Gerry Canavan

the smartest kid on earth

World-Historical Incompetence

with one comment

I agree with basically everything Adam Kotsko says here, except that my career is only about to be derailed by a financial crisis (as opposed to having already been derailed). Notably:

In addition, given the fact that this option exists, I believe that if Obama chose to obey the debt ceiling and defaulted on U.S. debt, he would be willfully causing a global financial crisis at a time when the economy is (in part due to the failures of his own policies) still extremely weak. Given the special role of U.S. debt in the global economy, it seems likely that said crisis would be the worst in the entire history of capitalism — if the collapse of one particular asset class reputed to be of AAA quality (CDOs, i.e. securitized mortgages) caused such chaos, what would happen when the gold standard of safe investments collapsed?

One thing’s for certain: the amount of human suffering that would result would be staggering, quickly shooting Obama up the list of “History’s Greatest Monsters.” In addition, he would be creating a situation in which someone like Michelle Bachmann could realistically be elected president, most likely creating a constitutional crisis of quite a different order.

I wish I knew for sure that Obama wouldn’t let that happen.

And, right on cue…

In addition to his warnings about the cost of a default, officials said, Mr. Geithner told the lawmakers the White House did not believe it had the authority, under the Constitution, to continue issuing debt if it reached the debt ceiling. Nobody in the room disputed Mr. Geithner’s bleak assessment, the officials said.

One Response

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  1. Even if true, why would Geithner say that. He’s as bad as me about not keeping his mouth shut, but I’m not Treasury Secretary.

    Alex

    July 8, 2011 at 3:50 am


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