Don’t Look Down

If we understand the timing, Our Exceptional Nation actually hit its debt ceiling back in May, but thanks to a high-stakes shell game over at Treasury, nobody noticed. Entropy being what it is, however, the shells aren’t being shuffled as fast as they were, and eventually they’ll come to a full stop on August 2.

The other nominal deadline in the news was last Friday, which The Preznit set as the last possible moment to achieve a Grand Sellout Bargain. Any cocktail-napkin deals signed off by then would still have needed to be translated into actual mind-numbing legislation and passed by Congress, and allowing two weeks for that would be cutting things short, what with other national emergencies like Demon Light Bulb legislation to tend to.

And so, here we are, apparently without a net. The stock market opens 150 minutes from the time of this post, and if shit’s gonna fly, we’re told that now’s as good a moment as any.

Although since Asia lives in the future, their markets opened last night, and as we write, hilarity had not yet ensued.

Of course, all this fear and loathing could be avoided if Congress just passed a one-line bill raising the debt ceiling, a maneuver so rare, they’ve only done it dozens of times in the past century. But the chances of that happening now appear to be less than Wile E. Coyote harmlessly bouncing off the desert floor.


I wish the media coverage on this would be more honest – it’s not a “debt limit” negotiation, it’s a “figure out what it’s going to take to keep the teabaggers from blowing up the economy” negotiation.


Exactly… and I wish we’d stop seeing this “unless the two parties can agree” bullshit.

This is a hostage situation, plain and simple. When a criminal is holed up in a bank, holding wokers and customers against their will and threatening to start executing them at dawn, you don’t blame the looming confrontation on a failure of the two parties (the hostage taker and the hostage negotiator) to come to an agreement. You don’t blame both sides. Yeah, the hostage negotiator may not be very good at his job, we may wish the police department had sent someone more seasoned at this sort of thing, but ultimately its the hostage taker who’s the criminal. It’s the hostage taker who’s at fault.

Good one Wall St and Koch brothers.

Your racist flying monkey minions are about to shit the bed in the worst possible way and take you down with us non hard working lazy bums.

You can lay most of this at the feet of one Grover Norquist. He should be dragged from his home and deported.

I always cheer for Wile E. Coyote.

@Serolf Divad: Who needs China to destroy our economy when we have the continuation of the Civil War brewing?

The teabaggera are just using leverage to get a better deal. We’ll soon see if the Wall Street Repubs can get them in line.

But here’s a question: if the debt ceiling date is mossed, what is it that the feds will be unable to do? Roll over the debt that the Chinese et al are holdng?

@Dodgerblue: My understanding of it is that if investors sell off U.S. T-bonds, which are considered the safest rock-solid investment around, their value will go down and the interest rates that the government has to pay out on them will go up. Then interest rates will go up over all. I keep reading that default means that federal employees and Social Security recipients won’t get their checks, but I don’t see how that follows. The government can always print more money, which of course, in turn, exacerbates the interest rate hike. I think the danger is that it creates a vicious spiral.

OTOH, if investors start selling off US T-bonds in mass, I’m not sure where they will find a safer place to park their money instead. German T-bonds? British? Japanese? The Krauts are busy propping up the economies of southern Europe, the Brits are well on their way to having a prime minister’s administration collapse, and the Japanese are digging out of earthquake/tsunami/nuclear meltdown hell.

@blogenfreude: Couldn’t we convict him of treason and shoot him instead?

@Mistress Cynica: Thought you’d want to see pictures of the daughters at the Bloomberg-officiated wedding of their dads.

@SanFranLefty: Thank you! Every bit as adorable as I imagined. Did you watch the slide show, with the 8 yr old boy signing as witness to his moms’ wedding. So verklempt.

@SanFranLefty: Sorry, gay haters, but as a straight, married man, I do not feel threatened by this photo.

@SanFranLefty: The Fed introduces money into the economy by buying bonds issued by the Treasury. In this case, the Treasury will be unable to issue new bonds due to the debt ceiling limit, so there is not a traditional way for the Fed to inject new money into the economy. Since there is a division between the Treasury and the central bank (the Fed), they can’t print money even if they want to. The scenario in which SS checks fail to be sent out is real because they would be forced to prioritize which obligations are paid first from incoming tax revenue, meaning it would be bondholders, then the military, and then everyone else gets to fight over the scraps.

Of course what’s really happening is a new economic shock designed to fool the public into accepting massive, across-the-board cuts on everything that’s keeping them alive, like SS and other social safety net benefits, but one would hardly expect our corporate-supremacist politicians or media to launch that truth torpedo.

@SanFranLefty: @Mistress Cynica:
i cried. when that adorable joyous older chubby angel gave the “thumbs up” to the audience, i lost it.
since bloomberg married two jewish men, we had the “breaking of the glass” to conclude the ceremony. an ancient tradition whose meaning varies depending on what rabbi you ask. my definition:
it’s the last time a jewish husband gets to put his foot down.

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