Well now things are really getting downright exciting:
House Majority Leader Eric Cantor (R-VA) today issued the following statement regarding House consideration of a balanced budget amendment, H.J. Res. 1, sponsored by Congressman Bob Goodlatte:
“We are being asked by the Obama Administration to approve a debt limit increase. While President Obama inherited a bad economy, his overspending and failure to enact pro-growth policies have made it worse and now our national debt is currently more than $14 trillion. House Republicans have made clear that we will not agree to raise the debt limit without real spending cuts and binding budget process reforms to ensure that we don’t continue to max out the credit card. One option to ensure that we begin to get our fiscal house in order is a balanced budget amendment to the Constitution, and I expect to schedule such a measure for the House to consider during the week of July 25th. I have no doubt that my Republican colleagues will overwhelmingly support this common sense measure and I urge Democrats to as well in order to get our fiscal house in order."
As a reminder, while in the US most states have mandatory balanced budgets, the same is not true for the Federal government (a fact that US bankers slaughter calves to daily, out of gratitude that they can plunder future generations' cash flows while converting the NPV into non-extradition islands in French Polynesia complete with thermoregulated gold and Chateau Lafite 1990 cellars).
Should this law pass, it will mean that QE is the only option for future growth, as this will mean a dead end for debt funded deficit spending. Yes, it will benefit bonds since the US will finally start getting its insolvent fiscal house in order, and result in an epic collapse in stocks.
The soap opera just got exciting again.