Today's Treasury Statement shows that we are bumping right up against the debt ceiling AGAIN! The August 2 agreement was supposed to keep this from happening, but the second tranche of $500 bln in borrowing authority has been held up by procedural votes in Congress.
Treasury back in "payment juggling" mode. When it did this back in June-July, it resulted in a significant slowdown in the economy that showed up in the data.
Here we go again!
Just $10 bln below the debt ceiling!!
Thanks for showing.
ReplyDeleteHow long until they get it through?
And how much can the squeeze using 'extraordinary accounting measures' ?
ReplyDeleteDid a quick google news search, and like you say there is nothing about America hitting the debt ceiling again. Fascinating, it almost seems like we live in a world of Propaganda.
I love congress and their self destructive ways...t hey make my worthless hedging options turn to gold when they scare the hell out of the voters. Your observation will make headlines in a day or two.
ReplyDeleteHoly s Mike good catch.... this same thing really screwed up June and July... I think caution on equities is best advised until the govt morons get past this... And If they let Greece go bankrupt like Lehman it could be even more chaotic....
ReplyDeleteResp,
Mike,
ReplyDeleteI wonder if you've seen this on DeLong's blog:
http://delong.typepad.com/sdj/2011/09/in-which-barack-obama-flunks-bureaucratic-process-1.html
He quotes from Suskind's new book about Obama's worrying about foreigners not buying Treasuries and fearing a fiscal crisis. Obama wanted a memo from the mostly clueless budget director Orszcag on how to respond to such a crisis. He didn't want Summers or Emmanuel to see it first. Maybe he was afraid they'd try to talk him out of his fear.
Obviously this is disastrous if true, and given the President's actions, I wouldn't be surprised if it is true.
DeLong has posts about other parts of the book as well.
Hopefully Tsy has spent the last month "reloading" all the accounting tricks they used to push out a debt ceiling breach from May to August.
ReplyDeleteIn any event, its unlikely Obama will make it to election day without at least one more debt ceiling and/or govt shutdown crisis. Like Dr. Phil says, we train people on how to treat us.
Anti's link is definitely worth following (Delong has several different excerpts up today). Its an ugly business when the good guy in a story is Larry Summers.
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ReplyDeletebeo,
ReplyDelete"all the accounting tricks": they just stopped paying vendors, put them all on "slow pay". Many businesses had to tap credit lines to get through....
It's pretty bad when businesses, including many small businesses, are waiting to get paid by the govt and are in effect "financing" govt due to the morons in govt running fiscal policy.....
Yeah Mike and another thing,
ReplyDeleteThe "mini-recession" they caused by not paying the bills for ten weeks back in May-July probably collapsed tax revenues (as savings desires stayed constant) and thus we are seeing the debt acccrue at a faster rate than these morons originally estimated...just like Greece...
Now they are doing it again. have to agree with Beo here, Ill look at it but probably we are going to have another hit of the hard ceiling now before the '12 elections (this I was not assuming). Democrats probably thought they would make it thru without having to worry about that before the elections....
Shaun: Yes, nobody is talking about this. Is that surprising??
ReplyDeleteMatt, Beo: I agree. Debt ceiling fights will continue. BTW, a bill to repeal the debt ceiling was introduced by several Democratic reps, but it will never see the light of day on the House floor. Repubs will kill it.
The solution to many things still lies in PPCS and the $60T coin. See: http://www.dailykos.com/story/2011/09/18/1017960/-How-to-Win-the-Battle-for-Full-Employment?via=history and
ReplyDeletehttp://www.dailykos.com/story/2011/09/18/1018041/-The-Pres-and-the-Coin-Trick?via=history
and
http://www.dailykos.com/story/2011/08/05/1003393/-End-the-Austerity-War-Against-the-People:-Mint-the-Platinum-Coin!?via=history
Calculated Risk: Poll: Debt Ceiling impacted confidence similar to 9/11 and Katrina
ReplyDeleteCan we take another one of these kerfuffles so soon and not feel the hit? I doubt it.
The solution to many things still lies in PPCS and the $60T coin
ReplyDeleteJoe, is there any particular reason to go with $60T and not $50T or $100T? Once you blast past the size of public debt or GDP (both around $15T), the numbers are too big or anyone to wrap their mind around it.
beowulf:
ReplyDelete"Its an ugly business when the good guy in a story is Larry Summers."
Check this out:
http://feeds.washingtonpost.com/click.phdo?i=40d30952b91f839c4e85207a8635c20d
And this interview with Summers:
http://feeds.washingtonpost.com/click.phdo?i=31ab36265b2495d2fc13bd8c4e4612ea
Larry does come across as actually the good guy, contrary to the popular opinion. Maybe not as effective as we could hope for, but definitely more on our side, seems to me,