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02 October 2013


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r whitman

If Obama and the Democrats win this with a "clean resolution" then they also win the debt ceiling debate in 2 weeks.

William R. Cumming

Governing like life in the Armed Forces is a tough tough business. Many are not up to it IMO!

For whatever reason both Congress and the Executive Branch and the Armed Forces seem to reflect each day more and more the lack of leadership talent in the USA. Greed and worship of Mammon seems to be the rule of the day in the richest country the world has ever seen but also one in which paying the price of leading evidently was too high for much of America.

Imagine for example what a tax free zone and 1 million new Chinese immigrants under the age of 40 might do for Detroit. Or perhaps Charles the First could arrange the sale of Detroit to Canada. I have recently learned that I am the first Cumming in five generations to not be a Canadian.


Colonel Lang,

Would a major constitutional crisis be so bad? I once considered myself a liberal Democrat, but for some years I have voted for the Green Party. It would be very hard to convince me that the vast majority of any party officials in either major party have the least interest in what is good for the country or even for their individual constituents.

This has been a country run by and for the corporations for so long, that there seems little hope for it.

Maybe a constitutional crisis might change that dynamic?





I agree with you 100%.

Americans have successfully convinced by corporate propaganda that big government is bad. I bet most citizens know that they aren’t receiving services equal to the taxes paid. However, us old farts remember when government provided protection from corporate predators and the wealthy paid taxes appropriate to the graft they took in. Today, we are easy game and the money flows offshore.

The House Republicans have taken this one step further. They know government is evil. Shutting it down is good. This is going to drag on to the federal debt defaults. We shall then see if the President has the balls and opens the government for work. Citing the 14th Amendment, he pays the bills without having the House’s approval.


Laura Wilson

WIN...the debt ceiling? Hello, you don't want to pay the debts we have already incurred? Really? What MBA School does that come out of?


Sorry to have lost you.

My opinion is that we are seeing one of the weaknesses of the Republican system. In a parliamentary system, if major legislation fails then it is understood to be a vote of no-confidence and that the government no longer has the support of the people. An election is called. The reason for the non-confidence usually becomes the central issue of the campaign.

Thus, there is an immediate and proven way to get rid of an unpopular government, or, from the other side, to confirm the will of the people.



A treasury debt default is bogus and just more fear mongering. Interest expense is $400 billion. Total federal government receipts are around $2,700 billion.



Now if Congress decides that the government cannot borrow from future generations any more (something less likely than a giant meteor hitting planet earth). Then they can't spend more than they tax. Yes, for some that is catastrophic but for others like today's toddlers it maybe exactly what the doctor ordered.

nick b

In the abstract, this has been very interesting to watch. In yesterday's Washington Post there was a very insightful discussion between Ezra Klein, and Robert Costa of the National Review, about why Speaker Boehner won't or can't bring a 'clean' continuing resolution to the House floor for a vote: http://www.washingtonpost.com/blogs/wonkblog/wp/2013/10/01/why-boehner-doesnt-just-ditch-the-right/

Last week we received platitudes from leaders of both sides explaining that a government shut down wasn't going to happen. But that line was crossed, with relative ease. It's a problem, to be sure, but we're still on ground that has been tread upon before. Things will get considerably more ugly if the debt limit comes and goes and the United States defaults on its debts. There is no precedent for this, and no one knows just how bad it could be. (It will be very, very bad.)

As an interesting aside on US debt, many debt instruments are hedged or insured through the use of credit default swaps (CDS). Basically it's insurance in case your bond defaults, your counter party will make you whole on your investment, and they'll own the defaulted instrument. You might think there is a huge market for CDS on US Treasury instruments, but there isn't. The market puts so little risk on US Treasuries than no one feels the need to insure against default. Default is, in essence, unthinkable.

So this week I'm hearing platitudes from leaders on both sides that default will not happen. Why am I not assured? Should the Congress decide that default is just another line to cross, and head the country into it, a constitutional crisis could easily arise around efforts to avoid default through the 14th amendment. In fact, I'm not sure how it's avoided. But it may not even matter. These things don't happen in a vacuum. It's conceivable that the rating agencies could downgrade our debt preemptively should we get too close to the drop dead date, causing sell offs and general market chaos even without default. And should the unthinkable happen, and the US actually default on its debt? Well, there will be no getting the genie back in that bottle. For the US will have defaulted not because we were unable to pay, but unwilling. Our credit, and our global standing, may never be the same again.


This is nothing but partisan politics at it's finest. It's all about perceived political advantage.

Go back to the budget battles during the Carter and Reagan era. Was anything really accomplished?

In any case government debt has continued to grow as our government spends more than it took in for decades now. What will change at some point is that interest rates will no longer decline because it just can't. Then rollovers become more expensive.

Will Reks

From what I can understand neither party has any great incentive to fold over the shutdown. Obama can't allow the Republicans to kill his only significant accomplishment of note and the Republicans can't allow the working class to have a greater reason to vote Democrat.

Norbert M. Salamon

Not being Constitutional lawyer, nor a USA citizen, I do see that the 14th Amendment would force the USA into default of the current bonds, if and only if, the president uses the interpretation that the government would have to pay interest, and borrow the money thereto from the Federal Reserve, which is not effected by the lack of budget for the next fiscal year.

However, if I am correct, the President does not have constitutional authority to get a budget to operate the government - or pay any bills not authorized by Congress; therefore, I can not see how
"the president has the balls and opens the government for work"
for the government needs Congressional action to have operating funds.


I think the people eager to confront -- and to their way of thinking -- "win" against the president and the Democrats and what they represent tot hem felt great on Sunday night, and still felt pretty good yesterday.

I think they won't feel so good by next week or the week after that. But at least they'll have gotten over whatever was in their system that just had to come out, and we can all go on from there.

That, at least, will be a blessing.


Turning to the larger question of the fate of the Republicans and Democrats in the future, I do not see the rough parity between the two major parties lasting much longer.

There will be far more low income immigrant voters who have no place in the current Republican Party in 12 years, and many of their current older white voters, sadly, will not longer be able to cast their ballots for anyone. I also expect that going forward, there will be a considerably larger number voters from long term American families who will also be lower income who, again, are of no interest to the current leadership of the Republican Party.

The Republicans do not have the current under 30s, either. They may gain some as they get older, but not as many as they might have in prior generations. Too many will remain too needy to become Republicans.

California is an not a typical state but take a look at these numbers. They did surprise me:

"California has reached an all-time high of 18.2 million registered voters, while the number of registered Republicans has fallen below 30 percent, signaling a worrisome decline for the state's minority party, officials said Friday."


"The GOP now has about 1.5 million more voters in the state than those registered as having no party preference, previously called decline-to-state voters. Independent voters account for 21 percent of the electorate.

Democrats make up 43.7 percent of voters, a slight decline from four years ago. The raw number of registered Democrats has been climbing, while the number as well as percentage of Republicans has fallen."


Look at that 21 percent for Independents. There is where the new third party -- the moderate one that I hope for, the one in which the interests of nonelite Americans will come first -- may be perhaps be found.


There's no point in agreeing to piecemeal funding because Boehner has stated that there is no change in the ultimate goal of inflicting damage on the ACA, which is, like it or not, the law of the land and okayed by the Supreme Court.

The Medicaid expansion in the ACA is aimed at helping the poor, but the people who will be helped by the law if it succeeds include middle and lower-middle class people. Small businesses also. Difficulty in obrtaining affordable health insurance isn't just for the poor any more.....


A crisis is always tempting because it lets one imagine new possibilities. I'm not immune to it myself, "If only we could just clear away the old dross and do what's best and what would work". It's almost never the most reasonable and levelheaded who prevail when the rules break down though.

The problem in this case that I see is that to resolve this logjam without the House Republicans changing their mind the US government has to spend money without an appropriation bill. Any crisis would therefore likely involve implicitly removing or weakening Congress's "power of the purse". This would be a radical shift of power away from the legislature towards the executive, even by the standards of a century marked by ever expanding executive power. The consequences of that might never be felt, so long as everyone who gets elected president is a good and decent person with no desires that would lead them to abuse their authority.


Public disgust is bi-partisan and overwhelming. It may morph into an anti-incumbency movement. Both parties are likely to find that the 2/3rds of this country that generally agree on most things in moderation have had enough.

Mark Logan

Vietnam Vet,

The deal struck with the private insurance industry is that 80% of their gross has to be spent on medical bills, which is better than the 70% they spend now.

I'm not upset by preserving the US private HC insurance industry just yet. The example of the German system demonstrates it can work, and work very well. The Germans practically write the policy's for them, so the major arena for competition between the players is administrative efficiency.

As good as it gets, IMO.


Here's the irony: for all the talk about "gov't shutdown," the fed gov't has not shut down. The "essential functions" of gov't, to which vast majority of gov't spending is directed at, continue. Many people suffer, either their livelihood threatened (directly or indirectly) or at least seriously inconvenienced, as the consequence of these, but they are left in the lurch by political calculation--they are not politically consequential enough to have spending on their account covered as "essential." Both Democrats and Republicans are happy to play this game, possibly for a long time, because, in practice, the political costs they pay is relatively limited. In some sense, underneath all the grand rhetoric, the whole thing is an irresponsible game dishonestly conducted. This is sickening.


I expect BO to back down shortly. The man can be blackmailed, which is why Republicans continue to raise the stakes. At least this time he didn't give everything away before going to the negotiating table, as he did in December, 2010.

I also expect that he will get Republicans to agree to his proposal to cut Social Security and military pensions via the chained CPI. Once that inviolable wall has been breached, cuts will be piled onto cuts.


The shutfown is almost entirely the fault of House republicans, particularly the Tea Party strain. Obamacare/ACA is simply the pretext. If they wipe that out, they will bring up another hobby horse and foment another crisis To think, that republicans used to be the sober party of fiscal responsibility and careful finance. The shutdown is apparently costing us $300 million a day, so the petulant House can make its point.

Some Republicans may be in unassailable seats, but not all are. A sufficiently upset public may turn them out. Republicans are already looking at demographic oblivion, and all their gerrrymandering and voter disenfranchisement efforts may not be sufficient to hold an electoral majority after the next few cycles.

Obama has previously been far too willing to compromise, and has retreated from contests of will with Congress. That has led the republicans to consider him easy meat. If he had held fast and allowed the Bush tax cuts to expire, we'd have much more revenue now, helping to reduce the deficit, and also keeping us away from the debt ceiling a bit longer.

I'm no constitutional scholar, but seems that the House leadership might be subject to impeachment proceedings for their vast dereliction of duty and placing the government and country in harms way. This has been the least productive Congress since the Civil War, yet they have managed to hold 42 votes to rescind the ACA. The have refused to vote a budget, perhaps their most basic task.

It would be a mistake to forge deals short of a full budget, and a clean lifting of the debt ceiling. Continuing Resolutions and temporary fixes only allow for this game to be repeated, likely in less favorable political circumstances.

Similarly it would be a misjudgment to fund favored portions of the government and not others. We saw how that worked when air traffic control was released from the sequester, because it disproportionately inconvenienced business travelers and the affluent. The sequester was supposed to gore everyone's ox sufficiently to get a budget deal done; now it's the new normal. If there are parts of the government that should be shrunk or programs to be cut, it should be done through the budget process.

As for Obamacare/ACA, it's supposed to pay for itself, by bringing in more healthy young people who will be purchasing insurance plans, by raising rates on some affluent people, and by reining in costs. We shall see how that works out.


The votes are there, in the House, to pass a clean CR.

John Boehner won't bring it up for a vote because he's running for re-election next year in Ohio and he's afraid of a Tea Party challenge in the Primary - along with the fear of losing his Speaker of the House position if he allows a vote.

This is all on Boehner to do the right thing FOR THE COUNTRY and allow a vote.


Just a personal observation, so far have not missed anything important in my existence due to the government taking a vacation. Less meddlesomeness is always a benefit.
It might be two weeks or so before a deal is struck, enjoy the time off --- the IRS the NSA and the various other meddlers will be back and nothing will change.


What I find irritating about this whole situation is the US is 12 Trillion in debt. The Fed is buying billions mortgage and other bonds per month to keep down interest rates. This shut down will be nothing compared to what will happen if the dollar tanks, or we have our Greek moment. If interest rates get above 4 percent the money used to pay on the debt will consume a large chunk of tax revenues. That will trigger either higher interest rates to attract buyers of US debt putting us in a spiral I don't want to think about, or cause the markets to dump US debt. Either or you would have a problem paying basic Government services let alone this on going health care train wreck.

The political ineptness of the Republicans is simply breath taking. They can't get the WH back and they lost the Senate. There are people who think we will never see another Republican President again. The Tea Party is the only political group I know of who are trying to keep the US from blowing it's fiscal head off (With little to show for it I might add). The left seems to think we can tax anything productive that moves and that will solve everything. What a mess!

Robert C

Agree...only govt employees hurt....and people who had a trip to a National Park planned. These episodic govt shutdowns could be eliminated by congress ending the exemption for the FAA and air-traffic controllers. Corporate America (airlines, hotels) simply would not stand for closure of all airports.


nick b

The Anti deficiency act of prevents obligations or expenditures that exceed appropriated funds. http://en.wikipedia.org/wiki/Antideficiency_Act
To spend money without appropriation is a crime that can be punished by imprisonment. What I believe you are suggesting is already illegal.

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