Republicans and the debt ceiling

[Anonymous]

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Anonymous wrote:The fundamental problem here is that McCarthy does not have the votes for any deal he cuts with Biden, but he does not seem to recognize that fact. 30-50 of his members are extreme wackos who will vote against anything, and the Rs don't control the Senate (and there are probably 10 Rs in the Senate who are extreme wackos who will vote against anything). So he's got to cut a deal that will get 50 plus D votes in the House and 30 plus D votes in the Senate. But he's not offering the Ds anything at all. He won't reform prescription drug pricing, won't close the carried interest loophole, won't increase taxes on wealthy, and won't cut defense spending. Negotiation means both sides get something and give up something. But it's just demands from McCarthy with no give.

Agree with your analysis -

Do you think there is any hope for 14th amendment or other solution to resolve this crisis?

The 14th amendment idea seems dumb to me. Not a lawyer so I don't know what the courts would ultimately say, but I don't really think that matters because the market reaction would very likely be bad because the debt may turn out to be illegal. That would cause many of the same problems as a default.

If I'm the admin, I'm looking at two options. First is stopping payments to contractors, hospitals, state governments, and big businesses. These folks have the ear of republicans and stopping those payments won't immediately have too bad economic outcomes. Second is trying to find some more "extraordinary measures" that would let me push the X date into the fall past Sept. 30. That would drive this into the regular budget season where it could be resolved under the normal government shutdown threats, and where Biden will have a strong hand to blame the Rs for the shutdown.

Since the 14th Amendment requires our DEBT to be valid, the Treasury should continue to make interest payments on the Treasury debt. But refuse to make any other payments, and let all those private businesses who rely on government funds go to court and argue that their debt is valid too.

Those private businesses have contracts and are billing for services rendered. The US cannot just not pay them.

Once it runs out of cash, what else is it going to do? The GOP won't let the US borrow more money and won't let it get more money thru taxes. There's no other option other than stop paying.

And then the courts will force payment with interest. We can't just break contracts like that.

Sure, probably in a year or two they would get a judgment, but the debt ceiling will have been resolved by then. And if it hasn't, that judgment still won't get paid if there is no cash to pay it. No court is going to order congress to raise taxes or raise the debt ceiling.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:What happens when you default on your debts?

The banks raise your interest rates…

On $31 trillion dollars…

That will cost the United States more than any of the proposed spending cuts.

You have it backwards. All this debt makes inflation go higher and interest rates go higher.
On $31 trillion dollars.

The debt it already there. the inflation happened because of the recovery from COVID as evidenced by HIGHER inflation in other industrialized countries. If the Biden spending was the problem, the inflation would be higher in the US, but it isn't.

That said, we already have the debt. So causing an economic crash and driving interest rates higher and particularly the rates the US government pays, sim,ply means that that cost to service the debt goes up and the country gets less for its money, thus costing more than it does now.

The current inflation is from energy policy, which explains why Europe is higher. I am saying this debt will produce more future inflation.

[Anonymous]

Anonymous wrote:The fundamental problem here is that McCarthy does not have the votes for any deal he cuts with Biden, but he does not seem to recognize that fact. 30-50 of his members are extreme wackos who will vote against anything, and the Rs don't control the Senate (and there are probably 10 Rs in the Senate who are extreme wackos who will vote against anything). So he's got to cut a deal that will get 50 plus D votes in the House and 30 plus D votes in the Senate. But he's not offering the Ds anything at all. He won't reform prescription drug pricing, won't close the carried interest loophole, won't increase taxes on wealthy, and won't cut defense spending. Negotiation means both sides get something and give up something. But it's just demands from McCarthy with no give.

It is McCarthy who is giving. With no debt ceiling increase you have to cut trillions in spending. That is the starting position of negotiations.
There is no default that would happen, unless Biden wants it to. Not raising the debt ceiling does not produce default, it produces trillions in spending cuts.
Democrats are giving up so much because they are the party of more government and more spending, though Republicans spend even more when they are in power.
If they want to say OK we will cut trillions, McConnell will freak out and be eager to cut a deal.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The fundamental problem here is that McCarthy does not have the votes for any deal he cuts with Biden, but he does not seem to recognize that fact. 30-50 of his members are extreme wackos who will vote against anything, and the Rs don't control the Senate (and there are probably 10 Rs in the Senate who are extreme wackos who will vote against anything). So he's got to cut a deal that will get 50 plus D votes in the House and 30 plus D votes in the Senate. But he's not offering the Ds anything at all. He won't reform prescription drug pricing, won't close the carried interest loophole, won't increase taxes on wealthy, and won't cut defense spending. Negotiation means both sides get something and give up something. But it's just demands from McCarthy with no give.

Agree with your analysis -

Do you think there is any hope for 14th amendment or other solution to resolve this crisis?

A total misunderstanding of the 14th amendment. It requires Biden to pay the debt, it does not allow him to borrow money without authorization from Congress.

[Anonymous]

Anonymous wrote:I am so sick of the dysfunction in our Congress.

They can never pass a budget on time, so we limp along with CR's.

Now another cliff hanger, where the whole world's economy could be plunged into recession.

If you had an employee that operated like they do, you would fire them summarily.

They are so hypocritical. Focused on theater and culture wars, when our country has REAL problems.

The system is beyond broken.

Not CRs, they do omnibus. I would rather they do CRs, a few hundred billion at a time. Makes it harder to hide the payoffs.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I am so sick of the dysfunction in our Congress.

They can never pass a budget on time, so we limp along with CR's.

Now another cliff hanger, where the whole world's economy could be plunged into recession.

If you had an employee that operated like they do, you would fire them summarily.

They are so hypocritical. Focused on theater and culture wars, when our country has REAL problems.

The system is beyond broken.

Let's be clear, this is not a budget issue, this is a debt ceiling. That said, the Dems have routeinly used regular order, hearings etc to pass bills that comprise the budget.

The GOP does not. The tax cuts from 2017 didn't have much in the way of hearings, testimony or other standard features of lawmaking.

The Dems have not used the regular budget process since George W Bush was President. It is always an omnibus, instead of the dozen or so individual appropriations bill they are supposed to pass.

But the disfunction squares on the shoulders of the GOP who are not using regular order or other methods of fact finding to create legislation.

[Anonymous]

Contractors have routinely not been paid during previous budget shutdowns. And even there, this is about future spending, not current bills due.

[Anonymous]

Anonymous wrote:Contractors have routinely not been paid during previous budget shutdowns. And even there, this is about future spending, not current bills due.

OMG The debt ceiling is about current and past bills. The budget/appropriations process in the fall is about future spending.

[Anonymous]

Anonymous wrote:Contractors have routinely not been paid during previous budget shutdowns. And even there, this is about future spending, not current bills due.

Narrator: This isn't a budget shutdown, nor would it be.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The fundamental problem here is that McCarthy does not have the votes for any deal he cuts with Biden, but he does not seem to recognize that fact. 30-50 of his members are extreme wackos who will vote against anything, and the Rs don't control the Senate (and there are probably 10 Rs in the Senate who are extreme wackos who will vote against anything). So he's got to cut a deal that will get 50 plus D votes in the House and 30 plus D votes in the Senate. But he's not offering the Ds anything at all. He won't reform prescription drug pricing, won't close the carried interest loophole, won't increase taxes on wealthy, and won't cut defense spending. Negotiation means both sides get something and give up something. But it's just demands from McCarthy with no give.

Agree with your analysis -

Do you think there is any hope for 14th amendment or other solution to resolve this crisis?

A total misunderstanding of the 14th amendment. It requires Biden to pay the debt, it does not allow him to borrow money without authorization from Congress.

Congress has already told him to spend the money.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Contractors have routinely not been paid during previous budget shutdowns. And even there, this is about future spending, not current bills due.

OMG The debt ceiling is about current and past bills. The budget/appropriations process in the fall is about future spending.

Your statement is false. The debt ceiling is about borrowing money. Lower the ceiling.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Contractors have routinely not been paid during previous budget shutdowns. And even there, this is about future spending, not current bills due.

OMG The debt ceiling is about current and past bills. The budget/appropriations process in the fall is about future spending.

Your statement is false. The debt ceiling is about borrowing money. Lower the ceiling.

Borrowing money to pay the bills we've already incurred!

[Anonymous]

[Anonymous]

Anonymous wrote:

So raising taxes wasn’t even an option. And only 35% of respondents think republicans are behaving responsibly. And 86% said they were not following closely or somewhat closely. CNN is truly going for foxlite.

[Anonymous]

Anonymous wrote:

“Cut spending” always polls well. It doesn’t poll well when you say what you’re cutting. Try this question again with “cut spending on Pell grants, healthcare for low income people, and enforcing environmental laws while increasing defense spending” and see what the results are.