[vision-master]

$this->bbcode_second_pass_quote('Keith_McClary', 'O')bama will cave in and sell out to the wealthy and powerful.

[Bill Hicks]

$this->bbcode_second_pass_quote('vision-master', '')$this->bbcode_second_pass_quote('Keith_McClary', 'O')bama will cave in and sell out to the wealthy and powerful.

[ian807]

I think the debt ceiling debate is a sideshow – a small part of a bigger global picture. I think there are factions in government/finance in Europe and the USA who want to collapse the USA and European economy and preserve Euro-American hegemony by killing the dollar and the Euro. The scenario, I think, will go like this:

1) No debt ceiling agreement is reached.

2) Congress dithers for weeks and months as the government meets fewer and fewer of its financial obligations.

3) Eventually, bond holders stop getting paid. The bond market panics. The USA’s debt is now unfinanced by China, et. al. exacerbating the government’s crisis. The panic spreads to Europe where the Euro dies a noisy death.

4) The shrinkage of government money tanks the economy of the USA. Deflation follows rapidly.

5) Through QE3, QE4, QE-forever or some other method, the government starts printing money and injecting it into the economy in any way it can until inflation reaches Zimbabwe levels.

Result?

1) The USA has hyper-inflated its way out of dollar denominated debt.

2) New currency is issued, but wages and prices in the USA are now realigned with BRIC and Chinese standards, making the American economy competitive on price.

3) The Chinese must either keep their currency pegged to the dollar, making it worthless and causing major political upheaval at home, or let it rise, making their export market much less competitive, which suppresses their economy.

In short, China is de-fanged while America and Europe are given breathing room while they still have military power, and oil is plentiful. The alternative, waiting 10 years for the inevitable default, would simply give China and the BRIC countries overwhelming military and economic advantage.

Better to take your pain now, if it takes your enemies with it.

Put yourself in the position of the "old money" elite in the USA and Europe vs. the upstart and uncooperative Chinese elites. If you were old money, what would you do?

[Quinny]

Anecdotal but relevant.

In 1997 I was working in LA with colleagues from all over the 'developed' world. We got to talking about tax rates and those from US were initally saying how their taxes were much lower than the Europeans and Canadians. When we compared like with like however, tax levels were remarkably in line. In fact if medical insurance was factored for age etc, the US lads were probably paying more tax overall.

$this->bbcode_second_pass_quote('Keith_McClary', '')$this->bbcode_second_pass_quote('prajeshbhat', 'I')n USA taxes are 14.6% of the GDP.

[prajeshbhat]

Worried about the $ 14 Trillion national debt, wait till you see this.
http://countercurrents.org/bailout240711.htm

This data was found on the first ever audit of the federal reserve. The super efficient private sector got a $16 Trillion bailout from the federal reserve. At 0% interest. At least the government is willing to pay 0.25%. All the usual suspects are in the list.

[Novus]

The whole debt debate is turning into a black swan.

My bold prediction is Congress rewrites democracy with the creation of the super congress. They pass a budget that guts SS and medicare and Obama is forced to sign or default the nation which he would be blamed for. This event becomes a game changer as the super congress can ram things into law without common representative input. Representative Democracy dies here and now as these rules will make congress immune to criticism from the voters. A fascist corporate state rises in the aftermath that repeals workers rights, abolishes regulations on pensions, and passes even more taxes cuts for the big boys.


It is not really a fair "prediction" because it is already happening.

[peripato]

$this->bbcode_second_pass_quote('Novus', 'T')he whole debt debate is turning into a black swan.

My bold prediction is Congress rewrites democracy with the creation of the super congress. They pass a budget that guts SS and medicare and Obama is forced to sign or default the nation which he would be blamed for. This event becomes a game changer as the super congress can ram things into law without common representative input. Representative Democracy dies here and now as these rules will make congress immune to criticism from the voters. A fascist corporate state rises in the aftermath that repeals workers rights, abolishes regulations on pensions, and passes even more taxes cuts for the big boys.


It is not really a fair "prediction" because it is already happening.

[Mesuge]

Anybody have seen the press conference with Schumer & Reid today? Correct me if I'm wrong, but as Schumer put it in the Q&A session, that those ~100 extremists (tea party leaning) in the house don't represent american citizens, was in my book behind the fence of usual political correctness, say just few years ago unheard of. Bit by bit this kind of venom put this on trajectory of real internal war in the long term. I really do subscribe to Orlov's thesis of similar CCCP brakeup brewing in the pipeline for the good old USA.

[Cog]

As I recall, we had an election in 2010 that changed the House political composition in a very dramatic way. I'm sure those voters represented a point of view that Schumer despises but its a very valid one. Maybe Schumer thinks that elections are passe.

[gollum]

$this->bbcode_second_pass_quote('Cog', 'A')s I recall, we had an election in 2010 that changed the House political composition in a very dramatic way. I'm sure those voters represented a point of view that Schumer despises but its a very valid one. Maybe Schumer thinks that elections are passe.

[Cog]

$this->bbcode_second_pass_quote('gollum', '')$this->bbcode_second_pass_quote('Cog', 'A')s I recall, we had an election in 2010 that changed the House political composition in a very dramatic way. I'm sure those voters represented a point of view that Schumer despises but its a very valid one. Maybe Schumer thinks that elections are passe.

[Timo]

As much as i hate to admit it, even i can see that SS, Medicaid, and Medicare cannot last forever. Means testing is a must if these programs are going to last for any length of time. The dilemma that i and the rest of the country are having right now is whether or not to jump off a cliff and end these programs at catastrauphic expense, or to slowly descend down a slope of reduced services that minimizes the negative consequences, but may prolong the inevitable for another decade or two. The common good trumps ideology for me. I don't want America to become a serf state, unlike the ptb.

[Cog]

Means testing for SS and Medicare is a logical first approach.

[smiley]

If the house and the congress value the democratic principles then we should not see a deal before the 2nd of august. Representatives have the legal and moral obligation to thoroughly review the legislation put before them. Certainly an important piece like this.

Step 1: Introduction
Step 2: Committee Consideration
Step 3: Committee Action
Step 4: Subcommittee Review
Step 5: Mark Up
Step 6: Committee Action -- Reporting a Bill
Step 7: Publication of Committee Report
Step 8: Floor Action -- Legislative Calendar
Step 9: Debate
Step 10: Voting
Step 11: Bill Referred to Other Chamber
Step12: Conference Committee
Step 13: Final Action - Enrollment
http://usgovinfo.about.com/od/uscongres ... rocess.htm

That takes time and I can well imagine that a few will refuse to sign a piece of legislation that is forced upon them by holding a gun to their head.

Another risk is that seeing the importance of this bill many will seize the opportunity to add a few earmarks for their votes. That will slow down the process and reduce the net savings by such a proposal.

I can see some sort of tentative deal being reached before the 2nd but certainly not put into legislation. What the market reaction will be I'm not sure. There is still a great deal of confidence in the US out there. If there is a deal presented with sufficient theatrical acts of cross-party unity, this might not trigger an immediate reaction but it does set the stage for a further erosion of the dollar.

What might be important is that after the debt limit is raised the US has to quickly put out $300b in bonds to repay Geithners "special measures" (make up for missed payments of the past few months). That would also make the US pass the 100% GDP limit on debt and within inches of the 70% limit for the public debt (AAA requirement of S&P). If that hits prime time it could well trigger the markets into a strong negative reaction.

[gollum]

$this->bbcode_second_pass_quote('Cog', 'M')eans testing for SS and Medicare is a logical first approach.

[Bill Hicks]

$this->bbcode_second_pass_quote('Cog', ' ')Time to wean the mooch class away from their entitlements

[gollum]

I'm sitting here wondering if in the long run it wouldn't be better to have Obama and the Republicans crash the financial system and put the nation and society in a position of being able to start fresh?

[Livewire713]

$this->bbcode_second_pass_quote('gollum', 'I')'m sitting here wondering if in the long run it wouldn't be better to have Obama and the Republicans crash the financial system and put the nation and society in a position of being able to start fresh?

[Bill Hicks]

$this->bbcode_second_pass_quote('gollum', 'I')'m sitting here wondering if in the long run it wouldn't be better to have Obama and the Republicans crash the financial system and put the nation and society in a position of being able to start fresh?

[gollum]

$this->bbcode_second_pass_quote('Bill Hicks', '')$this->bbcode_second_pass_quote('gollum', 'I')'m sitting here wondering if in the long run it wouldn't be better to have Obama and the Republicans crash the financial system and put the nation and society in a position of being able to start fresh?