#debt default

[dreaminginthedeepsouth]

Mike Luckovich

* * * *

LETTERS FROM AN AMERICAN

April 19, 2023

HEATHER COX RICHARDSON

APR 20, 2023

The debt ceiling crisis has brought the difference between Biden Democrats and the modern Republican Party into sharp relief. The debt ceiling is not about future spending; future spending is debated when Congress takes up the budget. The debt ceiling is a curious holdover from the past, when Congress actually wanted to enable the government to be flexible in its borrowing rather than holding the financial reins too tightly. In the era of World War I, when the country needed to raise a lot of money fast, Congress stopped passing specific revenue measures and instead set a cap on how much money the government could borrow through all of the different instruments it used. Beginning in the 1980s, though, Republicans began to use the debt ceiling as a political cudgel because if it is not raised when Congress spends more than it has the ability to repay, the country will default on its debts. Republicans focused on cutting taxes, initially promising that tax cuts would not require any cuts to services because they would nurture the economy so effectively that tax revenues would increase despite the cuts. Immediately, though, both deficits—the difference between what the government spends and what it takes in—and the debt, which is the total sum that the government owes, ballooned. That skyrocketing debt means that Congress repeatedly has to increase the amount that the Treasury borrows to pay the country’s bills. That is, it must lift the debt ceiling. Congress has raised the debt ceiling more than 100 times since it first went into effect, including 18 times under Ronald Reagan as well as 3 times under former president Donald Trump. The United States has never defaulted on its debt. When Republicans threatened to push a debt crisis in late 2021, Treasury Secretary Janet Yellen warned that a default “could trigger a spike in interest rates, a steep drop in stock prices, and other financial turmoil. Our current economic recovery would reverse into recession, with billions of dollars of growth and millions of jobs lost.” It would jeopardize the status of the U.S. dollar as the international reserve currency. Financial services firm Moody's Analytics warned that a default would cost up to 6 million jobs, create an unemployment rate of nearly 9%, and wipe out $15 trillion in household wealth. Now House Republicans under speaker Kevin McCarthy are insisting they will force the country into default unless Biden and the Democrats abandon their legislative program and do what the Republicans want. And what they want is to enact a drastic version of the Republican platform of the past 40 years. Today, McCarthy introduced a 320-page measure that would address the deficit and growing debt by drastic cuts to government programs across the board. It is largely a wish list of right-wing demands such as a repeal of key measures of the Inflation Reduction Act, including those addressing climate change and funding the Internal Revenue Service; additional requirements to qualify for benefit programs; and getting rid of the program to forgive certain student debt. It would lift the debt ceiling only for a year, meaning the government would be right back to negotiating over it almost immediately. There are two things at work behind this demand. The first is that the Republicans are in such extraordinary disarray that they are unable to put forward a budget—which is part of the normal process of funding the government—because they are unable to agree on one that can get enough votes to pass the House. Different factions in the party want cuts that, even if they could get through the House, would never pass the Senate, and the farthest-right group of lawmakers have indicated they won’t agree to anything. With this grab-bag measure, McCarthy is trying to cover all his bases, but already some of his conference is torn that it goes too far…or not far enough. That inability to get their way through normal political channels illustrates the larger story behind the Republicans' position: they want to destroy the government as it has existed since 1933, but since that government is actually quite popular, they cannot get the cuts they want by going through normal legislative procedures. Instead, they are trying to get their demands by holding the rest of us hostage. It is notable that while the Republicans are willing to slash education, food safety, and so on, they want to preserve the Trump tax cuts for the wealthy and corporations that cost the Treasury $2 trillion. Their stated concern for financial responsibility is also undermined by the reality that repealing the funding for the woefully understaffed IRS is expected to cost the Treasury $124 billion as wealthy tax cheats continue to avoid enforcement. McCarthy is doubling down on his debt ceiling demands in part because the Republican base is wedded to Trump, which means the Republican Party is now wedded to Trump, and Trump insists that Republicans must use the debt ceiling to get what they want. Early hopes that they could run a Trump-like candidate without the Trump baggage—someone like Florida governor Ron DeSantis—are starting to fade. Today, Matt Dixon of NBC News reported that although the DeSantis team asked him to hold off on an endorsement, the co-chair of the Florida congressional delegation, Vern Buchanan, has endorsed Trump. Buchanan said that Trump will “get our economy back on track,” including lowering taxes and “promoting America-first trade deals.” A former chair of the Florida Chamber of Commerce, Buchanan is one of the wealthiest members of Congress. He clearly continues to believe that the key to boosting the economy is more tax cuts and is willing to accept all the other pieces of another Trump presidency—Trump has recently called for vengeance against his enemies, replacing civil servants with his own loyalists, and attacking Mexico—so long as the United States government embraces the supply side economics the Republicans have advanced since 1981. President Joe Biden contrasted his own vision for the United States to that of the Republicans when he spoke today at the International Union of Operating Engineers Local 77 in Accokeek, Maryland, in a corrugated-steel garage. His own vision, he reiterated, calls for building the economy from the middle out and the bottom up, not from the top down. He outlined how the Democrats’ many investments in infrastructure and manufacturing have benefitted working- and middle-class Americans, while Republicans have sought to cut those investments and cut taxes for the wealthy. Biden wants to address the deficit by rolling back Republican tax cuts on the wealthy and on corporations, saying it’s high time they paid their fair share. McCarthy is trying to spin the crisis in his own conference as Biden “playing partisan games,” and Republicans say they hope that passing their measure will force Biden to negotiate over the debt ceiling. But Biden has steadfastly refused to negotiate over the credit of the government, although says he is quite happy to negotiate over the budget, which is part of the normal legislative process. House minority leader Hakeem Jeffries backed up Biden, saying: “The United States of America must always pay bills already incurred without gamesmanship, brinksmanship, or partisanship. House Democrats will oppose any effort to hold the economy hostage as part of any scheme by Extreme MAGA Republicans to jam its right-wing agenda down the throats of the American people.” Their refusal to negotiate over the nation’s finances puts them in good company. We have seen a scenario just like this one before. In 1879, when the positions of the parties were reversed, Democratic former Confederates won control of Congress for the first time since the Civil War. Once in power, they banded together, demanded the leadership of key committees—which the exceedingly weak speaker gave them—and set out to make the Republican president, Rutherford B. Hayes, stop protecting Black voters by refusing to fund the government until he caved. Southern Democrats told newspapers they had blundered when they fought on the battlefields: far better to control the country from within Congress. Extremist newspapers threatened violence as they called for Congress members to “drive or starve Mr. Hayes into signing a bill that sweeps these obnoxious laws out of existence.” House minority leader James Garfield (R-OH) noted: “They will let the government perish for want of supplies.” “If this is not revolution, which if persisted in will destroy the government, [then] I am wholly wrong in my conception of both the word and the thing.” A Civil War veteran who had seen battle at Shiloh and Chickamauga, Garfield understood revolution. Hayes stood firm, recognizing that allowing a radical minority of the opposition party to dictate to the elected government by holding it hostage would undermine the system set up in the Constitution. The parties fought it out for months until, in the end, the American people turned against the Democrats, who backed down. In the next presidential election, which had been supposed to be a romp for the Democrats, voters put Garfield, the Republican who had stood against the former Confederates, into the White House.

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LETTERS FROM AN AMERICAN

HEATHER COX RICHARDSON

#debt ceiling #Mike Luckovich #Letters From An American #Heather Cox Richardson #US House of Representatives #debt default #Trump baggage #history #budget #McCarthy

[penguicorns-are-cool]

It looks like on June 1st the US is going to default on the debt which is going to crash the global economy.

Not enough people are talking about how scary this is and that's probably because economics is confusing but I'm going to explain it really quick.

So the US debt is actually essential to the global economy (I know weird right debt is supposed to be bad). The debt is basically because we take a lot of loans and go into 800 billion dollars of trade deficits every year (when we import way more than we export, ideally import and export would be equal value but when the import is more than the export we have to pay the difference) this is fine because the US has paid off all of its loans and deficits in time the debt is just all the loans that we haven't finished paying off. A lot of countries and companies give loans to the US or a lot of people buy bonds because the interest is profitable and those countries and companies depend on the fact that the US generally pays its loans, that's why we have a AAA rating which is kind of like having the highest credit score. To prevent us from having to default on all these loans since the amount of loans and value of the loans are only rising, we just keep raising the debt ceiling and it's been working out.

Now that's all fine so why don't we just raise the debt ceiling again? well, that's because stupid fucking Mcarthy (he's that guy who was elected as speaker back when the congress had to shut down for like half a week for that election) well the reason he won is because he promised to pay off the debt, WE CAN'T JUST FUCKING PAY OFF THE DEBT. look the US has a lot of money but not that much money. But now he's in a bit of a tricky spot because he won very narrowly because a few people liked that he would pay off the debt, so if he raises the debt ceiling, he loses their support and they might just vote him out. So instead of just raising the debt ceiling, congress has been talking about plans to default which means we say we haven't paid the debt in time and we're going to pay it all at once right now which means that we have to cut a ton of welfare programs for example: Veteran's Aide, school, nutrition assistance (funding for food for pregnant people and young children), air safety towers, rail safety inspections, workforce development services, gov funding college scholarships, student debt relief, mental health support for students, support for students with disabilities, food stamps, access to healthcare, and a bunch more stuff.

Now why you non-Americans should care. the US, for better or for worse, is the center of the global economy. the US dollar makes up over half the money used in foreign trade, a lot of countries and companies do loan money to the US because it is seen as very safe to be part of the debt, and there are tons of people who invest in the US and US companies. If the US defaults it would first of all hurt all those countries that are part of the debt because those countries would not be paid back immediately and would not be able to profit from US loans anymore since the US would not be seen as trustworthy enough for that, it would crash the US economy which means the value of the US dollar would go haywire hurting anyone who uses US dollars in foreign trade, and it would hurt anyone invested in anything American.

So yeah this is really fucking scary and it looks like they're going to go through with the default so it does look like we're going to be in a recession in about 6 days especially since the global economy is already really fucked up right now and all that.

#default #important #economy #recession #scary #global economy #debt #debt limit #debt default #american politics #us politics #US

[rhpotter]

PSA for anyone who depends on Medicare, Medicaid, VA benefits or any kind of government benefit - it's super important to make plans NOW for the worst case scenario.  And maybe yell at your local Republican representatives while you’re at it.

#debt limit #debt default #american politics #republican party #psa

[devonellington]

Fri. May 26, 2023: I'd Rather Be Reading

image courtesy of  nini kvaratskhelia via pixabay.com Friday, May 26, 2023 Waxing Moon Pluto Retrograde Sunny and pleasant Are you ready for Memorial Day Weekend? I am totally not. Yet I am. Today’s serial episode is from Angel Hunt: Episode 36: Quarry or Guardian? Is her host a hunter or the hunted? Angel Hunt serial link. I forgot to mention that Wednesday night into Thursday night,…

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#"Labor Intensive" #ANGEL HUNT #Archives #Census #cleaning #client work #debt default #enchanted garden #FALL FOREVER #flash fiction #grocery shopping #Legerdemain #library #Llewellyn #meditation #Memorial Day #nightmares #Playland #Process Muse #reading #residency proposal #serilas #social media rounds #WGA Strike #WICKED

[sgreffenius]

At last, some clarity on this matter.

#debt default

[kp777]

China calls in loans to Pakistan, Kenya, dozens more | Fortune

#debt default

[politicalmojonews]

White House: We're Not Negotiating over the Debt Limit and Have 'to Get Default Taken off the Table'

On Tuesday’s broadcast of MSNBC’s “Alex Wagner Tonight,” White House Communications Director Ben LaBolt stated that President Joe Biden is still not negotiating over the debt limit and “What the President has been open to throughout this process is a budget negotiation, is an appropriations negotiation through the typical process.” Host Alex Wagner asked, “Let me just get right to I think the…

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#debt limit #joe biden #federal budget #debt default #biden corruption

[filosofablogger]

A Tale Of Two People ...

A short scenario for you to ponder … Ed and Linda are married, own a home, have three children, and the usual household financial obligations.  Both have jobs outside the home, but Ed recently reduced his work hours – voluntarily – in order to “spend more time enjoying life.” It is the end of the month and Linda is sitting down, checkbook in hand, beginning to pay the monthly bills.  But,…

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#Debt ceiling #Debt default #future spending vs current debt #income vs outgo #U.S. Congress

[odinsblog]

“Surprise”

I fuckn hate this Ebenezer Scrooge looking mutha fucka

Anyway, here’s your “vote blue no matter who” Democrat.

Look, I am not saying don’t vote, but there are limits to electoral politics, and the GOP + SCOTUS have successfully gamed the system.

Joe Manchin, Kyrsten Sinema, Gene Green, Henry Cuellar, Jared Golden & Marie Gluesenkamp Perez are living proof that voting as progressively as possible in the primaries is probably far more important than being reduced to choosing between “the lesser of two evils” in the general election—and before anyone lies and regurgitates the centrist talking point that “the only way to win in the midwest is to be Republican-lite,” I remind you about what the Democratic Farmers-Labor Party just accomplished in Minnesota.

#politics #joe manchin #conservadems #vbnmw #debt ceiling #mountain valley pipeline #primary elections #neoliberalism #default crisis

[dreaminginthedeepsouth]

LETTERS FROM AN AMERICAN

May 3, 2023

HEATHER COX RICHARDSON

MAY 4, 2023

“No one should assume that the Fed can really protect the economy and the financial system and our reputation globally from the damage that [a U.S. default] might inflict,” Federal Reserve Chair Jerome Powell said today. “We shouldn’t even be talking about a world in which the U.S. doesn’t pay its bills. It just shouldn’t be a thing,” he added. Powell commented on the debt ceiling crisis when he was in front of the press to announce an interest rate hike of a quarter of a percentage point intended to reduce inflation further. Interest rate hikes make it more expensive to borrow money, which should cool the economy. At the same time, more expensive borrowing upsets the stock market, which tends to fall after a rate hike, as it did today. Interestingly, while Republicans are blaming Democrats for creating inflation by pumping too much money into the economy through social welfare programs, The Wall Street Journal yesterday embraced the argument that a key factor in inflation has been price gouging by corporations. A piece by Paul Hannon noted that businesses are boosting their profit margins, confident that consumers will blame supply chain issues and higher energy prices rather than the companies padding their profits. Oil giant Shell just announced almost $9.6 billion in profits in the first three months of 2023. But Powell’s management of inflation is a smaller story right now than the debt ceiling. Today, the White House Council of Economic Advisers explained three different scenarios. If the debt ceiling crisis runs right up to the edge of default and is resolved before that default, unemployment would rise by 0.1% and 200,000 jobs would be at risk. A default lasting less than a week would cost 500,000 jobs, creating a 0.3% rise in unemployment. And if the U.S. goes into a longer default, the Council of Economic Advisers says, 8.3 million people will lose their jobs and the stock market will fall by 45%. In every case, economic growth will turn negative. The White House yesterday released a fact sheet outlining the cuts Republicans are demanding before they will agree to raise the debt ceiling. In addition to costing jobs and throwing the nation into a recession, their demands will cut nearly 7,500 rail inspection days, shut down at least 375 air traffic control towers, and cut $5.2 billion from highway infrastructure projects. The cuts will eliminate nearly 200,000 child care slots, cut 1.7 million people from food security programs, and remove rental assistance from nearly 600,000 families. In short, the Republicans’ demands are a way to force the country to accept their vision of the country, one that relies on the markets and private enterprise and slashes government action to provide a basic social safety net, promote infrastructure, regulate business, and protect civil rights. So far, Senate minority leader Mitch McConnell (R-KY) has stayed out of the fight over raising the debt ceiling, both because he was out of the Senate recovering from a fall, and because he has apparently wanted to let House speaker Kevin McCarthy (R-CA) deal with the far-right extremists in the conference while appearing to give establishment Republicans plausible deniability from the extremists’ demands. But Biden is trying to pull McConnell into the negotiations to emphasize that the fight over the debt ceiling is not about him and McCarthy, but a struggle that involves the whole government. While McConnell seems to be trying to hold Senate Republicans apart from the House extremists, a story that has fallen under the radar is that Senator Steve Daines (R-MT), chair of the National Republican Senatorial Committee, the man responsible for the fundraising to get Republicans elected to the U.S. Senate, has endorsed Donald Trump. Daines is in close touch both with Trump and with the wealthiest Republican donors. Senator John Cornyn (R-TX) made it clear to Jonathan Swan and Carl Hulse of The New York Times that all the Republicans care about is winning back the majority. “I really don't care what the tactics are,“ he said. Not caring about tactics so long as you are in power might well be a problem for another Republican, former Georgia Senate candidate Herschel Walker. Senior political reporter for The Daily Beast Roger Sollenberger dropped a story tonight alleging that Walker solicited hundreds of thousands of dollars from a billionaire industrialist who believed he was donating to Walker’s Senate campaign, only to have Walker take the money personally. If this story pans out, it suggests Walker will be in legal trouble for election finance issues.

—

LETTERS FROM AN AMERICAN

HEATHER COX RICHARDSON

#Letters From An American #Heather Cox Richardson #US House of Representatives #debt ceiling crisis #debt default

[vanity-complex]

Every once in awhile I learn just a little tidbit about America that makes me hate it here even more. Todays dose is that prisoners still have to make payments on their student loans while incarcerated 🥰

#it’s slightly more complicated than that #but if you know about student loans and deferment #default #or payment adjustments #all that applies here #but interest does not stop accruing #and when you get out you’re still fully responsible for that debt

[sarah-yyy]

Okay so i fully get that this isnt how anything works but if youre working for somebodys 16M they owe you at least like 3M and if not cash stocks and/or gold

oh buddy I WISH

#i work a general practice so it's inevitable that i have to do SOME transactions to keep the billables rolling in #which sucks most of the time #i am working on a $28m deal atm #which sounds like a huge client until you understand that it's $28m of DEBT that i have to help divest which means finding- #-SOME SUCKER to take on my client's debt so that he doesn't end up defaulting on all his loans and losing all his assets #which is...............not fun #this last week alone i feel like i deserve a $10m bonus #i feel like i've spoken to literally every single second-tier lender in akl tbh #asks #Anonymous #work stories

[high-quality-tiktoks]

Rep. Jeff Jackson (NC): Avoiding default.

#video #tiktok #tiktoks #wtf #news #usa #united states #united states of america #politics #money #default #debt #jeffjacksonnc

[sgreffenius]

So there you are.

Congress cannot force a default.

#public debt #debt default

[johnschneiderblog]

Social insecurity 

In our most recent phone call my friend Richard Prangley (shown here with his beloved Tiger collection in more tranquil times) was deeply troubled. His questions came rapid fire

“Is it true they’re going to quit sending out Social Security checks ...? How am I going to pay my bills ...?  Don’t they know people need this money to live ...?”

Richard had been watching TV news reports about the looming U.S. debt-ceiling crisis, the risk of default and the possible consequences for real people like himself.

It made me wonder if the well-paid folks in D.C. truly realize what effect their game of chicken is having on people like Richard - the most vulnerable among us who depend on the government, in one way or another, for their livelihood.

I did my best to assure Richard that it was simply a matter of political posturing and that, in the end, default would be averted.

“I sure hope so,” he said. Me too.

#John Schneider #Richard Prangley #Social Security #debt-ceiling crisis #default #game of chicken

[randyite]

#debt ceiling #default #education #child care #teachers #food inspection #family values #mccarthy #House