The Debt Ceiling Farce

[Lars]

[ame=http://www.youtube.com/watch?v=Ywt6q_P-4lQ&feature=feedu]‪The Debt Ceiling Farce‬‏ - YouTube[/ame]

The politicians are playing the usual Deficit Ceiling game again. Of course, the so-called Deb tCeiling is meaningless as the "ceiling" is always raised. But having something called the "Deb tCeiling" gives the Republican rubes the illusion that SOMETHING IS BEING DONE about deficits.

Debt ceiling: What happens if it isn't raised? - Jul. 13, 2011

Of course, the trillions that the United States has spent to improve the economy has done nothing. And instead of spending the money on something productive (like the Hoover Dam), the money was spent ensuring huge bonuses to the bankers, buying guns for Mexican drug gangs and promoting "diversity".

The Omaha Public Schools used more than $130,000 in federal stimulus dollars to buy each teacher, administrator and staff member a manual on how to become more culturally sensitive.

OPS buys 8,000 diversity manuals - Omaha.com

RAMZPAUL

 

[waltky]

Granny says dey need to send her dat 2nd stimulus check - den dey can fix the hole inna debt ceiling...

Debt negotiations: You're all doing it wrong
July 13, 2011: The nation's top lawmakers are locked in a knock-down, drag-out fight over raising the debt ceiling.

The stakes couldn't be higher. The full faith and credit of the U.S. government is on the line. It's a negotiation of immense importance. And if lawmakers really want to strike a deal, they might want to change how they're approaching the talks, say two leading experts -- one a former chief international kidnapping negotiator for the FBI. Lawmakers have to raise the nation's legal borrowing limit by Aug. 2, or the Treasury Department will run out of money to pay all its bills on time and in full. That deadline is now only a couple weeks away. Negotiations started months ago, and by all accounts, the parties are still deadlocked. It's classic brinkmanship.

"This is not exactly a textbook example of effective negotiation," said Robert Bordone, a professor who leads Harvard Law's negotiation studies. The professionals say that issuing ultimatums, threatening to walk out, belittling the opposition and negotiating in public are all counterproductive. The problem is that's exactly what President Obama and House Speaker John Boehner -- and their deputies -- have been doing. Both parties have been busy drawing lines in the sand. Republicans refuse to accept any increase in revenue, and Obama made clear earlier this week that he will not accept a short-term solution. "When you say that publicly, you make it harder for negotiations to move forward," Bordone said. "Part of the problem here is it seems to be much more of a show for constituents than a genuine negotiation between leaders."

Washington negotiations are, of course, anything but normal. There are special considerations. Like the next election. "In general terms, politicians only know how to grandstand in public and capitulate in private," said Chris Voss, the former FBI negotiator and now adjunct professor at Georgetown. And this negotiation has an extra layer of complexity. Both sides don't even agree on what is being debated. A not insignificant number of Republicans, for instance, are debt-ceiling deniers. Still, there are steps lawmakers can take to get negotiations back on track. First, talk a little less in public.

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Debt ceiling: Chaos if Congress blows it
July 13, 2011: President Obama has put the country on notice that he can't guarantee Social Security and other government checks will go out if the debt ceiling isn't raised by Aug. 2.

So it's worth reviewing just what the fallout could be if lawmakers fail to act on time -- either in early August or sooner if markets start to lose confidence that Congress will get its act together.

Nearly half of all government checks won't go out: The Treasury Department would be unable to pay between 40% and 45% of the 80 million payments it needs to make every month, according to an analysis by the Bipartisan Policy Center. Why? It's basic math: The United States doesn't bring in enough revenue to pay all its bills -- with monthly deficits averaging $125 billion. And if the debt ceiling isn't raised, Treasury won't be allowed to borrow new money to make up for the gap between revenue and spending.

Bottom line: Roughly $125 billion of bills on average may have to be put off.

Millions won't be paid: Just whose payments will be delayed is the question. And the answer won't come easy because any choice will hobble parts of the economy and anger large groups of Americans. Take Aug. 3 as an example. Treasury is due to send out checks to 29 million Social Security recipients. Of course, they may be paid but only if others are not.

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[percysunshine]

The rubes are the Democrats who still believe in Santa Claus. It is like their intellectual maturity stopped at the age of eight.

 

[waltky]

Granny'd like to see Obama an' Boehner get inna Indian wrestlin' match...

Tempers flare as debt-limit deadline nears
13 July`11 WASHINGTON — With time growing shorter, President Obama and congressional leaders grew angrier Wednesday in their effort to reach a deal to increase the nation's $14.3 trillion debt ceiling. At the same time, the chairman of the Federal Reserve and the president of the U.S. Chamber of Commerce warned that a failure to act could trigger a financial meltdown.

Republican leaders are at odds with the White House over a broad deal to cut spending and raise taxes while raising the debt limit by the Aug. 2 deadline set by the Treasury Department. But Senate Minority Leader Mitch McConnell also warned recalcitrant members of his own party that the GOP's political fortunes would suffer if the marathon White House sessions don't soon produce agreement.

Moody's Investor Services issued a stark reminder of the stakes by placing the nation's AAA bond rating on review for a possible downgrade. Moody's cited the "rising possibility" that the United States for the first time will default on its loans. But none of the warnings helped foster a deal — or tamp down the harsh rhetoric.

House Majority Leader Eric Cantor, R-Va., told reporters after the fourth White House meeting in as many days that when he proposed a short-term extension of the debt ceiling, Obama became "agitated." Cantor said Obama, who has firmly opposed a short-term measure, warned him not to "call my bluff."

In an effort to reach a deal, Obama said the White House could reach $1.7 trillion in spending cuts over 10 years without new revenues, said two Democratic aides familiar with the meeting. They spoke on condition of anonymity because they were not authorized to speak on the record. He could reach $2.4 trillion over 10 years with extra revenues, Obama told the group, the aides said.

The president then said there was too much "positioning, posturing and catering" to lawmakers' political bases, and he stood up and left the meeting, "Enough is enough," Obama said, according to the aides. "I know why he lost his temper," Cantor said. "He's frustrated. We're all frustrated."

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Republican tax stand a bust with public
July 14, 2011: Rep. Eric Cantor has led GOP opposition to revenue increases.

House Republicans who refuse to consider tax increases as part of a debt ceiling deal are out of step with most Americans, according to two new polls. That's bad news for Republicans who are betting the farm on resisting Democratic efforts to raise taxes on the rich. When looking to reduce debt, politicians can employ two tactics. The first is to cut spending. The second is to raise taxes. Most budget experts say you need to do both. But House Republicans -- an overwhelming majority of whom have signed a pledge to this effect -- refuse to consider any kind of tax increase, not matter who it hits. Turns out, most Americans don't share their conviction.

A full 67% of Americans favor a deal to raise the debt ceiling that includes taxes on wealthy individuals and corporations, according to a poll released Thursday by Quinnipiac University. And according to Gallup, only 20% of Americans want a deal that consists only of spending cuts. That's the position of House Majority Leader Eric Cantor and many of his colleagues. Instead, most Americans want the deal to include a mix of spending cuts and tax increases, something that is much closer to the bargaining position staked out by Democrats.

What kind of tax increases are being discussed?

The White House wants to close loopholes that benefit the owners of private jets, and raise taxes on hedge fund managers who pay lower tax rates on so-called "carried interest." Additional proposals would change how business inventory is taxed, eliminate government subsidies for oil and gas companies and limit deductions taken by the wealthiest Americans.

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