The Government Shutdown Countdown Lowdown MEGATHREAD

[Ideologue]

I'm yawning too.

[Ed Anger]

I'm yawning too.

Lazy lumpen proletariat!

[Ideologue]

Who're you calling lumpen!

[Sheilbh]

Agreed.  Just doubling the national debt was wimpy; we should have gone for a triple or a quadruple. 

National debt's currently at 73%. The CBO say it will only reach 100% in 25 years - not as people were hyperventilating, any time soon. There was no need to panic. Admittedly maybe panicked deals are the only possible way Congress can work, so there was no chance of the deficit being cut more sensibly.

[Admiral Yi]

Economist said 105 now.

[Sheilbh]

Tuesday's CBO release said 73% reaching 100% in 2038 (which is absurd anyway). Current deficit's around 4%. By 2038 net interest would cost 5% of GDP.
http://www.cbo.gov/publication/44521?utm_source=feedblitz&utm_medium=FeedBlitzEmail&utm_content=812526&utm_campaign=0
Maybe the Economist are including state and local debt?

Edit: Also their more short-term (and useful) projection is that the national debt will rise for a couple more years then start falling, so by 2018 should be around 68%.

[Admiral Yi]

Your link is talking about "federal debt held by the public."  I.e. not including IOUs in teh lock box.

[The Minsky Moment]

Your link is talking about "federal debt held by the public."  I.e. not including IOUs in teh lock box.

How is that a relevant measure of the government's net debt position?
That would be like saying I have net worth of -$20 if I had a 20 in my right pocket and an IOU for 20 in my left.

[CountDeMoney]

I think Eric Cantor actually had an orgasm during the rally/announcement.  His face contorted in a manner that either suggested an orgasm or a bowel movement.

House votes to fund government, gut Obamacare
By Michael O'Brien , Political Reporter, NBC News

The House approved legislation on Friday to keep the government open past Sept. 30, but also to eliminate funding for "Obamacare."

The vote marked an opening gambit by the GOP just 10 days before the deadline at which the government will run out of money, causing a myriad of federal services to cease. The provision gutting health care reform was intended to mollify conservatives who have vowed not to fund the government unless the landmark law is eradicated.

But the measure faces almost certain doom in the Senate, where Democrats have said they would vote to restore funding for the Affordable Care Act. And even if they were to fail, President Barack Obama has flatly promised to veto the bill.

The posturing by the Republican-controlled House means Washington now faces a narrow window of opportunity to reach an ever-elusive consensus over how to continue government operations, and avoid a politically-costly shutdown.

If no resolution is reached, a shutdown threatens to harm the economy and place scores of government workers out of work for an undetermined period of time. Wall Street appeared unconcerned by the developments, though, expecting lawmakers to reach an 11th-hour accord as they have in virtually every previous showdown.

Still, Friday's vote set up a tense series of negotiations between Obama, Republicans and Democrats in the Senate over the next 10 days. The House has canceled a planned recess next week in anticipation of the frenetic work it will take to cobble together a compromise to keep the government open that can win the support of Congress.

The vote was set for late morning, and was expected to pass only with the votes of Republicans.

As the GOP readied the vote, Obama traveled to Kansas, where he was expected to sharply denounce the GOP's approach to the fiscal impasse.

"The last thing we can afford right now is a decision by a minority of Republicans in Congress to throw our economy back into crisis by refusing to pay our country's bills or shutting down the government," said a White House official. "Instead of playing politics with the economy, Republicans in Congress should join the president to focus on creating a better bargain for the middle class."

The action will next play out in the Senate, where Democrats command a majority of votes. The upper chamber is expected to strip any measure to undermine the Affordable Care Act from the House-passed bill, though that has invited a filibuster threat from some hard-lined conservative senators.

But if history is any guide, several Senate Republicans -- at least 13 of whom have openly disparaged the effort to use the threat of a government shutdown as leverage to defund Obamacare -- may work to assemble a compromise spending measure to send back to the House. That could provide the contours of an eventual agreement.

Still looming, though, is the more politically-tricky prospect of having to authorize increased government borrowing -- known as the debt limit -- sometime next month. Republicans met Friday morning to discuss their strategy in that fight, and have long signaled they might seek a more modest, one-year delay of "Obamacare" in exchange for raising the debt limit.

[Admiral Yi]

How is that a relevant measure of the government's net debt position?
That would be like saying I have net worth of -$20 if I had a 20 in my right pocket and an IOU for 20 in my left.

That's a terrible analogy Joan.  The US has total liabilities -$105, $73 in the form of debt held by the public, and $32 in the form of IOUs to future retirees.

[The Minsky Moment]

How is that a relevant measure of the government's net debt position?
That would be like saying I have net worth of -$20 if I had a 20 in my right pocket and an IOU for 20 in my left.

That's a terrible analogy Joan.  The US has total liabilities -$105, $73 in the form of debt held by the public, and $32 in the form of IOUs to future retirees.

Not so.  The 32 is an IOU to the pay the bearer the coupon and principal on the dates specified.  Nothing more.  And the bearer is another arm of the government.  The asset and liability is identical and held be the same person.  They offet.

[Admiral Yi]

Not so.  The 32 is an IOU to the pay the bearer the coupon and principal on the dates specified.  Nothing more.  And the bearer is another arm of the government.  The asset and liability is identical and held be the same person.  They offet.

They offset except for the $32 IOU the other arm of the government has to Baby Boomers.

[The Minsky Moment]

They offset except for the $32 IOU the other arm of the government has to Baby Boomers.

There is no such thing.  SS is a pay-as-you go program; always has been.
However you want to characterize the commitment to future retirees; it is not "debt".

[Admiral Yi]

There is no such thing.  SS is a pay-as-you go program; always has been.
However you want to characterize the commitment to future retirees; it is not "debt".

The first statement is manifestly incorrect.  The Algore trust fund specifically paid more than we went.

If you want to get technical and say the future liability is not debt, then neither can you call the trust fund an asset.

[The Minsky Moment]

The first statement is manifestly incorrect.  The Algore trust fund specifically paid more than we went.

Al Gore did nothing I am aware of relating to the trust funds and as a single Senator and later VP he couldn't have.
The trust fund concept is essentially rhetorical and devoid of substance, and budgetary accounting correctly treats it as such.

If you want to get technical and say the future liability is not debt, then neither can you call the trust fund an asset.

Exactly, except there is nothing technical about it.