US may default on debt as soon as June 1, Yellen reaffirms
cnn.com
cnn.com
More importantly Republicans have shown time and again they are willing to consistently hold their positions without any expectation they'll have to compromise and berate other legislators and bully around to get what they want, I don’t want to see democrats give in to that again and again and again
EDIT: Couldn't Biden do an end run around the Republicans by strategically calling an emergency session after hours via Article II, Section 3 of the constitution? It has no requirements that the majority leader be there to start quorum, only that the session has been declared. Then attending democrats could just vote this thing through and call absence on the rest
Of course, "never give an inch" is now the motto of both parties, so it'll never happen and all we'll get is gimmicks.
This action would require a simple majority in the House, a 3/5 majority in the Senate, and either the presidency or increasing both of those to 2/3 majorities. The last time the Dems had that much power was 2010. Is it really surprising that folks are unwilling to accept a decade or more of giving the GOP whatever they want?
That's the political reality. If they don't want to deal with reality, then I guess we'll see what happens.
Changing that figure are what negotiations are for, but (at least) one side has loudly and publicly refused to negotiate.
That's a false distinction. It's all just legislation, and there's no real reason this needs to be here and that needs to be there except all the branches of government agree they want to do it that way.
If you think I'm wrong, point to the Constitutional provision that spells out debt ceiling increases are not the place to negotiate budget.
The democrats on the other hand, want to close tax loopholes[1] which is what the GOP is opposing
[0]: https://www.pbs.org/newshour/politics/heres-whats-in-the-gop...
[1]: https://www.washingtonpost.com/business/2023/05/15/debt-ceil...
I'm by no means opposed to taking steps to reduce the deficit, but the debt limit has had the above undesirable effect while simultaneously failing to actually reduce anything.
Of all the nuclear options I've seen proposed, this seems the most nuclear.
It feels like we've gotten here (to the point of massive national debt, and an economy where rate hikes wipe out banks) for a few reasons:
1) The US economy is like a big forest. Good forest management involves doing controlled burns or allowing small fires. The US has prevented small fires. So now we have a very overgrown, very flammable forest.
2) The US abusing its position as a world monopoly, basically to make money. Issuing more currency as one key way of doing that. There are good monopolies and bad monopolies. I'd argue Amazon is a good monopoly - they continually reinvest in making their product better for customers, keeping the potential gap between what a benevolent monopoly could do, and what they're actually doing, small. Then there are other monopolies like certain large enterprise software companies, that take advantage of their moat to extract value and don't reinvest much. The US govt has done the latter.
Burning the forest down would be chaotic for the world. The world doesn't want that.
The question is - how do you fix it without burning the forest down?
I think it’s kind of outrageous the USA is able to do this. I’m no longer sure what the world owes the USA but it’s pretty obvious to me having and endless money printer is quite an unfair advantage.
My sentiment is the rest of the world can clearly see this as being a something of a problem now and it’s why there is some sentiment towards de-dollarization. Not saying that is a good idea but I’m certain those feelings just exist.
The real answer though I think is that we don't really know and it's up to the courts.
We've only ever faced shutdowns due to budgets not being passed.
Both are awful. But the former is _far_ worse.
Isn't it a basic law of economics that the debt ceiling needs to be readjusted basically annually due to inflation since it's denominated in dollars, which are inflating slowly every month?
2) Many things the media (including Hollywood) do, if you assume the "liberal media" smear is more true than not, don't make much sense—it's as if that smear is kinda bullshit and they all just love money and lots of the owners of the media companies aren't actually left-leaning at all, and, go figure, that does seem to fit reality more than the smear does, while also explaining their confusing-if-they-were-actually-commited-to-the-liberal-cause behavior.
3) CNN has made some moves lately that make it seem like they're trying to pick up some of Fox's audience after the Tucker Carlson firing. This may not be part of that (actually, I doubt it is—see point #1, "the sky is falling!" gets viewers, which sells ads, and that's enough to explain this) but then again, it might be.
What Billionaire wouldn't want that kind of bling?
They've even spent months talking about how bad it will be, but it it will actually be that bad, why won't they budge?
Both republicans and democrats are heavily invested in the stock market which will crash and burn if US defaults.
It's all a show.
This is a slow burner.
That's a selective reading. The parties aren't perfectly symmetrical. The Dems like spending, so they're not going to challenge the debt. They have their own stuff they want to "pull," like trying to abolish the filibuster or pack the Supreme court because it's not currently controlled by liberals.
Note that they haven't been able to do either. If enough Democrats were on board with those items (the filibuster would have to be abolished before the packing court packing could begin) it would've happened by now. But many Democrats in the Executive and Legislative branches are very hesitant to do those things. GOP congress folks have not been hesitant to play chicken with the debt ceiling.
They were very, very close. IMHO, it's only a matter of time, and when it happens, there will be no delay.
A lot of our current deficit is due to tax cuts in the current century (Bush, Trump) and I suppose you'd agree that Dems dislike tax cuts, so why haven't they tried to push increases/cut-reversals in debt ceiling negotiations?
The Republicans love to spend money just as much or more than the Democrats. They just like to spend it on things which get even more of it into the hands of the wealthy.
And defaulting is somehow better than that?
That's just a rationalization for being unwilling to cooperate and compromise.
They're both in a car heading towards a cliff. One party has its foot on the gas, the other has its hands on the wheel, and neither will move. Complaining about how unreasonable the other side is doesn't change that fact doesn't make your side reasonable except to your partisans.
If the Republicans were responsible, they wouldn't be refusing to pass a debt limit increase. If the Democrats were responsible, they'd compromise now and wait for the next opportunity to repeal the debt limit (not fantasizing about untried gimmicks like platinum coins and a constitutional challenge). Neither party is being responsible.
No. The Republicans in the House did pass a debt limit increase, but the Democrats are threatening to drive off the cliff unless the increase is done their way.
https://www.npr.org/2023/04/26/1172368638/house-of-represent...:
> The House of Representatives narrowly approved a Republican bill that links avoiding a default with enacting spending cuts and several GOP policies rolling back several of President Biden's policies.
[EDIT] Less flippantly, re-read what you wrote: it's not a refutation of my claim, but instead re-affirms it.
> [EDIT] Less flippantly, re-read what you wrote: it's not a refutation of my claim, but instead re-affirms it.
No. Are the Democrats going to pass the Republican bill to avoid a default? Refusing to pass anything and pursuing untried gimmicks is driving off the cliff and just hoping for a soft landing. Both parties are making demands.
"I agree not to drive off the cliff if you agree to these other things."
Yes, technically those are both demands.
[EDIT] I think the core thing I'm not getting here is why you think the Republicans aren't the ones demanding something in exchange for a debt ceiling increase because they put those demands in bill form and passed them. I do not follow how that somehow makes it not the thing that it literally is.
> "I agree not to drive off the cliff if you agree to these other things."
Both parties have the ability to instantly end this debt ceiling drama right now. They are both choosing not to do so.
> [EDIT] I think the core thing I'm not getting here is why you think the Republicans aren't the ones demanding something in exchange for a debt ceiling increase because they put those demands in bill form and passed them. I do not follow how that somehow makes it not the thing that it literally is.
Because that's artificial. Legislative action needs to happen, different parties have different bills to achieve that action, and they have to come to an agreement but they've decided to play chicken instead. All the crap about how they're making demands and we're not is just political posturing.
Essentially, the government would stop paying for things. Which things is a level of chaos I wouldn't want to see. AIUI, e.g., that could mean things like social security payouts not getting paid out. That'd obviously be bad, as many aging Americans depend on those payments, and such an action would be to throw them under the bus. Another alternative is to default on debt, such as bonds, or perhaps say "we'll pay … uh … later?", and those consequences are mentioned in the article: the US's credit rating could be harmed (we've demonstrated that we're not as reliable a debtor as previously thought; this would translate to higher rates in the future, meaning borrowing costs the taxpayer more). Those people that hold US obligations would be harmed: the value of those would drop, representing the now-realized higher likelihood of a US default. (This would harm, e.g., investment accounts, I would imagine more so for older Americans, as younger Americans are more likely to have more money invested in riskier investments, like stocks. Although should this happens, I fully expect a (at least short term) Wall Street panic and stocks drop too…)
Holding America hostage with the debt ceiling is childish; the only real answer here is to raise the debt ceiling and then act like adults and get together and agree on a balanced budget with a surplus that can be used to start making headway into the owed debt until the national debt is at a reasonable level. But … I don't see that happening anytime soon; I think the most realistic path to such a budget involves taxing the rich, something to which the Republicans won't agree to, or cuts to the budget, which one party won't agree to (social services? Dems hate it; military? GOP hates it).
How is this different?
If Jimmy Carter and Bill Clinton could swing it during hard times then Gov has no excuse not to be able to do it now.
(the crash wasn't until '01/'02)