Just because the Fiscal Cliff was not enough...
- GEITHNER SAYS U.S. WILL REACH STATUTORY DEBT LIMIT ON DEC. 31
- GEITHNER: WILL USE `EXTRAORDINARY MEASURES' TO AVOID DEBT LIMIT
- TREASURY: SPECIAL MEASURES TO MAKE $200 BLN ROOM UNDER LIMIT
- GEITHNER: $200 BLN TO LAST TWO MONTHS IN `NORMAL CIRCUMSTANCES'
- GEITHNER: TAX, SPENDING `UNCERTAINTY' MAKES DURATION NOT CLEAR
- GEITHNER SAYS ALL MEASURES HAVE BEEN USED IN PRIOR IMPASSES
- GEITHNER OUTLINES PLANS IN LETTER TO SENATE MAJORITY LEADER
So since America's dysfunctional congress failed to "rise above" the Fiscal Cliff, it at least succeeded to "rise above" the debt ceiling. One out of two is not too bad...
To summarize: debt ceiling hit December 31, just in time for the no deal on the Fiscal Cliff, and then the Treasury will proceed to defund various Government retirement accounts for the next two and a half months, when sometime in March the true deadline to getting a joint solution on both the Cliff and the Debt Ceiling will becoming unextendable as the alternative is truly unthinkable: living within its means!
In other words, as we have said all along, the real deadline for a Fiscal Cliff is not December 31, but that day in March when all further debt ceiling extension avenues are exhausted.
The question therefore is - will the 2 months of America living under self-made austerity be enough to push it into recession.
And now cue flashbacks to August 2011
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Full tiny tim letter: