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Alternatively, the default can be selective, targeted only at the Fed's holdings.

Unless Obama is in league with the Tea Party in this Kabuki why would it be advantageous to selectively default only on Fed holdings? That would only validate their rhetoric that defaults don't matter. It would seem better to just direct the Fed and Treasury to cancel bonds that the Fed holds. That would reduce the debt and give some room without an actual default. And the re-issuance of bonds at a super-premium could extend this indefinitely. Default off the table Obama could hold out on signing a bill, leaving the government shut down, until he got at least part of the sequester, preferably all of it, eliminated. Then tell the Tea Party that, if they want to change the laws, go out and win majorities in the House, Senate and take back the White House. The Republicans would be challenged just to hold the House after this recent string of events and their party would be a five alarm fire.  

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Oct 13th, 2013 at 04:37:45 PM EST
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