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Budget Policy: Even if we don't raise the debt ceiling, enough revenue will still come in to the Treasury to pay our interest, our bonds and essential services. The government will not shut down- only its ability to borrow. Like the fiscal cliff, the dangers of hitting the debt ceiling, while dire, are not necessarily fatal. It would, however, concentrate the minds of the American taxpayer wonderfully and force Washington to do what American families do every day around the kitchen table - take the paycheck and pay the bills in order of priority. Pay the gas company and the...

Once upon a time, Congress didn't want to raise the debt ceiling,sending the country into default. It was bad, and we shouldn't do it again. The end. Oh, you wanted to hear the rest of the story? Okay, here it is. Back in 1979, Congress waited, and waited, and waited to lift the debt ceiling, because Congress never likes taking responsibility for the tax and spending decisions it's already made. Now, Congress usually does the right thing after it's exhausted every other possibility, at least when it comes to paying our bills, and this debt limit increase was no exception....

WASHINGTON (Reuters) - Republican lawmakers are preparing to introduce legislation to direct the U.S. Treasury to make interest payments on U.S. bonds first and then prioritize other government outlays in case Congress does not raise the debt ceiling. Supporters of the idea see it as a politically palatable alternative to default, which could rattle markets as occurred in the summer of 2011. The likelihood of another market-unsettling event is challenging Republicans to find another idea as they use the debt ceiling as leverage to extract spending cuts from President Barack Obama. But critics, including some Republicans, say prioritizing payments is...

The federal government will hit the statutory limit on its debt within the next two months, and further borrowing would require congressional action. Almost everybody recognizes that such action will need to take place, since no one has proposed a way to end all deficit spending immediately. But Republicans want to make sure that as Congress takes that action it both highlights the problem of overspending and takes steps to address it, while Democrats want to make sure that the problem receives neither attention nor remedy. To achieve its end, each party has focused on a different element of the...

NEW YORK (TheStreet) -- Investors should understand why some Republicans are willing to allow the U.S. to default on its debt. President Barack Obama on Monday took a preemptive approach to criticize Republicans on the looming debt-ceiling clash, as he said they had the choice between acting responsibly and paying Congress' bills, or acting irresponsibly by allowing the economy to crash.

Washington, D.C. – It is possible, possible, that the massive shuffling of Cabinet positions for president Obama will have a positive effect on his next four years in office. With so many people leaving the make-up of the team that led to a lot of mediocrity and divisiveness will be fundamentally altered.timothy geithner leaving obama administration Some of those changes, say Secretary of State, clearly trade one strong player for another but in other places the changeover will not be as smooth or as clearly good. There is, perhaps, no position more important in all of this than the change...

Amid all the political and media hoopla about the "fiscal cliff" crisis, there are a few facts that are worth noting. First of all, despite all the melodrama about raising taxes on "the rich," even if that is done it will scarcely make a dent in the government's financial problems. Raising the tax rates on everybody in the top two percent will not get enough additional tax revenue to run the government for ten days. And what will the government do to pay for the other 355 days in the year? All the political angst and moral melodrama about getting...

To call Greece First World may be a stretch, but Greece has defaulted once already, and it is only a matter of time until Greece defaults again. Welcome to default-o-rama, the next chapter in the First World's struggle for fiscal sustainability. Japan is piling up debt in the manner of a nation beyond hope. France, Belgium, Spain and Italy are defaults waiting to happen unless Europe can somehow generate the kind of growth that has eluded it for decades. America's fiscal cliff is an artificial crisis. We have no trouble borrowing in the short term. But at some point the...

Venezuela vs. Argentina, Which Will Run Out of Money First? Politics / Emerging MarketsOct 17, 2012 - 03:12 PM By: Money MorningMartin Hutchinson Martin Hutchinson writes: After a surprisingly comfortable re-election, Venezuela has decided to stick with Hugo Chavez and all that comes with him. That has prompted The Wall Street Journal and other pundits to forecast nothing less than economic doom for Venezuela in 2013. But when it comes to poorly run South American countries, Cristina Fernandez de Kirchner is someone that could easily give Chavez a run for his money. As Argentina's president, Fernandez de Kirchner is a...

Crisis Replay… Soon Argentina Will Be On Sale Again By Ronan McMahonSeptember 20,2012Just over a decade ago Argentina spectacularly unraveled with the biggest default in history — $100 billion. Dollar deposits were converted to pesos. Then, overnight, the peg of one-to-one with the dollar was broken. The unpegged currency immediately devalued. Savings were wiped out. Banks were set alight and locals took to the streets in protest. That crisis created the biggest buying opportunity of a decade. During the fire sales you could have picked up a historic, high-end property in Buenos Aires or a vineyard in Mendoza for a...

Greeks are pulling cash out of banks, stocking up on food in panic ahead of make-or-break election Sunday Dina Kyriakidou and George Georgiopoulos, Reuters Jun 13, 2012 – 8:41 AM ET ATHENS — Greeks pulled their cash out of the banks and stocked up with food ahead of a cliffhanger election on Sunday that many fear will result in the country being forced out of the euro. Bankers said up to 800 million euros (US$1 billion) were leaving major banks daily and retailers said some of the money was being used to buy pasta and canned goods, as fears of...

Staying in the eurozone will mean that the country will be lorded over by bankster operatives. They will provide enough money to keep the country alive, but they will also demand allegiance to their plans of "austerity", which will mean more cuts in government services, higher taxes and better tax collection methods. It won't be pleasant for anyone in Greece. ... But there is a better alternative . That alternative is for Greece to leave the eurozone and return to the drachma. Here's how this could be done in a way that could put Greece on its way to a...

Greece's two main parties are set for heavy losses in Sunday's (6 May) elections, with anti-bailout groups on the extreme left and right to enter parliament for the first time, raising again the prospect of an exit from the eurozone. Public anger at the austerity measures linked to the second, €130-billion-strong bailout package could translate into a new Parliament unable to form a ruling coalition and a new round of elections being called in the next months. Observers expect the ruling center-right New Democracy and the center-left Pasok parties to come in first and second, but it is unclear whether...

It's time to round off this short series of screeds. If these "Terminus" posts have struck you, Gentle Reader, as unusually angry or strident, I can scarcely be surprised. I'm very angry; the country is going downhill far faster than even I expected it to go, and good men have done little more than complain about it. My contempt at such limpness in the face of social, economic, and political calamity has caused me to jack up the stridency of my prose. Whether that's for good or for ill, I can only wait and see. * * * The belief...

No modern-day Paul Revere is taking a midnight ride to warn about this, but the defaults are coming. Many are already here. They are coming from student loans given to the wrong students for the wrong reasons. The portfolio of federally guaranteed student loans passed the one trillion dollar mark in early 2012, and it continues to grow. The portfolio consists not only of loans for students from low-income families currently in college but also of hundreds of millions of dollars of education loans taken out by students who graduated from college or quit before graduating that have not been...

What happened? Obama and his advisers have cast the collapse of the talks as a republican failure. Boehner, unable to deliver, stepped away from the deal, simple as that. But interviews with most of the central players in those talks— some ofwhomwere granted anonymity to speak about the secret negotiations — as well as a review of meeting notes, e-mails and the negotiating proposals that changed hands, offer a more complicated picture of the collapse. Obama, nervous about how to defend the emerging agreement to his own democratic base, upped the ante in a way that made it more difficult...

“A harder Default To Come” Friday, March 9, 2012 at 4:12PM “We owed it to our children and grandchildren to rid them of the burden of this debt,” said Greek Finance Minister Evangelos Venizelos about the bond swap that had just whacked private sector investors with a 72% loss. While everyone other than the bondholders was applauding, the drumbeat of Greece’s economic horror show continued in its relentless manner. In central Athens, a stunning 29.6% of the businesses ceased operations, up from 24.4% in August; in Piraeus 27.3%, a 10-point jump since March. The whole Attica region lost 25.6% of...

The long-discussed Greek debt deal with huge haircuts for investors did what was expected: $3 billion in credit default swaps. A committee of credit-default swaps traders will expedite an auction to settle about $3 billion of contracts tied to Greece after the nation took steps to force investors to participate in the biggest sovereign-debt restructuring in history. The Greek Sovereign 5 year CDS is currently trading at over 25,000. Here is the CDS spread by date. Notice that the 6 month Greek CDS spread is at … 84,199%. How big is 25,000+? Here is the comparable U.S. Sovereign 5 year...

Greece Has Defaulted - Which Country In Europe Is Next?Michael SnyderMarch 3, 2012 Well, it is official. The restructuring deal between Greece and private investors has been pushed through and the International Swaps and Derivatives Association has ruled that this is a credit event which will trigger credit-default swap contracts. The ISDA is saying that there are approximately $3.2 billion in credit-default swap contracts on Greek debt outstanding, and most analysts expect that the global financial system will be able to absorb these losses. But still, 3.2 billion dollars is nothing to scoff at, and some of these financial institutions...

Okay, as I have been warning since the first quarter of 2010, Greece has defaulted. What I mean by default is that Greece did not honor the payment terms of its debtor agreements. I really don't care what this or that association decides to call it, if you bought Greek bonds you ain't getting the money that Greece promised when they promised they will give it to you. Just to add something official sounding to it, Fitch has declared it so, Fitch Downgrades Greece From C To Restricted Default. Of course, if you are on BoomBustBlog of following me, your...