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Goldman's 3 Debt-Ceiling Debacle Scenarios
The most likely outcome of the current fiscal dispute, in Goldman's opinion, is an agreement that combines an increase in the debt limit and a "continuing resolution" that reopens the federal government. Unlike the November T-Bill market traders, Goldman expects this to pass; but no earlier than the end of next week (i.e., October 11-12) and more likely sometime around the Treasury's projected deadline of October 17.
Other outcomes are possible, but Goldman believes they have lower probabilities.
Via Goldman Sachs,
Will the Federal Shutdown End with a Debt Ceiling Increase?
- It is possible that political pressure to end the shutdown could build, but polling thus far does not indicate this has happened yet. It is also possible that if the effort to resolve the two issues together fails, the shutdown could remain unresolved even after the debt limit has been increased. This is a possibility, but we see it as less likely than a combined continuing resolution and debt limit increase.
- The intense public focus on the shutdown may have actually raised the possibility of a "clean" debt limit increase. While the situation could go a number of ways, it still appears that the risk of a failure to raise the debt limit is low and that the shutdown has not had a negative effect on the prospects for increasing it.
The federal shutdown has entered its fourth day and looks very likely to last into next week and quite possibly longer. The situation is highly uncertain, but at this point we can envision the outcome going one of three ways:
1. The shutdown ends over the next several days, as Congress feel pressure to resolve it. It is possible that public sentiment could build to the point that a majority of Republican lawmakers support a "clean" extension of spending authority without health-related policy changes attached. Most polls show the public broadly opposed to the shutdown, and we believe there would be ample support in the House to reopen the government if a "clean" continuing resolution was put to a vote on the House floor. However, Republican leaders are unlikely to bring such a bill up for a vote unless there is broad agreement within the Republican membership of the House to do so. So far, sentiment among Republican voters is still much more evenly divided, and doesn't imply that public pressure will change the situation anytime soon. A Quinnipiac University poll conducted just before the shutdown found 49% of Republicans in favor of a shutdown to block the health law, while 44% opposed it; a new CBS News poll conducted October 1-2 (i.e., after the shutdown began) asks a similar question and shows little change, with 48% of Republicans in support and 49% opposed. We would expect opposition to the shutdown to build as the negative effects get more attention, but this seems likely to take several more days at least. If so, the debt limit deadline would be only a week away at that point and dealing with the two issues would seem unlikely. We see this outcome as only a 10% probability.
2. The shutdown and debt limit are dealt with together by sometime around the debt limit deadline of October 17. If the shutdown continues into next week, both parties seem likely to agree to merge the discussion of these issues. This would make sense from a practical perspective since negotiating and passing a continuing resolution could take at least a week if there are procedural objections in the Senate, leaving little time for a debt limit negotiation before the October 17 deadline. From a political perspective, this would also be advantageous, for two reasons:
First, as noted above, a standalone agreement on reopening the government seems difficult to reach without addressing seemingly irreconcilable differences on whether changes to Obamacare should be included. But a much broader set of proposals have been floated in the context of the debt limit, such as changes to sequestration and/or a fast-track process for tax reform.
Second, like most compromises, whatever agreement is reached on either the debt limit or ending the shutdown will probably be unsatisfactory to some members of both parties. If so, congressional leaders would probably prefer to only have to disappoint some of their members once, rather than twice in close succession. We see this as a 60% probability.
3. The debt limit is increased well before October 17 but the shutdown continues beyond that. It is possible that after attempting to merge the two issues, congressional leaders could find themselves still unable to agree on how to resolve the shutdown by the time the debt limit deadline has been reached. However, it appears fairly clear to us that neither Republican nor Democratic leaders are interested in allowing the Treasury to run out of cash. In such a scenario, it is plausible that House Republicans could agree to bring up a "clean" or nearly clean debt limit increase, which would pass with more Democratic than Republican votes. Media reports indicate that Speaker Boehner has raised this possibility with some of his Republican colleagues. We assume that Senate Democrats would prefer to deal with both issues together, but since the White House's position has been that there will be no negotiation on the debt limit, it might be difficult for them to reject a clean debt limit extension simply because it did not also reopen the federal government. That said, while this is a possibility, this would only come about if the approach to combine the debt limit and the shutdown fails. We believe this outcome has a 30% probability.
Could Congress raise the debt limit earlier than expected?
As the fiscal debates over the last few years have demonstrated, it usually takes Congress until just before or sometimes just after the deadline to strike a deal on an important issue. Once again, there are reasons to think Congress might wait until the last possible moment to raise the debt limit (or simply suspend the debt limit until a future date, probably the end of 2014). In addition to the usual political factors, an issue that has concerned us is that there appears to be a sense among some in Congress that the October 17 deadline is not in fact the deadline. This is due in part to the fact that the Treasury has indicated it expects to have a $30bn cash balance when it exhausts its borrowing capacity. By contrast, ahead of prior debt limit increases, the Treasury has simply provided the date at which it expects to exhaust its borrowing authority, leaving unstated how much cash it expected to have at that point. Some $30bn is not a great deal of cash for an organization whose cashflows can diverge from expectations by several billion dollars on a given day. That said, the explicit acknowledgement of the likely size of the cash balance has led in our view to a sense in Congress that the October 17 deadline could come and go without real consequences.
But one of the more counterintuitive effects of the current fiscal dispute is that it is beginning to look possible that Congress might actually raise the debt limit well ahead of the deadline. If the shutdown and debt limit issues are tied together as we expect, rising political pressure to resolve the shutdown could serve as a catalyst for a debt limit agreement rather than the debt limit deadline itself. This could mean that lawmakers focus more intently on raising the debt limit as a way of ending the shutdown. Also, Congress is scheduled to go on recess the week of October 13, but this would presumably have to be cancelled if the debt limit had not yet been addressed. In the past, seemingly intractable political disputes have often been resolved around the start of planned congressional recesses.
Moreover, the intense focus on the shutdown and Obamacare seems to have increased the likelihood, noted earlier, that Republican leaders could opt to pass a "clean" or nearly clean debt limit extension. We noted in a recent report that one potential silver lining of a government shutdown would be that it would reduce the appetite for a second difficult fiscal dispute. The jury is still out on how this will actually play out, but our sense at the moment is that things are moving in this direction: while the shutdown looks likely to last longer than most observers had expected, there is growing discussion of passing a debt limit increase with a fairly small package of policy changes, or potentially none at all.
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who takes politicians seriously these days? they do put on a good show though.
Personally, I have seen much better theater for a much smaller price tag.
Not that it matters. Lord Rothschild said it best -
"Permit me to issue and control the money of a nation and I care not who makes the laws.”
Allowing the market to crash would be political suicide for many Republicans, so it will not come to that. It will become perilously close. This is just a good, old-fashioned game of chicken.
http://dareconomics.wordpress.com/2013/10/04/around-the-globe-10-04-2013/
You presume that the hand working the puppet is different for the two parties. FAIL.
my money is on papa bear taking a big dump all over the system.
My cash is on door #3. Governement stays shutdown, but debt ceiling is lifted, hopefully by an amount to run for another 30 days or so. Followed by more attempts to fund the things causing the most gnashing of the publics teeth. At some point the resistance to funding these things is going to become unbearable for the dems and perhaps even the most liberal media outposts will start reporting on the Dems insistence that either the failed health law that they voted in on party lines stands or everyone is going to be inconvenienced in one way shape or form. Such is life when one party seeks to pass the biggest entitlement bill ever along party lines after midnight on a sunday night.
they do. now let's get them into a ring with some lions, collusseum style.
Those are three outcomes you now know won't happen.
If the gov stays shuttered through the weekend, the sheeple will be bored with the sob stories and move on. Gov loves the short attention span of the sheeple during election time but it may work against them for the shutdown.
Potentially, can Obama raise the debt ceiing by executive order? If that were to happen, Hitler would be very, very, proud.
Then you better wake Ol' Adolf up and get him ready...
Because that is exactly what Obama is going to do if he doesn't get his way.
He would invoke powers not granted to him under the 14th amendment.
(saw some propaganda of this in last Sunday's newspaper letters to editor) /s
Why not - Bush did it all the time. Only difference between B and O is Brush cutting vs Golf.
"All the time," eh?
Then you shouldn't have too much trouble with a few examples (or one)?
See?
That's the weird thing about progressives/liberals/Democrats.
And they never get it.
Voter fraud: "Everyone does it."
My own personal favorite, though, is the vitriol they spew towards Republicans, e.g., "Those goddamned, motherfucking, piece of shit Republicans. All they ever do is call people names and want to kill children. We should go to their houses and kill them and their children. Pricks."
Weird.
I'm actually starting to wonder if Michael Savage might be correct in thinking there is some Axis I or Axis II disorder going on.
He forgot the 7 short term extensions\raises to push this to December.
These things seem to have a radar for year end.
The Thomas Sowell point on the government shutdown is so crystal clear that it really can’t be argued.
Who is responsible for the shutdown? Sowell asks. It’s the Democrats because the Republicans in the House of Representatives have sent proposed legislation fully funding the government in every aspect that Obama would want except for ObamaCare.
Four times!
So to protect ObamaCare the Democrats shut down the government.
Southerners never used to mention the world “Yankee” without saying "Damn Yankee." And Harry Reid and Obama have started not using the world shutdown except to say the “Republican Shutdown.” One normally doesn’t expect such duplicitous, self-serving lies as this. They are incredible.
These actions are what have made Harry Reid the number one Most Disliked Member of the Senate in recent polls.
Re; can’t be argued
When something can't be argued, it can be ignored or spun. And, that's when bullshit is the most useful. Bullshit is how the politicians (sociopaths) manipulate the dumbasses for fun and profit.
This statement also "can't be argued": "Ronald Reagan proved deficits don't matter", said Dick Cheney.
See, politics is ALL about bullshitting the dumbasses.
Everybody loves free money. They just don't like other people getting it.
Never "used" to? As if it changed? Well, now alot say "fucking Yankee" so you may have a point... civility ain't what it used to be.
In that vein I would love to see a geographic breakdown of where those identifying as Repubs in the poll hail from- I would bet that most of those wanting it all restored are Northerners as it seems that most of the Congresscritters willing to sign on are.
Yep, Northern Repubs surely loves them some big gubmint.
Good point.
And I would love to see a breakdown of the Senators who spoke out and made nasty statements to Politico about Senators Mike Lee and Ted Cruz after Wednesday’s closed-door White House meeting among President Barack Obama and top congressional leaders and didn’t have the guts to attach their names to them.
Those someones leaked vicious hyperbole after the meeting and got it wrong. Mike Lee and Ted Cruz did have the answers to avoid shutdown; these Republican turncoats just didn’t agree with them and went to the enemy, Politico, to spread their vicious lies.
No doubt it was Senators John McCain and Bob Corker, operating under the banner of anonymity, that were among the most vicious of the lot.
As Senator Lee said afterwards, “I would have felt comfortable with TV cameras in the room. I don’t think Ted would have minded, either. But I think there might have been other members of the conference who would have been ashamed.”
Lee said he is getting a lot of feedback from his constituents to “please protect us from this law.”
It’s a battle not between Republicans and Democrats, he said, but between the American Establishment and the American people.”
As to the rumor mongers, my bet is on Tokyo Rose, i.e., John McCain. No Republican has violated Ronald Reagan’s philosophy of never attacking members of your own party in public more strongly than John McCain. And in controversies surrounding ObamaCare, he has been especially vicious against fellow Senators such as Ted Cruz. McCain also has been a Republican turncoat on critical issues such as immigration. But he has maintained a strong war-making posture. Was he, as a political prisoner, also a turncoat? Here’s an incredible story:
John McCain: War Hero or Something Less?
By Philip Giraldi
Global Research, June 01, 2013
antiwar.com
Two time Medal of Honor recipient Marine Major General Smedley Butler once said “war is a racket.” He might have added that while enriching the few it victimizes and degrades everyone else who is caught up in the meat grinder, soldiers as well as civilians.
Consider how accounts of soldiers who are captured and subsequently turn on their own country are as old as warfare. American soldiers taken prisoner are only supposed to provide their names, ranks, and serial numbers to their captors though in practice many find themselves agreeing with their interrogators or even signing confessions to avoid abuse or obtain better conditions in their prisons. A number of American prisoners were described as having been “brainwashed” during the Korean War, the expression initially suggesting that they had been subject to psychological conditioning and indoctrination that made them question their loyalties and which subsequently produced episodes of aberrant behavior.
In some cases the psychological conditioning was combined with physical torture, but in most cases not. In nearly all cases the victims later recanted the confessions they provided to their captors, were despondent over what they had done and said while under North Korean and Chinese control, and sometimes had difficulty in readjusting to life in the United States.
Vietnam also produced its own crop of American prisoners of war, numbering perhaps as many as 2,000 when the Paris peace talks started in 1973. One of them was John McCain, now a reliably hawkish Senator from Arizona who has recently visited Syria in an attempt to jump start a new war in the Middle East. While it is well known that McCain was a captive of the North Vietnamese for more than five years after his plane was shot down while bombing a power plant, considerably less well known is his behavior while a prisoner of war in Hanoi which has long been the object of some speculation due to allegations of possible cooperation with his captors.
McCain, who was saved from drowning by a Vietnamese civilian and was treated at a Hanoi hospital for his wounds, was the son of the Admiral commanding the Pacific Fleet, so he was what might be referred to as a high value captive for the North Vietnamese regime. As such he received considerable attention from his captors, was referred to by his fellow prisoners as the “Crown Prince,” and was, by some accounts, handled with kid gloves. And his connections may have ensured that he would receive additional high value treatment from the Pentagon upon his return to the U.S., he being awarded an astonishing Silver Star, Legion of Merit, Distinguished Flying Cross, Bronze Star and a Purple Heart for his 22 missions spent bombing mostly civilian targets in North Vietnam.
McCain’s own tale of his torture and the confession he recorded for the North Vietnamese comes largely from his book Faith of My Fathers, in which he describes his shame at cooperating with the enemy. But some of McCain’s fellow prisoners, who were tortured and did not collaborate, have challenged his narrative, expressing their belief that McCain was not physically abused at all and that he was well treated. Others who were also in the prison camp dispute that claim. But by McCain’s own account he may have begun cooperating with the North Vietnamese within three days of his capture and was fully on board within two weeks, providing specific intelligence on his aircraft carrier, its aircraft, and the support vessels attached to it, information that was later featured in North Vietnamese radio broadcasts. One account that appeared on a wire service entitled “PW Songbird is Pilot Son of Admiral” reported that McCain may have gone beyond an acceptable level of collaboration in assisting the psychological warfare offensives aimed at American servicemen: “The broadcast was beamed to American servicemen in South Vietnam as a part of a propaganda series attempting to counter charges by U.S. Defense Secretary Melvin Laird that American prisoners are being mistreated in North Vietnam.”
Douglas Valentine, in a 2008 article in Counterpunch, describes how “On one occasion, General Vo Nguyen Giap, the top Vietnamese commander and a nationalist celebrity of the time, personally interviewed McCain. His compliance during this command performance was a moment of affirmation for the Vietnamese. His Vietnamese handlers thereafter used him regularly as prop at meetings with foreign delegations.”
It has also been claimed by retired Army Colonel Earl Hopper, admittedly without any corroborating evidence apart from what might be contained in inaccessible Pentagon files, that “McCain told his North Vietnamese captors, highly classified information, the most important of which was the package routes, which were routes used to bomb North Vietnam. He gave in detail the altitude they were flying, the direction, if they made a turn… he gave them what primary targets the United States was interested in…the information McCain provided allowed the North Vietnamese to adjust their air-defenses. As result…the US lost sixty percent more aircraft and in 1968 [and] called off the bombing of North Vietnam, because of the information McCain had given to them.”
If McCain indeed collaborated beyond the point that might have been understandable for any prisoner seeking to ameliorate his confinement it would be an intriguing tale, particularly if it could be plausibly demonstrated that it might have influenced his subsequent behavior as a senator cheerleading for the Pentagon while simultaneously covering up some of the more disgraceful by products of Vietnam.
Pulitzer Prize winning journalist Sydney Schanberg, who was intrigued by the Vietnam POW issue, began pursuing the McCain story in the late 1980s. Schanberg, a former senior editor at the New York Times, is best known for his coverage of the war in Vietnam and his book The Killing Fields about Cambodia, which was made into an Oscar winning movie. Schanberg was unable to find a mainstream paper or magazine interested in the story but he eventually completed a feature article on the Senator and the prisoners in Vietnam entitled “McCain and the POW Cover Up,” which first appeared on the website of The Nation Institute in September 18, 2008. The article was later replayed by The American Conservative in its July 2010 edition, together with critical commentary.
Schanberg makes two key points: first that a number of American prisoners of war were left behind in Indochina in 1973 with the connivance of top levels in the U.S. government and second that John McCain has worked assiduously to obstruct any efforts to open Pentagon files and follow up on leads to determine the status of the POWs and the “missing in action.” Admittedly, the prisoner of war issue is considerably more complicated than Schanberg represents it to be with many of the sightings and other evidence subject to challenge while his assumption that the Vietnamese were interested in exchanging their remaining prisoners for U.S. financial assistance is also somewhat speculative. But it appears undeniable based on the statements of senior U.S. government officials cited in the article and accompanying commentary that at least some prisoners were left behind with the full knowledge of and even enablement by the White House and Congress. Numerous elected and appointed officials subsequently lied to cover up their mendacity. It was a national disgrace, compounded through the fully documented case Schanberg makes for subsequent obstructionism by McCain and a number of other Senators who followed his lead, including current Secretary of State John Kerry, to impede any serious search for the missing in action and POWs.
One might reasonably infer that McCain’s cover up of Vietnam era POW sightings could well have been driven by fear that some released prisoners might have unpleasant things to say about his activities while at Hoa Lo prison. But as the war is now long over and any remaining prisoners are surely dead, none of this would matter a great deal today realistically speaking except to the remaining POW families. But the past does shape the present and character surely does matter, particularly if one wants to become president and have the authority to send American soldiers to their deaths in support of questionable interventionist policies that might be rooted in a psychological need to fix what went wrong in Vietnam.
Though no longer a presidential candidate, John McCain is still a powerful voice in the Senate consistently advocating policies calling for the United States to use military force around the world. He is a reliable hawk who contrary to all the evidence continues to embrace the Iraq fiasco as if it were an American triumph and who is now the most active senator agitating for direct U.S. military action against Syria and Iran. His recent visit to Syria to demonstrate support for the rebels is, in fact, a violation of the Logan Act which forbids the conduct of foreign policy by anyone outside the executive branch of government.
More troubling perhaps, McCain has consistently and irrationally advocated an undeviating hard line against Russia, the only country with the military capability to confront and destroy much of the United States through its nuclear armed ballistic missile forces. McCain supports untouchable defense budgets, American Exceptionalism, and a proactive “defense” policy that is a holdover from the George W. Bush years. He constantly flouts his patriotism and war record, which have become essential parts of his political persona, and he might well be reasonably described as the leading advocate of militarism in the United States Senate.
Much of McCain’s chauvinistic bluster might indeed be explained by guilt over his long ago confession to the North Vietnamese, a failing for which he might be making atonement through doubling down to demonstrate his unwavering support of the military. And there is also a darker side to him, possibly fed by guilt, evident in his frequently observed volcanic temper, which has been sometimes been directed against families of former prisoners who have raised the POW issue. It has been plausibly described as the side of a man who is not at peace with himself.
So who is the real John McCain? A credible case has been made that McCain may have crossed the line and collaborated extensively while a prisoner in North Vietnam. His subsequent actions to block any inquiry into the status of possible POWs have also been examined in some detail and quite reasonably questioned. Many journalists and former government officials have long been aware of McCain’s possible misrepresentation of his deportment in Hanoi even if the story has not exactly made the front pages.
The Pentagon reportedly has recordings of McCain’s radio broadcasts, which could be released if the Senator allows the Department of Defense to do so. And there would also been an intensive intelligence debriefing after the return to the United States, an unredacted version of which has never been produced. If the recordings were truly limited to an under duress script fabricated to satisfy McCain’s tormentors, as he states in his book, they would only have reinforced the image of war hero, so it raises the question of why that was not done in 2008 or when McCain made his first run for the presidency in 2000. The president of the United States has his finger on the nuclear trigger, surely making his mental state and possible betrayal of his comrades while in military service legitimate lines of inquiry. The documents relating to McCain in the Pentagon archives would reveal one way or the other at least some of the truth about the man.
There are a number of possible reasons for the unwillingness within the media and among the public to seek the truth about John McCain, also noted most recently in the broader reluctance to confront the legacy of the war against Iraq on the tenth anniversary of the invasion.
No one likes to reopen old wounds, particularly since both Vietnam and Iraq were wars fought on lies and both are now widely viewed as major policy disasters. And in post-9/11 America, government secrecy has created a situation in which information can easily be managed to both protect and benefit those in the White House and in Congress while embedded journalists increasingly become part of the story as they integrate seamlessly with policy makers. This groupthink is largely driven by the intangible beltway consensus about the underlying American myth of “we are the good guys” that the public is inclined to support in an age when the country is falsely and deliberately perceived as drowning in a sea of terrorists and ungrateful foreigners.
Confidence in America’s public institutions can be criticized but must not be seriously damaged so there is a well understood line that must not be crossed. If one were to read about a war hero Senator who turns out to be considerably less than that and who did his best to block the return of American prisoners it would undermine confidence in government and just might call into question the legitimacy of America’s wars since 1945. But it is perhaps not too late to take another look at McCain and the post-Vietnam POW issue while many veterans of that conflict are still alive. It might also help to discredit the Senate’s leading warmonger. Either way, it would be a reckoning that is long since overdue.
http://www.globalresearch.ca/john-mccain-war-hero-or-something-less/5337240
Interesting, I didn't know much of what you put up there and it will give me some good stuff to research.
I would very much like his broadcasts to be released.
i think the zhers vastly underestimate the amount of political capital that has been invested in the usd. /s
Yeh... they put on a great show while (deficit) spending US citizens tax monies. A lot of the spending is not on the US taxpayer themselevs but on non citizens and programs developed to bring in and settle more non citizens.....
Very interesting model that.....
Why doesn't the GOP dig in its heels? Demographics don't look good for future election cycles, so the Republicans need a game changer.
Sure, it could blow up in their faces, but if they can deflect the blame to the blue team then it could be positive for them in 2016.
Just default and get it out of our system. Otherwise same shit next year and this getting boring
Damn....What would I do without GS 'wisdom' to guide me through these tough times!!!!
Doing God's Work, you know ...
That's not my God, or our Creator.
“Perhaps the biggest of the big lies is that the government will not be able to pay what it owes on the national debt, creating a danger of default. Tax money keeps coming into the Treasury during the shutdown, and it vastly exceeds the interest that has to be paid on the national debt.
"Even if the debt ceiling is not lifted, that only means that government is not allowed to run up new debt. But that does not mean that it is unable to pay the interest on existing debt."
Who Shut Down the Government?Thomas Sowell | Oct 04, 2013
Even when it comes to something as basic, and apparently as simple and straightforward, as the question of who shut down the federal government, there are diametrically opposite answers, depending on whether you talk to Democrats or to Republicans.
There is really nothing complicated about the facts. The Republican-controlled House of Representatives voted all the money required to keep all government activities going -- except for ObamaCare.
This is not a matter of opinion. You can check the Congressional Record.
As for the House of Representatives' right to grant or withhold money, that is not a matter of opinion either. You can check the Constitution of the United States. All spending bills must originate in the House of Representatives, which means that Congressmen there have a right to decide whether or not they want to spend money on a particular government activity.
Whether ObamaCare is good, bad or indifferent is a matter of opinion. But it is a matter of fact that members of the House of Representatives have a right to make spending decisions based on their opinion.
ObamaCare is indeed "the law of the land," as its supporters keep saying, and the Supreme Court has upheld its Constitutionality.
But the whole point of having a division of powers within the federal government is that each branch can decide independently what it wants to do or not do, regardless of what the other branches do, when exercising the powers specifically granted to that branch by the Constitution.
The hundreds of thousands of government workers who have been laid off are not idle because the House of Representatives did not vote enough money to pay their salaries or the other expenses of their agencies -- unless they are in an agency that would administer ObamaCare.
Since we cannot read minds, we cannot say who -- if anybody -- "wants to shut down the government." But we do know who had the option to keep the government running and chose not to. The money voted by the House of Representatives covered everything that the government does, except for ObamaCare.
The Senate chose not to vote to authorize that money to be spent, because it did not include money for ObamaCare. Senate Majority Leader Harry Reid says that he wants a "clean" bill from the House of Representatives, and some in the media keep repeating the word "clean" like a mantra. But what is unclean about not giving Harry Reid everything he wants?
If Senator Reid and President Obama refuse to accept the money required to run the government, because it leaves out the money they want to run ObamaCare, that is their right. But that is also their responsibility.
You cannot blame other people for not giving you everything you want. And it is a fraud to blame them when you refuse to use the money they did vote, even when it is ample to pay for everything else in the government.
When Barack Obama keeps claiming that it is some new outrage for those who control the money to try to change government policy by granting or withholding money, that is simply a bald-faced lie. You can check the history of other examples of "legislation by appropriation" as it used to be called.
Whether legislation by appropriation is a good idea or a bad idea is a matter of opinion. But whether it is both legal and not unprecedented is a matter of fact.
Perhaps the biggest of the big lies is that the government will not be able to pay what it owes on the national debt, creating a danger of default. Tax money keeps coming into the Treasury during the shutdown, and it vastly exceeds the interest that has to be paid on the national debt.
Even if the debt ceiling is not lifted, that only means that government is not allowed to run up new debt. But that does not mean that it is unable to pay the interest on existing debt.
None of this is rocket science. But unless the Republicans get their side of the story out -- and articulation has never been their strong suit -- the lies will win. More important, the whole country will lose.
http://townhall.com/columnists/thomassowell/2013/10/04/who-shut-down-the-government-n1716292/page/full
... we do know who had the option to keep the government running and chose not to.
The Republicans could have chosen to send a clean CR to the Senate, which would have passed it and sent it to the President for signature. That is, the Republicans also had the option to keep the government running and chose not to.
Except, that is not a true statement. The entire fault lies with Boehner. Because he has not allowed the entire House of Representatives to vote on a clean CR. Because he knows that, if he does, enough Republicans will vote with the Democrates that the clean CR will pass. And he will then lose his speakership. This really is not about the Tea Party. It is about Boehner wanting to keep his speakership.
Why should anyone support efforts to block the full House from voting? Is that what our Constitution intends?
You need to take your argument up with the U.S. Constitution.
The Affordable Care Act was passed through questionable Constitutional provisions using the Health Care Nuclear Option*. The action of Speaker Boehner in not bringing the so-called clean funding bill to a full house vote is completely within the House rules and is Constitutional.
ObamaCare was passed through the Senate on a majority cloture vote when the rules called for a 60% majority. Harry Reid pulled a trick to get it passed; but Boehner’s actions are completely Constitutional. The Speaker has every right to bring whatever legislation he wants or doesn’t want to the floor, according to House Rules.
If the House wants something different, it needs to get a different Speaker.
______________________________________
*The Health Care Nuclear Option, also known as reconciliation, is being considered by liberal politicians to insure that Obamacare makes it to the President’s desk by Easter. According to The New York Times, the plan is to have the President submit reconciliation legislation to be posted on the internet this weekend. The legislation will be crafted in a manner so that it can be passed using special reconciliation procedures created solely to enact laws to reduce the deficit as part of the annual budget. The next step is for the President to conduct his half day bipartisan summit at the Blair House on February 25th. With that faux-bipartisan stunt over with, the President will be free to pass legislation in a partisan manner that tosses aside the regular rules of business in the Senate." – Brian Darling, The Foundry, (February 19, 2010)
Good points all. The problem is that the TBTFs needs fresh Treasury issuance since it is life blood to these vampires, an essential piece of the QE flow that sustains them, and they will not allow it to stop. So the debt ceiling will increase. A few congressmen will not stand in their way, just as it did not with the TARP bill. Game is over and has been for a while. Boys will drop the S&P a few hundred points if anyone gets out of line. No elected officials from the OPresident down has the balls to stand up to these vile creatures.
Lloyd has Spoken.
So it is written, so it shall be done.
The Lloyd giveth, and the Lloyd taketh away, blessed be the name of Lloyd.*
*pfffFFT.
Gold and silver are so stable all of a sudden.
Um, hello.
If you've not seen this movie before, debt ceiling is raised, nothing changes, and off we go to QE to infinity. This is all theater so we believe there is some sort of deliberative process occurring in the republic, when it is all a show.
BTFD and do not place your bets on anything resembling a bad outcome.
Thank you.
P.S. The entire end of Breaking Bad was a pre-death fantasy of Walter White from the moment the keys fell from the visor. Jacob's Ladder, indeed.
Louis Cammarosano wrote October 3, 2013, on The Dark Side Of Artificially Low Interest Rates:
“The Fed’s QE program to date has pumped more than $3 trillion of money printed out of thin air into the economy, or rather the banks and the U.S. Treasury. The beneficial results are only evident in higher stock and real estate prices. Job and wage growth is almost non existent with the labor participation rate at a thirty-two year low. The gains in the stock market can be wiped out in a matter of minutes and home prices can also drop quickly. The labor market certainly won’t improve after a stock market crash.
“Earlier this year when Chairman of the Federal Reserve Ben Bernanke first started talking about tapering the $85 billion a month QE program he was thinking that the Fed could keep the Fed funds rate low while tapering the size of the QE purchases and still achieve low interest rates. Mr. Bernanke found out soon that even talking taper would cause rates to rise irrespective of where the Fed funds rate is. Since the Fed knows the economy is weak and can’t withstand higher interest rates it knows that rates must be kept low. Rates won’t stay low just because the Fed keeps the Fed funds rate low – it will require more QE.*
“All manipulation schemes eventually become overwhelmed by natural market forces. The Fed’s QE program is entering its sixth year. Eventually the market will demand higher rates for the risk of extending credit to a sovereign that meets its obligations by printing the difference. When that happens the party that was enjoyed be a small segment of the population is over.”
* at some point no amount of QE will keep rates low if confidence is lost in the Fed and the dollar due to excessive dollar creation.
Further reading:
http://smaulgld.com/the-dark-side-of-artificially-low-interest-rates/
debt ceiling, going up, ding ding..
I don't trust Goldman's predictions of the future any more than their predictions for stocks. They always talk their book. They are probably betting on a hard default, but tell the muppets otherwise.
Once the Uncertainty of the shutdown debt ceiling are clear, I am going all in full Bulltard..... This will go hyperbolic before it ends badly....