When you watch the above video, keep in mind that it’s happening in the midst of a high-stakes negotiation that could be ended tomorrow with a simple increase in the debt limit, something that wouldn’t even take off the table a “grand bargain” of deficit reduction, since that could conceivably play out in the 2012 budget, which expires in September.

Obama: This is not just a matter of Social Security checks. These are veteran’s checks, these are folks on disability and their checks. There are about 70 million checks that go out each month. I can not guarantee that those checks go out on August 3rd if we haven’t resolved this issue. Because there may simply not be the money in the coffers to do it.

In the context of this negotiation, I would say that this is the last card you play, the one you play when everything else hasn’t worked. The President tried giving the Republicans almost everything they claim to want, he tried accommodation, I’m not he’s tried this level of fear.

$23 billion in Social Security checks need to go out August 3rd. The current estimate of tax receipts coming in that day is around $12 billion. It’s just a math problem. If the President is unwilling to take steps like coin seigniorage or the Constitutional option, if the debt limit really is a limit with no extraordinary measures left, $12 billion is not enough to pay out those checks.

If the President has failed to create the impression that a lack of increase of the debt limit would constitute a national crisis, I think he just blew past that now.

Of course, given the topsy-turvy nature of the negotiations over the past week or so, we don’t know who this threat is really directed at. Probably all of Congress in equal measure. Again, they could all end this manufactured crisis tomorrow by sending over a bill to increase the debt limit, period.