From Ezra Klein’s Wonkblog today:
Banks are dumping T-bills. “With Washington’s fiscal standoff still unresolved, large financial firms have been unloading investments once considered pristine, suggesting a wild week ahead for markets. Banks are dumping short-term government debt, usually one of the most plain-vanilla investments available, amid fears that Congress and the White House won’t reach an agreement by Thursday to raise the debt ceiling…Senior Treasury officials convened by phone Sunday afternoon to discuss the evolving market conditions, an agency official said…The Securities and Exchange Commission is monitoring bank capital levels and the amount of short-term Treasurys held by financial firms, among other things.” Damian Paletta and Dan Strumpf in The Wall Street Journal.
World should ‘de-Americanise’, says China following default fears. “In China, Xinhua, the official government news agency, said that as American politicians continued to flounder over a deal to break the impasse, “it is perhaps a good time for the befuddled world to start considering building a de-Americanised world”…Xinhua attacked America’s pre-eminent position in the world, adding that “such alarming days when the destinies of others are in the hands of a hypocritical nation have to be terminated”.” Philip Sherwell and Malcolm Moore in The Telegraph (UK).
The US would be the first major Western sovereign default since 1933 Germany. “Reneging on its debt obligations would make the U.S. the first major Western government to default since Nazi Germany 80 years ago. Germany unilaterally ceased payments on long-term borrowings on May 6, 1933, three months after Adolf Hitler was installed as Chancellor. The default helped cement Hitler’s power base following years of political instability as the Weimar Republic struggled with its crushing debts. “These are generally catastrophic economic events,” said Professor Eugene N. White, an economics historian at Rutgers University in New Brunswick, New Jersey. “There is no happy ending.”” John Glover in Bloomberg.
Just had an email from Brian, Canadian citizen – he admires the US in many ways, but has always been puzzled by our odd attitudes on medical care. Now he is also worried:
we’ll be in FL by Nov. 17th. for another VT season…people in this country and our contacts in the UK are flabbergasted by the way your govt. is doing such damage to itself and its economy…big investors here such as our multi-billion dollar pension plans are starting to shy away from the US markets due to the volatility screwing up all their actuarial tables…how can such a small group of racist tea partiers take over so dramatically?
And so it goes . . .
Because that worked so well. Who needs a balance of powers anyway? Checks and balances? Bleh. We have a US Senator is ‘whipping’ votes in the House of Representatives. A significant cohort of the Congress is ideologically committed to the destruction of a strong Federal government. The House Speakership – designed to wield enormous power – now powerless. Who really needs him any more? Put the world economy at risk during a fragile recovery? So what if that usually leads to World Wars. That’s the world’s problem. – and damn Europeans and Mooslims.
Shut it down. Take it down! USA! USA! USA!
I asked my old friend Wikipedia for a few random factoids about the debt and that debt ceiling thingee:
- US government indebtedness has been the norm in the financial history of the nation. The carriage of debt in Western Europe and North America by governments has been normal for the past 200 years, so the US situation is not unique.
- The US has been in debt every year except for 1835.
- Debts incurred during the American Revolutionary War and under the Articles of Confederation led to the first yearly report on the amount of the debt ($75,463,476.52 on January 1, 1791).
- Every President since Herbert Hoover has added to the national debt expressed in absolute dollars. The debt ceiling has been raised 74 times since March 1962, including 18 times under Ronald Reagan, eight times under Bill Clinton, seven times under George W. Bush, and three times under Barack Obama.
Posted in broken government, Civics, Congress critters, economy, Politics
Tagged Article of Confederation, congress, debt ceiling, federal government, government, Politics, US natinal debt
Ezra Klein yesterday (formatting added by Moe):
The House GOP’s debt limit bill — obtained by the National Review — isn’t a serious governing document. It’s not even a plausible opening bid. It’s a cry for help. In return for a one-year suspension of the debt ceiling, House Republicans are demanding:
- a year-long delay of Obamacare,
- Rep. Paul Ryan’s tax reform plan,
- the Keystone XL pipeline,
- more offshore oil drilling,
- more drilling on federally protected lands,
- rewriting of ash coal regulations,
- a suspension of the Environmental Protection Agency’s efforts to regulate carbon emissions,
- more power over the regulatory process in general,
- reform of the federal employee retirement program,
- an overhaul of the Dodd-Frank financial regulations,
- more power over the Consumer Financial Protection Bureau’s budget,
- repeal of the Social Services Block Grant, more means-testing in Medicare,
- repeal of the Public Health trust fund,
- and more.
It’s tempting to think that this is Boehner teaching his conference a lesson. They told him what they wanted, and he’s going to let them have it — good and hard. House Republicans are walking into the debt-ceiling negotiations with an opening bid that makes them look ridiculous. This looks like an Onion parody of what the House’s debt-ceiling demands might be. It’s a wonder it’s not written in comic sans.
Dear House GOP:
You may have noticed that America doesn’t like you anymore. And America now expects the worst from you.
I have an idea how you can change that – pass the debt ceiling increase quickly, without a lot of drama. You’ll leave the punditocracy speechless.
Ehhh, they’ll never do it.
UPDATE 1/19: Yikes, they did do it! Yesterday. For three months. And I’m guessing when it comes back in 90 days, they’ll pass it if the spotlight can be turned elsewhere.
In the Wall Street Journal‘s editoriall this morning, we find much admiration for the debt deal (natch), much damning of damn liberals (it’s their job after all), and much admiration for the Tea Party success (political porn).
But there was also this little tidbit:
The same supposedly conservative Republicans and their talk radio minders may denounce this deal as a sellout, but we’ll be charitable and assume they’ve climbed so far out on the political ledge they don’t know how to climb back without admitting they were wrong.
We elected them, but how do we unelect them in a gerrymandered
nation world owned by a multinational meglithic oligarchy? (h/t friend Shep)
CLARIFICATION: My words above (unlike the cartoon itself) are actually not directed at the newly elected Tea Partiers, who may be the least ‘owned’ members of Congress. My words are directed at the majority of our Congress Critters, all too many of whom daily do the bidding of their Galtian overlords. (hint: that’s not us)