This morning on CNBC, Tim Geithner stuck with his line that there’s no debt ceiling plan b.
The only solution is to pass the debt ceiling hike, and that’s that. Even when asked why he couldn’t prioritise coupon payments, in light of the fact that the government takes in more than enough revenue to cover them, he insisted that the only choice is for the debt ceiling to pass.
We can see why Geithner is taking this hardline. He just wants this debate to end. Now.
Any hint that there’s give means more time for political fighting.
But let’s just put it this way: He better be lying, because there’s a non-trivial chance that the debt ceiling does not get lifted by August 2, and if The Treasury has not figured out a way to avoid a default on Treasuries, when the government clearly takes in enough money to do so, it would be a scandalous planning failure.
If we do default on August 3, Obama’s first act has to be to fire Tim Geithner.
Of course, hopefully we never find out whether Geithner had a Plan B.
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