Geithner: 14th says govt cant default; Redstate: Time to impeach Obama

[anvi]

Hmmm, not raising the debt ceiling in this light seems such a good experimental idea, it's a wonder the Pubbie-controlled Congress never tried it under the last big-spender president.   

But, anyway, Geithner and the gang really shouldn't be circling the wagons about the 14th Amendment.  It seems that, when politicians don't want to negotiate, hollow threats from everyone are the second-to-last item on the menu.  The last item features two alternatives; short-term patches with meaningless long-term targets that nobody will honor, or landing the plane abruptly on its nose.

[anvi]

Actually higher interest rates would be a sign of better days, better economic times. 

That sounds like an argument for not raising the debt ceiling, opebo; it's a sure-fire way to push up interest rates quickly and dramatically.

[anvi]

Actually higher interest rates would be a sign of better days, better economic times.  

That sounds like an argument for not raising the debt ceiling, opebo; it's a sure-fire way to push up interest rates quickly and dramatically.

Because the default risk will go up?  Actually if we actually do slash spending by 35%, it should go down!    Sometimes, I think the word "if" is the most important one in the English language.  What would we do without it?

The interest payments on the short-term bonds are not the only interest payments one would have to worry about.  If paying the interest on those bonds and renewing them is prioritized first and spending is cut in order to do that, the spending cuts apply to the current budget, not the next one.  That would trigger interest increases under the Proper Payment Act as well as the IRS if, for instance, tax refunds are delayed in the process.  Such immediate cuts would also have effects on intergovernmental finances.  There could also occur unpredictable outcomes if creditors, international and domestic, lose faith in their investments.  There is also the point that a precipitously drastic cut in government spending will have economic effects of their own.  How much is this experiment worth, and why are bond-holders the only people worth worrying about in case of a default?  Torie, I have never heard one single Republican in all the years I've been observing politics suggest that not raising the debt ceiling was a good idea before the last few months.  Maybe somebody did call for it in the past and I wasn't paying attention. but its being an "experiment" now is a new one on me.

[anvi]

Actually higher interest rates would be a sign of better days, better economic times.  

That sounds like an argument for not raising the debt ceiling, opebo; it's a sure-fire way to push up interest rates quickly and dramatically.

Not at all.  The debt has almost no effect on interest rates.

And if debts or obligations on legislatively mandated payment are not met?  Increased interest payments are often required by law in this circumstance.

Oh, hell, it's my birthday, I'm going to start drinking.  Staying sober is obviously not helping me.  

[anvi]

Good.  Well, let's do it then.  We have been told for the past few years, after all, that uncertainty is good for investment and rapid growth out of a recession.   

[anvi]

And cheers in return!

As long as the voters know it was what the Pubbies and fiscal conservatives wanted  to do, I'll be happy to go along with it.  If it works, y'all rightly deserve to be rewarded.  If it doesn't, then, that's how it goes. 

[anvi]

Opebo,

Ok, my friend, got ya.  It's certainly true that the high debts have not correlated to the interest rates; so long as they're paid, even with borrowed money, the rate can remain low.  I think it even can be argued that the interest rates being held artificially low by the fed helped contribute, along with other factors, to the rush for house purchases that helped expand the bubble in that market.

Torie,

I certainly agree that politicians need to be focused on the magnitude of the challenges we're facing; there's no doubt about that.  I just wish, you know, that Samuel Johnson could suggest some other ways to help people concentrate other than just the threat of hanging.  I don't think by any means the world will end immediately if the debt ceiling isn't raised by a month from now, but I'd prefer not to have to sail that river.  I was at a talk a long time ago given by Hans Blix, and he recited what he claimed was a Swedish diplomatic saying: "it's better for a bunch of old guys to get ulcers from arguing around a table than it is for a bunch of young guys to die in a field."

[anvi]

Brooks weighs in.

http://www.nytimes.com/2011/07/05/opinion/05brooks.html?_r=1&src=ISMR_AP_LO_MST_FB