The Debt Ceiling and the Conservative Bubble

[Torie]

Again, why all this chat of default when a failure to raise the debt ceiling will cut spending by "only" 17%, with debt service being paid first, along with other mandatory expenditures, as required by law? Sure the failure to raise the debt ceiling will be economically disruptive, but there will be no debt default. Period.

[Torie]

There is a sufficient pad to deal with that opebo. The debt service is 6% of the budget. So 83% minus 6% leaves a 77% of the budget pad. Don't over stress yourself here.

[Torie]

Again, why all this chat of default when a failure to raise the debt ceiling will cut spending by "only" 17%, with debt service being paid first, along with other mandatory expenditures, as required by law? Sure the failure to raise the debt ceiling will be economically disruptive, but there will be no debt default. Period.

I think you're wrong.  

As I understand it, the government makes 100 million payments per month and has no ability to neatly sort between "important" and "not important" payments.  There may not be the infrastructure in place to neatly sort through the bills and pay them on time.  Also, it's not necessarily legal to prioritize without congressional authority.

Plus, where is the 17% number coming from?  

I think it's fair to say that nobody knows what will happen if the debt ceiling doesn't get raised.  

18.58% actually. I just calculated it. The 17% is a number Brian York obtained, but that on a closer reading relates to the percent of the US expenditures that need budget authorization, which is what his currently in play over the CR, rather than raising the debt ceiling it turns out.

The idea that the government does not have the software to make sure it meets its Treasury debt service obligations strikes me as ludicrous. If that is the case, it's pathetic, and something needs to be done ASAP. But I don't believe that for a moment. That is just spin. We shall see if we go there, which hopefully we won't.

[Torie]

There is a sufficient pad to deal with that opebo. The debt service is 6% of the budget. So 83% minus 6% leaves a 77% of the budget pad. Don't over stress yourself here.

You realize there is no fat at all there, don't you Torie?  To put it into the Republican 'household budget' fantasy - the federal government is like a poor man whose rent, food, and debt payments are just barely covered by his income.  Reduce your income by 6%, and I understand you would never notice it (which is a great argument for increasing your freeloading class's taxes, but I digress), but reduce a poor man's income by 6% and he starts missing payments, meals, and finally defaults/goes homeless.  The Federal budget is at this level of tightness due to your class's robbery of the tax revenue.

You don't understand my point opebo. This discussion has nothing to do with what the budget should be.  Rather it is about whether it is likely a financial crisis will ensue if the debt ceiling is not raised. The answer is no. Sure there will be pain, financial disruption, and waste, and I oppose the whole Pub agenda on this (fight it out in the next election, and the one after that, dump the filibuster, and come up with something better when you win the trifecta if you do, and ram it down the Dem's throats to return the Obamacare favor if the parties are simply unable to work effectively together on anything anymore these days, that is what elections are for).

I hope I have made myself clear.

[Torie]

Link you are getting unduly personal here. Anyway, Bedstuy just commented that there is a separate computer program for Treasuries, so Rachael Maddow was wrong at least as to that, putting aside what the US government can do to pick which bills it pays, and which not (aren't they paying right now the troops, while not other government workers (other than politicians) by the way as we speak?).

Sure Bedstuy, the 18.58% figure on a day by day basis will vary up and down, and is probably seasonal to boot. But the annual average is ballpark.

[Torie]

The idea that the government does not have the software to make sure it meets its Treasury debt service obligations strikes me as ludicrous. If that is the case, it's pathetic, and something needs to be done ASAP. But I don't believe that for a moment. That is just spin. We shall see if we go there, which hopefully we won't.

No, actually, it's sensible in light of the Anti-Impoundment Act, which makes it clear that paying only some bills and not all of them is quite plainly illegal.

You are asking the executive to break the law here.  Come on now, you're smarter than that.

Interesting point, but when you don't have the cash, you sort of have to do that no? No cash is being "impounded" in other words, because there is no cash to impound. Anyway, I have never heard that card played before in this context, and if even if that is the case, then we need legislation to put debt service at the top of the list - unless team Obama wants a financial crisis to teach the Pubs a lesson.

How did Nixon selectively impound stuff, if the government software does not let you pick and choose what to pay by the way?  Maybe then it was all done by the hand.

[Torie]

Well we have closure now that the Treasury debt will be paid (it will be), so I'm done. I make no other claims - never have. Thank you.

[Torie]

I don't know if the government has software which can prioritize payments. Why should it? Why should someone assume that a certain political party will go insane and act like 5 year old children? I would be disappointed if the government did have software to prioritize payments since that would be a waste of money. The government should try to be efficient and reduce unnecessary spending. Don't you agree, Torie?

No, it is imprudent not to have the capability to pick and choose when things go awry. It should not cost that much money in the larger scheme of things. Think of it as a cost like, well, an insurance premium.   Anyway, we now know that the debt will be paid, and blaming software was BS, and for some reason the troops are being paid, without a software block, so I think much of it is hype. Both parties are in heavy spin mode now, and it is nausiating to me. Obama should be negotiating, and he can stand firm on Obamacare, but no, this is all about moving poll numbers because the Dems think this is a path to taking the House. They are very probably wrong, but they are going there.

Oh yes, the Pubs disgust me for not going to conference on the budget months ago. They didn't because they ran the risk that dissident Pubs might defect, since if the conference fails, after 20 days, stuff can be forced to the floor without a discharge petition, which is why Pelosi offered to give up that card in this context under the gun. But the Pubs are gutless in that if they cannot hold a majority on the merits, they should not be able to "win" based on procedural games.

But of course both parties have made procedural games into an art form. It is all about trying to move the polls now. And both parties on wrong in thinking all of this BS will move the polls much when push comes to shove in the next election. The Fruited Plain is that polarized. Where are the adults? Where are the politicians with guts who are more interested in good public policy than winning the next election?  The system is, if not broken, at a minimum not working on all cylinders. But in the end the public gets what they deserve. Both members of both parties should demand better, but they don't.

[Torie]

I don't know if the government has software which can prioritize payments. Why should it? Why should someone assume that a certain political party will go insane and act like 5 year old children? I would be disappointed if the government did have software to prioritize payments since that would be a waste of money. The government should try to be efficient and reduce unnecessary spending. Don't you agree, Torie?

No, it is imprudent not to have the capability to pick and choose when things go awry. It should not cost that much money in the larger scheme of things. Think of it as a cost like, well, an insurance premium.   Anyway, we now know that the debt will be paid, and blaming software was BS, and for some reason the troops are being paid, without a software block, so I think much of it is hype. Both parties are in heavy spin mode now, and it is nausiating to me. Obama should be negotiating, and he can stand firm on Obamacare, but no, this is all about moving poll numbers because the Dems think this is a path to taking the House. They are very probably wrong, but they are going there.

Oh yes, the Pubs disgust me for not going to conference on the budget months ago. They didn't because they ran the risk that dissident Pubs might defect, since if the conference fails, after 20 days, stuff can be forced to the floor without a discharge petition, which is why Pelosi offered to give up that card in this context under the gun. But the Pubs are gutless in that if they cannot hold a majority on the merits, they should not be able to "win" based on procedural games.

But of course both parties have made procedural games into an art form. It is all about trying to move the polls now. And both parties on wrong in thinking all of this BS will move the polls much when push comes to shove in the next election. The Fruited Plain is that polarized. Where are the adults? Where are the politicians with guts who are more interested in good public policy than winning the next election?  The system is, if not broken, at a minimum not working on all cylinders. But in the end the public gets what they deserve. Both members of both parties should demand better, but they don't.

The democrats don't think they should have to negotiate over the full faith and credit of the United States and I agree with them. Why should they negotiate with these tactics? Holding the debt limit hostage like this is not an act of responsible adults and the children in the room need to be taught once and for all that it is not acceptable behavior. There is no rational argument for why the Democrats need to negotiate and if there is I haven't heard it.

Because of the consequences. And most Dems around here think those consequences will be more negative than I do (beyond the politics), and I think they are significantly negative myself. That is why. You don't pick your opposition. They are just there. You do the best you can. And it goes both ways. I know, the the Dem leitmotif right now is to try to teach the Pubs a lesson (and in particular, oust them from control of the House), and hope the cost to the nation is not too high. Good luck with that, and I mean that sincerely (at least about the bit that the nation will not be hurt too much), not sarcastically, but also in the sense that the Dems will need a lot of luck. I doubt it will work out the way that you hope.

[Torie]

1. Apparently the software system is in place to handle the payments according to Bedstuy, and if that is not the case, why hasn't the Treasury Dept stated as part of the Obama "scare campaign" that that is the case?

2. In the end, even if the debt ceiling is not raised, I doubt it give the Dems much of a political benefit, so while it may teach the Pubs a lesson, it might well be the wrong lesson.