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What Janet Yellen Sees As Debt Limit X-Date Looms
Let's be clear: Most of us are working on the assumption the US won't default, or at least not on pr
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“could affect Social Security, Medicare and other benefit programs”
If the above happens,
1. The heat on the political players will be like lava.
2. The lava will flow well before coupons or principal are missed.
Very helpful. Thanks!
I’m not sure how easy this is from a logistical standpoint, but instead of missing ALL Social Security, Medicare, and other payments, just miss those in Republican districts. It could extend the X-date (especially if it was started now) and would put a ton of pressure on Republicans in those districts.
As appealing as I find this idea, it also strikes me as legally dubious.
Trump discontinued global entry for New York.
Upon further thought, some people get Social Security, beginning of the month others the middle. They could just change it to everybody end of the month. Most young people I talk to are fed up with baby boomers so I don’t think it’ll affect democrats base as much.
If federal operations and payments have to be stopped, Biden wants Republicans to get the blame, which means he can’t be seen as actively targeting particular states or voters (and that’s not him anyway).
Voters will understand protecting the national defense and debt above all else. They will expect that politically sacred benefits like SS and Medicare be protected as much as possible. Biden will want to shut down so-called non-critical government functions (national parks, etc), then increasingly critical functions (federal funds for education, transportation, social programs, etc), finally getting to the most critical parts (TSA, FAA, SS, Medicare, etc). Analogy to the body shutting down peripheral systems and senses as it approaches death – and he should use that analogy, voters will “get it”.
The pressure on Congress as this process unfolds will be incredible.
House Dems only need a handful (5? 7?) of Reps to cross the aisle – or a few more to abstain – to pass a no-strings debt ceiling bill.
There have been federal budget/debt impasses before. They have all been resolved by the White House shutting down layers of the federal govt until Congress cries “Uncle”.
Slow and steady sounds good.
I wonder how much clout the motorhome community has?
I don’t understand why the White House must negotiate with extortionists. The is a crisis manufactured by the Republicans. They are making demands while threatening to tank the economy if the other side fails to comply.
They are threatening to tank the US position as financial world leader. They are also threatening collateralized loans, the dollar and much else. The last time this happened in earnest the US lost its AAA credit rating, something that raised costs permanently. Another cut in rate will add more to interest costs for years. Are there any adults in this amateur circus now serving as our Congress? I can’t see them. Won’t their moms all be proud?
I still think the most likely scenario is what I’ve mentally been calling, “Extraordinary extraordinary measures.” That could be any number of Janet Yellen’s bad options, from minting a trillion dollar platinum coin to invoking the 14th amendment. This would also include paying off Treasury securities while not paying for anything else–anything short of total “default.” Goldman Sachs disagrees though, and I’m humble enough to admit they’re more knowledgeable than I.