"Just imagine an undisciplined out-of-control spender whose credit limit has just been extended. In other words, they can continue overspending without any accountability. That “they” is the U.S. government."
It’s been almost a week since Congress reached a temporary deal to suspend the U.S. government’s debt ceiling and the Treasury department has already wasted no time by adding another $375 billion in new debt."
Suspension of a cap on U.S. debt, which was previously fixed at $16.69 trillion, means the Treasury department, headed by Jack Lew, can effectively spend whatever amount of money it needs or wants."
How much debt can the U.S. government rack up by the next debt ceiling deadline on Feb. 7, 2014? At the current spending pace of $375 billion per week, U.S. public debt would reach $22.70 trillion."
"When you are the largest economy in the world, when you are the safe haven in all circumstances, as has been the case, you can't go into that creative accounting business," said International Monetary Fund Managing Director Christine Lagarde in an interview with NBC News' Meet the Press."
What does the bond market have to say about this?"
After reaching a yearly high of 2.97%, the yield on 10-year U.S. Treasuries (NYSEARCA:IEF) has since fallen by 12.5%. Put another way, the bond market is saying that it doesn’t care about the fiscal realities of the U.S. government’s unmanageable debt load."
etfguide
Showing posts with label debt ceiling. Show all posts
Showing posts with label debt ceiling. Show all posts
Thursday, October 24, 2013
Wednesday, October 16, 2013
“We fought the good fight”
WASHINGTON — Congressional Republican leaders conceded defeat Wednesday in their budget fight with President Obama over the new health care law, agreeing to support a reopening of the government and a lifting of the nation’s borrowing authority in exchange for future budget negotiations.
In a statement issued as the Senate and the House prepared to vote on the proposal, Mr. Boehner said: “The fight will continue. But blocking the bipartisan agreement reached today by members of the Senate will not be a tactic for us.”
The Senate is expected to vote on the bill Wednesday evening, with final passage coming late Wednesday or early Thursday.
In a statement issued as the Senate and the House prepared to vote on the proposal, Mr. Boehner said: “The fight will continue. But blocking the bipartisan agreement reached today by members of the Senate will not be a tactic for us.”
The Senate is expected to vote on the bill Wednesday evening, with final passage coming late Wednesday or early Thursday.
Under the agreement, the government would be funded through Jan. 15, and the debt ceiling would be raised until Feb. 7. The Senate will take up a separate motion to instruct House and Senate negotiators to reach accord by Dec. 13 on a long-term blueprint for tax and spending policies over the next decade.
“None of You [Reporters] Were Math Majors, Were You?”
"Default hysteria continues in Washington, in defiance of the most basic facts of arithmetic. Some Republicans have even been taken in, but one who is having none of it is Congressman David Schweikert of Arizona, the former treasurer of Maricopa County:"
Another reporter asked Schweikert (Arizona Rep) to respond to some doom-saying quotes from Chinese bankers. “I lay this at the steps of the administration and Jack Lew,” said the congressman. “The unconscionable, unacceptable use of language, the word ‘default,’ when the borrowing we need for 2014 is we’re 16 percent short on revenue. To use the word ‘default,’ to scare the markets—are politics really that important to this administration that it ignores basic math?”
Schweikert ticked off ways that he, as a county treasurer, had sought balance. “The basic repo desk, running your ladders on your debt—it’s stunning that the politicians in the administration care more about keeping this as a wedge than the international markets. Even Geithner made it clear that he had the ability to prioritize…. [T]here is no such thing as default unless there is an actual evil attempt from the administration. When you have 18 percent of GDP coming in in cash, less than 2 percent going out in debt coverage—I’m stunned you all fall for it in the press. None of you were math majors, were you?”
Instapundit commenter HK Vol said...
Power Line , Slate via Instapundit
Another reporter asked Schweikert (Arizona Rep) to respond to some doom-saying quotes from Chinese bankers. “I lay this at the steps of the administration and Jack Lew,” said the congressman. “The unconscionable, unacceptable use of language, the word ‘default,’ when the borrowing we need for 2014 is we’re 16 percent short on revenue. To use the word ‘default,’ to scare the markets—are politics really that important to this administration that it ignores basic math?”
Schweikert ticked off ways that he, as a county treasurer, had sought balance. “The basic repo desk, running your ladders on your debt—it’s stunning that the politicians in the administration care more about keeping this as a wedge than the international markets. Even Geithner made it clear that he had the ability to prioritize…. [T]here is no such thing as default unless there is an actual evil attempt from the administration. When you have 18 percent of GDP coming in in cash, less than 2 percent going out in debt coverage—I’m stunned you all fall for it in the press. None of you were math majors, were you?”
Instapundit commenter HK Vol said...
Power Line , Slate via Instapundit
Friday, October 11, 2013
When Negotiating Becomes Impassé
From an email by Darrell Issa to his constituents:
This is not the first time that our country has had a divided government or experienced a shutdown due to disagreements between the President and congressional leaders of opposing parties. However, in prior instances, both the President and respective leaders have found ways to engage in regular discussions to resolve issues.
President Clinton and Speaker Newt Gingrich were fierce opponents publically, as were President Reagan and Speaker Tip O'Neill, but they always found ways to work together to advance our nation's interests and their respective policy agendas.
What's different today is that President Obama has repeatedly and preemptively announced his refusal to negotiate with congressional leaders about operations of the federal government or the level of spending under his Administration.
Congress has a constitutional responsibility and authority to oversee federal spending and the Executive Branch’s execution of the law, including addressing our nation’s unsustainable debt levels and the problems associated with ObamaCare and its implementation.
The President himself has acknowledged some of the failures of ObamaCare by granting waivers to big business, big labor and other special interests, but insists on leaving individual Americans and families exposed to its serious flaws. He has granted these waivers unilaterally even though they are neither authorized by law nor consistent with his enumerated powers in the Constitution.The solution is to negotiate, not hunker down.
Thursday, October 10, 2013
"New York restaurant has no-talking menu"
Epicurious.com Editor-in-Chief Tanya Steel says the silent eating experience sounds like yet another facet of the sensory-dining eating out fad. Some restaurants offer diners the chance to consume in the dark. Other gastronomical joints feature the ability to consume not just the food - but the menu on which it is described.
Wednesday, October 9, 2013
“We always have enough money to pay our debt service”
WASHINGTON — Senator Richard Burr, Republican of North Carolina, a reliable friend of business on Capitol Hill and no one’s idea of a bomb thrower, isn’t buying the apocalyptic warnings that a default on United States government debt would lead to a global economic cataclysm.
“You’ve had the federal government out of work for close to two weeks; that’s about $24 billion a month. Every month, you have enough saved in salaries alone that you’re covering three-fifths, four-fifths of the total debt service, about $35 billion a month. That’s manageable for some time.”
A surprisingly broad section of the Republican Party is convinced that a threat once taken as economic fact may not exist — or at least may not be so serious. Some question the Treasury’s drop-dead deadline of Oct. 17. Some government services might have to be curtailed, they concede. “But I think the real date, candidly, the date that’s highly problematic for our nation, is Nov. 1,” said Senator Bob Corker, Republican of Tennessee.
And while Representative Trent Franks, Republican of Arizona, conceded that a government that could no longer borrow money would have to curtail some of its contracting, he said Democrats should not get carried away.
“You’ve had the federal government out of work for close to two weeks; that’s about $24 billion a month. Every month, you have enough saved in salaries alone that you’re covering three-fifths, four-fifths of the total debt service, about $35 billion a month. That’s manageable for some time.”
A surprisingly broad section of the Republican Party is convinced that a threat once taken as economic fact may not exist — or at least may not be so serious. Some question the Treasury’s drop-dead deadline of Oct. 17. Some government services might have to be curtailed, they concede. “But I think the real date, candidly, the date that’s highly problematic for our nation, is Nov. 1,” said Senator Bob Corker, Republican of Tennessee.
Others say there is no deadline at all — that daily tax receipts would be more than enough to pay off Treasury bonds as they come due.
“It really is irresponsible of the president to try to scare the markets,” said Senator Rand Paul, Republican of Kentucky. “If you don’t raise your debt ceiling, all you’re saying is, ‘We’re going to be balancing our budget.’ So if you put it in those terms, all these scary terms of, ‘Oh my goodness, the world’s going to end’ — if we balance the budget, the world’s going to end? Why don’t we spend what comes in?”
“If you propose it that way,” he said of not raising the debt limit, “the American public will say that sounds like a pretty reasonable idea.”
And while Representative Trent Franks, Republican of Arizona, conceded that a government that could no longer borrow money would have to curtail some of its contracting, he said Democrats should not get carried away.
“It’s like everything else here,” he said. “People on both sides of every argument seem to employ hyperbole when they could just state the truth and it would still be of significant consequence.”
Subscribe to:
Posts (Atom)