I read on Bloomberg this morning that the Federal Government will reach the borrowing limit on December 31st, and that Geithner will start using extraordinary measures to finance the federal deficit into early 2013. A reminder that unless some sort of bipartisan deal is reached in the next couple of months, the Federal Government will start to shut down due to lack of funds.
It did strike me though that a possible alternative for Obama is to write off some of the large stock of US treasuries now held by the Fed. I wonder if that would be legal without congressional approval? It could extend the Federal government's borrowing ability considerably further, though it would tear aside the thin fiction that at some point the Fed will release these back into the market, and hasn't been printing money in part to finance these huge deficits.