The Debt Ceiling Debate Will Be Returning Soon
Tyler Durden passes along an analysis that estimates that we’ll need to deal with raising the debt ceiling again some time in the next four months:
Key Takeaways:
- We expect the Treasury to exhaust its extraordinary measures to create borrowing authority on October 31, and run out of cash on November 1.
- Our “drop dead” date is about two months later than an earlier forecast. The main reason for the change is that we underestimated how much borrowing authority Treasury could create this time around.
- Our forecast assumes that Freddie Mac pays Treasury a $30.0 billion dividend at the end of September. That’s not a given, though.
- Even without the dividend payment, Treasury could probably make it to November 1 without a debt limit increase.
We’ve updated our projections for when Treasury will exhaust its extraordinary measures that will allow it to borrow under the current debt ceiling. We now expect that Treasury will exhaust those measures on October 31, and run out of cash the next day, November 1.
That puts the debt ceiling debate right in the middle of the debate over the Fiscal Year 2014 budget, and makes it even less likely that the House will deal substantively with immigration until much closer to the end of the year.
It’s a hostage crisis, not a debate.
Cry havoc and let slip the hogs of war.
There’s really no need to debate this, at least not with the administration.
Congress has the authority and requirement to set appropriations, and the authority and requirement to authorize debt.
It is not the executive branch’s job to help congress pick the bag of sh.t they are demanding, or to negotiate what previously congressionally-approved spending to cut, or even to smile and play nice. The president can veto, or he can sign — beyond that, this is Congress’s problem (that they have made up for themselves).
If the Republicans in the House want to run up a bill and skip out on payment, there is very little the Obama administration can do to stop them.
I would recommend vetoing any and all appropriations bills that don’t come with the needed borrowing authority in the future though.
I can’t take ZH.
“It’s the end of the world. Buy gold!”
ZH in a nutshell.
I have to deal professionally with the occasional person suffering from dementia (sometimes a permanent type, sometimes situational). I can affirm that trying to talk sensibly to insane people does NOT constitute a “debate”. I recomment restraints and adequate sedation.
But… but… we keep getting told that, under Obama, the deficit is shrinking and things are getting better and better! Why do we need to keep borrowing money?
Oh yippee! Another fight from Republicans over the debt ceiling. What a way to run a country.
More hand wringing from them over raising the debt ceiling but never any worries over spending millions more on the war machine if necessary! The Republican Party is dysfunctional and about time it went the way of the dinosaur. Even cave men would do a better job in Congress than that bunch of idiots!!
Whenever I’m looking for serious financial advice, I always turn to someone who took their name from a Brad Pitt character. After lots of discussion with Benjamin Button, I believe in Reaganomics. And going backwards in time.
@Rex Marsh:
apparently American disagrees with your opinion. Named the 5th most influential financial website for 5 years in a row
http://www.businessinsider.com/the-20-most-influential-blogs-2011-1
First, let me help you out here: We need to borrow because we still have a deficit. There, you just learned something …. you’re welcome.
And yes, things are getting better – the annual deficit is declining, by every measure, and the unemployment is declining. I can see why those two facts distresses you. Also, unfortunately for you, America has not defaulted on its debt, and has ample capacity to continue to meet its debt service obligations.
Although,to be fair, Republicans have demonstrated that they want America to default on its debt in order to make it politically possible to enact the kind of spending reductions that will cause another recession.
Please kill me…
Well, there has been one year in the history of this nation when we did not carry a national debt. That was 1835. In every other year, there has been debt. Debt has to be serviced. Well, maybe not, we know that a lot of deadbeat conservatives love to ring up charges on the ol’ credit card, they just dont want to pay the bill when it comes due.
At any rate, it’s interesting how no one on the right gave a crap about the debt/deficits until that dark skinned feller was in the White House.
@anjin-san:
You do realize that you’re a racist for even suggesting that this country ever had a race problem? And how do I know this? Because that is what conservatives keep telling me.
Now that’s downright entertaining. My 16:45 comment was nothing but a direct quote from Senator Barack Obama, and it got 3 downvotes.
Racists.
@Jenos Idanian #13: did you forget the quotes or do you assume we all know who said that and when!? i think we’re past the children and into the grandchildren now- great grandchildren are getting real close.
Senator Obama was grandstanding. His 2006(?) quote deserves some downvotes.
The Dems didn’t use the debt ceiling as a bargaining chip, threatening default. They got their shots in, and then what needed doing, as had been done for roughly a century. The GOP recently made a choice to utilize tactics not used before. Politically, this was useful. It is also dangerous, IMO, or at least it is if the Dems ever decide to respond in a similarly hardline manner. So the approach pays off, which means they’ll keep using it. It’s a lovely little dynamic. It’s basically playing chicken, when you know the other guy will swerve.