Economics Daily Digest: The default option

By Tim Price, originally published on Next New Deal

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Obama to Republicans: You Have No Choice but to Raise the Debt Ceiling (Prospect)

Jamelle Bouie writes that President Obama used the final press conference of his first term to remind voters that he's the one who's just trying to pay the country's bills while Republicans are setting the checkbook on fire and giggling at the pretty colors.

Half of Republicans in Congress Are Apparently Cool With America Defaulting (MoJo)

Andy Kroll notes that reports suggest GOP leaders know a debt ceiling standoff is a bad idea, but they feel they need to let the rank and file have a go at it and find out for themselves, like when a child insists he wants spaghetti and chocolate syrup for dinner.

The President's Priorities Are Not in Order (Esquire)

Charles Pierce argues that while the president has polished up the pitch for his "balanced" approach to budgeting, voters have never bought what lawmakers are selling about deficits being the top economic priority. You can't buy groceries with deficit reduction.

The Debt Ceiling Is Scarier Than the Fiscal Cliff (WSJ)

Alan Blinder warns that allowing the U.S. to default would be unprecedented, but even tumbling over the fiscal cliff would be preferable to letting the economy be smashed against the debt ceiling. Only Congress could make going up worse than falling down.

If we hit the debt ceiling, can Obama choose which bills to pay? (WaPo)

Brad Plumer notes that Republicans insist that if we hit the debt ceiling, the Treasury can avoid default by prioritizing payments, like when you pay your rent before the cable bill. Except instead of missing an episode of Girls, you could tank global financial markets.

The 3 Percent Cut to Social Security: aka the Chained CPI (HuffPo)

Dean Baker writes that cutting Social Security benefits is a bad way to achieve deficit reduction, is so politically toxic that no one would actually campaign on it, and directly contradicts promises that were made to voters, so naturally, it's almost inevitable.

401(k) breaches undermining retirement security for millions (WaPo)

Michael Fletcher reports that while lawmakers whittle away at the public retirement programs all Americans rely on, workers are raiding their other savings to make ends meet. But now that they can never retire they'll never need those savings, so it's win-win, right?

The Foreclosure Fiasco (NYT)

Joe Nocera argues that the latest $8.5 billion foreclosure settlement is another pointless P.R. exercise that solves nothing and helps no one, which seems a bit counterproductive given that all these settlements tend to do is generate terrible P.R. for everyone involved.

Foreclosure Review Insiders Portray Massive Failure, Doomed From The Start (HuffPo)

Ben Hallman and Eleazar David Melendez go behind the scenes of the Independent Foreclosure Review, which turned out to be not very independent and less of a review than a guessing game for which bank managers got to create their own answer key.

Bold new conservative ideas still mostly involve screwing the poor (Salon)

Alex Pareene checks in on the GOP's efforts to rebrand itself as the party of fresh thinking and innovative policy solutions, which so far involves raising sales taxes and advocating for missile defense systems. Keep at it, guys. Please don't let us disturb you.