Posted on 07/18/2011 10:55:28 AM PDT by No One Special
President Barack Obama's best hope of re-election lies in provoking Republicans to force the United States into technical default, engineering a brief but severe financial crisis in order to appear as crisis-manager-in-chief. The Tea Party movement may be marching into a political ambush, in which Obama will be able to portray the born-again budget-cutters as irresponsible fanatics who threaten to tip America into a new depression. The now unpopular president then would assume the role of national savior in time of crisis.
What would happen if August arrives without an increase in the US debt ceiling? There is no good reason for a new financial crisis to erupt. But there are bad reasons. The standard scenario was
rehearsed July 15 on the Financial Times' Alphaville blog, [1] which notes that "the United States runs a monthly fiscal deficit totaling $124bn, and that there are almost $60bn of T-bills maturing in the two weeks after August 2, all requiring redemption payments. (Plus a $20bn coupon payment on August 15 - Fitch has said this would be the trigger for restricted default, if missed.)" Technical default is likely, and so perhaps, as the rating agencies have threatened, is permanent loss of America's AAA rating.
The bigger danger lies in the "vast role Treasuries serve as collateral - a role which usually sees them safely locked up in the day to day operation of the money markets, but which we already know is vulnerable to a sell-off - a Lehman, 2008-style margin spiral - in the event of the debt ceiling remaining in place. You'd hardly wait for ratings agency downgrades."
(Excerpt) Read more at atimes.com ...
A: September
He may hope the media can pin this all on Bush but, we know when Bush left we did not have 9%+ unemployment and dayum near $4.00 a gallon gas. All they are doing is just pushing the day of reckoning deeper into 2012, just when they want folks to see the "great job" they are doing. They will not be able to create enough jobs to turn the economy around, they will not be able to stop the inflation that could go hyper if the dollar goes from being the Worlds Reserve currency into Monopoly money, they will not stop Foxnews, Breitbart, the Tea Party, Sarah Palin and everyone else getting the truth out and they will not stop people from seeing the end of our way of life!
I on the other hand see tons of election fraud and millions of illegals voting, I see the private sector and many citizens going "Galt". Let enough members of the productive class go Galt and the rage and inertia of the consumption class will be unstoppable and THAT will end any Re-Election bid by Swammy Obammy...
No sir. Only the weaselly republican leadership can do that.
so its the Tea Party that would be walking into a political ambush, not obozo??
can the author of this story or editor of this paper tell me one crisis obozo has handled correctly??? stimuloss?? gulf oil spill??? obama care??? Cambridge incident??? fast & furious?? anything??? bueller??? bueller???
The economic crisis is all about consumer confidence. Until that turns around, there isn't much that's going to right the economy. The more Obama and the Congress fool around with things, the longer it's going to take for consumers to start spending and companies to start hiring again.
ping — I think you’ll find this article of interest.
FRegards
DUDE!
His plan IS to sink the ship.
Spengler, step away from the crack pipe.
Spengler has always had a profound need to try to show he is the smartest guy in the room. But, anyone who thinks that what McConnell has proposed is a good idea is, to say the least, a bit out of touch and lacking in judgment. I do not underestimate the ability of the Rs to fail at whatever they attempt, but the McConnell plan is unconstitutional, immoral, and bad politics.
The R’s best chance is to send bill after bill to the Senate lifting the ceiling, but with spending reductions of major magnitude. The Rs should then spend every waking minute talking to their constituents and every media outlet saying that the President and his party have gotten an increase in the debt ceiling and that if they fail to enact it, the responsibility is theirs.
He’d fumble that too. We’re already in a crisis he’s shown himself unable to manage. The more crisis, the less he’s able to manage. Any nonsense in that regard would benefit the fiscally and monetarily responsible side, which is the tea party.
It basically tells us to 'surrender' to Obama because...
"... he's the president, and he can do it. So we are offering him authority to continue borrowing. The 2012 election will be a referendum on this country's economic future. It's tragic that we have to lose an opportunity to staunch the bleeding right now, but that's how our constitutional system works."
BS! BS! BS! ... and more "BS"!
“A: September”
The full answer was “A frugal September”.
But you advance nonetheless.
Final question:
“What would happen if another credit card arrives without spending cuts?”
A: Little
B: Less
C: Nothing
D: Less than all the above
Q: “What would happen if August arrives without an increase....”
Obama will go right ahead spending and printing as much as he wants so our congresscritters better be prepared to impeach him. He might even use this as his excuse to declare a “national emergency” and start grabbing our guns, gold, and pension plans and calling off all elections.
Oh, gee. An 80 billion dollar shortfall. Now, wouldn’t that 800 billion dollar stimulus boondoggle come in handy right about now? And the billions squandered on bailouts? And the billions squandered on ObamaCare and other Marxist boondoggles?
If this is a crisis, it was created by Obama. To hell with Marxism. To hell with Obama the big spender. To hell with the crisis. You can’t dig yourself out of a debt hole by borrowing more money. Piling on more debt will not solve the debt crisis.
Cut the damn spending already!! Cut the government!! Repeal ObamaCare if you’re serious!!
if the article is correct then the Republicans could propose a 70% top rate and a 200% death tax and Obama would still not accept.
No one has ever tried holding the line on spending or cutting budgets.
If the GOP holds, who knows what is in store?
I’m guessing Tea Partiers will be happy though.
The only smart tactical plan at this point is to pass the cap-cut-balance bill and hand it to Obama. If he vetoes the bill (which he most definitely will), then go immediately to the McConnel plan and let Obama take the heat for raising the debt ceiling. Hang it around his neck from now until 2012. Sorry but this is the only option at this point. McConnell knows that holding the line and forcing a default will put the Republicans at a severe disadvantage especially in the public spotlight and would give Obama a ton of ammo for his talking heads and his partners in crime media. This sounds like a cop-out, but from a pure strategic point of view, this is the only way the Republicans can avoid damage points before next election cycle. Remember, the only way Obama can win at this point is to create and inflict damage points to the other party. He is already damaged goods and even a no-name Republican is beating him. All the Republicans need to do at this point is to pound him on his failed policies and not do anything stupid and they win.
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