govt shutdown looms

[Danzig]

http://www.slate.com/articles/busine..._limit_is.html

Normally the way things work is that the Treasury Department cuts the checks Congress has told it to cut, collects the taxes Congress has told it to collect, and borrows to cover the difference. But the statutory debt ceiling also instructs Treasury not to borrow more than a certain amount of money. When we hit the debt ceiling on Oct. 17, Treasury will lack the legal authority to borrow any more money to close the gap between spending and tax revenue.

At that point, there are basically three options. One is President Obama could decide that the government’s legal obligation to spend (and certain elements of the 14th Amendment) trump the statutory debt ceiling, and just order the Treasury to sell more bonds. The second option is Obama could instruct the Treasury to pay some of the government’s bills and just not pay the rest. The third option is to pay nobody. All three of these options face the same basic problem of seeming to be illegal. (The second one also faces the problem that Treasury says it lacks the logistical capacity to do it.)

The general consensus is that the third option would, among other things, provoke a global financial crisis by causing a default on U.S. treasury bonds—bonds that are meant to be the safest asset in the financial system. The first option may avoid this fate, but perhaps not. It’s difficult to imagine financial markets would be undisturbed by the prospect. And in general, simply nobody knows what anyone should do about anything if the debt ceiling is breached. Unlike with the shutdown, there is no overriding OMB guidance. There are no rules to spell out essential versus nonessential services. Officially, at least, there’s no contingency planning at all. It’s just a kind of terrifying world of uncertainty.

And that’s the big difference between these two events. There hasn’t been a government shutdown in a while but they were common in the 1970s and 1980s. They’re a big deal in Washington, D.C. because federal employees don’t get paid when they happen. But as long as it doesn’t last too long, it’ll be fine. A debt ceiling breach, by contrast, is completely unprecedented. There’s no guarantee that it’ll lead to a worldwide financial panic and a massive global depression, but there’s honestly no guarantee that it won’t. Nobody knows what will happen, and you should find that prospect terrifying.

[randallscott35]

Much Ado About Nothing.

[dellinger63]

Remember five years ago when we were told we have to spend to prevent going bankrupt?

One thing that spending did get us was $6 trillion more in debt. $40K for every man woman and child in the country, about $160K for every senior. And now we don't have the money to pay the seniors the money they already paid in? Something drastic needs to be done. The budget needs to be cut by a trillion and the debt ceiling should be raised and re-visited in 3 months and every three months after until steady progress is made.

And the next time Washington says it's going to give money to bailouts, junking cars, and bailing out failed cities the American people need to say no f---'n way!

Yea the economy has gotten better, but at what expense? Guess what the interest is on $6 trillion? It's the gift that keeps giving.

Ending on a positive. Thank God the President changed his mind about bombing Syria.

[randallscott35]

The baby boomers simply don't give two shits about future generations or their parents. ZIRP steals from grandma and the endless debt each year f.ucks our children. My hope is the baby boomers are eating cat food after their epic failure of a generation.

[jms62]

Originally Posted by randallscott35

The baby boomers simply don't give two shits about future generations or their parents. ZIRP steals from grandma and the endless debt each year f.ucks our children. My hope is the baby boomers are eating cat food after their epic failure of a generation.

[randallscott35]

Originally Posted by jms62

Friskies for you.

[GenuineRisk]

Pretty funny clip from Jimmy Kimmel:

http://gawker.com/kimmel-asks-americ...for-1433866673

Best quote from the comments section:

"Most of America is Lenny and the rest of us are George, just trying to keep them calm and stop them from destroying something."

[Danzig]

jesus