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The U.S. shutdown and the threat of default

M

Markus S

41 - 29
I watch with increasing incredulity as the U.S. enters the second week of government shutdown. If I understand this correctly, there's a group of about 50 Republican members in the House of Representatives, the "tea party", who hold the other Republicans in thrall by threatening anybody who gives ground to Obama with the loss of his or her seat. The majority leader, Mr. Boehner, has adopted the position that unless Obamacare is somehow curtailed, the Republicans will let the country go into default, but of course, he doesn't want it. He has also said that he intends to use the threat of default as a bargaining tool again in the future. So even if there's a compromise this year, the Republicans will come back next year to ask for even more concessions.

Mr. Obama has said he won't negotiate over Obamacare. I understand that position entirely as he already negotiated to get the law passed in the first place. If I was in his position, I, too, would be unwilling to give in to what is widely perceived to be extortion.

What do our American members think?
 
I thought Jon Stewart put it rather nicely. He showed excerpts of all the Tea Party people swearing undying fealty to the Constitution, then pointed out that the Supreme Court, the ultimate arbiters of the Constitution, had found the Affordable Care Act constitutional, so where exactly is the problem?

Harry Reid used the term "banana Republicans". I think this is spot-on; it tends to confirm my belief that the USA is in fact the world's biggest banana republic.
 
Not an American but have a reason to be concerned as I have American friends.

It is a shameful dis-regard for democracy and the American people.

As the OP says, Obamacare has been negotiated, whittled away / watered down, re-negotiated and eventually passed into law.

What agenda are these repugnants / tea party pursuing?

Selfish self serving psychopaths the lot of them imho.
 
I find all of this interminable debauchery quite terrifying...the only conceivably good outcome is a destruction of the 'tea party' lunatics by sane America.

I doubt this outcome to be a possibility.
 
I think that it's not a coincidence that the US was bottom of the OECD rankings of literacy and numeracy. Sociopathic rich republicans can now rely on the support of voters with near zero critical thinking skills, and no knowledge of life in the rest of the developed world to vote for policies that will nearly guarantee their children a life on the edge of poverty.

I worry for the future of the US. It is bifurcating into two different countries, and the republicans are exploiting it to try to turn it into Mexico / South Africa / (any other country with terrible education and a huge wealth divide)
 
Here's what, to me, look like the four likeliest outcomes at the moment ranked from worst to best (in my view):

1. Actual default on US Treasuriess after the debt ceiling is not raised, which would almost certainly devastate the global economy. This is still pretty unlikely.

2. A failure to raise the debt ceiling which does not result in a default on Treasuries. I think this is what the Tea Party fringe in the House is now gunning for, having failed to make any progress on defunding Obamacare (which was hopeless from the beginning). Their idea is that Fiscal Service, which makes interest payments on Treasuries, would still function and, must likely, Social Security payments would still be sent out, but the debt limit would force massive cuts in other Federal programs. The immediate problem with this idea is that no one has any clear idea whether it could be done; the funding mechanisms are hardly transparent. The longer term problem is that if successful, this would permanently hobble the US ability to deficit spend and likely badly damage the economy (and raise the debt-to-GDP ratio as tax revenues declined, making the situation worse for next year).

3. Obama more-or-less gets his way by forcing the House to back down, perhaps by forcing a House vote on a "clean" Congressional Resolution to temporarily fund the government, having that pass, and then negotiates a settlement on the debt ceiling issue on a longer timeframe (as typically has happened in the past).

4. The deadlock lasts and runs past the deadline. At that point someone has to break the law since the law is inconsistent as to what happens in such a case. The inconsistency emerges between the 1917 Second Liberty Bond act that establishes the debt ceiling, the Federal Reserve act that prevents the Fed from lending directly to the Treasury, and the 14th Amendment to the Constitution which holds that US Govt. debt shall not be questioned. Obama steps up to the plate and either directly defends the 14th Amendment by issuing debt, or has it done indirectly (e.g., through a direct Fed payment to Treasury). This would solve the debt ceiling but almost certainly result in having the House vote for an article of impeachment against Obama (since he'd have to break one law to observe another). The impeachment article would pass the House but the Senate would not impeach him, so he'd stay in office. This is the best outcome since it would permanently end this idiotic debt ceiling debate. Unfortunately, Obama has shown no inclination to do this.

1 and 4 look pretty unlikely, so probably 2 or 3.
 
An open letter from xkcd:

open_letter.png
 
If I were Obama, I'd have them all arrested on Treason charges and send them to Guantanamo Bay. End of problem.
 
I'm hoping the US goes bankrupt as I'm looking forward to picking up California cheap in the liquidators auction.
 
Eric L said:
Here's what, to me, look like the four likeliest outcomes at the moment ranked from worst to best (in my view):

1. Actual default on US Treasuriess after the debt ceiling is not raised, which would almost certainly devastate the global economy. This is still pretty unlikely.

2. A failure to raise the debt ceiling which does not result in a default on Treasuries. I think this is what the Tea Party fringe in the House is now gunning for, having failed to make any progress on defunding Obamacare (which was hopeless from the beginning). Their idea is that Fiscal Service, which makes interest payments on Treasuries, would still function and, must likely, Social Security payments would still be sent out, but the debt limit would force massive cuts in other Federal programs. The immediate problem with this idea is that no one has any clear idea whether it could be done; the funding mechanisms are hardly transparent. The longer term problem is that if successful, this would permanently hobble the US ability to deficit spend and likely badly damage the economy (and raise the debt-to-GDP ratio as tax revenues declined, making the situation worse for next year).

3. Obama more-or-less gets his way by forcing the House to back down, perhaps by forcing a House vote on a "clean" Congressional Resolution to temporarily fund the government, having that pass, and then negotiates a settlement on the debt ceiling issue on a longer timeframe (as typically has happened in the past).

4. The deadlock lasts and runs past the deadline. At that point someone has to break the law since the law is inconsistent as to what happens in such a case. The inconsistency emerges between the 1917 Second Liberty Bond act that establishes the debt ceiling, the Federal Reserve act that prevents the Fed from lending directly to the Treasury, and the 14th Amendment to the Constitution which holds that US Govt. debt shall not be questioned. Obama steps up to the plate and either directly defends the 14th Amendment by issuing debt, or has it done indirectly (e.g., through a direct Fed payment to Treasury). This would solve the debt ceiling but almost certainly result in having the House vote for an article of impeachment against Obama (since he'd have to break one law to observe another). The impeachment article would pass the House but the Senate would not impeach him, so he'd stay in office. This is the best outcome since it would permanently end this idiotic debt ceiling debate. Unfortunately, Obama has shown no inclination to do this.

1 and 4 look pretty unlikely, so probably 2 or 3.
Click to expand...

Thanks Erik - you are better than my NYT subscription at explaining US Politics!
 
Eric L said:
3. Obama more-or-less gets his way by forcing the House to back down, perhaps by forcing a House vote on a "clean" Congressional Resolution to temporarily fund the government, having that pass, and then negotiates a settlement on the debt ceiling issue on a longer timeframe (as typically has happened in the past).
Click to expand...

If this is the result I hope that Obama doesn't give into a republican plan to "simplify" the tax code by making it much more regressive. That is probably my biggest worry right now, that the Obamacare repeal/delay tactic is a smokescreen and the real goal of the republicans is to make federal taxation even more regressive, and to try to gut social security, medicare, SCHIP etc etc. as part of a "deal".
 
10 years ago the USA had Steve Jobs, Bob Hope and Johnny Cash.
Now the USA has no Jobs, no Hope and no Cash.
 
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