There are a few stocks I have wanted to buy but they were just too high recently. A temporary drop in the markets is no big deal. But this game of Chicken is causing REAL economic problems. That's where everybody gets screwed. This has a real possibility of triggering recessions both in Euro and North America, ruining the painfully slow recovery we have all suffered through since 2008.
But Obama really has to hold his ground here. We have to lance this boil now or else the teabaggers will take hostages every 2 months forever.
I think Obama has to be prepared to go into technical default. He can win this, and I believe he has made the calculations. About Tuesday night, I'd love to see him go on prime time teevee with this speech:
"My Fellow Americans, a small group of Tea Party radicals in the House of Representatives has shut down the government and now they are pushing this nation to default on our debt, something that has never happened before. A big part of America's wealth is based on the fact that other nations see America as the most stable economy and see the dollar as the most reliable currency in the world. To everyone who is invested in American's debt obligation -- and that includes foreign nations as well as many pension funds, mutual funds, banks, and moms & pops who own some saving bonds -- I will not let the nation default.
I will use my administrative powers to make sure that every debt obligation is honored. However, because of the reckless action of these House Republicans, that means that Americans will have to endure a great deal of economic pain that is completely unnecessary.
Effective immediately, I have instructed the Pentagon to delay by 30 days any payments to contractors that are in the amount of $200,000 or more. This provides us the immediate relief so that we can pay interest to all bond holders and pay those bond holders in full as their maturities expire. This is only temporary relief. If Congress continues to fail to fulfill its responsibilities, I will be back with you on Thursday evening to identify further payments for delays."
And if they don't act, then POTUS goes on the air every two days, identifying more and more payments that will be held up. Highway contractors. Payments to states and universities from the Department of Education. Just keep doing this until the Republicans cave. And in reality, as soon as they see that Raytheon, Lockheed, Boeing, et al aren't getting paid, this will end real fast.
Obama should make a huge spectacle of this:
1) so that the public can remember what went down when they vote next year; and
2) so the teabaggers know they had better never try this crap again.
Obama has the bully pulpit, and he can win this way.
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