It can be effected simply by the Tea Party "caucus" in one body of Congress voting "no" on a debt ceiling increase.
It allows "Tea Party" Congressmen/women to vote their conscience and uphold their pledges to their constituents.
Oh, I know, the media will go all apoplectic, but guess what, after a few months of scrambling, the government will figure out who to pay and how to pay them, but won't be able to borrow one penny more.
Yes, maybe a million federal employees will get laid off. Tough. They can join the 14 million public and private sector employees already unemployed.
It will be uncomfortable as hell for awhile as the shock of less spending sets in. But, the private sector will accommodate and equilibrate as it always does. We will probably spiral back into recession, but we are tottering on the brink now anyway and surely headed there, especially if our debt is downgraded. I suspect it will take about 18 months to start to pull out of the tailspin created by this act of civil sanity.
All that is going on right now in Washington is a kabuki dance to see who can blame who and who can avoid the blame. Let's just rip this band-aid off and deal with the pain.
If you are a petrified Republican thinking that you are going to get blamed for a bad economy, guess what, you probably will anyway. If you are a petrified Democrat thinking that you are going to get blamed for a bad economy, guess what, you probably will anyway.
We are in the middle of an economic sh*t storm and everybody's gonna get splattered. But, the best course of action for the country is to stop kicking this can down the road, "eat our peas" and that means, balance our books immediately like all responsible adults do.
Inundate your Tea Party Senators and Congresspeople with phonecalls, cards, emails, letters, protests. It's completely in their hands to make this happen and WHEN IN THE HISTORY OF THE US HAVE SO FEW PEOPLE (Tea Party caucus) HAD SO MUCH POWER OVER THE FATE OF THE UNITED STATES? Make them do exactly what they were elected to do.
Another thing: So, you think this will tank the stock market? Think again. The “market” (meaning all of the individual investors that make it up—the collective conscious of market participants) will likely see no debt ceiling raise for exactly what it is: the best possible way to put Washington on an enforced, no screwing around spending diet and a means to preserve our AAA rating. On the other hand, if some BS smoke and mirrors plan gets passed, bye bye AAA and watch the stock market tank.
FREEZE IT NOW! Hell yes. They will print the money anyway, no matter what, so let ‘em print it, just don’t add 2 trillion dollars to the debt in addition to printing it.
Freeze it.
Watch ‘em print some mo QE3.
Hey is there anyway to stop the Gov from printing and printing and printing more money?
Actually, I think you’re right and the House should just pass on increasing the debt ceiling. However, there’s another wrinkle I’d like to introduce that makes it an even more attractive option.
Right now, legislators are scared because they think the failure to increase the debt ceiling will require too large a cut in federal spending. (Cutting $140 bn in August from a $310 bn budget is a 45% cut, and frankly, that is completely impractical. Way more people will get hurt than necessary, and Republicans will suffer dearly for forcing that situation.)
However, if the Social Security and Medicare Trust Funds are used to pay the $100 bn in SS/Medicare expenses each month, the remaining deficit falls to $40 billion of $210 other expenses, or less than 20%. And I can imagine cutting 20-50% out of a bunch of “other” federal programs for the duration of Obama’s presidency. The $40 bn a month rate would pile up $600 bn in budget cuts by November 2012, and we’d get there by just voting no to the debt ceiling increase.
This would work, so I hope someone in DC is at least considering it.