The Debt Ceiling Crisis

As the noted economist Paul Krugman wrote in his New York Times column yesterday, Democrats should have tried a lot harder to abolish the debt ceiling when they had a chance during the lame duck session Subsequently, Biden made a red-line-in-the-sand-type declaration that he wouldn’t negotiate a budget on the terms Republicans were offering, which were: Meet our demands or we’ll cause the U.S. to default on its debts, suffer international humiliation and send the economy on a path to total collapse. Now it looks like Biden is caving in. Having taken an inch, Republicans will demand a mile, forcing Biden to either admit a humiliating defeat of such dimensions as to seriously diminish his chances of reelection, or to act boldly to save the country by invoking the 14th Amendment to the Constitution and declare that the debt ceiling is an unconstitutional questioning of the validity of the public debt. In a rational world the Supreme Court would uphold Biden. In our world this is unlikely. It’s hard to fault Biden for caving in.

(More on this tomorrow.)