Debt-ceiling

Victory!

Featured image President Obama was triumphant yesterday, following the collapse of the Republican House’s ill-advised attempt to use the threat of a shutdown to block Obamacare. From the Democrats’ perspective, being threatened with a shutdown is like being threatened with a second helping of dessert. So the result was predictable. So what are we left with? A burgeoning debt, and no effort on the horizon to get it under control. Obama’s “victory” »

“We must increase our debt limit so that we can pay our bills.”

Featured image As Tyler Durden notes, this is the “most disturbing sentence uttered during the debt ceiling debate/government shut down.” America is now going on $17 trillion in debt, a level of insolvency that would already be regarded as catastrophic if the Fed were not keeping interest rates close to zero. The federal deficit declined in FY 2013, which ended on September 30. Final numbers are not yet available, but it is »

How bad is this?

Featured image Section 1002 of the Senate bill that was enacted last night is entitled the Debt Default Prevention Act of 2013. The text of the Senate bill is posted here; section 1002 begins on page 24. Section 1002 is one of those incomprehensibly formulated provisions full of cross-rerences. It is not exactly straightforward. Moreover, the legislative summary of the Senate bill — posted here — does not include a summary of »

The Fiscal Deal: A Post-Mortem

Featured image The terms of the Senate “compromise” have been unveiled, and they obviously don’t give the Republicans much. The deal funds the federal government through January 15, and raises the debt limit through February 7. I am not sure what this latter term means; is Treasury authorized to borrow whatever it takes, but only until February 7? Or have they estimated an additional amount that is calculated to last until then? »

“None of You [Reporters] Were Math Majors, Were You?”

Featured image Default hysteria continues in Washington, in defiance of the most basic facts of arithmetic. Some Republicans have even been taken in, but one who is having none of it is Congressman David Schweikert of Arizona, the former treasurer of Maricopa County: “You and I can find ways the game-playing has been done,” said Arizona Rep. David Schweikert, the former treasurer of Maricopa County. “You don’t get to have those debates »

Republicans look to stop bleeding; Dems look to attack sequester

Featured image The Senate reportedly is close to a deal that would reopen the government until January 15, 2014 and raise the debt ceiling until February 14. Under this deal, there would be bicameral budget negotiations through December 15 of this year to try to reach a broad bargain. On the Obamacare front, HHS Secretary Sebelius would have to certify that individuals receiving Obamacare subsidies meet the income levels required by law. »

The AP Misreports the Debt Ceiling

Featured image I wrote here that no matter what happens with the debt limit, the federal government will not default on its debt obligations. I also noted here that Moody’s–which certainly ought to know–agrees that there is zero chance of default on Treasury bonds. In recent days, many more commentators have made the same point. The government is legally obligated to recognize its debt obligations, and the existing $17 trillion debt can »

House Republicans contemplating short-term debt extension

Featured image The House Republican leadership reportedly is seriously considering passing its own six-week extension of borrowing, unless a Senate compromise emerges in the next day or two. A senior House Republican aide told Politico that “there will be a time fairly soon, I think, where the only option to get something done before the deadline is originating legislation in the House.” The legislation contemplated by House leadership reportedly would not be »

Democrats have the whip hand and use it

Featured image Earlier this weekend, a compromise proposal by Sen. Collins to end, or at least postpone, the fiscal showdown failed to gain traction due to lack of support from Democrats. Collins is the quintessential “moderate Republican,” the alleged disappearance of whom from the Senate causes such hand-wringing in MSM circles. Collins’ proposal would have extended government funding for six months and boosted the debt ceiling through the end of January. By »

What Now For House Republicans?

Featured image House Republicans are meeting with the White House tonight to try to resolve the current standoff over the partial government shutdown and the debt limit. Republicans are bargaining from a position of severe weakness, due to their misguided decision to try to condition a continuing resolution to fund the first part of FY 2014 on (first) a defunding of Obamacare, and (second) a one-year delay in Obamacare’s implementation. This was »

Are House Republicans On the Verge of a Major Strategic Error?

Featured image The House Republicans’ strategy with respect to the current fiscal impasse has been wrong-headed from the beginning, in my view. Refusing to pass a continuing resolution unless Obamacare was delayed for a year resulted, predictably, in a partial government shutdown with no end in sight. On the other hand, John Boehner and the House Republicans did not, initially, try to use the debt limit–a much stronger issue–to get concessions from »

Moody’s Confirms: US Won’t Default

Featured image I missed this when it came out on Monday, but if you missed it too, it is worth noting: Moody’s has confirmed that, exactly as I wrote here, the federal government will not default on its debt obligations if Congress does not increase the statutory debt limit. Steven Hess, Moody’s principal U.S. sovereign credit analyst, said: We believe the government would continue to pay interest and principal on its debt »

Obama gets folksy, keeps straight face

Featured image Barack Obama, who likes to talk about “folks,” was at his folksy best during his press conference yesterday. Several times, he used analogies to household living in an attempt to illustrate the folly of the Republican push for negotiations to end the partial government shutdown and raise the debt ceiling. He led of his remarks with this: Think about it this way, the American people do not get to demand »

Who has the upper hand in the debt ceiling dispute?

Featured image John has written a very important post called “Memo to GOP: If Obama Won’t Compromise, Don’t Raise the Debt Ceiling.” His post adds significant clarity to the debt-ceiling discussion. As to its conclusions, I think many of them are sound. Others, I’m not so sure about. Here’s the breakdown. First, I wholeheartedly agree with John that “if Obama won’t compromise, don’t raise the debt ceiling.” The balance of terror in »

Memo to GOP: If Obama Won’t Compromise, Don’t Raise the Debt Ceiling

Featured image In any negotiation, the key question is, what is the default status? That is, what happens if you don’t make a deal? If you are negotiating a business transaction (e.g., a merger), the default status is that the transaction doesn’t occur and the parties walk away. If you are trying to settle a lawsuit, the default status is that the case goes to trial and both parties take their chances. »

Barack Obama, Imaginary Senator

Featured image I don’t suppose anyone on television network news has mentioned it recently, but many people–probably including just about all of our readers–are aware of Senator Barack Obama’s passionate opposition to any increase in America’s debt limit back when President Bush was in office. And when the debt was a mere $8.6 trillion. But my friend and podcast partner Brian Ward thought that this abstract knowledge isn’t enough. Brian thought it »

The Federal Government Can’t, and Won’t, Default on Its Debt Obligations

Featured image One remarkable aspect of the shutdown/debt limit battle is the irresponsibility (on the part of the Obama administration) and incompetence (on the part of the news media) concerning the claim that the federal government will default on its debt obligations if Congress fails to raise the debt limit. President Obama and his minions have clearly suggested that default is a real possibility: “As reckless as a government shutdown is … »