Attack of the Giant Killer Debt Limit

Here you go again with this nonsense.

Compared to the last round, there’s one big plus: Obama has said he won’t negotiate this time and has proposed scrapping the wretched thing:

I will not play that game, because we have got to break that habit before it starts.

He also won the election, which counts for something if you are not a Republican.

The negatives: Republicans have learnt nothing; and Obama’s spokesman has taken off the table the option to declare that “the debt limit is a violation of the 14th Amendment”. The platinum coin was never on it, and Jack Balkin, its inventor, doesn’t think it’s remotely realistic.

So partial government shutdown it it has to be. (The interest payments are sacred by the 14th Amendment. You may be able to protect food stamps and the pay of servicemen and women in combat, but not much else or it doesn’t add up.) Brad de Long is right: Obama should prepare the ground for negotiating by telling Republicans, in great detail, exactly what this would mean for their constituents.

Let me revive an idea I floated earlier: do it by zipcode. The constituents of Congressmen on board for fixing the limit get paid in full. Constituents of holdouts – from Medicare providers to defence contractors – get paid in IOUs, to the extent necessary to balance income and receipts week by week. If that isn’t enough, you pay the first group partly in IOUs; but they get the cash first. The accompanying letter, signed by Obama and Geithner, explains why. The constituents really, really won’t like that.

The first stage of torture by the Inquisition consisted in “showing the instruments” to the suspect. It was often enough.

[Cross-posted at The Reality-based Community]