"Extraordinary measures" are estimated to run out some time in February.
Feb. 15 is looking to be a key date. Most of the longer dated treasuries are issued quaterly, and Feb. 15 is the next issue date for a quarterly issuance. Interest payments are accordingly very high on those dates. If the government is out of excess cash by that day, it will not take in anywhere near enough in daily receipts to cover the interest payments due, even if it reneges in all other payments.
One hint of how things may go will be seeing what happens with the treasury auctions that week: the 3-year, the 10-year and the 30year auctions are on the 12th, 13th, and 14th respectively. A significant amount of debt will be coming due on the 15th and will need to be rolled over.
Didn't we do this, like already ? :unsure:
Quote from: mongers on January 14, 2013, 03:08:40 PM
Didn't we do this, like already ? :unsure:
Twice actually.
They won't make the tough decisions so this can is going to be kicked a few more times.
How ugly is this going to get?
What are the different scenarios? How likely are they, respectively?
What if we had a bond auction and nobody showed up?
Quote from: derspiess on January 14, 2013, 03:42:25 PM
What if we had a bond auction and nobody showed up?
We would be completely fucked.
There will be uncertainty. Therefore, stocks will go down.
Quote from: Jacob on January 14, 2013, 03:36:33 PM
What are the different scenarios? How likely are they, respectively?
Most likely - some harebrained last minute compromise that puts this off for another 6 months or so.
Less likely scenarios include:
+ long-term resolution of the Executive's authority to issue debt to implement appropriations
+ nobody swerves and there is a big loud crash and lots of blood
+ nobody swerves and Obama takes one of several possible but controversial measures to borrow or otherwise evade the limit.
Obama comes out swinging ?
Quote
America is "not a deadbeat nation", US President Barack Obama has said, as he warned Republicans unconditionally to approve a rise in the US debt ceiling.
At a White House news conference, he said it would be "absurd" to use the borrowing limit as a negotiating chip.
But Republican House Speaker John Boehner said spending cuts should accompany a federal debt ceiling rise.
The US is expected to hit its $16.4tn (£10.2tn) borrowing limit by February unless lawmakers act.
Monday's press conference came a week before the inauguration ceremony in Washington DC that will begin Mr Obama's second term.
'Ransom'
With an agreement to prevent the so-called fiscal cliff of sharp spending cuts and tax increases barely two weeks old, Mr Obama faces another budget showdown with congressional Republicans.
The Democratic president warned lawmakers: "They will not collect a ransom in exchange for not crashing the economy.
.....
rest of item here:
http://www.bbc.co.uk/news/world-us-canada-21017052 (http://www.bbc.co.uk/news/world-us-canada-21017052)
Congress could just issue the bonds themselves like the old days.
Quote from: The Minsky Moment on January 14, 2013, 05:26:40 PM
Quote from: Jacob on January 14, 2013, 03:36:33 PM
What are the different scenarios? How likely are they, respectively?
Most likely - some harebrained last minute compromise that puts this off for another 6 months or so.
Less likely scenarios include:
+ long-term resolution of the Executive's authority to issue debt to implement appropriations
+ nobody swerves and there is a big loud crash and lots of blood
+ nobody swerves and Obama takes one of several possible but controversial measures to borrow or otherwise evade the limit.
I am partial to the $1,000,000,000,000 coin myself. :)
(https://languish.org/forums/proxy.php?request=http%3A%2F%2Fwww.bilerico.com%2Fimages%2Fsimpsons_trillion.png&hash=2ab4c9c15bcdac1b2a22d5dcb9f911800e04e750)
Quote from: The Minsky Moment on January 14, 2013, 05:26:40 PM
Most likely - some harebrained last minute compromise that puts this off for another 6 months or so.
6 months? We should be so lucky. At this rate, the fiscal crises are starting to occur so frequently that they're becoming one continuous megacrisis.
Instead of minting one trillion-dollar coin, why not mint a trillion dollar coins? #jobcreation
It's not like there needs to be these continuous crises. They are entirely manufactured by Congress.
Quote from: Warspite on January 14, 2013, 05:39:30 PM
Instead of minting one trillion-dollar coin, why not mint a trillion dollar coins? #jobcreation
That's a lot of platinum.
Quote from: The Minsky Moment on January 14, 2013, 05:44:36 PM
Quote from: Warspite on January 14, 2013, 05:39:30 PM
Instead of minting one trillion-dollar coin, why not mint a trillion dollar coins? #jobcreation
That's a lot of platinum.
Invading Canada and South Africa could secure the needed supplies, but a military campaign and occupation would entail significant cost.
Alternatively, melt down all upper-tier credit cards.
Quote from: The Minsky Moment on January 14, 2013, 05:44:36 PM
Quote from: Warspite on January 14, 2013, 05:39:30 PM
Instead of minting one trillion-dollar coin, why not mint a trillion dollar coins? #jobcreation
That's a lot of platinum.
Asteroid mining. :contract:
Quote from: jimmy olsen on January 14, 2013, 06:02:19 PM
Quote from: The Minsky Moment on January 14, 2013, 05:44:36 PM
Quote from: Warspite on January 14, 2013, 05:39:30 PM
Instead of minting one trillion-dollar coin, why not mint a trillion dollar coins? #jobcreation
That's a lot of platinum.
Asteroid mining. :contract:
How would paying the Chinese to do that, help the situation. :hmm:
What is the likelihood that cred-reporting agencies will downgrade US rating?
Last time I seem to recall some of them downgrading us from something like 'A+++ would lend again' to 'A++ would obviously still lend again'... and nothing much happened.
Quote from: Grinning_Colossus on January 16, 2013, 03:08:06 AM
Last time I seem to recall some of them downgrading us from something like 'A+++ would lend again' to 'A++ would obviously still lend again'... and nothing much happened.
Only one did a downgrade in 2011 (S&P). But at the time, Europe was supposedly in great crisis.
Will the U.S. still be able to issue debt at low interest rates if the rest of the credit agencies and bond buyers lose faith this year?
Gotta love the ability to blow up a procedural process on basic governmental accounting into a partisan time bomb. Yay, America.
Yesterday, the Heritage Foundation sent out a morning alert claiming that default is a "red herring":
QuoteThe U.S. is not going to default on its interest payments, Foster said, and "this assurance rests not on congressional action to raise the debt ceiling, but on the simple fact that the Treasury has far more than enough funds to pay all interest as it comes due."
(the source here is "JD Foster, PhD") :D
This is wrong, as pointed out in my OP here. It ignores the fact that interest payments are very lumpy and there are individual days where interest payment obligations far exceed the government's daily cash inflow.
Unfortunately there are probably some influential people in DC who actually read Heritage stuff and are under the horrible misconception that their "analyses" have some kind of rigor or credibility.
Quote from: CountDeMoney on January 16, 2013, 06:37:48 AM
Gotta love the ability to blow up a procedural process on basic governmental accounting into a partisan time bomb. Yay, America.
The fact that we are here today to debate raising America's debt limit is a sign of leadership failure. It is a sign that the U.S. government can't pay its own bills. I therefore intend to oppose the effort to increase America's debt limit.
Quote from: The Minsky Moment on January 16, 2013, 02:48:25 PM
Yesterday, the Heritage Foundation sent out a morning alert claiming that default is a "red herring":
QuoteThe U.S. is not going to default on its interest payments, Foster said, and "this assurance rests not on congressional action to raise the debt ceiling, but on the simple fact that the Treasury has far more than enough funds to pay all interest as it comes due."
(the source here is "JD Foster, PhD") :D
This is wrong, as pointed out in my OP here. It ignores the fact that interest payments are very lumpy and there are individual days where interest payment obligations far exceed the government's daily cash inflow.
Unfortunately there are probably some influential people in DC who actually read Heritage stuff and are under the horrible misconception that their "analyses" have some kind of rigor or credibility.
We have that organisation over here. :bowler:
edit:
Oops that's the Heritage Lottery Trust/Foundation. :blush:
edit 2:
Then again the UK organisation has somewhat more ethical means of funding.
No it's quite awful.
Quote from: derspiess on January 16, 2013, 02:56:55 PM
The fact that we are here today to debate raising America's debt limit is a sign of leadership failure. It is a sign that the U.S. government can't pay its own bills. I therefore intend to oppose the effort to increase America's debt limit.
So which payments do you want the US to default on?
Quote from: derspiess on January 16, 2013, 02:56:55 PM
Quote from: CountDeMoney on January 16, 2013, 06:37:48 AM
Gotta love the ability to blow up a procedural process on basic governmental accounting into a partisan time bomb. Yay, America.
The fact that we are here today to debate raising America's debt limit is a sign of leadership failure. It is a sign that the U.S. government can't pay its own bills. I therefore intend to oppose the effort to increase America's debt limit.
Are you trolling us, or are you really that fucking retarded? Serious question. For the last few weeks pretty much everything that you post on political subjects matches what the worst dregs of conservative humanity religiously believe and want to indoctrinate others with.
Quote from: derspiess on January 16, 2013, 02:56:55 PM
Quote from: CountDeMoney on January 16, 2013, 06:37:48 AM
Gotta love the ability to blow up a procedural process on basic governmental accounting into a partisan time bomb. Yay, America.
The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. government can’t pay its own bills. I therefore intend to oppose the effort to increase America’s debt limit.
Geez after 30+ years of pretty consistent leadership failure on this issue you needed this to get a sign?
I just figured it was absurdist poetry, in the tradition of Ogden Nash.
Quote from: CountDeMoney on January 16, 2013, 06:37:48 AM
Gotta love the ability to blow up a procedural process on basic governmental accounting
It's not really even that. It's an oddball, vestigial legislative artifact left over from a WW1-era bond drive.
Quote from: The Minsky Moment on January 16, 2013, 03:52:17 PM
I just figured it was absurdist poetry, in the tradition of Ogden Nash.
It's Pluto.
Quote from: Faeelin on January 16, 2013, 03:43:59 PM
Quote from: derspiess on January 16, 2013, 02:56:55 PM
The fact that we are here today to debate raising America's debt limit is a sign of leadership failure. It is a sign that the U.S. government can't pay its own bills. I therefore intend to oppose the effort to increase America's debt limit.
So which payments do you want the US to default on?
We know it won't be Medicaid. :secret:
Quote from: Faeelin on January 16, 2013, 03:43:59 PM
Quote from: derspiess on January 16, 2013, 02:56:55 PM
The fact that we are here today to debate raising America's debt limit is a sign of leadership failure. It is a sign that the U.S. government can't pay its own bills. I therefore intend to oppose the effort to increase America's debt limit.
So which payments do you want the US to default on?
Go back to 2006 and ask Obama! :yeah:
You guys are awesome.
There is a bit of a difference between piling on debt during the height of the boom, and during very weak economy. Not that I agree with Obama in 2006, but the context is important.
Quote from: DGuller on January 16, 2013, 04:12:42 PM
There is a bit of a difference between piling on debt during the height of the boom, and during very weak economy. Not that I agree with Obama in 2006, but the context is important.
Still gotcha on that one ;) :hug:
Score!
Quote from: derspiess on January 16, 2013, 04:14:48 PM
Quote from: DGuller on January 16, 2013, 04:12:42 PM
There is a bit of a difference between piling on debt during the height of the boom, and during very weak economy. Not that I agree with Obama in 2006, but the context is important.
Still gotcha on that one ;) :hug:
Not really. Obviously I didn't recognize Obama's words, otherwise I would know what you were up to. However, same words and actions can be adequate in one context, and retarded in another context. You implicitly put the words of 2006 into the context of 2013, and that's what I reacted to. Your gotcha relies on the context being irrelevant.
In 2006, we could've conceivably had surplus without destroying the economy. We couldn't achieve that by turning on a dime, so denying the debt ceiling increase was not the way to achieve that, but the argument against debt piling on was strong. In 2013, only retards and nuts think that we can have a budget surplus.
Quote from: The Minsky Moment on January 16, 2013, 02:48:25 PM
Yesterday, the Heritage Foundation sent out a morning alert claiming that default is a "red herring":
QuoteThe U.S. is not going to default on its interest payments, Foster said, and "this assurance rests not on congressional action to raise the debt ceiling, but on the simple fact that the Treasury has far more than enough funds to pay all interest as it comes due."
(the source here is "JD Foster, PhD") :D
This is wrong, as pointed out in my OP here. It ignores the fact that interest payments are very lumpy and there are individual days where interest payment obligations far exceed the government's daily cash inflow.
Unfortunately there are probably some influential people in DC who actually read Heritage stuff and are under the horrible misconception that their "analyses" have some kind of rigor or credibility.
When I was in law school I was on the editorial board of the Journal of National Security Law. We received one submission from a Heritage fellow that was so incoherent, so lacking in quality writing, and so devoid of citation that we just rejected it. It was fucking offal.
Ever since then, I can't take them seriously.
Actually, offal isn't half bad. But I understand your point.
Quote from: DGuller on January 16, 2013, 04:21:58 PM
Quote from: derspiess on January 16, 2013, 04:14:48 PM
Quote from: DGuller on January 16, 2013, 04:12:42 PM
There is a bit of a difference between piling on debt during the height of the boom, and during very weak economy. Not that I agree with Obama in 2006, but the context is important.
Still gotcha on that one ;) :hug:
Not really. Obviously I didn't recognize Obama's words, otherwise I would know what you were up to. However, same words and actions can be adequate in one context, and retarded in another context. You implicitly put the words of 2006 into the context of 2013, and that's what I reacted to. Your gotcha relies on the context being irrelevant.
In 2006, we could've conceivably had surplus without destroying the economy. We couldn't achieve that by turning on a dime, so denying the debt ceiling increase was not the way to achieve that, but the argument against debt piling on was strong. In 2013, only retards and nuts think that we can have a budget surplus.
Yeah, keep talkin' :lol:
Quote from: The Brain on January 16, 2013, 04:29:52 PM
Actually, offal isn't half bad. But I understand your point.
Offal can be good to eat, but it's shitty policy.
Offal is unfit for human consumption. But I'm glad they put it on the traditional Argentine asado-- I can go for the good cuts of steak while others are distracted by the sweetbread and that nasty braided small intestine.
Quote from: derspiess on January 16, 2013, 04:47:56 PM
Offal is unfit for human consumption. But I'm glad they put it on the traditional Argentine asado-- I can go for the good cuts of steak while others are distracted by the sweetbread and that nasty braided small intestine.
Ugh, Foreigners. :yuk:
Quote from: Ed Anger on January 16, 2013, 04:49:21 PM
Quote from: derspiess on January 16, 2013, 04:47:56 PM
Offal is unfit for human consumption. But I'm glad they put it on the traditional Argentine asado-- I can go for the good cuts of steak while others are distracted by the sweetbread and that nasty braided small intestine.
Ugh, Foreigners. :yuk:
My only slip-up is when I've had too much wine & I go for a blood sausage thinking it's a chorizo :yuk:
Quote from: derspiess on January 16, 2013, 03:59:44 PM
Go back to 2006 and ask Obama! :yeah:
Why would you repeat a moronic statement by a politician you don't respect?
Quote from: The Minsky Moment on January 16, 2013, 06:26:12 PM
Quote from: derspiess on January 16, 2013, 03:59:44 PM
Go back to 2006 and ask Obama! :yeah:
Why would you repeat a moronic statement by a politician you don't respect?
To see what reaction I'd get.
And who said I don't respect Obama?
Quote from: derspiess on January 16, 2013, 07:03:11 PM
Quote from: The Minsky Moment on January 16, 2013, 06:26:12 PM
Quote from: derspiess on January 16, 2013, 03:59:44 PM
Go back to 2006 and ask Obama! :yeah:
Why would you repeat a moronic statement by a politician you don't respect?
To see what reaction I'd get.
And who said I don't respect Obama?
Raz.
No, I was talking to Viking about Respect.
Just blame Spicy.
Nah, I like Spicy. He's an honest sparring partner. I am curious though, would he be good with the President dropping most of the gun stuff in exchange for concessions in the spending fight coming up?
No. It's not like Obama has leverage on guns unless he can peel off enough GOP House members and get his blue dogs to toe the line.
But out of curiosity, but what GOP spending concessions would you like to see?
Quote from: derspiess on January 16, 2013, 10:28:15 PM
No. It's not like Obama has leverage on guns unless he can peel off enough GOP House members and get his blue dogs to toe the line.
But out of curiosity, but what GOP spending concessions would you like to see?
Most of the blue dogs got replaced by Republicans. It's like back in 1994 where the Republicans wiped out the Boll Weevils. Well, mostly I'd like to see spending to be cut in Republican districts first. Like I said before, if they really believe in spending cuts why not gore their own ox?
Quote from: Razgovory on January 16, 2013, 10:34:57 PM
Quote from: derspiess on January 16, 2013, 10:28:15 PM
No. It's not like Obama has leverage on guns unless he can peel off enough GOP House members and get his blue dogs to toe the line.
But out of curiosity, but what GOP spending concessions would you like to see?
Most of the blue dogs got replaced by Republicans. It's like back in 1994 where the Republicans wiped out the Boll Weevils. Well, mostly I'd like to see spending to be cut in Republican districts first. Like I said before, if they really believe in spending cuts why not gore their own ox?
:lol: Awesome. And I guess we'd have all the assurances from your guys that they'd promptly follow suit and vote for cuts in their districts? Pinkie-swear?
Why, you are the guys who don't believe in government. We won't touch your guns and you can go all Mad Max. I suppose my point is, I want to know if you guys really believe in cutting spending and limited government or you just use that as a truncheon to attack programs you aren't keen and cut spending on people you don't care about. If we accept cuts in government services in your areas it would seem like a win, after all, less government is better. If you really believe that.
(https://languish.org/forums/proxy.php?request=http%3A%2F%2Fstatic2.businessinsider.com%2Fimage%2F50eef524ecad04766900000c-960%2Ftax%2520rates%2520ranking%2520100k.jpg&hash=c55c3509d8852548c813dc7d2e9dbba75fc0e3d6)
Does that use no state income taxes included or an average?
Neither article nor source says, really. :hmm: Similar for this graph:
(https://languish.org/forums/proxy.php?request=http%3A%2F%2Fcdn.theatlantic.com%2Fstatic%2Fmt%2Fassets%2Fbusiness%2FThe-Numbers-Jan-2012-International_1.gif&hash=b1eec646395c9f517bdd44d5728087bd672c8894)
Yeah if that is just Federal Taxes that is very misleading.
More short-term can-kicking coming.
Quote
Paul Ryan Confirms GOP Thinking About A Short-Term Debt-Ceiling Hike (http://www.businessinsider.com/paul-ryan-debt-ceiling-obama-spending-reduction-2013-1)
In a briefing with reporters today at House Republicans' retreat in Williamsburg, Va., Rep. Paul Ryan said that the House GOP is discussing a possible "short-term debt limit extension," but that the "worst thing for the economy" would be a lift in the debt ceiling without any spending cuts.
Ryan suggested the lift in the debt ceiling could be extremely short, so that it could be addressed with another fiscal battle — the sequester — in March.
Ryan also urged President Barack Obama to prioritize payments under the debt limit to ensure there is no default on the country's obligations.
There was a comedy movie back in the 70s based on the premise that the US went broke. Wish I could remember the name of it.
Doesnt seem so funny now though.
Quote from: crazy canuck on January 17, 2013, 04:49:48 PM
There was a comedy movie back in the 70s based on the premise that the US went broke. Wish I could remember the name of it.
Doesnt seem so funny now though.
You talking about
Americathon, where John Ritter was the President, and they have a telethon to raise money for the country so the Native American Indians don't foreclose and repossess it?
Don't even ask why that is occupying a part of my brain.
Quote from: CountDeMoney on January 17, 2013, 05:10:36 PM
Quote from: crazy canuck on January 17, 2013, 04:49:48 PM
There was a comedy movie back in the 70s based on the premise that the US went broke. Wish I could remember the name of it.
Doesnt seem so funny now though.
You talking about Americathon, where John Ritter was the President, and they have a telethon to raise money for the country so the Native American Indians don't foreclose and repossess it?
Don't even ask why that is occupying a part of my brain.
You are a GOD!
I recall everything from the mid- to late-70s that was constantly regurgitated on HBO during its 16 hour programming day.
Might as well watch Death Race 2000 afterwards.
Anybody read David Maraniss's biography on Obama: http://www.amazon.com/Barack-Obama-ebook/dp/B005GG0KZ8/ (http://www.amazon.com/Barack-Obama-ebook/dp/B005GG0KZ8/)
I very much enjoyed his bio on Bill Clinton (http://"http://www.amazon.com/First-In-His-Class-ebook/dp/B0031OQ0NS/"), but this Obama bio seems to have some mixed reviews. I may wait a little bit longer since the book is still less than a year old.
(https://languish.org/forums/proxy.php?request=http%3A%2F%2Fecimages.kobobooks.com%2FImage.ashx%3FimageID%3D5VSeoV-dVkSsA4AExayvFw%26amp%3BType%3DFull&hash=f11a448937675182eea5307edb8b73ec03072b0f)
Quote from: Phillip V on January 18, 2013, 07:30:43 AM
Anybody read David Maraniss's biography on Obama: http://www.amazon.com/Barack-Obama-ebook/dp/B005GG0KZ8/ (http://www.amazon.com/Barack-Obama-ebook/dp/B005GG0KZ8/)
I very much enjoyed his bio on Bill Clinton (http://"http://www.amazon.com/First-In-His-Class-ebook/dp/B0031OQ0NS/"), but this Obama bio seems to have some mixed reviews. I may wait a little bit longer since the book is still less than a year old.
(https://languish.org/forums/proxy.php?request=http%3A%2F%2Fecimages.kobobooks.com%2FImage.ashx%3FimageID%3D5VSeoV-dVkSsA4AExayvFw%26amp%3BType%3DFull&hash=f11a448937675182eea5307edb8b73ec03072b0f)
What a horrible choice of picture; I get strong vibes of the Joker from it.
Quote from: Agelastus on January 18, 2013, 07:32:22 AM
What a horrible choice of picture; I get strong vibes of the Joker from it.
:huh: It's just a younger Obama, which is appropriate since the book covers his earlier years.
Quote from: Agelastus on January 18, 2013, 07:32:22 AM
What a horrible choice of picture; I get strong vibes of the Joker from it.
the joker would probably manage to solve the problem
Quote from: derspiess on January 18, 2013, 11:03:18 AM
Quote from: Agelastus on January 18, 2013, 07:32:22 AM
What a horrible choice of picture; I get strong vibes of the Joker from it.
:huh: It's just a younger Obama, which is appropriate since the book covers his earlier years.
So the smile and the crease lines around it don't remind you of Jack Nicholson's Joker then? :hmm: I must be oversensitive, I guess.
Quote from: Agelastus on January 18, 2013, 11:16:06 AM
So the smile and the crease lines around it don't remind you of Jack Nicholson's Joker then? :hmm: I must be oversensitive, I guess.
Well yeah, he's got a Joker-like smile, but it is what it is.
How do you kick the debt ceiling can down the road? :mellow:
Quote from: Sheilbh on January 18, 2013, 06:15:12 PM
How do you kick the debt ceiling can down the road? :mellow:
You increase the limit a tiny bit, so you run up against the ceiling again in a few months?
Quote from: Sheilbh on January 18, 2013, 06:15:12 PM
How do you kick the debt ceiling can down the road? :mellow:
Easy - combine two metaphors and Bob's your Uncle.
Quote from: Sheilbh on January 18, 2013, 06:15:12 PM
How do you kick the debt ceiling can down the road? :mellow:
You don't. You kick the deficit reduction can down the road, which up to now debt ceiling has been a part of.
Word is, there will be some stuff attached that Reid can't abide, so the Senate will not bring it to a vote. Yay, another standoff.
Quote from: Admiral Yi on January 19, 2013, 04:31:36 AM
You don't. You kick the deficit reduction can down the road, which up to now debt ceiling has been a part of.
How has the debt ceiling been part of deficit reduction up to now?
But that's my view, you can't kick the can down the road. You can with the deficit reduction but the debt ceiling is either you enable the executive to pay what you've told them to do, or you don't. The only way you could kick the can down the road was if you were talking about proposals to abolish it (almost no-one else in the world has a similar mechanism) or proposals to raise it so high it doesn't matter (the Danish strategy).
Incidentally this is what McConnell had to filibuster himself over. The Administration proposed changing the way the debt ceiling worked, so it was automatically approved and Congress had to accept or decline it - if they declined it the President could then veto that. So to refuse to raise the debt ceiling the House would need a two thirds majority. McConnell, during the fiscal cliff debates, wanted to stir up some trouble with the Democrats and, thinking they lacked the votes, proposed precisely this. It turns out the Democrats did have enough votes in the Senate, so McConnell had to filibuster his own proposal :lol:
Quote from: Sheilbh on January 19, 2013, 05:37:08 AM
How has the debt ceiling been part of deficit reduction up to now?
Back in the summer the GOP held a gun to the debt ceiling's head and said unless you cut spending we'll kill everyone in the room.
QuoteBut that's my view, you can't kick the can down the road. You can with the deficit reduction but the debt ceiling is either you enable the executive to pay what you've told them to do, or you don't. The only way you could kick the can down the road was if you were talking about proposals to abolish it (almost no-one else in the world has a similar mechanism) or proposals to raise it so high it doesn't matter (the Danish strategy).
I agree with this in principle. When the legislature votes in a budget, they vote in a de facto increase in the debt ceiling. I would have no problem with abolishing the debt ceiling altogether. But it is a little disingenuous to say that the House voted voluntarily for the current budget. They were blackmailed with across the board tax increases much the same way they previously tried to blackmail Democrats with a default.
Quote from: Admiral Yi on January 19, 2013, 12:09:57 PM
Back in the summer the GOP held a gun to the debt ceiling's head and said unless you cut spending we'll kill everyone in the room.
Yeah, but that's the first time that's ever happened. I think saying 'up to now' the debt ceiling's been tied to deficit reduction implies more than catastrafuck one off.
QuoteI agree with this in principle. When the legislature votes in a budget, they vote in a de facto increase in the debt ceiling. I would have no problem with abolishing the debt ceiling altogether. But it is a little disingenuous to say that the House voted voluntarily for the current budget.
We'll have to depart here because I don't understand how this works in the US. In the UK if the legislature fails to pass a budget there's an election until a majority can pass a budget. Whatever way of funding government the US legislature hoodwinks into existence should be funded. So abolish the debt ceiling or increase it beyond doubt like the Danes.
But I can't think of any specific spending cuts that the House Republicans have proposed in their last term - except for plan B, which ironically, was just a tax raise.
Fiscal Footnote: Big Senate Gift to Drug Maker'A provision buried in the fiscal bill passed this month gives Amgen, the world’s largest biotechnology firm, more time to sell a lucrative kidney dialysis drug without price restraints.'
http://www.nytimes.com/2013/01/20/us/medicare-pricing-delay-is-political-win-for-amgen-drug-maker.html
QuoteThe language buried in Section 632 of the "fiscal clif" bill delays a set of Medicare price restraints on a class of drugs that includes Sensipar, a lucrative Amgen pill used by kidney dialysis patients.
The provision gives Amgen an additional two years to sell Sensipar without government controls. The news was so welcome that the company’s chief executive quickly relayed it to investment analysts. But it is projected to cost Medicare up to $500 million over that period.
Amgen, which has a small army of 74 lobbyists in the capital, was the only company to argue aggressively for the delay, according to several Congressional aides of both parties.
Supporters of the delay, primarily leaders of the Senate Finance Committee who have long benefited from Amgen’s political largess, said it was necessary to allow regulators to prepare properly for the pricing change.
But critics, including several Congressional aides who were stunned to find the measure in the final bill, pointed out that Amgen had already won a previous two-year delay, and they depicted a second one as an unnecessary giveaway.
(https://languish.org/forums/proxy.php?request=http%3A%2F%2Fgraphics8.nytimes.com%2Fimages%2F2013%2F01%2F20%2Fus%2FSUB-LOBBY-1%2FSUB-LOBBY-1-articleInline-v2.jpg&hash=6fb05aae1c64391507628f671fcc47b7e3510748)
Let's hear it for shareholder value.
Quote from: Admiral Yi on January 19, 2013, 12:09:57 PM
I agree with this in principle. When the legislature votes in a budget, they vote in a de facto increase in the debt ceiling. I would have no problem with abolishing the debt ceiling altogether.
Agreed - once the appropriation is made, it's made. Adding in a supplemental debt limit overdetermines the problem.
FYI - Judge Posner has come out publicly questioning the constitutionality of the limit. It does seem to run afoul of the spirit of INS v. Chadha as it seems to give the Congress a quasi-veto over previously enacted legislation.
They can't just abolish the debt ceiling unless Congress plans to start voting on every bond issuance again.
Quote from: CountDeMoney on January 20, 2013, 07:32:08 AM
Let's hear it for shareholder value.
Maybe they'll have extra budget for market research!
Quote from: MadImmortalMan on January 21, 2013, 05:26:14 PM
They can't just abolish the debt ceiling unless Congress plans to start voting on every bond issuance again.
Says who?
My copy of the Constitution puts executive power in the executive branch. And my copy of the US code imbues the Secretary of Treasury with broad powers to manage the public debt and carry out financing services for the government as required.
If Congress makes an appropriation and directs the executive to carry it out but does not specifically tax or attach a particular bond issue to the appropriation, then it is the obligation of the Executive to use its general executive authority to raise the required funds on the credit of the United States. Doing anything else would involve faithlessness in execution of the laws and violate the President's Art II duties.
Quote from: The Minsky Moment on January 22, 2013, 10:09:47 AM
Quote from: MadImmortalMan on January 21, 2013, 05:26:14 PM
They can't just abolish the debt ceiling unless Congress plans to start voting on every bond issuance again.
Says who?
My copy of the Constitution puts executive power in the executive branch. And my copy of the US code imbues the Secretary of Treasury with broad powers to manage the public debt and carry out financing services for the government as required.
If Congress makes an appropriation and directs the executive to carry it out but does not specifically tax or attach a particular bond issue to the appropriation, then it is the obligation of the Executive to use its general executive authority to raise the required funds on the credit of the United States. Doing anything else would involve faithlessness in execution of the laws and violate the President's Art II duties.
Says Article 1. The executive can't buy toilet paper to wipe their asses without the approval of Congress.
He's not buying anything.
Quote from: Razgovory on January 22, 2013, 01:05:11 PM
He's not buying anything.
That's right-- HE'S SELLING OUR KIDS' FUTURE
Quote from: MadImmortalMan on January 22, 2013, 12:53:02 PM
Quote from: The Minsky Moment on January 22, 2013, 10:09:47 AM
Quote from: MadImmortalMan on January 21, 2013, 05:26:14 PM
They can't just abolish the debt ceiling unless Congress plans to start voting on every bond issuance again.
Says who?
My copy of the Constitution puts executive power in the executive branch. And my copy of the US code imbues the Secretary of Treasury with broad powers to manage the public debt and carry out financing services for the government as required.
If Congress makes an appropriation and directs the executive to carry it out but does not specifically tax or attach a particular bond issue to the appropriation, then it is the obligation of the Executive to use its general executive authority to raise the required funds on the credit of the United States. Doing anything else would involve faithlessness in execution of the laws and violate the President's Art II duties.
Says Article 1. The executive can't buy toilet paper to wipe their asses without the approval of Congress.
Move to strike as non-responsive.
The Article I authority exists once the appropriation is made.
Joan, you really want the USSC to decide which it likes better, the debt limit legislation or the appropriations/tax legislation? Not going to happen.
Quote from: The Minsky Moment on January 22, 2013, 01:32:33 PM
The Article I authority exists once the appropriation is made.
No it doesn't. Congress has the power to borrow. Yeah, it's silly to make an appropriation and not provide the funds, but that just means Congress isn't doing its job, not that there's somehow power conferred on the executive automatically.
Quote from: MadImmortalMan on January 22, 2013, 02:20:23 PM
Quote from: The Minsky Moment on January 22, 2013, 01:32:33 PM
The Article I authority exists once the appropriation is made.
Yeah, it's silly to make an appropriation and not provide the funds, but that just means Congress isn't doing its job...
That is an odd result? Dont you have a legal doctrine that office holders are performing their roles properly unless there is some evidence to the contrary which would then give rise to on obligation by the exective to carry out the will of the congress.
How does your system work if the President can simply ignore what congress legislates?
Quote from: crazy canuck on January 22, 2013, 04:51:57 PM
Quote from: MadImmortalMan on January 22, 2013, 02:20:23 PM
Quote from: The Minsky Moment on January 22, 2013, 01:32:33 PM
The Article I authority exists once the appropriation is made.
Yeah, it's silly to make an appropriation and not provide the funds, but that just means Congress isn't doing its job...
That is an odd result? Dont you have a legal doctrine that office holders are performing their roles properly unless there is some evidence to the contrary which would then give rise to on obligation by the exective to carry out the will of the congress.
How does your system work if the President can simply ignore what congress legislates?
You mean like how he's ignoring his legal obligation to submit a budget proposal before the deadline?
Of course it'd also be nice for the Senate to pass a budget, but apparently these fiscal fights are just too fun.
http://www.scribd.com/doc/121706518/HR325
Raises the debt limit and holds all congressmen salaries in escrow until a budget is passed.
Quote from: MadImmortalMan on January 22, 2013, 02:20:23 PM
No it doesn't. Congress has the power to borrow. Yeah, it's silly to make an appropriation and not provide the funds, but that just means Congress isn't doing its job, not that there's somehow power conferred on the executive automatically.
Congress has the power to borrow. It can exercise that power either by: (1) specifying the form of borrowing and tying it to a particular appropriation - i.e. finance this by issuing 10 year bonds or zero coupons or whatver; or (2) it can just direct the Treausury to spend the money and leave it up to the Treasury under its general delegated authority to determine the form of the borrowing.
The Congress exercises its borrowing power every time it makes an appropriation without specifically allocating funds or providing for sufficient tax revenue. it doesn't have to specifically say the words borrow to exercise the power.
The alternative is as you point out nonsensical. It is also unconstitutional. The Canuck is basically right. The Executive has a constitutional responsibility to use the means at its disposal to make sure the laws are faithfully executed. If that means selling t-bills so be it. The Congress can't use the debt limit as a quasi legislative veto to thwart the Executive's ability to carry out the laws that Congress already passed.
Quote from: Admiral Yi on January 22, 2013, 01:34:57 PM
Joan, you really want the USSC to decide which it likes better, the debt limit legislation or the appropriations/tax legislation? Not going to happen.
It's almost always more optimal to resolve these things w/o forcing the constitutional issue.
But if we end up having to play this game every 6 months, I am not so sure. :ph34r:
Quote
QE is macroeconomic doping, and America is Lance Armstrong": Davide Serra of Algebris
Any 'truth' in this ?
A drop. Some signs we are interpreting as recovery, such as asset prices, are merely a reflection of incredibly cheap money.
But only a drop. We still measure "the competition" in real terms, which can't be gamed. Unless you want to just cook all the macro stats, like Argentina is doing.
Quote from: mongers on January 23, 2013, 03:59:30 PM
Quote
QE is macroeconomic doping, and America is Lance Armstrong": Davide Serra of Algebris
Any 'truth' in this ?
Doping won Lance seven TdFs. So no from the perspective that doping worked.
The analogy is obscure in this context.
Monetary policy can improve economic performance. It may also have negative side effects if used in excess. In those senses I suppose the analogy holds.
Quote from: The Minsky Moment on January 23, 2013, 05:38:33 PM
The analogy is obscure in this context.
Monetary policy can improve economic performance. It may also have negative side effects if used in excess. In those senses I suppose the analogy holds.
:thumbsup:
Quote
Obama Signs The Debt Ceiling Bill, Officially Ending The Debt-Limit Fight Until At Least August (http://www.businessinsider.com/obama-signs-debt-ceiling-bill-spending-cuts-taxes-2013-2)
President Barack Obama signed the "No Budget, No Pay Act of 2013" into law Monday night, the White House said, officially suspending the nation's debt limit through May 18. The bill also suspends pay for members of Congress if their chamber does not pass a budget resolution by April 15.
The Senate had passed the debt ceiling bill last week, and the House passed it the week before. The two chambers passed the bill along different lines. The House saw fairly strong bipartisan support for the bill. But in the Senate, it passed largely on partisan lines. Republican Senators said they voted against it because of a lack of spending cuts that accompanied the debt-limit increase.
The debt-ceiling bill is that it is not technically a clean hike in the nation's debt limit. It's a suspension of the debt ceiling for a certain time period. On May 19, the debt limit will be raised by an amount "necessary to fund commitment incurred by the Federal Government that required payment."
The Bipartisan Policy Center estimates that number will be around $450 billion. The BPC also estimates that the next point the nation will need to raise the debt limit will come in August.
The no budget no pay provision is what Senator Heller ran on last year. He was all over that when he visited our office.
Still need to deal with $1.2 trillion sequester by end of this month?