The threat of a default is a gun pointed at Wall Street [View All]

[eridani]

Baker makes sense, but I have no confidence at all that Obama will do the right thing.

http://www.truth-out.org/saving-social-security-stopping-obamas-next-bad-deal66099

In order to avoid this train wreck, supporters of Social Security and Medicare have to restructure the options. They have to push President Obama to announce in advance that he will never sign a debt ceiling bill that includes cuts to Social Security and Medicare, the country's two most important social programs.

This would be a hugely popular position since not only Democrats, but also independents and even Tea Party Republicans, overwhelming support Social Security and Medicare. Furthermore, the gun, in the form of a potential debt default, is actually pointed at the Wall Street banks, not the public.

This would be a hugely popular position since not only Democrats, but also independents and even Tea Party Republicans, overwhelming support Social Security and Medicare. Furthermore, the gun, in the form of a potential debt default, is actually pointed at the Wall Street banks, not the public.

<snip>

One thing that would not be around the day after a default is Wall Street. The default would wipe out the value of the assets of the Wall Street banks, sending Goldman Sachs, Citigroup, and the rest into bankruptcy. The recovery for the economy from such a situation will be difficult, but the shareholders of the Wall Street banks would be wiped out and their top executives unemployed.

For this reason, the threat of a default is a gun pointed most directly at Wall Street. Given the power of Wall Street over Congress, it is inconceivable that they would ever let the Republicans pull the trigger.

This means that, if President Obama is prepared to take the right and popular position of supporting Social Security and Medicare, he will win. This is both good policy and great politics. The public just has to force President Obama to stand up and show some leadership.