at the price of higher interest on government paper.
A practical answer to that is to sue for a declaratory judgment and ask for an expedited hearing. It's hard to imagine the SCOTUS would not expedite the case with the credit of the government at issue.
A less practical answer is that the evil in the 14th Amendment scenario is that interest rates will spike, an evil because all kinds of consumer interest rates are pegged to T-Bills. That's going to happen anyway if the POTUS does not invoke the 14th Amendment option, so why not invoke it and try to avoid the other bad consequences?
At the very least, it buys time while the markets crash and Wall Street hammers its GOP minions.
There are no good options, so you have to opt for the least horrible.
The trillion dollar coin fails the giggle test and therefore probably dies in the SCOTUS, but it's better than nothing.
The 14th Amendment option, in my view, has the best legal legs, but the POTUS is right that it's just the least awful of awful options.
I still maintain doing nothing is not an option, and the POTUS should try something, no matter how outlandish, just because he has an obligation to avoid whatever parts of the impending disaster are avoidable. If the SCOTUS shoots him down, he tried.
Because the Tea Party is acting completely crazy, Mr. Obama may have to act a little bit crazy because there's just no response that does not contain a hint of crazy. Whether it's the trillion dollar coin or a literal reading of the 14th Amendment's guarantee of Civil War debt to apply to all debt, something has to be done.
It becomes necessary to embrace the crazy.
I edit this diary on the 9th to add this link to a chart underscoring my point that we are going to take a hit on interest rates anyway. http://www.washingtonpost.com/...