House Republicans Plan To Link Debt-Limit & Shutdown Into One Fiscal Fight

We're going down the dark path now folks. Looks like it's beginning and who knows where it will lead.

House Republicans Plan To Link Debt-Limit And Shutdown Into One Fiscal Fight

Nancy Pelosi tried hard this evening (in the post WH meeting presser) to position the Democrats in order to disavow the inevitable but now Bloomberg is reporting that:

*HOUSE REPUBLICAN PLAN WOULD LINK SHUTDOWN, DEBT-LIMIT FIGHTS

House Republican leaders plan to bring up a measure to raise the U.S. debt-limit as soon as next week as part of a new attempt to force President Barack Obama to negotiate on the budget by merging the disputes over ending the government shutdown and raising the debt ceiling into one fiscal fight. This is not what most sell-side strategists expected as a base-case; in fact it is close to a worst-case for many - especially given Obama's apparent unwillingness to negotiate.

Republican leaders are attempting to pair their party’s priorities with a debt-limit increase, a plan they shelved last month to focus on a stopgap measure to fund the government in the new fiscal year. The goal is to have a bill ready in coming days, even without resolving the partial government shutdown, according to a Republican lawmaker and two leadership aides who asked not to be identified to discuss the strategy.

If they do this and send it through right before Oct 17th the administration will either have to pass it into law or the US will default on it's debt. Which could actually precipitate a global economic recession or even collapse.

reply to post by Bassago


That's the problem, I'm not sure if there is enough time for everyone to reconcile their egos by October 17th.

That is only 15 days away, even if people tried to make progress by then, everyone is currently so stubborn that I am not sure there is enough time.

Let alone deal with Obama Care, the debt ceiling and the current government shutdown.

reply to post by darkbake


I agree. As far as the shutdown, leave it shut who cares. If we default on the national debt we are going to be in big trouble and we'll have a lot of company.

They can`t keep kicking the can down the road we need to get control of our spending a showdown is inevitable,if not now,when? Now is as good a time as any.
If defaulting and crashing the economy is what it takes for congress to finally get serious about the debt then so be it.Someone has to take one for the team why not us? better us than our children or their children.
The sooner this house of cards falls down the sooner we can start rebuilding it.

reply to post by Tardacus


You make excellent points Tardacus. Guess now is as good a time as any. Still an eye opener when you smack up against it and we know the folks who caused it are going to just breeze on by.

Frankly I'm getting pretty tired of all the political BS so tearing it all down and starting over sounds like a viable plan. Unfortunately as always the people who can least afford it are going to be hurt the most. You can bet this won't hurt the pols or Obama, he'll just spend the rest of his time in that 10 million dollar house his backers built for him in Hawaii. At least the congress will have to come home and face the music (hopefully.)

Tardacus
They can`t keep kicking the can down the road we need to get control of our spending a showdown is inevitable,if not now,when? Now is as good a time as any.
If defaulting and crashing the economy is what it takes for congress to finally get serious about the debt then so be it.Someone has to take one for the team why not us? better us than our children or their children.
The sooner this house of cards falls down the sooner we can start rebuilding it.

Hear, hear, the fact is that the economy has been crashed for some time but, the driver is still clinging to the wheel.

reply to post by Tardacus


Yeah but are we to believe they have the marbles to actually do that?

rather

What makes you think they believe now is the time?

Kicking the can down the road is like baseball... it's a great American pastime.

good, now I'm seeing some aggression.

I was getting fed up of the republicans not representing conservatives, now they are.


And if the economy crashes, then so be it. It was anyway, and anyone with half a brain new what was coming.

reply to post by xstealth


I'm all for shutting down the government. Look at just the first day, we sent home 800,000 bureaucrats and it's a good start. I do however have concerns about a sovereign debt default. That could have a global impact that finishes the US.

Bassago
reply to post by xstealth

 

I'm all for shutting down the government. Look at just the first day, we sent home 800,000 bureaucrats and it's a good start. I do however have concerns about a sovereign debt default. That could have a global impact that finishes the US.

do you think there is anything we can do to prevent a debt default?

like I said, it's going to happen anyway. I'd rather deal with it before my child does.

xstealth

Bassago
reply to post by xstealth

 

I'm all for shutting down the government. Look at just the first day, we sent home 800,000 bureaucrats and it's a good start. I do however have concerns about a sovereign debt default. That could have a global impact that finishes the US.

do you think there is anything we can do to prevent a debt default?

like I said, it's going to happen anyway. I'd rather deal with it before my child does.

If the republicans can keep the (partial) government shutdown in effect while raising the debt limit that would do it. I'm no fan on increasing debt but with $11 trillion of debt and $60 trillion in unfunded liabilities we are going to be in a much worse position if we default. So will our kids.

Since congress holds the purse strings they can still use piecemeal funding bills for essential services and defund the pork. That works for me.

Bassago

xstealth

Bassago
reply to post by xstealth

 

I'm all for shutting down the government. Look at just the first day, we sent home 800,000 bureaucrats and it's a good start. I do however have concerns about a sovereign debt default. That could have a global impact that finishes the US.

do you think there is anything we can do to prevent a debt default?

like I said, it's going to happen anyway. I'd rather deal with it before my child does.

If the republicans can keep the (partial) government shutdown in effect while raising the debt limit that would do it. I'm no fan on increasing debt but with $11 trillion of debt and $60 trillion in unfunded liabilities we are going to be in a much worse position if we default. So will our kids.

Since congress holds the purse strings they can still use piecemeal funding bills for essential services and defund the pork. That works for me.

we can't keep increasing the debt limit, we are 17 trillion in debt, not 11.

but when will it stop when we are 100 trillion? no we will increase the debt limit then too.

default is guaranteed

Bassago
If they do this and send it through right before Oct 17th the administration will either have to pass it into law or the US will default on it's debt. Which could actually precipitate a global economic recession or even collapse.

That is very true and perhaps the reason that the government shut down will only last until another week or so and will never reach the death line of Oct. 17th.

So far congress has been able to hold on to an emergency spending bill, to finance Obamacare, but as the death line of Oct 17 get closer they government will come to an understanding because they will never allow the nation to default in its debt so the debt ceiling will be increased to the $16.7 trillion cap on government borrowing.

When this happen the government will look like the joke they are playing on the tax payers and workers.

Either that or we most come to the realization that our nation is truly broke to the point that it rather default.

But I am sure that is not to that point yet, those that are running our government still have more tricks under their sleeves.

marg6043

But I am sure that is not to that point yet, those that are running our government still have more tricks under their sleeves.

the government's tricks are simple.

buy more bonds, print more money...that's all they have.

it's a ponzi scheme.

See, I didn't realize how bad the government debt was when it was around 9 trillion. I paid no attention, and didn't care.

Then I started applying it to my own situation, granted, I can't print my own money; but it makes me realize how dire the situation really is.

This video will really help some people understand, how ludicrous it is to keep raising the debt limit.

reply to post by xstealth


Oh, I agree, I agree with you on the ponzy scheme but as long as it works it will keep been exploited, the government and those pushing agendas has gotten too use of the easy working the scam.

As long as it works the government will keep on doing it, because nobody wants austerity and neither wants to give away their comfort.

Being over the pond, can somebody please clarify for me this......is Obama sticking his heels in about raising the debt ceiling and saying no to that too? Because from where I'm sitting this seems like a game of chess and raising the debt ceiling is exactly what Obama wants. Just asking for clarification.....I get the Obamacare argument btw.
Rainbows
Jane

reply to post by Bassago


In the summer months, firefighters start "controlled burns". This type of burn scorches selected areas of wilderness creating fire breaks to eliminate or lessen the impact of spontaneous wildfires that start due to any number of uncontrolled factors.

What we need to do is create our own "controlled burn". We need to intentionally limit our spending, keep the debt ceiling where it is, keep government shut down, keep the pressure on defunding new tax programs (Obamacare).

Because there is going to come a day when the unexpected happens, and no government, no country will be prepared.

reply to post by angelchemuel


No, Obama wants the debt ceiling raised. And actually everyone wants the debt ceiling raised and here is why:

Various holding companies that hold US Bonds will have to cash them in by law if the US defaults. There would be no more "well we will just treat this like a post-dated check until you are ready"; those bonds become pay on demand.

Since the US dollar is a fiat currency, there is a chance of there being cash on hand to cover the bonds; however there is a chance that cash isn't warehoused for immediate distribution for that pay on demand.

What makes this so super bad? It limits the US's borrowing ability with other nations....and the elephant in the room is that the US dollar is the World's Reserve Currency. As the value of the dollar tanks, so does the relative solvency and wealth of every nation on the planet holding US dollars in their reserve. Yes, just like countries used to park pallets of gold bars in their vaults, there are pallets of US dollars ($100 bills but generally $10000 and $100000 bills--they do exist and are valid tender).

As to what exactly will happen if the debt ceiling does not get raised and the US defaults is anyone's guess, but generally a sudden loss of wealth generally means countries get upset and start banging the drums of war. While most people today can that it is only money, governments tend to be more childish.

reply to post by Ahabstar


That's fine and all, but xstealth brings up a good point. The debt will be defaulted on inevitably. The cost to service the interest on the debt alone is getting astronomical. Eventually (after continuous raising of the debt limit), the debt will get so high that all incoming taxes combined will go towards servicing the debt. Then if the debt grows even more, we can't pay. This game is going to end sooner or later. Also the longer it takes the worse off everyone will be when it happens.

reply to post by Bassago


It's a ponzi, plain and simple. I'm in Ireland, where a similar situation exists, just that the numbers are smaller in relation to a hugely smaller population. We have all seen the debt clocks whizzing around at ever increasing pace. The debt curve on the graph gets steeper and steeper, it can't continue, it has to collapse.
Yes kicking a can down the road is the old addage; remember in the Simpsons Movie, Old Wiggum arrested Homer for kicking a can down the road more than four times?
Max Keiser is a freak, an absolute freak, but a freak who knows his onions. I listen to what he says with great interest. It's not a question of if but when.
We know that lots of let's say unethical things have gone on in the halls of big finance around the world recently; by kicking the can further down the road, we are merely turning a blind eye. Nah, feck that, let it come tumbling down.