Monday, May 30, 2011

Debt Ceiling Up For A Vote Tomorrow; Nationwide Default Imminent

After weeks of posturing and playing chicken with America's economic stability (and fiscal credibility), House Republicans are bringing H.R. 1954, raising the government's debt limit, to the floor for a vote Tuesday evening.

It's a vote designed to fail - they're bringing the bill to the floor under "suspension of the rules," meaning that it will require a 2/3 vote to pass.

There are 432 members of the House right now, and 2/3 of that total is 288.  That means that if all 192 Democrats in the House voted to raise the debt limit, the measure would still need 96 Republicans to vote for it in order to pass.

However, not every D will vote for it  (though the vast majority will) plus some will be absent (i.e. - Gabby Giffords).  In other words, H.R. 1954 will need the support of somewhere between 102 and 106 Rs to pass.

Probably not going to happen.  Most of them are more interested in adhering to their economic nihilist ideology than in actually governing.

The move to require a 2/3 vote, however, frees up any Republican who is from a district that is more moderate than they are to vote for raising the debt ceiling without, you know, actually raising the debt ceiling.

The vote is scheduled for ~6:30 p.m. Eastern, or 3:30 p.m. Arizona time.  The debate on the matter will be earlier in the day, late morning or early afternoon Arizona time.

Government Executive magazine, a publication of the National Journal, offers a list of likely ramifications of default here.  For readers who believe that ultimately the Republicans will do the responsible thing here, read the list.

There's nothing on the list that the Republicans harbor any serious objections toward.


Thane Eichenauer said...

If this article is the basis for which government employees are educated then it is not surprising that government spends without conscience.

To assume that the stock market would plunge is to assume that the federal government is some sort of lynchpin to the operation of businesses nationwide which is hardly the case. Given that the news has been warning the voters that the sky is falling for months on end any business worth investing in has already made plans if any given government department stops operating.

As for mass layoffs in the bureau of the Public Debt that isn't necessarily a bad consequence. Profligate government spending is enabled by profligate government borrowing. No borrowing would result is sharply reduced government spending. That is a good thing.

As for sky-high mortgage and interest rates rather the opposite would be likely to occur. Without billions and billions of dollars being removed from the lending pool we would likely see a reduction in interest rates and increased business profitability without the government consuming nearly all the available lending supply.

Of course the government could announce that it is ending its occupations of Iraq and Afghanistan and immediately suspend the fuel and bomb purchases needed to prosecute those projects thereby reducing spending to a rate much closer to actual tax revenue collection.

Of course that would presume that the elected Democrats (and Republicans) in office had any desire to act responsibly which I have yet to believe is the case.

Anonymous said...

Re: Raising the Debt Ceiling, every person needs to watch this documentary.

“The Secret of Oz”

The world economy is doomed to spiral downwards until we do 2 things: outlaw government borrowing; 2. outlaw fractional reserve lending. Banks should only be allowed to lend out money they actually have and nations do not have to run up a “National Debt”. Remember: It’s not what backs the money, it’s who controls its quantity.