The pending debt limit showdown-brinksmanship at it's finest impacting us and the world-

lousubcap

Here's a good read from the Washington Post.  Should this occur, there will be major short term financial ripples and the blame game.  After the WDIB (Who's Richard is bigger) runs its course we should (key word) get past the posturing.

But fasten your seat belt:

https://www.msn.com/en-us/money/markets/u-s-must-raise-debt-limit-by-as-early-as-june-1-to-avoid-default-treasury-says/ar-AA1aBh1h?utm_

lousubcap

And a different approach-no Constitutional scholar (or otherwise here):

If House Republicans refuse to raise the limit on the amount of money America may repay on what it owes — the deceptively named “debt limit” — they might force the United States to default, pushing interest rates into the stratosphere and shaking the world economy. 

President Biden rightfully says that raising the so-called debt ceiling should not be negotiable. After all, Democrats joined Republicans during the Trump administration to raise it three times, even as Trump and the Republicans enacted a major tax cut for big corporations and the wealthy that caused the nation’s debt to soar.

Yet now, Kevin McCarthy and his band of Republican radicals are demanding that in return for their agreement to raise the debt ceiling, Biden and Democrats make drastic cuts in programs Americans rely on — in everything from from public safety to health care to education.

My advice to Joe Biden: Ignore McCarthy and the Republican radicals. 

Mr. President, your oath to uphold the Constitution takes precedence. As the supreme law of the land, the Constitution has greater weight than the debt ceiling.

Section 4 of the Fourteenth Amendment to the Constitution states that “The validity of the public debt of the United States … shall not be questioned.”

A debt ceiling that prevents the federal government from honoring its existing financial commitments violates the Constitution.

So, if House Republicans refuse to raise the debt ceiling, you are obligated by the U.S. Constitution and your oath of office to ignore the debt ceiling and continue to pay the debts of the United States.

Should they wish, let the radical Republicans take you to court. 

Even the Republican radicals on the Supreme Court will likely support you. No “originalist” interpretation of the Constitution could read that document differently. 

The Constitution makes it clear that Congress’s power to borrow money does not include the power to default on such borrowing.

The original intent of the drafters of the Constitution in 1787 was to give Congress the power to tax and borrow to pay debts and to provide for the common defense and public welfare. As Alexander Hamilton wrote in Federalist No. 30, the power to tax and borrow was established to ensure payment of debt or to prevent a default.

The “Second Founders” who amended the Constitution after the Civil War explicitly forbade Congress, or anyone, from repudiating or defaulting on the debt.

The Republicans want to lure you into a cynical game, Mr. President. The nation needs you to play hardball by ignoring them. "

Again, seat belts for the ride.  Too bad the majority of those clowns in the Capitol are too party fixed to understand the ramification of the game they are playing.

Can't fix stupid!

Botch

Two weeks ago Invertebrate (ie no spine) mccarthy presented the trumplican plan to their Bosses (ie Wall Street); it was done behind closed doors and not widely reported.  
A US default will hurt everyone, within the US and worldwide, but none more than the US oligarchs of Wall Street.  I'm 97% sure the trumplicans will obey their Masters and not allow a default, but they're probably free to posture up until the last minute (the extreme MAGAts within the House make this a bit dangerous).  
President Biden is doing exactly the right thing by refusing to negotiate; congress is supposed to develop the budget, with an approval by the Executive branch.  I hope @Bodine and @WeeWillieWilson see this, although they tend to take potshots and then weep on their mommy's sofa for a few days.  

HeavyG

McCarthy will fold, as he should.

The debt limit law has been the law for just over a hundred years and has done zilch to prevent the continuing increase of the federal debt. So just repeal the damn thing. Neither party really wants to decrease the debt or balance the budget.
Most people don't want to pay the amount of taxes that would actually pay for all the stuff they want and have come to expect so... I guess we just keep on doing what we're doing until the inevitable financial crush knocks over our house of cards. Then the real fun begins.

JohnInCarolina

dmchicago

JohnInCarolina said:

Twice in one week?

nolaegghead

The precedent set by anyone capitulating to a zero sum game would be a new low for American politics.  If McCarthy was to get any concessions for "paying our bills", it would be utilized by both sides as the majority switches and, I would hope, legislation would be crafted to make this automatic.  It's like Pence as the prez of the Senate counting the votes for president - it's a largely ceremonial procedure.

The amount of wealth that would evaporate even if this comes down to the wire is mind blowing.  These people hate government and want to tear it down.  it's a bomb that will hurt everyone (except maybe if you bet against the deadline).

Kayak

JohnInCarolina said:

Maybe we could put a little girl in charge?

fishlessman

if we dont pay or slack off on payments, countries with higher credit ratings can pay higher fees when they borrow to make up for it.......   bigger scale than taking out a mortgage but sounds legit

lousubcap

From The Atlantic today-for your consumption.

Frictionless conduit here in the interest of some public insight-

Isabel Fattal SENIOR EDITOR

This afternoon, President Joe Biden met with House Speaker Kevin McCarthy in their first sit-down since February. The meeting produced no breakthroughs on the federal debt ceiling, even as a deadline for default looms in early June. I called my colleague Russell Berman, who has been watching the ongoing stalemate closely, for help creating a short guide to this moment.

Debt Questions, Answered (Brendan Smialowski / AFP / Getty) View in browser Is this 2011 all over again? This month’s debt-ceiling crisis comes with a dose of déjà vu. As Russell explained last week, the circumstances largely echo the 2011 showdown between congressional Republicans and then-President Barack Obama: A new GOP majority in the House is using the looming threat of a national default—which would likely lead to a stock-market crash and possibly a recession—as leverage to push a first-term Democratic president to agree to spending cuts. But after talking with Eric Cantor, who in 2011 was the House majority leader deputized to negotiate an agreement with then–Vice President Biden, Russell reported that the crisis we’re in now is worse than that of 12 years ago. He gave me three reasons: Kevin McCarthy has a lot more to lose than his predecessors did. “Republicans have a much smaller majority in the House this time around,” Russell noted. McCarthy “is operating with much less room to maneuver, given how hard he had to fight just to get the job. There’s an ever-present threat that if he negotiates a bad deal or if he folds in this confrontation, he could be ousted.” One important subject is off the table this time around: Both parties have decided not to negotiate on the major entitlement programs of Medicare and Social Security. Russell explained that Republicans are not asking to cut those two major programs, as they did in 2011, due in large part “to the influence of former President Trump,” who endorsed a hands-off approach to the programs to avoid alienating older voters. The removal of these programs from negotiations could make it a bit easier to get to a deal, but it also means that if the GOP gets President Biden to agree to any cuts, they’re likely to be smaller than what the two parties were talking about in 2011. The most meaningful distinction between the 2011 standoff and today’s might also be the simplest: The two parties haven’t even started to negotiate. The deadline for America defaulting on its debt is a bit of a moving target, but Treasury Secretary Janet Yellen has said that the country could default as soon as June 1 if Congress doesn’t raise the debt ceiling. At this time in 2011, however, a lot of negotiation had already happened—“because the Obama administration conceded the premise that Republicans were offering, which was that this was something to negotiate over,” Russell said. Today’s meeting was really just the beginning of the conversation—and that’s a late start, with just three weeks until the deadline. Why does this keep happening? How did the U.S. wind up with such consistent debt-ceiling drama anyway? Russell explained that contentious debt-ceiling debates haven’t been the norm for America’s entire history. In fact, 2011 marked a shift away from debt-limit negotiations being anything other than a formality. “What the Republicans did in 2011 set a precedent that the Democrats really hate, in which the debt ceiling is not just automatically raised,” Russell said. The idea of automatically raising the ceiling makes some sense if you think about what the debt ceiling actually is: “It’s essentially paying for spending that Congress has already authorized and appropriated,” Russell told me. “The common analogy is to the credit-card bill. You don’t really negotiate with your credit-card company over whether you’re going to pay the credit-card bill.” Especially in the past few years, Democrats have put forth proposals to take these negotiations off the table and change the law, “so that Congress does not have this cudgel that can hold the United States economy hostage to what has been a very polarized, often dysfunctional legislative branch,” Russell said. Some Republicans have even expressed interest in these proposals too. But until then … what’s next? Russell walked me through three possible scenarios: The parties do not reach a deal in the coming weeks, and the country either defaults or gets very close to defaulting on its debt. If that happens, “the stock markets begin to crash, and the political pressure ramps up significantly on both parties,” Russell said. “And that’s where you might see one party blink.” Speaker McCarthy, President Biden, and the two parties just “agree to punt,” as Russell puts it—“to basically say, We’re going to raise the debt ceiling for a short period of time, to buy time for formal negotiations on spending and the budget.” The GOP’s concession would be to raise the debt ceiling without getting any spending cuts, whereas President Biden’s concession would be to say, We’re going to negotiate on this where we had previously said we wouldn’t. The parties reach a deal. What would a deal look like? “The Republicans would like an agreement in which Congress and the president commit to reduce spending over the next two years, in addition to some other issues,” Russell told me. So a deal would include “an agreement on big-picture spending levels, plus maybe one or two other policy issues that aren’t directly related to spending, where the parties can make some progress.” The exact shape that such an agreement would take remains to be seen.

Gulfcoastguy

https://www.yahoo.com/news/republicans-demand-dirty-debt-limit-034857283.html

nolaegghead

Gulfcoastguy said:

https://www.yahoo.com/news/republicans-demand-dirty-debt-limit-034857283.html

That is a load of ****.

https://en.wikipedia.org/wiki/History_of_the_United_States_debt_ceiling?wprov=sfti1

JohnInCarolina

Gulfcoastguy said:

https://www.yahoo.com/news/republicans-demand-dirty-debt-limit-034857283.html

That is probably one of the more disingenuous pieces I’ve read in some time.  

lousubcap

Guess it's time to lean into the 14th amendment and get everyone wound tight!

Gulfcoastguy

Wikipedia? 

JohnInCarolina

http://twitter.com/SteveRattner/status/1658542830229282837?s=20

Botch

^^^ Oh, but funneling more and more wealth generated by the US to those at the top just lifts the Entire Boat, via "trickle-down"! [/reagan]  We've got 35, 40 years of proof now!  
 

JohnInCarolina

lousubcap

"President Biden has canceled his trip to Australia and Papua New Guinea to focus on a deal with Republicans to prevent the U.S. from defaulting on its debt. Biden’s decision has forced the cancellation of the Quad summit in Sydney, which is likely a win for China. “[Biden’s canceled trip] will be seen in the region as a self-inflicted wound caused by political polarisation in Washington that does not reflect well on America’s reliability as a partner,” said Daniel Russel, a former U.S. assistant secretary of state for east Asian and Pacific affairs who is now at the Asia Society Policy Institute. Daniel Hurst reports for the Guardian. "

JohnInCarolina

http://twitter.com/joshtpm/status/1659227417750261760?s=20

BigreenGreg

Congress threw out balanced budgets a long time ago. We’re going to default deal or not. There is no tool that will force politicians to act honorably with our money. Game over, question will be how long we last. Good time to be old.

JohnInCarolina

BigreenGreg said:

Congress threw out balanced budgets a long time ago. We’re going to default deal or not.  

No.  The debt ceiling is about paying bills we already agreed to pay.  We only default if we don’t raise it, and the raising only requires a vote in Congress.  We do not need to have a balanced budget in place to raise the debt ceiling.  

BigreenGreg

I agree, but at some point printing money doesn’t work anymore and decisions need to be made. Spent a year in Venezuela and have seen what it looks like. 

JohnInCarolina

BigreenGreg said:

I agree, but at some point printing money doesn’t work anymore and decisions need to be made. Spent a year in Venezuela and have seen what it looks like. 

No argument there, but raising the debt ceiling isn't about us printing money.  And there were a lot of things that went wrong for Venezuela.   

JohnInCarolina

http://twitter.com/QasimRashid/status/1659931007276007427?s=20

lousubcap

With enough numbers you can spin any result you want.  Just cut to the chase but that is boring economics like your own household; how much in the bank, how much we owe and how much coming in within the owed window. 

Granted at this level of $$ the numbers are not as tight but there are those with systems that know.  Friggin political gamesmanship. 

JohnInCarolina

lousubcap

Where it is now:

Defense spending is reportedly a sticking point as the White House works to mollify House Republicans who say they'll force the United States into an unprecedented default on its debts unless they get budget cuts. President Biden is offering to reduce spending across various agencies, including the Defense Department, but the GOPers want the Pentagon exempted, reports the New York Times, here. The Hill rounds up more reactions from Democrats and Republicans, here.

Just $70 billion apart on a trillion-dollar concession. Except for the disagreement over defense spending, the sides are reportedly near agreement. "Biden's proposal included more than $1 trillion of spending cuts, freezing spending for the next two years," wrote Quartz, while Reuters reported that the sides "are edging close to a deal on the U.S. debt ceiling, with the parties just $70 billion apart on discretionary spending, according to a person familiar with the talks."

lousubcap

Worth a quick read on this Holiday weekned eve:

Insights, analysis and must reads from CNN's Fareed Zakaria and the Global Public Square team, compiled by Global Briefing editor Chris Good Fareed: Debt-Limit Charade Belies US Strength

As the US nears next week’s probable June 1 deadline to raise its federal borrowing limit, after which the Treasury says America could begin defaulting on its debts, Fareed writes in his latest Washington Post column that this sad drama contrasts brightly with broad-based US economic strength.    The US “has recovered from the coronavirus pandemic faster than any major economy in the world,” Fareed writes. It’s a leader in AI, producing most of the top-end research; its biggest banks dominate, globally; it’s a leader in fossil-fuel production; the US military “remains in a league of its own”; due to immigration, America’s working-age population will remain robust.    “Could it be that it is precisely this backdrop of strength that allows Washington’s politicians—and the Republican Party in particular—to indulge in this crazy political theater?” Fareed asks. “For most countries, the price of playing games with one’s creditworthiness would be sharp and severe, and that would act as a disciplining mechanism. But in Washington, the country’s enduring strength has become a license for irresponsibility.”

JohnInCarolina

http://twitter.com/mornetroispiton/status/1663167726020624386?s=20

lousubcap

The compromise debt/budget bill and some key provisions-

"Raising the debt limit … The debt ceiling won’t be a problem again until well after the next presidential election. The text suspends the debt ceiling until Jan. 1, 2025, but the Treasury Department’s “extraordinary measures” will be replenished during that time, pushing the next X-date at least several months later.

Spending caps … Negotiators agreed to place limits on overall discretionary spending for the next two fiscal years, but they notably agreed to break the principle of “parity” between defense and nondefense spending that had been key to previous budget agreements. Defense spending would rise about 3% next year, while nondefense spending would remain essentially flat. (Note that with annual inflation still over 4%, both amount to a real-dollar cut.)

Appropriations incentives … The bill gives Congress some encouragement to actually pass their annual appropriations bills rather than simply sidestep the new budget caps with a full-year CR: If the 12 spending bills aren’t passed by year’s end, a 1% spending cut would be enforced — applied evenly to defense and nondefense accounts to keep the pressure bipartisan.

Covid aid clawbacks … Nearly $30 billion in unspent relief money Congress approved during the height of the pandemic would be clawed back from dozens of programs. There are cutouts for some programs such as veterans health care and Covid-19 treatment and vaccine research.

IRS rollbacks… After Republicans spent months railing President JOE BIDEN’s push for $80 billion in Internal Revenue Service funding, the deal would divert a chunk of that money, meant to boost tax enforcement and crack down on fraud. The bill itself rescinds $1.4 billion of the funding first provided in the Inflation Reduction Act, and the White House says it could shift $20 billion more to backfill other nondefense spending.

Work requirements … Adults 49 and under currently need to meet work requirements to receive SNAP nutrition benefits, and the bill would gradually raise that age to 54. It would at the same time fully exempt veterans, the unhoused and those who were recently in foster care for the first time.

Environmental permitting … The long-rumored “permitting reform” element of the deal turned out to be less than monumental — amounting to a new “shot clock” for federal environmental reviews, limiting them to one or two years. The bill picks one big winner, though: West Virginia’s Mountain Valley Pipeline — a key priority of Sen. JOE MANCHIN (D-W.Va.) — would get a green light from Congress.

Student loan repayment … While we wait for the Supreme Court to render judgment on Biden’s student loan relief program, the president agreed to completely end the repayment pause that has been in place since the Trump administration at the end of August. Read the full bill text."