So they’ve raised the debt ceiling.
For three months.
A reason to drink in celebration?
Or a reason to drink to oblivion?
What’s your call?
UPDATE:
And a further question: “Is There a Big Loophole in the Debt Ceiling Deal that Will For All Practical Purposes Eliminate the Ceiling Forever?”
7 comments:
Oblivion. You do not keep rewarding wayward offspring with "I'll give you another 3 months to mend you naughty ways".
And they've been naughty alright, what is really needed is a healthy unrelenting dose of serious tough love about where the endless borrowing will end up. Just like our illustrious leader in NZ needs.
I can't help but link to this headline at Interest.Co.NZ: 'Can kicked down the road until February but riskier assets buoyed by decision nonetheless'.
The headline's beautiful irony just screams, capped off by that last "nonetheless." Because it those very "riskier" assets--that have been and are still propped up by debt-based bailouts, QE and capital-consuming low-interest rates--those zombies that should have died in the bust but have instead been left to walk and consume more capital--that should have been "buoyed" by the decision to keep the scam going.
Because without the scam, most of those zombies would be dead. Deservedly so. Instead of hanging around our necks like millstones dragging us further under.
Robert Wenzel: "It is simply an extension of government as usual."
I suppose I'm glad that the global economy isn't going to go apeshit in the run up to the weekend, makes it hard to relax.
In all seriousness, I don't really see any other immediate option. Simply stopping the whole show cold would have vast and unpredicatble consequences. The best solution in my eyes is to keep the government ticking over whilst phasing in cuts to essential programs, scrapping superfluous ones and aggressively pursuing polices that will promote growth.
Sounds easy in theory....
Frankie Lee
"phasing in cuts"..
But we know they won't do anything meaningful so eventually it will go tits up because you simply can't run a ponzi scheme without coming unstuck. The govt doing it doesn't change things. I'd like to see the whole shambles fall over so a new start can be made - delaying it just makes a bigger mess when it happens. They won't even need a new constitution.
What was interesting is that ordinary people, like veterans, actually got out and fronted at the White House this week. I think a line got crossed by Barry O by shutting down things that relate to people who value them dearly.
@PM of NZ - "You do not keep rewarding wayward offspring with "I'll give you another 3 months to mend your naughty ways".
Agreed.
I would actually really have liked them to have defaulted on the debt. I am convinced that the impact on NZ would be far less than most people think. Why? Because the vast majority of our trade is now with *Asia*, not the US. Asia is where the growth is.
I actually don't think the US has the balls to ever front up to its debt. I think they will continue raising the "debt ceiling" on and on, ad infinitum. I also can't see anything *stopping* that - not even a big sharemarket "correction". The US economy would stagger for a couple of weeks and then just keep on going.
The US either has to choose. Does it want a Federal Government on the scale of a European country, if so, then taxes will have to go up to attempt to sustain it, and will correspondingly hit growth? Or does it want a Federal Government on the scale that the Founding Fathers envisaged, in which case it is time for the Feds to wean the country off of unfunded Social Security, Medicaid and Medicare commitments, eliminate corporate welfare from farms to green businesses to the automotive sector and more. However, neither major party is willing either to hike taxes or cut spending, but it doesn't mean that they can evade it. The Democrats are as scared of making people pay for the status quo as the Republican are of seriously cutting spending to stay within the current revenue envelope. Of course, major simplification of the tax system and replacing the panoply of deductions with general lower rates across the board would help growth, but it doesn't help politicians elected on the basis of maintaining pork.
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