2016 Postmortem
Related: About this forumThe default has already begun
By Felix Salmon OCTOBER 14, 2013
FISCAL AND MONETARY POLICY | POLITICS | SOVEREIGN DEBT
The big question in Washington this week is whether, in the words of the NYT, were going to see a legislative failure and an economic catastrophe that could ripple through financial markets, foreign capitals, corporate boardrooms, state budget offices and the bank accounts of everyday investors. In this conception and I have subscribed to it just as much as anybody else the sequester is bad, the shutdown is worse, and the default associated with hitting the debt ceiling is so catastrophic as to be unthinkable.
This frame is a useful one, not least for the politicians in Washington, who seem to have become inured to the suffering caused by the shutdown, and downright blasé about the negative consequences of the sequester. Both of them could last more or less indefinitely were it not for the debt ceiling, which is helpfully providing a hard-and-fast deadline: Congress is going to have to come up with a deal before the ceiling is reached, because the alternative is, well, the zombie apocalypse.
Theres more than a little truth here: Im a firm believer, for instance, that the president both can and should prioritize debt repayments in the event that the debt ceiling is reached. If were going to be so stupid as to hit the ceiling, then prioritizing debt service is the least-worst outcome. But at the same time, the situation is less binary than it looks, not least because the US government is already in default on its obligations.
http://blogs.reuters.com/felix-salmon/2013/10/14/the-default-has-already-begun/
Sunlei
(22,651 posts)The higher interest on our bills will ruin this country. republicans are nothing but a bunch of deadbeat dads. They should be thrown in jail or forced to pay what they cost the USA out of their own pockets.
Everything we buy has to be in smaller lots so we have to pay almost retail prices instead of wholesale prices. Our Gov is so broken!