Reply to MikieIt should not be an issue. Newt Gingrich was the malevolence that started this entirely inane and destructive tactic in modern American politics. Everyone should be clear that raising the debt ceiling is a legislative requirement that is required to cover the debts incurred by all Federal governments, be they Republican or Democrat. Using that requirement to try and bludgeon any current government into cutting so-called 'excessive spending' is completely illegitimate, a form of political blackmail. If the Republicans really want to cut programs, fine, let them run on it, and win the election and implement it. But as is amply documented, if this gamesmanship really did result in a US default, then it would make the Great Depression seem like a walk in the park. However I'm cautiously optimistic that the whole gambit will in the end only result in further humiliation and estrangement for the lunatic MAGA clownshow and that sanity will prevail before disaster. (After all, McConnell assured the media just the other day that 'America will always pay its debts'.)
It should also be recalled the one of the last installments of this political insanity actually increased the overall Government debt, AND contributed greatly towards Republican losses in the subsequent elections. But then, it's no use trying to explain the obvious to those unable to understand it.
The debt ceiling was created by the Second Liberty Bond Act of 1917. The law was not intended as a means to paralyze the government. Rather, it established the plan whereby the government could undertake new borrowing to cover expenses. Yes, it could have been done differently, but it wasn't.
The national debt stands at what? 31 or 32 trillion dollars. A large hunk of that was accumulated during the governments support of the economy during the 2010 crash and then during the Covid 19 pandemic. In 2010 the national debt was at 13+ trillion dollars.
The GDP is currently -2022- around 20 trillion dollars.
Democrat and Republican congresses have both raised the debt limit. This year it will probably be a prolonged battle because some members of the far-right are what David Brooks calls 'nihilists'. They seem to be prepared to see the government burn down. There are not enough Nihilists in the House to definitely block a higher debt ceiling. There are enough, that they could force the government to default IF the rest of the republicans fail to vote for override.
Default would be bad for government employees, Social Security and Medicare recipients, Disability program recipients, military employees, suppliers, and all the US bond holders around the world (like China) who might want to cash a few million of the bonds in. A default would seriously damage the US Government's credit rating.
If they block raising the debt ceiling, then we might hope that the congressional nihilists will all have some kind of an unfortunate accident. It's not that many, maybe... 15.
Default would be bad for government employees, Social Security and Medicare recipients, Disability program recipients, military employees, suppliers, and all the US bond holders around the world (like China) who might want to cash a few million of the bonds in.
I've read that a US Bond Default would credibly cause a financial apocalypse, an 'all the banks are closed and there's no money' scenario. I think it's an exaggeration but not much of one.
Reply to Wayfarer I'm a thrifty individual, and I would prefer the government have exercised thrift more often than it has. 32 trillion dollars is a hell of a lot of debt. On the other hand, only a mad man would think it should be dealt with in one fell swoop. Entitlements (like Social Security) and interest on the debt are not deferrable (unless you are a crazy nihilist). So, in order to pay down the debt we would need to reduce military expenditures and quite a bit of civilian discretionary expending, It would be pretty painful.
Will the government become thrifty? I doubt it very much.
Will Congress eventually raise the debt ceiling? Oh, probably -- at the last possible minute.
Reply to BC There's a lot in what Brooks says about nihilists. These MAGA lunatics are completely out of touch with reality. (What was the saying from a few years back, 'reality appears to have liberal bias?') It's true that Government indebtedness is a huge problem, but nobody in the advanced economies dare utter 'tax rises' even while their populations age and the expectation from public services continues to grow.
Reply to Wayfarer The 50 states are not allowed to print money or to operate at a deficit. This can produce happy outcomes. Minnesota (my state) has collected $17 billion dollars more than it spent. To governor and legislature are busy arguing about what to do with it. We have a rainy-day fund of a few billion, which is drawn on when tax collections come up short. Some of the surplus will go into that. Some will go into education. Some will probably be rebated.
A surplus this big is unprecedentedly large. Minnesota is a high-tax state. Consequently, we have better schools, better health, and better social services than many states. Our roads aren't good, but that's the fault of cold winters and hot summers.
A share of federal spending is good, of course. If the feds collected all the taxes that are due, if they spent less subsidizing industries that would still do just fine without it, and similar measures, the federal budget could come closer to being at least balanced on a year to year basis.
Our state Republicans are currently outnumbered in the legislature and the governor is a Democrat. It's the way things ought to be.
Reply to BC I have family in Wisconsin. Lovely place, hope to be back there again in August. The political scene has been extremely fraught, beginning with Scott Walker who oversaw gerrymandering of the whole state and whose party basically attempted a silent coup. I'm really glad Tony Evers won in November.
This is something of a theater happening every now and then.
I think now the question is if the current Senate is so dysfunctional, so bitterly venomous, that they take the theater way out of the comfort zone and force (I guess in the summer) a government shutdown or even a missing of a payment (which is called a debt default).
If someone or enough people really, really want to make things hard for the Biden administration or then make minority leader Mitch McConnell to look even worse, by all means make this the new issue.
Yet in the end likely the whole financial system will crash. But that can take a while to happen...
It's kind of unfortunate that you travel all the way to North America to visit Wisconsin.
I've only began to visit the United States later in life, I've had, I think, 7 trips there now. (Highlight was catching the California Zephyr from SF to Chicago about ten years ago). America has always exceeded my expectations - it's a lot like it looks on television, but I've always been treated with courtesy and friendliness, and it was just better than I expected. Just as well, as I now have two American grandkids (although they will be dual Australian citizens.) I get the Wisconsin is kinda dull, but Lake Michigan is something.
Well, yes, I suppose. Cheese is important. Do you have something against cheese? Who doesn't want to visit an ice castle made out of cheese curds? Kohler, WI is famous for making toilets and Green Bay is the toilet paper capital of the world. That's where "splinter-free toilet paper" was introduced in 1935. Then there is bratwurst and beer. Milwaukee has Pabst, Miller, Schlitz, and Blatz breweries.
In Wittenberg, WI, you could buy some really fine apple wood smoked liver paté, bacon, ham, or wieners at the Nuesky plant.
This is extremely true. Lake Michigan is... something.
Do your relatives live in or near Madison? The capital of Wisconsin is unlike the rest of the state so it is more interesting. I haven't been there recently, but it used to be a sort of east coast outpost on the prairies.
as I now have two American grandkids (although they will be dual Australian citizens.) I get the Wisconsin is kinda dull, but Lake Michigan is something.
True. I used to live in Ohio and I was enchanted by Lake Erie. I would so move to Australia if I had dual citizenship.
Reply to BC Madison is a nice place, we visited late August last and went down to the lakeside of the University campus. My son lives in Oconomowoc, it’s kind of a satellite suburb of Milwaukee. Got taken to a ball game at Milwaukee Stadium. Beginning to feel very at home there.
Reply to Wayfarer There's an interesting Frank Lloyd Wright church in Oconomowoc, Greek Orthodox. The sanctuary is bowl shaped, I believe -- based on the post card. The day we arrived the staff was too annoyed by previous unscheduled visitors to show the place. Understandable.
Reply to Mikie There are those who say that even by negotiating he's caved, but I don't know about that. You can't negotiate with extortionists without emboldening them to keep doing it. What bothers me is that the MAGA extremists really might be willing to cause a financial catastrophe rather than compromise.Trump said in the disgraceful display on CNN last week that they 'might as well do it'. Or they might leave it so late that it causes a default on one or another payment, which the market interprets as worst-case, causing the mother of all stock-market crashes. Not too long to wait to find out, in either case. :yikes:
You can't negotiate with extortionists without emboldening them to keep doing it.
Yes. I almost want to say: you want to blow up the global financial system? Go for it. Call their bluff. If they’re not bluffing, then they really are insane.
What’s hilarious is that McCarthy talks as if this is Biden’s doing — as if he’s not manufacturing this entire thing. The whole thing is quite pathetic.
Reply to Mikie McCarthy is a spineless hypocrite. . Especially compared to his predecessor. He's not a leader, rather he's on a nose-ring being pullled along by the Freedom Caucus., That's what happens when you sell your soul and any remnant of principle just to get into office. The extremists in the GOP are a greater threat to the world than Putin, in some ways.
The Dems will use a parliamentary procedure with the help of several GOP congressmembers to force a vote in the House that will pass and go on to easy passage in the Senate for Biden to sign the clean debt ceiling raise into law by the first of June. McCarthy is Dead Speaker Walking –'even if he were to get everything he wants out of Biden – so both men are just engaging in political kabuki theatre in order to give Minority Leader Jeffries time to engineer the Dem's parliamentary rescue of the US Debt from the pathetic default-ransom by the GOP Insurrection Caucus.
Of course, worse case, Biden invokes the 14th Amendment and keeps paying on US Treasuries until the constitutional crisis is litigated in SCOTUS ... sometime next year (maybe in time for the general election). No US Default -– come hell or highwater! – is my prediction.
Reply to Wayfarer Yeah, by next Wednesday the bill we be on Biden's desk or he will have to invoke the 14th Amendment the week after. This ain't silly shit like the Lehman Bros fiasco.
A reminder on what the GOP hostage-takers are demanding for the release of their victim:
[quote=The Guardian;https://www.theguardian.com/business/commentisfree/2023/may/18/us-debt-ceiling-crisis-republicans]The Republicans want major spending cuts, but they want to force those cuts through by threat instead of having to legislate normally. And the cuts they’re asking for are appalling: they include slashing funds to things like cancer research, rental assistance for the poor, support for schools with large numbers of low-income students, and pay for Americans in uniform. The Republican bill would end Biden’s attempt at student loan debt relief, repeal tax breaks for renewables and clean energy while increasing reliance on fossil fuels, raise already-onerous work requirements to receive food stamps and welfare benefits, and decrease the efficiency and abilities of the IRS.
The Republican proposal would leave a great many Americans worse off – but (OF COURSE) it would be a boon for oil executives and wealthy tax avoiders. ...
Today’s Republicans are a party of destruction. As much as they claim to want to make America great again, they seem much more intent on sowing division, fomenting chaos and embracing an ethos of nihilism. There is no school shooting brutal enough to make them reconsider America’s extreme gun laws; no pregnant woman who suffers enough to make them take a step back on criminalizing abortion; and virtually nothing their unelected leader Donald Trump can to do make them reject him – allowing a deadly attack on the Capitol, being deemed a sexual abuser by a New York jury, and undermining America’s tradition of free and fair elections have not been enough to end the Republican party’s love affair with Trump. As the party has not only embraced Trump but molded itself in his image, it has become all the more dangerous to the nation.[/quote]
Oh, and the MAGA nutcase MTG has just introduced articles of impeachment against Biden. They will go nowhere, of course, but she obviously has an ax to grind, and nothing better to do.
An update from The Hill - discussions have been paused.
The 'Freedom Caucus' (read: MAGA Extremist) faction is still insisting that it won't sign the limit increase until it's extortion demands are met. Not discussing their demands is categorised as the White House 'being unreasonable'.
McCarthy has warned that negotiators must come to an agreement on at least the broad parameters of a deal by this weekend if a bill is to have any chance of moving through both the House and Senate by June 1, the earliest date when the Treasury Department has warned of a default.
Politico reports that Biden is resisting invoking the 14th Amendment to bypass the vote, saying it is not a slam-dunk and would lead to complex negotations and legal cases.
I wonder if Kevin McCarthy caves, whether he will loose his job over it. After all, part of the devil's bargain he had to sign to win the Speaker's gavel was to agree that he could be tossed out by a single vote. It hasn't attracted any comment that I've noticed, but you'd have to think it was a possibility.
US debt problem, the nation spending recklessly well over it's income (and not the political theatre event played in the Congress) is like inflation.
Remember how inflation was discussed about early when we didn't have it?
It doesn't matter, it's no problem and won't be a problem. Bringing up the whole issue is a typical nonstarter discussion that the opposition uses as scare tactics...
Until in the end it is a problem.
But first, as we remember from inflation, that was going to be transitory. A non-issue. A freak event because of this and that and something that will last only for few months. :wink:
Things that can be a possible problem, but haven't been for many decades, don't make them being possible and real problems. In the end.
You are just going to be the lucky person that during whose life the shit reaches the fan. And it's going to happen: only after a crisis hits, will something will be done. It's really, unavoidable.
The issue with inflation and debt is how hidden their effects are, and perhaps more importantly, what kind of perverse incentives propel policymakers to accept (perhaps even encourage?) and downplay.
Even when the writing is on the wall, the long-term, indirect nature of something like inflation will always give policymakers a patsy.
I remember a while back having a discussion about inflation here, and for reasons I cannot possibly fathom it seemed people were desperate to find something other than economic policy to blame.
As long as people believe there is such a thing as a free lunch, this problem will persist forever. What people must understand is that someone always has to pay, and 9 times out of 10 it's the common man who gets shafted.
I don’t know if the above two posts reflect awareness of the specific problem regarding raising the debt limit. Due to a quirk of the American political system, Congress has to approve raising the amount that Treasury can borrow to pay for costs already incurred. It has nothing directly to do with spending proposals for the future or even with the budget. It is only concerned with paying for costs already incurred. If the debt limit is not raised, the American Government may not be able to meet its obligations - make payroll for the military, pay pensions, make interest payments on its already-massive debts - it’s a huge list. And if that happens, it’s going to be everyone’s problem, because it will cause an extremely severe stock market crash and huge economic downturn, possibly on the scale of the Great Depression or even greater. ‘Financial apocalypse’ is a term often used. It is the threat of this happening, that one party - one side of politics, not ‘all politicians’ - is using as a threat to force the Government to accept enormous spending cuts. And that is an illegitimate political tactic - before the ‘tea party republicans’ came along in 2011-12, no side in American politics had ever contemplated such a tactic. But the extreme right of the GOP have normalised it (God help us all). Hopefully sanity will prevail, but it’s getting very close to drop-dead time.
I don’t know if the above two posts reflect awareness of the specific problem regarding raising the debt limit.
As I referred to "the political theatre event played in the Congress", I'm quite aware of this.
The real problem is this: this is a long term structural economic problem, not just a political one. Yet (unfortunately) it's just treated as a part of the political discourse and nothing else. The whole debt ceiling theater simply hides this, as it is just a way to grab attention and milk something out of the current administration. Let's just remember: as punctually as a clock that has stopped shows precisely twice in a day the correct time, so precisely the GOP will raise the debt issue as a problem when there in opposition and not talk about it when it's their administration in power. Just as the GOP's solution is to cut down 'liberal welfare' expenditure, but not to shrink the Superpower military (especially when China hasn't dissolved itself like the Soviet Union did).
That above could be stated nearly as a fact. It is perhaps totally inescapable that people will fall into their political camps on the subject and look at this only from the political viewpoint. Yet the facts remain obvious:
a) This is a long term problem, something that yet hasn't been a problem and since the last time the US defaulted (yes, cutting the last remnants to a gold standard was basically a default) was back in the 1970's, hence nobody will care. Since nothing has happened for many decades, people can easily presume that nothing will happen during the next election cycle, at least.
b) Neither the GOP or the Democrats will do anything about it before a crisis erupts. Cutting expenditure will create a downturn that will instantly create pain and the benefits will be seen only years after, which will help the opposition, that likely has gotten into power then. Hence only a crisis will make the leaders do something about this. Naomi Klein made partly a good point in her "Shock Doctrine: the rise of disaster capitalism".
c) As this a long term problem and can in the crisis can happen in the 2030's, 2040's or 2050's, it is problematic to raise the alarms about this. People will end up only with a permabear label with a following of preppers that are waiting for Armageddon, which won't happen.
A friend that works in the local Central Bank (and thus basically in the ECB) said a year ago that the US Federal Reserve has been already between a rock and a hard place and simply cannot move on this.
Still no resolution. The Freedom Caucus really might push the US into default rather than back down. They are refusing to even consider tax increases as a means to address the deficit: only cuts to welfare will be considered.
As I understand it default might mean not being able to make some specific payments - but that if Congress then decided to pass the limit increase, payments would be able to resume. By this means, the Freedom Caucus might be willing to indicate it's complete callousness and disregard for the welfare of the nation by engineering a 'limited default' - which would still cause major stock-market ructions and many other unknown consequences. Kind of like cutting off the finger of your kidnap victim and mailing it to the parents, then blaming the parents for not coughing up. I wouldn't put it past those MAGA thugs.
One of the cuts that the GOP are trying to extort is funding for the Inland Revenue Service to hire more tax agents.
Republicans’ proposal to rescind $71 billion in IRS funding pushed through by Democrats last year would cut projected tax receipts by $191 billion over the next decade, the nonpartisan Congressional Budget Office estimates.
The result: The government would find itself an additional $120 billion in the hole.
Republicans, who’ve campaigned hard against the IRS money since last summer, have mostly ignored the budget warnings, arguing they are trying to protect average Americans from zealous tax collectors.
This is bullshit. 'Treasury Secretary Janet Yellen has insisted that the new funding [will] not be used to increase audit rates on those earning less than $400,000 a year.' The reason they want to defund the IRS is so that all their rich donor mates can get the tax department of their backs. See this analysis.
As always, GOP cuts will worsen the deficit and benefit the wealthy while the GOP are bleating about 'cutting wasteful spending'.
As always, GOP cuts will worsen the deficit and benefit the wealthy while the GOP are bleating about 'cutting wasteful spending'.
You may be right -- and surely this is true for many Republicans, but also Democrats -- that this is intended as a deliberate move to benefit the owner class, but don't underestimate how much the Freedom Caucus is motivated not by money but ideology. Some are against the IRS not because they are shills for donors far, far wealthier than they will ever be, but because "Muh liberty!" It's a, so to speak, principle.
I don't know case by case which explanation is best. Someone like Matt Gaetz is apparently just a piece of shit who plays a populist on TV but has always had his hand out to every lobbyist and donor he came anywhere near, and presumably has been more or less peddling influence since he entered politics. But some of these folks just aren't bright enough to be that corrupt. MTG probably only manages to be corrupt when someone explains to her in small words exactly what she needs to do for the money. In the meantime she's just a dangerous narcissist. But then there are those who are so dumb they really believe, you know, God hates the Fed and loves AR-15s. Not kidding. Not kidding at all. Most who make it to the national legislature have learned which of their true beliefs it's cool to say on a hot mic, but if you drop down to the Congressional minor leagues, state legislatures, it is shocking how absolutely stupid a lot of these tea-party-maga-evangelical-libertarian bozos are. Just plain stupid.
So gutting the IRS even though it will cost more, that's just a bit too subtle for some of these yahoos. The IRS are jackbooted thugs who hate our liberty, period. They want to take our money and use it to pay for abortions.
Crashing the world economy? That's just something some eggheads say will happen, I don't believe it. And even if the world economy crashes, what's that got to do with America? Fuck em. Let em take care of their economy and we'll take care of ours. -- No, seriously, this is the level of thought of the people who vote in Republican primaries and too many of those who end up getting elected.
Never attribute to malice what can be explained by greed or stupidity, the saying goes. You're right about the greed, but don't forget about the stupidity.
[quote=The Hill; https://thehill.com/homenews/senate/4016038-mccarthy-has-little-room-to-maneuver-in-debt-ceiling-talks/] House Freedom Caucus members, such as Rep. Ralph Norman (R-S.C.), warn they won’t accept anything less than the House-passed bill [which Democrats have said repeatedly is DOA].
That leaves McCarthy with strikingly little room to maneuver.
The House bill cut discretionary spending to fiscal 2022 levels and then caps domestic discretionary spending to 1 percent growth over the next decade. It also expands work requirements for federal social aid programs and rescinds $30 billion in unspent COVID funding.
House Republicans are also pushing for energy permitting reform, measures to secure the U.S.-Mexico border and to block Biden’s plan to forgive $400 billion in student debt relief.
Biden is holding fast against many of the Republican demands, which Democrats warn would hurt American families across the nation by cutting an array of federal programs, expecting McCarthy will back down. l.[/quote]
Still reckon, depending on the outcome, it's quite possible that McCartney will loose his gavel over it. Those Freedom Caucus types are ruthless ideologues.
The Dems + 5 or more Repubs will force a vote in the US House and they will pass a bill to raise the Debt Ceiling. The US Senate will pass that bill within 24 hours, and then the Congress will recess for Memorial Day. McCarthy will still be the Speaker for a while longer and POTUS will sign the law by the first of June. US Federal Budget negotiations to resume in earnest in the Fall. The sky isn't falling – even though Federal Indictments of Putin's Bitch seem imminent followed by Fulton County, Georgia Indictments in July/August. :party:
Military Spending Emerges as Big Dispute in Debt-Limit Talks
President Biden has offered to freeze discretionary spending, including for defense. Republicans want to spend more for the military, and cut more elsewhere.
What a shocker. Can republicans make it any more obvious who they represent? It’s a joke.
Well, apparently, these a*holes are going to drag this nonsense out until the 11th hour and 59th minute before they slam on the brakes to stop this trainwreck. Wtf, Dems? :brow:
Republicans want to spend more for the military, and cut more elsewhere.
I watched a US 60 Minutes segment last night, about rorting and gouging in the US Defense Establishment (below for anyone interested). One of the interview subjects had been a top contract negotiator for the Pentagon and widely despised by the aero-space industry for calling out their predatory and monopolistic pricing practices. One example was a part that was generally available on the open market for $350 odd bucks, for which the Pentagon was routinely paying 10 grand. But the clincher was an episode during the Iraq war. It was discovered that one of their helicopter models needed an urgent parts replacement or could literally fall out of the sky. The supplier of said part immediately put an enormous premium on the thousands of units that would have to be supplied. The procurement teams said words to the effect of 'we're not paying that!' To which the response came, 'well, let them crash, then.' They paid. Obviously the Freedom Caucus guys have taken a leaf from their book. So all these extra billions that the GOP wants for 'defense' will simply line the pockets of lobbyists and military-industrial executives. It is all entirely corrupt.
What’s frustrating is the obduracy of both parties on this matter. There’s some sounds coming from Bernie and others, but it’s ignored or treated as impossible.
There’s no reason we should be spending 858 billion dollars, a year, on the “military” - ie, Boeing, Lockheed Martin, Raytheon, etc. None.
What’s frustrating is the obduracy of both parties on this matter.
That’s where I part company. I put the blame wholly and solely on the Republican Party. Using the debt ceiling vote as leverage for political purposes is immoral from the get-go. Blaming the Democrats for what is happening is like blaming the bank staff for the hold-up.
We should abolish the debt ceiling. It does nothing but to create an artificial crisis every few years. The debt ceiling has not accomplished anything. A credit limit is not what makes me a responsible borrower, and the same applies to the nation as a whole. You don't want to waste all of your money paying interest? Well, then pay on the principal and start reducing the debt. I've been living completely debt free for the past five years and my credit limit is completely irrelevant at this point because I keep paying my bills as I go. Any time I do make a large credit purchase I pay it off in a timely manner -- I don't keep floating my debt along for years or decades since that would just be an insane waste of my resources.
Reply to Mikie Yes, but the budget deficit next year is projected to be 1.4 trillion. And this during a time of rising interest rates. The spending we're doing is unsustainable. The military spending needs to be pared back, but even if you cut it in half, we still have an enormous fiscal problem.
Cutting it in half would be a good start. Cut it down to 100 billion, I say. Still too much. Now the deficit is 700 billion, which can easily be made up for by taxing the wealthy and corporations. Fairly easy, just not “politically viable” thanks to both parties— but mostly Republicans.
It’s also worth remembering that no one seemed to give a damn about the debt during Trump’s four years. Now the Republicans have to scream about it and cause a ruckus, which trickles down to us talking about it. Which is annoying, but unavoidable when it’s something this important (the debt ceiling that is).
Yeah, it’s silly. The spending has already been made. If they want to cut the debt, then reject the budget.
Republicans don’t really care if shutdowns or debt gimmicks cause chaos and pain— they’re interested solely in making people as miserable as possible so they can blame the person in office.
Notice the language from McCarthy: “If president Biden allows a default…” It’s laughable.
Still no agreement. McCarthy is making noises about ‘progress’ and ‘optimism’ but the hardliners in the GOP back-office are still holding out. I wouldn’t put it past them to drive the US into default out of pure ideological hatred and spite.
And that’s that. Now let’s see what the deal is, and if the MAGA Republicans will accept it. I imagine McCarthy could get some democrats to help, but he seems to have said that’s out of the question…so who knows.
The Freedom Caucus are vowing to torpedo it - have a listen to the video in this NYT article.
“Not one Republican should vote for this bill,” Representative Chip Roy, a Texas Republican and influential member of the ultraconservative House Freedom Caucus, said at a news conference outside the Capitol. “We will continue to fight it today, tomorrow, and no matter what happens, there’s going to be a reckoning about what just occurred unless we stop this bill by tomorrow.”
Another member of the group, Representative Dan Bishop of North Carolina, said he considered the deal grounds for ousting Mr. McCarthy from his post, something that any one lawmaker can attempt thanks to a rule Mr. McCarthy agreed to while he was grasping for the votes for his job.
I knew there'd be calls for McCarthy's head.
Hakeem Jeffries (House minority leader) is saying there needs to be 150 Republican votes. But
Two of the Rules Committee’s arch-conservative members, Mr. Roy and Representative Ralph Norman of South Carolina, could vote against allowing it to move forward, in a sharp rebuke to the speaker. If they were joined by another Republican on the committee, they could sideline the agreement before it even reached the floor.
Reply to Wayfarer Both Schumer & McConnell are nothing if not lifelong, loyal-to-a-fault employees of the billionaire political parties donor-class and committed to avoiding default on US Debt. The US Senate will easily pass the bill.
Now maybe we can get back to the important things— like fighting wokeness, Disney…arming teachers, banning books, restricting unions, gutting environmental regulations, etc. You know— the normal Republican agenda.
Reply to 180 Proof Still has to go through Senate. And still an outside chance one of the Republican hard-heads will call for a spill of the Speaker's chair.
[quote=Ralph Nader]
Why was the bloated, redundant military budget off limits in the debt limit negotiations between the militaristic GOP and Joe Biden? That’s over half the federal operating budget. Untouchable. Full of contractor rip offs and corruption.
[/quote]
?Wayfarer Both Schumer & McConnell are nothing if not lifelong, loyal-to-a-fault employees of the billionaire political parties donor-class and committed to avoiding default on US Debt. The US Senate will easily pass the bill.
Comments (67)
Yellen says minting a trillion dollar coin is off the table. I wonder if republicans are crazy enough to see this to the end.
It should also be recalled the one of the last installments of this political insanity actually increased the overall Government debt, AND contributed greatly towards Republican losses in the subsequent elections. But then, it's no use trying to explain the obvious to those unable to understand it.
The national debt stands at what? 31 or 32 trillion dollars. A large hunk of that was accumulated during the governments support of the economy during the 2010 crash and then during the Covid 19 pandemic. In 2010 the national debt was at 13+ trillion dollars.
The GDP is currently -2022- around 20 trillion dollars.
Democrat and Republican congresses have both raised the debt limit. This year it will probably be a prolonged battle because some members of the far-right are what David Brooks calls 'nihilists'. They seem to be prepared to see the government burn down. There are not enough Nihilists in the House to definitely block a higher debt ceiling. There are enough, that they could force the government to default IF the rest of the republicans fail to vote for override.
Default would be bad for government employees, Social Security and Medicare recipients, Disability program recipients, military employees, suppliers, and all the US bond holders around the world (like China) who might want to cash a few million of the bonds in. A default would seriously damage the US Government's credit rating.
If they block raising the debt ceiling, then we might hope that the congressional nihilists will all have some kind of an unfortunate accident. It's not that many, maybe... 15.
I've read that a US Bond Default would credibly cause a financial apocalypse, an 'all the banks are closed and there's no money' scenario. I think it's an exaggeration but not much of one.
Will the government become thrifty? I doubt it very much.
Will Congress eventually raise the debt ceiling? Oh, probably -- at the last possible minute.
A surplus this big is unprecedentedly large. Minnesota is a high-tax state. Consequently, we have better schools, better health, and better social services than many states. Our roads aren't good, but that's the fault of cold winters and hot summers.
A share of federal spending is good, of course. If the feds collected all the taxes that are due, if they spent less subsidizing industries that would still do just fine without it, and similar measures, the federal budget could come closer to being at least balanced on a year to year basis.
Our state Republicans are currently outnumbered in the legislature and the governor is a Democrat. It's the way things ought to be.
I think now the question is if the current Senate is so dysfunctional, so bitterly venomous, that they take the theater way out of the comfort zone and force (I guess in the summer) a government shutdown or even a missing of a payment (which is called a debt default).
If someone or enough people really, really want to make things hard for the Biden administration or then make minority leader Mitch McConnell to look even worse, by all means make this the new issue.
Yet in the end likely the whole financial system will crash. But that can take a while to happen...
It's kind of unfortunate that you travel all the way to North America to visit Wisconsin. :confused:
Do they involve cheese?
I've only began to visit the United States later in life, I've had, I think, 7 trips there now. (Highlight was catching the California Zephyr from SF to Chicago about ten years ago). America has always exceeded my expectations - it's a lot like it looks on television, but I've always been treated with courtesy and friendliness, and it was just better than I expected. Just as well, as I now have two American grandkids (although they will be dual Australian citizens.) I get the Wisconsin is kinda dull, but Lake Michigan is something.
Anyway, to get the discussion back on track, here's today's updates.
Well, yes, I suppose. Cheese is important. Do you have something against cheese? Who doesn't want to visit an ice castle made out of cheese curds? Kohler, WI is famous for making toilets and Green Bay is the toilet paper capital of the world. That's where "splinter-free toilet paper" was introduced in 1935. Then there is bratwurst and beer. Milwaukee has Pabst, Miller, Schlitz, and Blatz breweries.
In Wittenberg, WI, you could buy some really fine apple wood smoked liver paté, bacon, ham, or wieners at the Nuesky plant.
What more do you want?
This is extremely true. Lake Michigan is... something.
Do your relatives live in or near Madison? The capital of Wisconsin is unlike the rest of the state so it is more interesting. I haven't been there recently, but it used to be a sort of east coast outpost on the prairies.
I'm glad to hear that. :up:
Quoting Wayfarer
True. I used to live in Ohio and I was enchanted by Lake Erie. I would so move to Australia if I had dual citizenship.
Quoting BC
I love cheese. NY style sharp cheddar is my favorite.
Quoting BC
Good question. :chin:
Quoting BC
Columbus, Ohio also prides itself on its bratwurst. They have a festival and everything. It's so exciting.
I’m guessing Biden caves.
Yes. I almost want to say: you want to blow up the global financial system? Go for it. Call their bluff. If they’re not bluffing, then they really are insane.
What’s hilarious is that McCarthy talks as if this is Biden’s doing — as if he’s not manufacturing this entire thing. The whole thing is quite pathetic.
The Dems will use a parliamentary procedure with the help of several GOP congressmembers to force a vote in the House that will pass and go on to easy passage in the Senate for Biden to sign the clean debt ceiling raise into law by the first of June. McCarthy is Dead Speaker Walking –'even if he were to get everything he wants out of Biden – so both men are just engaging in political kabuki theatre in order to give Minority Leader Jeffries time to engineer the Dem's parliamentary rescue of the US Debt from the pathetic default-ransom by the GOP Insurrection Caucus.
Of course, worse case, Biden invokes the 14th Amendment and keeps paying on US Treasuries until the constitutional crisis is litigated in SCOTUS ... sometime next year (maybe in time for the general election). No US Default -– come hell or highwater! – is my prediction.
Which is 13 days away, and (I think) 4 sitting days....
I have vivid memories of the day Lehmann Bros failed.
https://news.harvard.edu/gazette/story/2023/05/laurence-tribe-explains-how-14th-amendment-can-help-biden-avoid-default/
Hope you’re right. Whatever happens, I can’t imagine the powers that be will allow a default.
[quote=The Guardian;https://www.theguardian.com/business/commentisfree/2023/may/18/us-debt-ceiling-crisis-republicans]The Republicans want major spending cuts, but they want to force those cuts through by threat instead of having to legislate normally. And the cuts they’re asking for are appalling: they include slashing funds to things like cancer research, rental assistance for the poor, support for schools with large numbers of low-income students, and pay for Americans in uniform. The Republican bill would end Biden’s attempt at student loan debt relief, repeal tax breaks for renewables and clean energy while increasing reliance on fossil fuels, raise already-onerous work requirements to receive food stamps and welfare benefits, and decrease the efficiency and abilities of the IRS.
The Republican proposal would leave a great many Americans worse off – but (OF COURSE) it would be a boon for oil executives and wealthy tax avoiders. ...
Today’s Republicans are a party of destruction. As much as they claim to want to make America great again, they seem much more intent on sowing division, fomenting chaos and embracing an ethos of nihilism. There is no school shooting brutal enough to make them reconsider America’s extreme gun laws; no pregnant woman who suffers enough to make them take a step back on criminalizing abortion; and virtually nothing their unelected leader Donald Trump can to do make them reject him – allowing a deadly attack on the Capitol, being deemed a sexual abuser by a New York jury, and undermining America’s tradition of free and fair elections have not been enough to end the Republican party’s love affair with Trump. As the party has not only embraced Trump but molded itself in his image, it has become all the more dangerous to the nation.[/quote]
Oh, and the MAGA nutcase MTG has just introduced articles of impeachment against Biden. They will go nowhere, of course, but she obviously has an ax to grind, and nothing better to do.
The 'Freedom Caucus' (read: MAGA Extremist) faction is still insisting that it won't sign the limit increase until it's extortion demands are met. Not discussing their demands is categorised as the White House 'being unreasonable'.
Politico reports that Biden is resisting invoking the 14th Amendment to bypass the vote, saying it is not a slam-dunk and would lead to complex negotations and legal cases.
Remember how inflation was discussed about early when we didn't have it?
It doesn't matter, it's no problem and won't be a problem. Bringing up the whole issue is a typical nonstarter discussion that the opposition uses as scare tactics...
Until in the end it is a problem.
But first, as we remember from inflation, that was going to be transitory. A non-issue. A freak event because of this and that and something that will last only for few months. :wink:
Things that can be a possible problem, but haven't been for many decades, don't make them being possible and real problems. In the end.
You are just going to be the lucky person that during whose life the shit reaches the fan. And it's going to happen: only after a crisis hits, will something will be done. It's really, unavoidable.
(I presume people are rather young here)
Even when the writing is on the wall, the long-term, indirect nature of something like inflation will always give policymakers a patsy.
I remember a while back having a discussion about inflation here, and for reasons I cannot possibly fathom it seemed people were desperate to find something other than economic policy to blame.
As long as people believe there is such a thing as a free lunch, this problem will persist forever. What people must understand is that someone always has to pay, and 9 times out of 10 it's the common man who gets shafted.
As I referred to "the political theatre event played in the Congress", I'm quite aware of this.
The real problem is this: this is a long term structural economic problem, not just a political one. Yet (unfortunately) it's just treated as a part of the political discourse and nothing else. The whole debt ceiling theater simply hides this, as it is just a way to grab attention and milk something out of the current administration. Let's just remember: as punctually as a clock that has stopped shows precisely twice in a day the correct time, so precisely the GOP will raise the debt issue as a problem when there in opposition and not talk about it when it's their administration in power. Just as the GOP's solution is to cut down 'liberal welfare' expenditure, but not to shrink the Superpower military (especially when China hasn't dissolved itself like the Soviet Union did).
That above could be stated nearly as a fact. It is perhaps totally inescapable that people will fall into their political camps on the subject and look at this only from the political viewpoint. Yet the facts remain obvious:
a) This is a long term problem, something that yet hasn't been a problem and since the last time the US defaulted (yes, cutting the last remnants to a gold standard was basically a default) was back in the 1970's, hence nobody will care. Since nothing has happened for many decades, people can easily presume that nothing will happen during the next election cycle, at least.
b) Neither the GOP or the Democrats will do anything about it before a crisis erupts. Cutting expenditure will create a downturn that will instantly create pain and the benefits will be seen only years after, which will help the opposition, that likely has gotten into power then. Hence only a crisis will make the leaders do something about this. Naomi Klein made partly a good point in her "Shock Doctrine: the rise of disaster capitalism".
c) As this a long term problem and can in the crisis can happen in the 2030's, 2040's or 2050's, it is problematic to raise the alarms about this. People will end up only with a permabear label with a following of preppers that are waiting for Armageddon, which won't happen.
A friend that works in the local Central Bank (and thus basically in the ECB) said a year ago that the US Federal Reserve has been already between a rock and a hard place and simply cannot move on this.
As I understand it default might mean not being able to make some specific payments - but that if Congress then decided to pass the limit increase, payments would be able to resume. By this means, the Freedom Caucus might be willing to indicate it's complete callousness and disregard for the welfare of the nation by engineering a 'limited default' - which would still cause major stock-market ructions and many other unknown consequences. Kind of like cutting off the finger of your kidnap victim and mailing it to the parents, then blaming the parents for not coughing up. I wouldn't put it past those MAGA thugs.
Here is a 'gift' link to the current WaPo coverage for those interested.
This is bullshit. 'Treasury Secretary Janet Yellen has insisted that the new funding [will] not be used to increase audit rates on those earning less than $400,000 a year.' The reason they want to defund the IRS is so that all their rich donor mates can get the tax department of their backs. See this analysis.
As always, GOP cuts will worsen the deficit and benefit the wealthy while the GOP are bleating about 'cutting wasteful spending'.
You may be right -- and surely this is true for many Republicans, but also Democrats -- that this is intended as a deliberate move to benefit the owner class, but don't underestimate how much the Freedom Caucus is motivated not by money but ideology. Some are against the IRS not because they are shills for donors far, far wealthier than they will ever be, but because "Muh liberty!" It's a, so to speak, principle.
I don't know case by case which explanation is best. Someone like Matt Gaetz is apparently just a piece of shit who plays a populist on TV but has always had his hand out to every lobbyist and donor he came anywhere near, and presumably has been more or less peddling influence since he entered politics. But some of these folks just aren't bright enough to be that corrupt. MTG probably only manages to be corrupt when someone explains to her in small words exactly what she needs to do for the money. In the meantime she's just a dangerous narcissist. But then there are those who are so dumb they really believe, you know, God hates the Fed and loves AR-15s. Not kidding. Not kidding at all. Most who make it to the national legislature have learned which of their true beliefs it's cool to say on a hot mic, but if you drop down to the Congressional minor leagues, state legislatures, it is shocking how absolutely stupid a lot of these tea-party-maga-evangelical-libertarian bozos are. Just plain stupid.
So gutting the IRS even though it will cost more, that's just a bit too subtle for some of these yahoos. The IRS are jackbooted thugs who hate our liberty, period. They want to take our money and use it to pay for abortions.
Crashing the world economy? That's just something some eggheads say will happen, I don't believe it. And even if the world economy crashes, what's that got to do with America? Fuck em. Let em take care of their economy and we'll take care of ours. -- No, seriously, this is the level of thought of the people who vote in Republican primaries and too many of those who end up getting elected.
Never attribute to malice what can be explained by greed or stupidity, the saying goes. You're right about the greed, but don't forget about the stupidity.
That leaves McCarthy with strikingly little room to maneuver.
The House bill cut discretionary spending to fiscal 2022 levels and then caps domestic discretionary spending to 1 percent growth over the next decade. It also expands work requirements for federal social aid programs and rescinds $30 billion in unspent COVID funding.
House Republicans are also pushing for energy permitting reform, measures to secure the U.S.-Mexico border and to block Biden’s plan to forgive $400 billion in student debt relief.
Biden is holding fast against many of the Republican demands, which Democrats warn would hurt American families across the nation by cutting an array of federal programs, expecting McCarthy will back down. l.[/quote]
Still reckon, depending on the outcome, it's quite possible that McCartney will loose his gavel over it. Those Freedom Caucus types are ruthless ideologues.
What a shocker. Can republicans make it any more obvious who they represent? It’s a joke.
I watched a US 60 Minutes segment last night, about rorting and gouging in the US Defense Establishment (below for anyone interested). One of the interview subjects had been a top contract negotiator for the Pentagon and widely despised by the aero-space industry for calling out their predatory and monopolistic pricing practices. One example was a part that was generally available on the open market for $350 odd bucks, for which the Pentagon was routinely paying 10 grand. But the clincher was an episode during the Iraq war. It was discovered that one of their helicopter models needed an urgent parts replacement or could literally fall out of the sky. The supplier of said part immediately put an enormous premium on the thousands of units that would have to be supplied. The procurement teams said words to the effect of 'we're not paying that!' To which the response came, 'well, let them crash, then.' They paid. Obviously the Freedom Caucus guys have taken a leaf from their book. So all these extra billions that the GOP wants for 'defense' will simply line the pockets of lobbyists and military-industrial executives. It is all entirely corrupt.
What’s frustrating is the obduracy of both parties on this matter. There’s some sounds coming from Bernie and others, but it’s ignored or treated as impossible.
There’s no reason we should be spending 858 billion dollars, a year, on the “military” - ie, Boeing, Lockheed Martin, Raytheon, etc. None.
That’s where I part company. I put the blame wholly and solely on the Republican Party. Using the debt ceiling vote as leverage for political purposes is immoral from the get-go. Blaming the Democrats for what is happening is like blaming the bank staff for the hold-up.
No I agree. I was speaking specifically about military spending.
The thought has often occured to me, every time Ukraine fires a Patriot missile, some sales rep makes a huge commission on supplying the replacement.
Cutting it in half would be a good start. Cut it down to 100 billion, I say. Still too much. Now the deficit is 700 billion, which can easily be made up for by taxing the wealthy and corporations. Fairly easy, just not “politically viable” thanks to both parties— but mostly Republicans.
It’s also worth remembering that no one seemed to give a damn about the debt during Trump’s four years. Now the Republicans have to scream about it and cause a ruckus, which trickles down to us talking about it. Which is annoying, but unavoidable when it’s something this important (the debt ceiling that is).
Yeah, it’s silly. The spending has already been made. If they want to cut the debt, then reject the budget.
Republicans don’t really care if shutdowns or debt gimmicks cause chaos and pain— they’re interested solely in making people as miserable as possible so they can blame the person in office.
Notice the language from McCarthy: “If president Biden allows a default…” It’s laughable.
https://www.nytimes.com/2023/05/27/us/politics/debt-limit-deal.html?smid=nytcore-ios-share&referringSource=articleShare
I knew there'd be calls for McCarthy's head.
Hakeem Jeffries (House minority leader) is saying there needs to be 150 Republican votes. But
Going to an exceedingly tense week in Washington.
71 Republicans, 46 Democrats voted no.
Telling that more Dems than Republicans voted Yes
On to the senate, where a single no vote could still trigger default. :yikes:
*
https://thephilosophyforum.com/discussion/comment/810055
And two weeks ago ...
Quoting 180 Proof
https://www.theguardian.com/us-news/2023/may/31/debt-ceiling-final-vote-house-congress :cool:
@Mikie
Now maybe we can get back to the important things— like fighting wokeness, Disney…arming teachers, banning books, restricting unions, gutting environmental regulations, etc. You know— the normal Republican agenda.
Still has to go through Senate. And still an outside chance one of the Republican hard-heads will call for a spill of the Speaker's chair.
Why was the bloated, redundant military budget off limits in the debt limit negotiations between the militaristic GOP and Joe Biden? That’s over half the federal operating budget. Untouchable. Full of contractor rip offs and corruption.
[/quote]
God bless this man. Still plugging away.
Quoting 180 Proof
https://www.dw.com/en/us-senate-gives-final-approval-on-debt-ceiling-bill/a-65800254 :up:
Ah…You want a medal or something?