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The Debt Ceiling Farce Is Ending... Or Is It?
It may be time to rebrand Congress as the new CTU, although when it comes to who in D.C. should play agent Jack Bauer we are still unsure. The reason is that this morning we get two diametrically opposing fictions about the latest reality on the debt ceiling. On the one hand we read in the LA Times that, "Republican leaders in the House have begun to prepare their troops for politically painful votes to raise the nation's debt limit, offering warnings and concessions to move the hard-line majority toward a compromise that would avert a federal default. For weeks, GOP conservatives, particularly in the House, have issued demands about what they would require in exchange for their votes to increase the debt limit... Unwilling to risk the economic and political consequences of a federal default, which could come as early as Aug. 2, they have started the difficult process of standing down."
That, however is not what The Hill heard: "House Republican leaders have missed a 36-hour deadline President Obama set during a Thursday meeting for lawmakers to give him a plan to avert a national default. The deadline came and went Saturday morning without a response from House Speaker John Boehner (R-Ohio). Instead, Boehner and House Majority Leader Eric Cantor (R-Va.) plan to move the Cut, Cap and Balance Act on the floor next week, which would require passage of a balanced budget amendment to the Constitution before the debt limit is raised. A House GOP leadership aide said at noontime Saturday that Boehner and Cantor did not send Obama a revised proposal to raise the debt-limit, as the president requested." So which is it? And has M. Night Shyamalan been retained to write the surprise twist ending to this nail-biter? We doubt it. Unfortunately, we are still convinced the republicans, under the "wise" defection of Mitch McConnell will fold, Obama will get what he wants, and the republican tough stance will go up in a puff of smoke leading to an even great loss of credibility for the GOP. There is less than 168 hours in which we can be proven wrong. We hope we are, but we doubt it.
Version one of events from the LA Times, in which yet another movie, Star Wars, is invoked:
At a closed-door meeting Friday morning, GOP leaders turned to their most trusted budget expert, Rep. Paul D. Ryan of Wisconsin, to explain to rank-and-file members what many others have come to understand: A fiscal meltdown could occur if Congress fails to raise the debt ceiling.
House Speaker John A. Boehner of Ohio underscored the point to dispel the notion that failure to allow more borrowing is an option.
"He said if we pass Aug. 2, it would be like 'Star Wars,'" said Rep. Scott DesJarlais, a freshman from Tennessee. "I don't think the people who are railing against raising the debt ceiling fully understand that."
The warnings appeared to have softened the views of at least some House members who, until now, were inclined to dismiss statements by administration officials, business leaders and outside economists that the economic impact would be dire if the federal government were suddenly unable to pay its bills.
Freshman Rep. Steve Womack (R-Ark.) said the presentation about skyrocketing interest rates that could result from downgraded bond ratings was "sobering."
"It illustrates to us that doing nothing is unacceptable," he said. "I think the conference understands this is a defining moment for us. It's time to put the next election aside."
Granted the LA Times does realize this spin of events is missing one key thing: the fact that conservatives will scream bloody murder at being betrayed by their own party:
At the same time, Republican leaders orchestrated a series of public moves intended to soften the blow for conservatives. They agreed to give the House an opportunity to vote on two top conservative priorities: a so-called cut-cap-and-balance bill, which would order $111 billion in cuts in federal programs for 2012 and impose a cap on future spending, and a constitutional amendment that would require a balanced federal budget.
The Democratic leadership in the Senate is also expected to allow votes on one, and perhaps both, measures. Neither is expected to become law — the constitutional amendment would require a two-thirds vote in both chambers — but the chance to vote could appeal to the "tea party" conservatives in the House, who are most skeptical of any deal with the White House to raise the debt limit.
"We're in the fourth quarter here," Boehner said. "Let's get through that vote, and we'll make decisions about what will come after."
As for the "other side", here is The Hill:
At a meeting late Thursday afternoon, Obama gave congressional leaders 24 to 36 hours to meet with their colleagues to figure out a plan that could pass both chambers.
“It’s decision time,” Obama said.
Ignoring Obama’s directive, Republican leaders are coalescing around the Cut, Cap and Balance bill that is expected to pass the House but has virtually no chance in the Democrat-controlled Senate.
Senate Republican Leader Mitch McConnell (R-Ky.) is pushing Senate Majority Leader Harry Reid (D-Nev.) to schedule votes on the Cut, Cap and Balance bill and a balanced budget amendment in the upper chamber next week.
A Senate Democratic aide said it’s likely that at least one of those Republican priorities will receive floor time next week because it would clear the way for passage of a last-ditch contingency plan later this month.
The contingency plan, proposed by McConnell, has become more politically viable as negotiations between Obama and congressional leaders have broken down.
We stand by our prediction that there will be no budget cuts (and $1 trillion over the next decade amounts to less than $100 billion per year: this is less than 8% of the total amount of debt issued each year by Time Geithner: i.e., a farce, and a precondition to a downgrade by S&P, of course, until they too are shut down by the latest and greatest bribe out of wherever). There will also beno tax hikes, and the US Titanic will continue on its merry way to the iceberg without a change in course, even as the two-party scam in DC congratulates itself for a "grand compromise" well done.
Next up: total US debt/GDP at 120% in under a year, with a primary deficit at 10% of GDP, i.e. far, far worse than Italy.
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Why not spend time planning how to navigate the inevitable fall-out caused by a default and start explaining to people what will happen and what they should do while Congress attempts to fix the mess. If we default it is NOT unfixable though people will suffer. It is like going on TV to explain that a large asteroid is about to hit the Pacific Ocean and while it will be tough there are things we can do to survive it provided we start planning now.
You get the prize.
Freshman Rep. Steve Womack (R-Ark.) said the presentation about skyrocketing interest rates that could result from downgraded bond ratings was "sobering."...
Dumb ass Arkansawyer. Let's see, if the usa doesn't raise the debt ceiling they won't have to borrow anymore so wtf does he care what the freaking rate is? lolololol
Second place.
They've still got to keep re-financing the old debt.
That can is getting heavier and kicking distance is getting shorter. Interesting times for sure. PM'S to the upside. Yippee!
Of course the Repugnicants have to wait until the SHTF moment, all the while the MSM is carpet bombing the populace with nuclear destruction propaganda. Its the only way for the RINO's to cover their assholes when they betray the sheeple that voted them into office.
I have to wonder if Tyler didn't have a Fruedian slip when he used the word "beno" when talking about all the miasma coming out about this situation.
It would actually take a mountain of "beano" to cut the gaseous efflufium coming out of the House, Senate, and the Obama administration.
No, belay that beano....perhaps we have a solution to our energy crisis staring us right in the face!
Bus meet slave, slave meet bus.
Have a secret group of the most ultra-conservative economists they can find get together behind closed doors and have them write up a 10,000+ page bill in the most obfuscated legal double talk imaginable, then present it for a vote at the latest possible moment and have House Speaker Boner tell the people that they need to pass the bill so that they can later find out whats in it. On second thought, nah ... that could never work, or could it? - Muhahaha!!
If the US was lead into WWI, WWII, and Vietnam because it served the banking interests, what do you think the probability is that this outcome won't? The question then is how are those interests served? By keeping bonds strong or by undercutting them? I still contend that the 2008 crises was orchestrated to allow the banks to liquidate fixed income holdings. Therefore no matter the outcome of the debt ceiling talks bonds should fall apart IMHO. Who's to say when you reach a debt nadir that any outcome won't be catastrophic? The realization that there is no end to money printing would be just as catastrophic to some as a default is to others.
While there is zero chance of a default, what if there is a dollar crises coming once they kick the can over the cliff? This would be like 2008 where they said there would be a crises if the bail out didn't happen and yet once folks concluded the bail out would happen the markets sold off for another 40% or so.
think about to what laws will be mixed into this piece of garbage that have nothing to do with the debt ceiling. only afterwards we'll find out that all 401K's belong to them!
congress is corrupt. obama is an idiot. mitch mcconnell's "kick the can" plan will be their out. all fiat sux. even CHF sucks bc if EUR collapses, so does CHF as EU is their #1 export market. buy gold bitcheeeezzzzz.
But on Thursday, I heard the head of the Republican Party establish a 24 hour deadline for Our Dear President to give the very first clue as to what would represent a balanced cut.
Who knew?
- Ned
The sand pile is way past the angle of repose. As more grains and the occasional pebble continue to fall it can't be very long before the laws of wealth/money physics (which like real physical physics cannot be broken are nonetheless quite capable of being bent) begin to apply themselves. What remains to be seen is will the correction be a long massive sand slide or an explosion. We are living in interesting times Lads. Pay attention and be prepared.
I always thought we would skate by on this last hike before the doom. A mini deal gets rates started north. Ponzi ends in less than 30 months!
Gold foriegn currency non-dollar denominated assets = opportunity of a lifetime coming, stay out of markets till then.
CheerS!
So ultimately you will all be turned into Orks marching lockstep
to Wagner in Fascist bliss under the flag of the Dragon with
7 heads and 10 crowns upon it's head with Nbiru high in the sky
and a scary giant red moon and various other odd and frightening
sky displays concurring as ashes fall from the grey cold dreary
skies. Mists that taste vaguely of feces and hemlock mixed
shall alight upon thy tongues as refuge is sought in digital
wonderlands, all flesh even failing to satisfy. All things
shall be had in plenty provided your mark lucifuges over
your eyes.
That's what I'm getting from reading all your comments.
If I'm wrong, please forgive me.
Could definitely happen. There are good number of us who'll do what we can prevent it, though.
Don't be misled by the boards. The Nazi-wannabes make a disproportionate amount of noise. You can check out the Israeli papers and see the same thing from the hardliners who want to bomb the shit out of the Palestinians.
look...do we want to have this party now or at Christmas?
If we have it now things should be settled down by Christmas.
Do you want your Christmas ruined by this? I say lets ruin August.
What do you mean end? This is just the START!
30 years of spending money you don't have.
30 years of soverign risk ahead.
China also stole US military secrets. China won't let US default.
"Let"?! LOL
default or not, makes no sense. the people must starve---that is the only default of any importance. not monetary, but foodatory.
Is there any way to get a copy of McConnell's plan? I want to see how far his plan moves the retirement age upwards. I've heard several sets of numbers, but I want to see how badly he's trying to stab America in the back with this plan.
maybe time for a yearly solidarity tax of $10Bil from Exxon and the other large oil companies... germany did do a solidarity tax (temporary) tax to assist in paying the union of East and West Germany...
That might be Obummer's strongest political move: I can hear him saying, "Damn right I'm going to default. We pay banks and bondholders instead of social security retireees, vets, the unemployed, and the people who need it the most? Over my dead body." He'd be re-elected for sure (and probably assasninated)...