Budget talks: This is getting nasty

The Big Ragu · Jul 22, 2011

Bubbler said:

I'm not convinced the markets don't meltdown to some degree anyway. It might not be as bad as the 24-hour reaction you're talking about, Ragu, but that's all relative. Bad is bad.

Maybe that's what we need. I've said all along the GOP will move when Wall Street forces their hand. I hate that I might be right about that.
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As for market meltdowns. ... If this goes on well into next week, the U.S. bond and stock markets will react. The bond market has been shrugging this all off. It was interesting to watch this week.

I know a lot of people on here think Wall Street is this monolithic entity that moves the world, but it's not the case as much as it once was. Our bond markets in particular right now are a big beneficiary of the fact that as fucked up as things are here with our debt problem, most of the rest of the world is looking worse.

I think even if they DON'T work something out and there is a selective default, we'd actually still survive it relatively well. They could shut down the government for a month, let's say, not pay government workers, maybe hold back medicare payments, things like that, and for sure, yields and interest rates in the U.S. would rise and our stock market would sell off.

But within a week of them working it (and they will eventually allow the treasury to start issuing more debt), even without the rating agencies taking us off watch, or upgrading from a downgrade, we'd begin recovering.

The fact is there is no place safe to put money right now (hence my gold thread -- $1600 an ounce right now). Europe's debt woes are worse than ours, and they haven't really dealt with the underlying problems. The U.S. is actually kind of the safe bet for a lot of the world. Where do you put your money if you want safe returns, Australia? There isn't enough of Australia.

BrianGriffin · Jul 22, 2011

Mark McGwire said:

I'll say it again.

This group of Republicans have been offered a deal that any conservative would be happy to take.

They won't make a deal because they simply won't give Obama anything at all that can look like a win.
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This is true. By any reasonable way of looking at it, any proposal I've seen has been more than generous to one side. If the GOP can't move at all on taxes, then it's clear why this thing fell apart.

Let's be clear: If there is a "compromise" that does not involve the closing of some tax loopholes, then it's not a compromise at all. There was agreement at the beginning that the debt would have to be reduced. That was the given. The Republicans are acting as though that is part of the compromise. That's not the case. That was simply the starting point to which the compromise was to be built.

A fair compromise would not necessarily have be close to 50 percent increased revenue (the end of some tax loopholes and possibly some increase in the marginal rate for higher earners) and 50 percent percent budget cuts. But to not give in an inch on any tax revenue? ... that is fatalistic behavior beyond absurd.

Mark McGwire · Jul 22, 2011

Yup. I sincerely hope the President has the General Counsel's office briefing the shit out of the 14th Amendment option.

YankeeFan · Jul 22, 2011

Mark McGwire said:

Yup. I sincerely hope the President has the General Counsel's office briefing the shit out of the 14th Amendment option.
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He's already said they're not going that route.

Mark McGwire · Jul 22, 2011

No, he hasn't.

He's said he doesn't want to go that direction and he's said that he doesn't want to get into it.

He hasn't ruled it out.

He's also had Bill Clinton putting the idea out there as a reasonable one.

Football_Bat · Jul 22, 2011

YankeeFan said:

You know how I know this is a big deal?

MSNBC has preempted Lochup: Raw and is live.

This only happens for really big news -- like Casey Anthony big.
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But only for a while. Back to Prison Block they go.

Brian · Jul 22, 2011

The Big Ragu said:

Bubbler said:

I'm not convinced the markets don't meltdown to some degree anyway. It might not be as bad as the 24-hour reaction you're talking about, Ragu, but that's all relative. Bad is bad.

Maybe that's what we need. I've said all along the GOP will move when Wall Street forces their hand. I hate that I might be right about that.
Click to expand...

As for market meltdowns. ... If this goes on well into next week, the U.S. bond and stock markets will react. The bond market has been shrugging this all off. It was interesting to watch this week.

I know a lot of people on here think Wall Street is this monolithic entity that moves the world, but it's not the case as much as it once was. Our bond markets in particular right now are a big beneficiary of the fact that as fucked up as things are here with our debt problem, most of the rest of the world is looking worse.

I think even if they DON'T work something out and there is a selective default, we'd actually still survive it relatively well. They could shut down the government for a month, let's say, not pay government workers, maybe hold back medicare payments, things like that, and for sure, yields and interest rates in the U.S. would rise and our stock market would sell off.

But within a week of them working it (and they will eventually allow the treasury to start issuing more debt), even without the rating agencies taking us off watch, or upgrading from a downgrade, we'd begin recovering.

The fact is there is no place safe to put money right now (hence my gold thread -- $1600 an ounce right now). Europe's debt woes are worse than ours, and they haven't really dealt with the underlying problems. The U.S. is actually kind of the safe bet for a lot of the world. Where do you put your money if you want safe returns, Australia? There isn't enough of Australia.
Click to expand...

Just wanted to thank you for your thoughts on this and other threads like it. I probably don't agree with much of what you do politically, but I learn so much and get a great perspective from all your posts. I wish more financial reporting in the country were this reasoned and accessible for ignorant schlubs like me.

sportsguydave · Jul 22, 2011

dixiehack said:

Carlton, on behalf of my mentally handicapped twin aunts and the hundreds of special education kids my wife has taught over the years, come up with another juvenile putdown that isn't a play off "retard."
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Good luck with that. And as the parent of a special needs child - and a former special ed aide and teacher - you can add my voice to the request.

Unfortunately, that's the way Carlton rolls these days. Really a shame.

Point of Order · Jul 22, 2011

Shorter Boehner: The dog ate my debt homework.

YankeeFan · Jul 22, 2011

Mark McGwire said:

No, he hasn't.

He's said he doesn't want to go that direction and he's said that he doesn't want to get into it.

He hasn't ruled it out.

He's also had Bill Clinton putting the idea out there as a reasonable one.
Click to expand...

This doesn't rule it out:

President Barack Obama said on Friday he discussed with White House counsel whether the 14th Amendment offered an alternative to raising the $14.3 trillion debt limit, and they concluded it did not.

"There is a provision in our Constitution that speaks to making sure that the United States meets its obligations and there have been some suggestions that a president could use that language to basically ignore that debt ceiling rule, which is a statutory rule," Obama told a town hall meeting.

"I have talked to my lawyers, they are not persuaded that that is a winning argument," he said.

http://www.reuters.com/article/2011/07/22/us-usa-debt-obama-amendment-idUSTRE76L3RE20110722
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President Obama said today that Congress has to avoid a government default by raising the $14.3 trillion debt ceiling because his lawyers say he lacks the authority to do so on his own.

Responding to a questioner at the University of Maryland, Obama struck the "14th amendment theory" -- that the Constitution gives the president the authority to make sure the nation's debts are paid, including an increase in the debt ceiling.

"There's a provision in our Constitution that speaks to making sure that the United States meets its obligations, and there have been some suggestions that a president could use that language to basically ignore this debt ceiling rule, which is a statutory rule; it's not a constitutional rule," Obama said.

He said, "I have talked to my lawyers ... They're not persuaded that that is a winning argument."

http://content.usatoday.com/communities/theoval/post/2011/07/obama-speaks-at-university-of-maryland/1
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I suppose he left a little room. The lawyers could still "persuade" him. But, what are they going to tell him that would change his mind?

Point of Order · Jul 22, 2011

Who on this board, if the President rang you up, would refuse to take the call?

Flying Headbutt · Jul 22, 2011

The amazing thing is, and I really am not exaggerating, I think Boehner's people like Obama's people more than they like Cantor's.

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Budget talks: This is getting nasty

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Budget talks: This is getting nasty

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