Presumably Nancy Pelosi would be willing to file such a petition. Would enough Republicans vote for a clean extension? I doubt it. Even if they did, would the Senate filibuster? Certainly.
Our governmental debt and T-bills aren’t just sitting out there static for 20 years. In effect, they are a continuous rolling debt - every day old t-bills are cashed in and new ones are issued. So a change in the interest rate that the US government pay to borrow money affects the overall cost of serving the debt very quickly.
One of the greatest assets this country has is the world’s confidence in its promise to pay back its debts. People rush to offer us less and less interest charges to lend the US money. They give us sweetheart loan deals, and it’s one of the only things keeping us afloat - we have a 16 trillion dollar debt, but the interest is kept managable because the confidence the world places in us keeps our interest rates very low.
However, if we are retarded enough to go through with this self-inflicted wound, the world confidence in our loans will crash. That means that since T-bills are not the rock solid safest investment in the world they once were, people are going to demand a higher interest rate to loan us money. And we still will need to borrow money. As old T-bills are cashed in, new ones will have to be taken out to cover them, at the new interest rate. We could, overnight, in one retarded move, quintiple the amount of money it takes us every year to service the debt.
The idea that those who are willing to take the country hostage over the debt ceiling are doing so to reduce our deficit is morally bankrupt and completely illogical. Their chosen path would be a self-inflicted worldwide recession, combined with the double whammy of having to pay a much higher interest rate on our current rolling debt combined with decreased revenues from the economic crash. The debt would bloom. Possibly double or more. And there would be no upside.
They are essentially going into congress with a bomb on their chest saying “give us tax cuts for the rich or we’re going to take this whole motherfucker down!”. It goes beyond mere political disagreement. They have become a threat to the peaceful, productive, and wealthy existance of this country.
What’s the conservative pundit party line on this? That defaulting wouldn’t be that bad?
Or do they fundamentally misunderstand what the debt ceiling is? I read somewhere that Fox News is calling it the Spending Limit instead of the Debt Limit now. (I also note that Saint Cad still hasn’t explained where he got his misapprehension about the debt ceiling in that other thread… If the average conservative voter and/or politician is under the same misapprehension, that may explain a lot.)
That’s what I’ve been hearing. These are people who are convinced that the national debt is the imminent doom of America, and that anything is better than that. And that the consequences of defaulting on the debt and cutting a trillion dollars from the budget will just be a speed bump.
I hope Obama’s remarks yesterday are a sign that he intends to use the bully pulpit to keep this mantra constantly in the news. The administration and Dems should repeat this loudly and often in every available forum.
I almost wish we had gone “over the cliff.” Instead, we kicked the can down the road. Now we are going to see little else is done pending the debt ceiling. Forget sensible immigration or gun reform. Or any other issue you might feel needs addressing.
If we wiggle past the debt ceiling, the continuing resolution is ending a month or 2 down the road. If the Repubs are allowed to create some BS fiscal crisis every couple of months, that would be a heck of an effective practice to avoid anything getting done.
Remember when the Republican line was “Debts don’t matter”? That was awesome.
As an aside, one reason I asked my above question is that I (perhaps foolishly) poked my head into Michelle Malkin’s blog to get an idea of the “conservative POV,” and found a front-page post on the debt ceiling. I looked at it and had NO idea what exactly she thought of the “hostage taking”; all I could tell is that she felt the President was being a hypocrite. Perhaps I could’ve read more posts or the comments to figure it out, but I wasn’t feeling THAT masochistic.
Actually the House GOP appears to be demanding spending cuts, not tax decreases, in exchange for raising the debt ceiling. Now, I’ve explained above we have enough leverage with power of the purse to just deny new appropriations and shut the government down ala '94 if we want to force lower spending. The debt ceiling adds really nothing to our leverage, but makes it much, much riskier for the economy. (A temporary government shut down will force a compromise in a few days and will not be a major economic blow, a debt default has permanent consequences.) So I don’t understand why the House leadership is focused on the debt ceiling and not on the 3/27 expiration of the budget CR.
Did “stupid” enter into your calculations?
Technically, it’s not a “default” - the interest on the debt will still get paid:
In Tim Geithner’s letter to John Boehner on Monday, he talked about not paying Social Security, Medicare, etc:
The one thing he (and Obama, in his press conference) did not mention was interest payments on the debt, which is the textbook definition of “default”. Those interest payments will continue to get paid, even as grandmothers won’t.
So, yes, the government may shut down. Social Security and Medicare checks and etc etc won’t get distributed. But the government has already said that it will not default on the debt.
I’m sure they’d try to pay the interest on the debt, but without additional ability to borrow then the Treasury would have to pay it every day from cash they had coming in that day, and they might or might not have enough to cover the amount due. The Fourteenth Amendment might render it unconstitutional for the US to fail to cover this sort of outstanding debt (as opposed to other mandatory payments like Medicare and so on), but maybe it doesn’t, and anyway that’s not something that can get sorted out in one business day.
No, the Pubs certainly are not going to do anything to interrupt the flow of interest-checks to holders of U.S. Treasury bonds, whether in New York or in Beijing.
Who will be receiving those interest payments, versus all the other payments you cited? That may be a key element in Republican decision making.
Not so sure that corporate America has that firm a grasp any longer. The down side of gerrymandering is the solidity of the base, a representative only needs to listen to one set of voices, which is the loudest. They don’t fear the Democrats, they only fear each other.
They pander to the TP extreme, because they are going to get the business types anyway, where are they gonna go? Libertarians? Greens? So they defend themselves from the nutcases, who are most likely to challenge them if they don’t demonstrate their veal. Zeal. Whatever.
At least with your father’s Oldsmobile Republican Party, there was some level of sanity, based on ruthless self-interest. Nowadays, not so sure that they have the whip hand any more.
The business types will go with the side that is not going to destroy the economy if push comes to shove.
I think you’re misquoting the Republicans. No wonder they get exasperated with crypto-Islamo-Kenyanists like you.
If by debt, you mean the trillions spent ridding the world of the Weapons of Mass Destruction which we gave Saddam when he was our enemy’s enemy, or salvaging the banks of the Job Creators who contribute to the Patriotic Party, then we applaud that debt and seek to increase it without limit, to enrich the Job Creators, and serve as a warning to the Marxist Party.
But if by debt, you mean funds borrowed to pay the salaries of left-wing anti-Jesus teachers, or to pay the salaries of the fruitcakes at the DEA, or FDA, or Sesame Street; or the foodstamps paid to niggardly and ethnic people whose ancestors never fought in 1776, then we oppose these heinous programs, and when Obama comes for our guns we will shove them up his asshole.
Hope this helps.
Applause! Damn fine summation!
I’ve always been against letting us hit the debt ceiling, before this and currently, but I also used to think if we hit the debt ceiling Treasury could just prioritize interest payments and so we wouldn’t default.
However, recent reporting has lead me to believe that is not the case. Yes, in any given year debt servicing is well under 10% of Federal spending, so we should not theoretically ever have to fail to make interest payments. But, it isn’t evenly distributed throughout the calendar year nor is our revenue. So it ends up that certain days on the calendar correspond to dates when Treasury auctioned off a large batch of bonds, so billions in interest payments come due on the exact same day. With daily fluctuations in cash holdings due to uneven revenue streams, it is instead highly likely that while we collect enough revenue in a given say, quarter, to make all interest payments, the realities of the cash flow situation could actually mean we fail to make interest payments on key days when they come due because they are intrinsically “spikey” because of how they were issued.
There’s an additional problem that all the computerized payment systems at Treasury are set to automatically pay bills as they come due, and this is apparently not easily changed or altered at the last minute. So we’d have this days where billions in interest payments are due and if since Congress has left Treasury unsure as to how to proceed most likely a large number of automated payments would still be processing.
Ah. My mistake. Carry on.
"Reagan proved that deficits don’t matter. We won the mid-term elections, this is our due. "
- Dick Cheney
But I like your version better.