Earlier this week the absurd and totally unnecessary debate in Washington over raising the national debt-ceiling came to an agreement, both houses of Congress passed it, and the President signed it. Earlier this week I gave this metaphor for the deal, wondering why we need enemies with "friends" like our representatives in Washington. Now that … Continue reading We Have A Debt-Ceiling Deal. The Economy Loses.
Ok, we have a "deal" in Washington to raise the debt ceiling. Big whoop. With friends like these, we don't need enemies. I don't much time today (end of semester, grading, and all), but I'll comment tomorrow in more depth. Meanwhile, I'll leave you with this metaphor for how I see the debt-ceiling deal and … Continue reading So We Have a Debt-Ceiling Deal. Whoppee. With “Friends” Like These…
Any higher education students out there who think the whole Washington debate about raising the debt ceiling is just some hypothetical exercise that doesn't affect you, think again. If the debt ceiling isn't raised, then we don't know what the government will pay and what it won't pay in August and September. And Treasury isn't … Continue reading Students Have A Stake in The Debt-Ceiling Crisis
Yesterday I took a stab at describing what the consequences of a government default might be and I added to it here. There's basically three lessons to take away from those questions. One, nobody knows now exactly what happens, especially in financial markets. Two, it all depends on the specifics of a deal or no deal … Continue reading What Happens If Debt Ceiling Is or Isn’t Raised – How It Plays Out (updated)
I'm with Brad Delong and a host of others in wondering just why President Obama doesn't simply do away with this whole silly, unnecessary debate about the debt ceiling. Too much is at risk to continue this charade and silly theatrics. Brad summarizes for us: Does anybody have any doubt that any Republican President--Bush II … Continue reading What Is Obama Waiting For?
I've mentioned in many previous posts that government debt is really not like private debt. Instead government bonds are more like another type of currency or money. The key difference between government bonds and paper money is that bonds pay interest and money doesn't. That's about it. But it's a key point because government bonds, … Continue reading More on What Happens If Debt Ceiling Isn’t Raised
Anybody who tells you they know exactly what's going to happen if Congress doesn't raise the government debt ceiling before next week is just making it up. Reality is we don't know for sure. As Brad Delong notes (and Krugman and Nick Rowe), economists don't even have nicely worked-out theoretical models of what happens if … Continue reading What Happens If Government Debt Ceiling Isn’t Raised? 2 Things That Might, 1 That Will, and 1 That Won’t
The debt-ceiling circus in Washington continues as I write this. The Republicans seem bound and determined to ruin the "full faith and credit" of the United States, while President Obama is frustrated that the Republicans won't accept his deals to cut Social Security and Medicare. None of this is necessary. We don't need a debt … Continue reading Debt-Ceiling: An Absurd, Unnecessary Law
I don't enjoy scary movies. Never have. I also don't enjoy scary "amusement" park rides.* I know I'm kind of a fluke in our U.S. culture this way. I just find that there's enough excitement, thrills, and fright in the real world if you just open your eyes. An example of real world things to … Continue reading This Is No Movie Folks. It’s Real and It’s Scary.
Apparently, the Republicans and Tea Partiers are insisting that the federal government budget be balanced immediately (the demand for no increase in the debt ceiling) and that it be done entirely from spending cuts (the "no tax increases" pledge) to discretionary spending. This is enough to demonstrate that they simply are not dealing in reality … Continue reading Arithmetic, Reality, and Dreams of A Balanced Budget