Financial News

[StrangeSox]

Congress Continues Debate Over Whether Or Not Nation Should Be Economically Ruined

 

WASHINGTON—Members of the U.S. Congress reported Wednesday they were continuing to carefully debate the issue of whether or not they should allow the country to descend into a roiling economic meltdown of historically dire proportions. "It is a question that, I think, is worthy of serious consideration: Should we take steps to avoid a crippling, decades-long depression that would lead to disastrous consequences on a worldwide scale? Or should we not do that?" asked House Majority Leader Eric Cantor (R-VA), adding that arguments could be made for both sides, and that the debate over ensuring America’s financial solvency versus allowing the nation to default on its debt—which would torpedo stock markets, cause mortgage and interests rates to skyrocket, and decimate the value of the U.S. dollar—is “certainly a conversation worth having.” "Obviously, we don't want to rush to consensus on whether it is or isn't a good idea to save the American economy and all our respective livelihoods from certain peril until we've examined this thorny dilemma from every angle. And if we’re still discussing this matter on Aug. 2, well, then, so be it.” At press time, President Obama said he personally believed the country should not be economically ruined.

 

3:1 odds against them actually raising the debt ceiling in time.

[BigSqwert]

Poor Balta

[StrangeSox]

He's on ignore, of course.

[BigSqwert]

As all Obama apologists should be.

[StrangeSox]

I have everyone on ignore, I simply anticipate what subject we're going to be rehashing

[southsider2k5]

As all Obama apologists should be.

 

[Balta1701]

By the way, since we're talking about shutdowns. The FAA has been reauthorized by Congress 20 times in its history. The authorization for its existence expires at the end of the day on Friday. Its current reauthorization is held up because House Republicans attached a rider that makes it harder for rail and air travel workers to unionize, while the Senate Democrats did not. The House Republicans responded by passing a bill that defunded a number of rural airports in states inhabited by key Democratic votes.

[Cknolls]

Nice trick of words. Defaulting on DEBT you say. But if you default on OBLIGATIONS, that is also a default, just of a different kind.

Lol. Am I wrong? What is so tricky? GMAFB

[Cknolls]

By the way, since we're talking about shutdowns. The FAA has been reauthorized by Congress 20 times in its history. The authorization for its existence expires at the end of the day on Friday. Its current reauthorization is held up because House Republicans attached a rider that makes it harder for rail and air travel workers to unionize, while the Senate Democrats did not. The House Republicans responded by passing a bill that defunded a number of rural airports in states inhabited by key Democratic votes.

 

Yeah. It's not like the Dems had control of Congress or anything.

[Balta1701]

Yeah. It's not like the Dems had control of Congress or anything.

If it's standard procedure to pass the FAA bill a few months before the last authorization expires, and it's standard procedure to actually pass the bill...why would the Democrats pass it a year or two in advance unless they expected the incoming House to totally throw out all the historical niceties and precedents that used to exist?

[Jenksismyhero]

I agree:

 

http://online.wsj.com/article/declarations.html

 

Out of the Way, Please, Mr. President

The Gang of Six puts forward some ideas worth pursuing. By PEGGY NOONAN

 

It's good, it represents progress, build from it. That would be a helpful approach to the Gang of Six proposal on the debt. Don't deep-six it because it's flawed. Flawless isn't going to happen. There will be a big election in 2012. A lot can be settled then, and after.

 

The Gang of Six—three Democrats and three Republicans in the Senate—this week put forward a plan aimed at reducing the national debt by almost $4 trillion over the next 10 years. It includes $500 billion in immediate cuts, and repeals a costly provision of ObamaCare. The plan would lower the top individual tax rate to 29%, push corporate tax rates down to 29% from 35%, and abolish the Alternative Minimum tax. On long-term spending the plan includes a legislative supermajority and sequester feature. In the words of a senator involved in the bargaining, "For the first time, we have some real teeth" in spending controls.

 

This is all pretty good. It moves the ball forward in the right ways.

 

As for the flaws: A lot is left up to committees and future action. A lot is left vague. But a critic of the plan, the Cato Institute's Dan Mitchell, highlighted with justice one of its central advantages: It "is not fueled by class-warfare resentment." These days that always comes as a surprise and a relief. And it might have come at a cost to the Democrats in the bargaining sessions.

 

The primary good of the plan is that it represents the work of three serious liberals and three serious conservatives who together are moving in the right direction, not the wrong one. They admit the spending crisis is a crisis; they appear to admit that we cannot, at least now, tax our way out of it. This seems small but isn't. Agreement on these essentials is an antidote to feelings of widespread public hopelessness: "Washington can't do anything." That hopelessness damages us more than we know, both at home and in the world. We have to look competent. We have to look like we can reform ourselves. The other day there was an apparently incorrect report that the Republicans and the president had neared a debt ceiling deal. The markets immediately jumped. Everyone wants Washington to work. People hunger for it.

 

The plan has already garnered a lot of opposition, much of it fair, but to quickly push it aside would be a real missed opportunity. Those who critique the plan can help it. Its cuts in entitlements and its attempts to reform them are unclear and appear insufficient. If the Senate passed a final proposal along Gang of Six lines, House Republicans would have to make the bill more concrete, more reliable in its mechanisms. And they'd probably have to make deeper cuts. Overshadowing all negotiations is the persistent threat of a credit downgrade. The senator at the bargaining table said that if a final bill doesn't contain "at least $4 trillion in cuts," we will get a downgrade, which would carry costs greater than the cuts in the Gang of Six plan.

 

Attempts to find a final compromise are delicate, with a lot of moving pieces. But the Gang of Six proposal is cause for encouragement. It could not be turned into specific legislation quickly. Gang of Six member Kent Conrad said Thursday morning it could take six months to get it all done and through the appropriate committees. But President Obama signaled this week, for the first time, that he might back a temporary debt ceiling increase to allow work to continue.

 

That's good. But a note on his efforts in the drama. It is time for the president to get out of the way.

 

For the longest time he wouldn't engage, and now he's engaged. For the longest time he didn't care about spending, and now he cares about spending. Good, both in terms of policy and for him. But his decision to become engaged has become a decision to dominate, to have his face in front of the television with his news conferences, pronouncements, and what his communications people are probably calling his "ownership" of any final agreement. He's trying to come across as the boss, the indispensable man, the leader. And, of course, the reasonable one.

 

That's all very nice and part of Political Positioning 101, but at this point it's not helping. He's becoming box-office poison. His numbers are falling. The RealClearPolitics composite job approval poll rating has him down six points since June 2, when the debt ceiling crisis began. That fall, from 52% to 46%, exactly tracks his heightened media presence and his increased attempts to be seen as dominant. Public Policy Polling, a Democratic firm, said that if he ran for president today he'd lose, that his job numbers are "worse than they appear," and that he continues to have real trouble with undecided voters.

 

And if you've watched him lately, you know why. When he speaks on the debt negotiations, he is not only extremely boring, with airy and bromidic language—really they are soul-killing, his talking points—but he never seems to be playing it straight. He always seems to be finagling, playing the angles in some higher game that only he gets. In 2½ years, he has reached the point that took George W. Bush five years to reach: People aren't listening anymore.

More Peggy Noonan

 

The other day he announced the Gang of Six agreement with words that enveloped the plan in his poisonous embrace: "I wanted to give folks a quick update on the progress that we're making." We're. He has "continued to urge both Democrats and Republicans to come together." What would those little devils do without Papa? "The good news is that today a group of senators . . . put forward a proposal that is broadly consistent with the approach that I've urged." I've urged. Me, me, me.

 

That approach includes "shared sacrifice, and everybody is giving up something." He was like a mother coming in and cheerily announcing: "Dinner's served! Less for everybody!"

 

We're trying to begin a comeback, not a famine. We're trying to take actions that will allow us to grow.

 

He's like a walking headache. He's probably triggering Michele Bachmann's migraines.

 

The Gang of Six members themselves should have been given the stage to make their own announcement, and their own best case.

 

The president, if he is seriously trying to avert a debt crisis, should stay in his office, meet with members, and work the phones, all with a new humility, which would be well received. It is odd how he patronizes those with more experience and depth in national affairs.

 

He should keep his face off TV. He should encourage, cajole, work things through, be serious, get a responsible deal, and then re-emerge with joy and the look of a winner as he jointly announces it to the nation. Then his people should leak that he got what he wanted, the best possible deal, and the left has no idea the ruin he averted and the thanks they owe him.

 

For now, for his sake and the sake of an ultimate plan, he should choose Strategic Silence. Really, recent presidents forget to shut up. They lose sight of how grating they are.

Edited July 22, 2011 by Jenksismybitch

[southsider2k5]

One thing I want to say that can't be said enough, cutting the projected rate of growth, isn't really cutting. I'd be curious to see how much of the cuts fall into each category.

[Balta1701]

I agree:

 

http://online.wsj.com/article/declarations.html

If you're actually serious about deficit reduction (no one is), then the gang of 6 plan should be laughed at.

 

Virtually all of its deficit cuts, as Ms. Noonan notes...are things left up to unnamed bipartisan committees to decide.

 

Why does it do this? Why, the answer is ridiculously simple...because no Senator, Congressperson, or President wants to be the one who has his/her name attached to cutting a popular program in his or her district/state. This is a hard and fast rule; if you have a military base in your district, for example, you don't offer it up, you protect it like your job depends on it, because it does.

 

By leaving the actual cuts up to unnamed committees of Senators to come up with...the Gang is doing exactly that...they're saying "We need to cut this much but we're too scared to actually come forwards and say the things that we need to cut because we'll be out of a job." So, they're punting to hypothetical committees in the future.

 

The dumb part is...Hypothetical future committees will have the exact same problem.

 

We see this happening right now with the teaiest of the tea party. They send letters to Obama demanding that he come up with trillions of cuts, so that they don't have to take the hit themselves. Or they vote for jokes like a balanced budget amendment...so that they don't have to take the hits themselves.

 

No one cares about cutting the deficit. They care about making the other side take the blame for the cuts. Its right there in the "Gang of 6" proposal, and in the "Cut cap and whatever" proposal, and in just about every other proposal out there.

[NorthSideSox72]

LOL at telling the President to "get out of the way". He's the one pushing FOR this. The reason it isn't getting done is the people to his left screaming about cuts, and the people to his right screaming they refuse to do anything different on revenue.

 

I've blamed Obama for an awful lot of bad policy so far, but on this, he's absolutely not the problem. I'd put the majority of blame on the fact that the GOP made a grand bargain to support tea party policies to the point of refusing any attempt and compromise, and then to a lesser but still significant extent, the lefties refusing to see that the government's spending is out of control.

 

[StrangeSox]

Talks have collapsed, with Boehner calling Obama this afternoon to tell him he's not going to meet with him any more. Obama held a very angry press conference a short while ago, calling the Republicans out for their unwillingness to negotiate and demanded that Boehner, Pelosi, Reid and McConnell be at the White House tomorrow with plans on how they're going to raise the debt ceiling by August 2nd.

[StrangeSox]

Conservative Fantasies About Debt and Default

 

It's no wonder tea-party Republicans in the House feel unhelpful pressure from the grassroots. They're being presented with an upside down vision of the world, where the whole debt ceiling debate is an Ivy League conspiracy, compromising to solve it is both lamentable reality and foolish capitulation and the only sober-minded people in DC are the tea-party Republicans in the House.

[Rex Kickass]

I think we are headed for a constiutional crisis of sorts about the Debt Limit in less than ten days. The truth is that the debt limit is silly. The debt limit needs to be raised for spending that has already been approved by the US Congress.

[mr_genius]

One thing I want to say that can't be said enough, cutting the projected rate of growth, isn't really cutting. I'd be curious to see how much of the cuts fall into each category.

 

^^^

[mr_genius]

should have passed cut, cap, balance.

 

i guess the Dems want a default.

[Balta1701]

One thing I want to say that can't be said enough, cutting the projected rate of growth, isn't really cutting. I'd be curious to see how much of the cuts fall into each category.

Between January 93 and 01 the debt went up but fell from 40 to 30% of GDP. Does that not count?

[kapkomet]

LOL at telling the President to "get out of the way". He's the one pushing FOR this. The reason it isn't getting done is the people to his left screaming about cuts, and the people to his right screaming they refuse to do anything different on revenue.

 

I've blamed Obama for an awful lot of bad policy so far, but on this, he's absolutely not the problem. I'd put the majority of blame on the fact that the GOP made a grand bargain to support tea party policies to the point of refusing any attempt and compromise, and then to a lesser but still significant extent, the lefties refusing to see that the government's spending is out of control.

 

 

 

 

What are you smoking?

[kapkomet]

Hey, wait, there's no social security trust fund? No lock box? WTF?

 

[Balta1701]

Hey, wait, there's no social security trust fund? No lock box? WTF?

 

Of course there's no lock box. Remember the candidate who wanted to use that money on $2 trillion in upper class tax cuts got fewer votes so he won. We spent that lockbox money on the greatest economy of all time.

[DBAHO]

From an outsider's point of view, looks like nothing will be agreed upon unless the House Republicans budge on their stance on not raising taxes for the wealthy and corporations from the Bush Era Tax Cuts.

 

Don't know if I see that happening, with the whole Tea Party idology front and centre within the Republican Party, but the blowtorch will be applied to them this week by the Democrats and the Media (well except for Fox News) you would think.

[Balta1701]

It's not the news media they care about, they own enough of that.

 

It's wall street that matters. They're the only ones who can say enough and have the teaists listen.