Kthug says — and my one knowledgeable banker friend agrees — a downgrade on US debt may not be that big of a deal. Everyone knows the bond rating agencies are idiots at this point. That’s not to say it will have no effect, but it’s not clear how big it will be.
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dpcap
all of my stocks crashed this morning. So it does seem to have an effect. Will they recover? That’s the question now, it seems.
beltane
We have a big stockpile of liquor so there is nothing to worry about.
scav
Besides, they haven’t agreed what to call the new entity that would follow PIGS, PUGS is missing the I. PAIGS? PUIGS? SPUGI? GAIPS?
The Moar You Know
From Calculated Risk this AM (commentor Bob Dobbs):
cleek
damn his lack of clairvoyance!
Ol' Dirty DougJ
I don’t think the potential for downgrade caused it, per se.
Montysano
I want it to be a big deal. It should be, and needs to be, a big deal. If it’s not, the Teahadists will be that much more emboldened. Regardless of what Moody’s believes, we cannot fight two wars, fund a new Medicare benefit, and give huge tax breaks, all while maintaining a proper level of government and meeting our obligations to SS. The math doesn’t work.
The fact that the markets are, at least so far, unconcerned is not good news.
R-Jud
I earn mostly dollars but pay my bills in pounds. I’d really like for this to be not as bad as they’ve been telling us it will be. Or at least for both the currencies I use to drop in value together.
Just Some Fuckhead
Anything that postpones me having to get a job is welcomed, up to and including The Apocalypse.
jwb
I don’t think the debt downgrade by the ratings agencies means squat. Unlike corporate, state and municipal debt, people pretty much know what they are buying when they buy treasuries. It might have a small effect in that some funds require that investment instruments have a certain rating for the fund to hold, but it’s not clear to me that enough of the bonds are held by such funds to move the market. What will move the market is the sense that treasuries have become unreliable. If a ratings downgrade reflects that perception, then the market will move accordingly, but it’s because of the change in perception not the change in rating. For treasuries the market is going to set the price, and the ratings are basically meaningless.
eemom
I don’t think we can let him off the hook so easily this time. I don’t see any way around the conclusion that he fucked up by letting the pigs define the narrative, i.e., that cutting the deficit is or should be a priority while the economy is circling the drain. That was just as wrong six months ago as it is now.
arguingwithsignposts
The cas1no gamblers don’t seem to be worried too much at this point. Meh. Color me unimpressed.
General Stuck
So is it official now? That Obama is the shits
Brachiator
@Ol’ Dirty DougJ:
I will alert the Greeks.
The bond rating agencies are “idiots,” and yet governments and banks scramble to deal with the impact of their decisions.
And also, while everyone is focused on August 2, let’s see what impact the debt ceiling impasse has had on the US:
The Republicans are so intent on killing the federal government that they don’t care if the entire economy collapses as well.
cleek
@eemom:
by what mechanism does one “define” a “narrative” and how did he not employ that mechanism ?
Pococurante
Today’s market correction still leaves us up over all for the last five business days. I’m looking at the S&P index 500.
So basically the equities folks don’t believe we’re really going to default. Another way to read it is that blue chip equities actually benefit from bond flight.
Citizen_X
Hah hah hah! Future written history–isn’t that person the optimist?
jrg
My understanding is that a number of different securities depend on investor’s faith in the ability of the US to pay it’s debts.
This strikes me as a very dangerous game to be playing. It’s going to be very difficult to get this genie back in the bottle.
RobNYNY1957
The problem is that in a lot of settings (tax code, pension plan law), ratings have the force of law. Once an investment is below investment grade (BBB-), a lot of institutions lose tax benefits or are compelled to sell.
cat48
$500B more per year is a big deal. I read that somewhere last nite. How much does he think it is?
Jay B.
The writer, while clumsy, is stating the obvious. This entire charade has been a disaster for the Administration — the solution is obvious NOW, the problems with Obama’s approach have been obvious since the last ginned up crisis over the expiration of the Bush Tax Cuts (and a substantial number of people then saw this very fight happening over the debt ceiling because of the success the GOP had in the tax cuts fight — while most here were cheering how Obama ushered through meaningless compromises, well, and OKing the continuation — effectively forever, although couched in hilariously stupid “two years we’ll review it” language — the Bush Tax Cuts — the real take away was: We can hold this Administration hostage).
But of course, the GOP got greedy, instead of being content to simply destroy the New Deal and leave Obama’s fingerprints all over it, the teahadists wanted to cripple government now and forever.
All over a phony fight that Obama has completely embraced.
Yeah, this took real clairvoyance. Who could have foreseen it?
LITBMueller
Yeah, but take a look at what happened to value of the Yen starting in 2002. Doesn’t that paint a different picture than the one Krugman paints?
Davis X. Machina
Shorter Krugman: “Mr. President, I’m not saying we wouldn’t get our hair mussed… ”
This is Krugman the polemicist v. Krugman the economist. Here he’s guilty of the same whistling-past-the-graveyard as GOP, though he’s doing it to preemptively rebut a defense of any Democratic concessions.
If the bond-ratings consequences of a failure to meet federal debt obligations aren’t significant, then there’s no reason for Obama & Reid to concede anything.
The Moar You Know
cleek: The GOP has been indulging in hostage-taking since the day Obama got elected. While the poster over at CR put it in a somewhat clumsy fashion, the reality of the situation is that Obama has been dealing with hostage taking terrorists, and he’s still treating them as fellow legislators acting in good faith. That should have stopped after ACA.
He is, indeed, going by an obsolete playbook.
ruemara
cleek
Obama said “debt”, “deficit” and “entitlements”. This spreads a narrative around like butter on hot toast, undermining liberalness and progressive policies that would otherwise sail through Congress and be praised in the media.
eemom
@ cleek
um, by NOT making the case to the public that the republican OH MY GOD WE”RE BROKE WE GOTTA STOP BORROWING MONEY faux-hysteria was total bullshit? By instead AGREEING that yes, we TOTALLY need to cut spending, right the fuck now? By not explaining why that is exactly the WRONG thing to do in a depressed economy, which is after all not rocket science?
Ol' Dirty DougJ
Yes. I’m just not convinced that ratings drive loss of faith. I think it might be vice versa.
eemom
yes. That.
Derf
That was the most pathetic attempt to defend Kthug I have ever seen. You have just shown how utterly naive and clueless you are about macro economics. Clearly believing whatever the talking heads on TV tell you. Those are right wing talking points btw. Where exactly is it you get your talking points from?
But no worries. The US won’t default. Why am I so sure? Because the Repukes biggest donors, The Chamber of Commerce and Wall street, do not want it to happen. And they basically ARE the Repuke party these days.
All this BS you have obviously bought into is just Boehner trying to get the best deal possible.
FlipYrWhig
Show me one statement where Obama says or implies that we need to cut spending “right the fuck now.”
You’re not going to find it.
He says we need to cut spending over the long term and to do so in such a way that everyday people are not harmed. He says this consistently.
The echo chamber has decided they’d rather reinforce each other’s outrage about made-up nonsense than actually listen to words or read about details. Don’t fall for it.
Bruce S
FYI – here’s more on this from Rortybomb:
http://rortybomb.wordpress.com/2011/07/24/the-activist-ratings-agencies-and-their-poor-public-sector-predictions/
General Stuck
The notion that Obama or any other dems, cannot broach the topic of making “any” changes to SS and medicare, is just insane. I guess people are saying that the part of Obama’s package that would allow medicare to bargain with drug companies for lower prices, with those “program spending cuts” should be off the table and that money still delivered to greedy drug companies, is somehow needed to stimulate the economy. And there are other examples of targeting wasteful government spending that would fall in that category
The big brains on this blog tells us so, as handed down from the lord of liberal finance, Mr. Krugman. Not to be questioned.
No thanks, I will go for the better truth, that almost always are the needles in the haystack.
FlipYrWhig
I also don’t get the gripe about how the Republicans are hostage takers and so Obama shouldn’t treat them with good faith. Obviously they’re hostage takers, and obviously he knows this. How would you have him treat them instead? Be more aggressive rhetorically about how much they suck? And then what, they vote the way we want because they’ve been shamed? I don’t get what the alternative is.
William Hurley
It seems to me that select members of the investor- and corporate-class whose amygdala and pre-frontal cortex work properly can distinguish the US’s socio-political problem from that of “GRIPS”, which are experiencing structural economic problems compounded by political cowardice. These situations “sound” the same, but they are not.
The US presently enjoys borrowing rates that are at historic lows. The GRIPS did not pre-crisis inflection point and certainly do not post-inflection.
The US’s blessed with a so-call “high class” problem – being that investors from across the globe – want desperately to park their monies in US government backed instruments. Not only that, the US economy, as viewed from the lens of the investor/corporate class, is structured such that they’re rarely losers when employing their capital inside the US economy.
The net-net of it all is that the US can pay all debt service obligations coming due. We are, at present, restricted in taking these simple fiduciary steps because a political faction has chosen to leverage risk – or the appearance thereof – to maximize their perceived political fortunes.
The truly ludicrous aspect of this internal political debate is that the President has chosen to give it ground – ground that’s in the center ring of the Villagers political circus.
While the Villagers watch in breathless, mindless (theatrical) horror, the President’s Chief of Staff, Bill Daly, makes his regular rounds comforting his former “class”-mates regarding the good standing of their risk-free, guaranteed investments.
Too bad credit card companies and banks won’t extend the same courtesy to lowly depositors and card-holders.
Bender
I LOVE YOU GUYS!
When the GOP was on the hook to be blamed for the debt ceiling no-deal, lefties swore it was going to cause default (in your imaginations, at least), a downgrade from the ratings agencies, and that downgrade would be the End Of All Of Western Civilization.
Now, when agencies put Obama on the hook and actually start downgrading the US — expressly because of Obama’s aversion to cost-cutting and with no mention the ceiling deal… suddenly, Obama’s Buttboys determine that downgrading is no big deal. Because the ratings agencies are stupid-heads.
Harry Carey thinks you guys are insufferable homers.
ruemara
It’s not a fucking negotiation. The Republicans are not hostage takers. They are an arm of the body politic and they have been given that power by voters. You act as if it’s just walk away or ignore them because you can. You can’t. It’s in the damn nature of the government. You don’t get to pass on them, especially after the 2010 elections. I wish the person who came up with the hostage negotiation analogy would stuff it, it’s just not right with regard to the issue. It is a damn crazy insane head of the hydra that insists on eating arsenic if you don’t give it what it wants-which is to be the sole head. You can’t negotiate with that, you can only survive it.
jwb
Bender: It’s not the downgrade, it’s the default that’s the problem, asshole.
Shawn in ShowMe
@eemom
You mean the same public that didn’t bother voting in 2010?
The same public that only bothers to listen to political speeches every four years and then returns to watching American Idol?
The general public has already demonstrated they don’t care what goes on in Washington in the intervening years between presidential elections, as long as their personal lives are not disrupted. If playing word games will manipulate the GOP into raising the debt ceiling, let the White House play word games.
Call a provider cut a benefit cut. Call renegotiating drug prices a cut, too. Yell “Rabbit Season” so the Repubs can yell “Duck Season” and shoot themselves in face.
JGabriel
DougJ @ Top:
I agree. The rating agencies have lost most of their credibility. An actual default will have long term consequences, but a ratings downgrade w/o default will probably have zero to minimal impact — especially over the long term.
dpcap:
I think that would have happened with or without a downgrade. The stock market has delayed pricing the effects of a default into the market. Once the July 22nd deadline that the President set was reached with no deal in place, the effects of that delay cascaded.
That’s my thinking anyway on it anyway. I’m sure people with more economic training or market experience can/will either correct me or elaborate further.
.
General Stuck
teehee
Alex S.
I’m beginning to like Harry Reid’s plan. There’s probably some accounting trickery involved but it fulfills the republican demands without touching vital programms. And the Bush tax cuts expire as well. After all, the dirty little secret about the budget is that there is no problem once the Clinton tax rates return and the wars have ended. Ok, some medicare means-testing, and lifting the SoSec income cap, but that’s it. Economic growth will do the rest.
Chemist
@23 Davis X. Machina
I think you might have missed some of the context surrounding Krugman’s post. He is arguing that a *pre-emptive* downgrade might not be a big deal, addressing the widely reported idea that a downgrade on its own would cause a significant sell-off of bonds and/or equities unless an agreement was reached before Asian market opening.
An actual default, however, would be a big problem (and would cause downgrades). Sovereign debt ratings for large economies are somewhat redundant because everyone has similar information.
srv
Feature, not bug.
The only objective threat to the plutocracy are the teahadi’s and the only liberal hope is that the Republicans can control them.
cyd
A huge chunk of Treasury notes are held by investment pools, such as retirement funds, that are legally obligated to invest only in AAA instruments. A US debt downgrade will trigger a massive sell-off that will make the Lehman collapse look like a minor blip.
If your “banker friend” is telling you that a downgrade is no big deal, he is an idiot.
eemom
I don’t know. I have always supported Obama, but that doesn’t mean I think he’s an infallible God-body. It’s beginning to seem like some folks would rather twist themselves into rhetorical knots than acknowledge that yes, the man just might have fucked up a little here.
Not usually a huge fan of Kornacki at Salon, but if someone can reasonably dispute what he says here I’d like to hear it.
JGabriel
@RobNYNY1957:
Correct me if I’m wrong, but my understanding is that the ratings agencies are talking about a downgrade to AA from AAA. That’s still pretty far from BBB-.
Also, it’s my understanding that most of the laws written to require AAA debt usually specify “or” US T-bills, not that T-bills must be AAA.
.
eemom
I’m all for that, if it works out that way. So far it doesn’t seem to be.
Brachiator
@Jay B:
You could make a case that the Democrats and the Obama Administration foolishly let themselves be backed into a corner over the tax cuts issue. But to suggest that it was a phony battle is just plain wrong.
@Bender:
As physicist Richard Feynman supposedly said in another, but applicable context, “If you knew what you were talking about, you would understand how wrong you were.”
Shawn in ShowMe
Alex S
Maybe I’m way off base here but the Reid Plan isn’t going to be accepted by the Republican caucus either, ’cause Cassius Cantor is calling the shots now. Yeah, they’re cuts but they’re not the right cuts. They don’t gut SS and Medicare, they cut payments to our Galtian overlords.
The value in the Reid Plan value is as a demonstration that the Dems offered an alternative without tax increases and the crazy people still said no. Just another campaign point to run on next year.
Linda Featheringill
@Citizen_X:
future written history.
Nah. You can’t do that. Unless you are omniscient and can see not only the future but all the factors that led to it.
Shorter: Not unless God died and left you in charge.
RP
But what happens when you game this scenario out? How would the media have reacted? How would the right have reacted? Would anything have changed w/r/t the debt ceiling? It’s not clear to me that your approach would have made any difference.
Which is not to say that Obama handled this perfectly. I’m sure he’s made plenty of mistakes. His biggest was probably not including the debt limit in the negotiations last December (assuming that was possible). But it’s one thing to say that he’s made mistakes; it’s another to say that he “fucked up,” implying that he bears some large portion of the blame for the current situation. I don’t buy that for one second.
Brachiator
@Jay B:
By the way, I meant to add that anyone Obama could not have simply let the Bush tax cuts expire, as long as the Republicans refused to do anything about other expiring tax provisions.
Raenelle
What is this “our” you speak of? Whenever the message is that something will be good, or something else will be disastrous, they are always talking about good or disastrous for the overlords. When banksters say it might not be all that bad, they mean it might not be all that bad for them. Who knows how it will affect the other 99% of the US or the world?
General Stuck
I once thought you were a person of some nuance, or at least respected in relation to the truth. There is no rhetorical twisting to justify anything Obama has done here.
It is simple straight facts about what is being offered the wingers, at least as much as we know.
If you believe he just should have given the wingnuts the finger from the beginning, refusing to even engage them, that is ok. It is wrong headed politics, but feel good emo tribal shit.
You and others seem to have a sock in your ears, or are just being intellectually lazy to continue to conflate, “program spending cuts” with basic ‘benefit cuts”, and the dude from your link does the same that is just fucking inaccurate to what is happening, and what Obama has offered up. Did you not read my previous comment on this thread that a big chunk of the so called medicare cuts had to do with bargaining with drug companies for lower drug prices.
If it all is just a neverending grudge match that fits only a soundbite or two, then that is okay if you see it that way. But it is shallow as shit, and doesn’t get off labeling those of us that take the time to use our head, as Obama lovers, or whatever your implication.
Alex S.
@Shawn in ShowMe:
Hehe yes, all that matters. It’s ingenious. (I should point out that I don’t believe that there is a danger of default because of the 14th amendment.) And also, the republicans can’t agree to any offer because it would make the Democrats look fiscally responsible.
General Stuck
Thirded. precisely
eemom
First of all, you all are wrong that the 14th Amendment is a silver bullet for default. On legal grounds it is at best arguable, as I mentioned yesterday.
This
and the remainder of your tirade is kind of uncalled for, General. I am a person of all kinds of nuance, and unless you seriously think I suddenly and inexplicably morphed into a firebagger because I am raising questions about the wisdom of the strategy Obama appears to be using — which given my track record as an Obot is pretty ridiculous — you’re being rather emo yourself.
The Ithacan
Wow.
The General hit the mark with that one.
The Right is and will remain intensely tribal. Members of the Right have access to an extra-ordinary and extra-ordinarily powerful in-group bias/filter.
The Left (to which I proudly proclaim membership) often frustrates me with its incessant “caved,” sold-out” rhetoric.
It is very deflating and I often see it being egged on by (paid?) trolls who delight in inciting “Obama is Weak-athons” that go on for 200 comments.
Obama is a (somewhat) left of center President who is not going to thrill all of us all the time but he is a massively better than anyone on the Right.
Edited for Grammar
Jay B.
Whatever. In a functional democracy run by normal people it would have never happened. Clearly Obama and the Democrats didn’t want the Bush Tax Cuts to end, whether or not there were other changes to the tax code. And now we’re in this crisis, which has its roots in the last one. This will keep happening and you’ll plainly be surprised each and every time until there’s nothing left for us peasants.
Nothing in the Shock Doctrine was wrong.
eemom
and just ftr, I have no argument with the proposition that whatever “cuts” –nod nod, wink wink — Obama has proposed are reasonable in themselves. My point, and that of Kornacki in the piece I linked, are that his strategy doesn’t appear to be working now and may very well backfire on other Dems in 2012. That’s the nuance YOU are missing, General.
General Stuck
LOL, Tirade? I thought I was and am being most calm and matter of fact. Nope, you accused some of us of twisting ourselves into knots to explain what Obama was doing was okay. That is false, and I was just stating that fact.
We take the time to make arguments, in some detail. You can engage them in detail to refudiate them, but I take exception to those that make such allegations, who rarely write more than a sentence or two at a time to explain what they mean.
This is no tirade. Would you like a cookie? :-)
cat48
Obama had one redline drawn & he has not crossed yet. A longterm extension of DC till 2013. Regardless how, why, when where or who, that’s the red line he’s given. I’m watching for that & Reid/Pelosi also are holding this line.
So far, no one’s caved, capitulated, or whatever, from that.
General Stuck
Then Somebody needs to tell the voters that Obama is fucking up, because they are square in Obama’s camp, and all over the wingers for their antics.
Though I am certain, the nutroots will be greatly disappointed and predicting the end of the dem party. Per usual.
Corner Stone
@Jay B.: The Deal to extend the Bush Tax Cuts was a horrible mistake (if “mistake” it can be called). As some argued at the time, it set the table for the eventual destruction of all arguments that government could play a force for good in peoples’ lives.
The Moar You Know
Just finished it. I’m a lot less hopeful than when I started the book.
Ash Can
@Shawn in ShowMe:
Exactly. There’s no way they’ll go for any defense spending cuts. They’ll use that as the perfect excuse to insist that the plan exposes the nation to grave danger and call it a non-starter.
No matter what the Dems come up with, the Republicans will reject it. As long as they don’t get exactly what they want — and they won’t — they won’t say yes. And even if they were to get everything they wanted, they’d move the goalposts even further.
Elie
We are all arguing hypotheticals right now. We know only what has been talked about to the media or blog outlets. No one here, its safe to say, has been privy to what is actually happening real time among the real players. Its probably safe to say that even they don’t at any point in time, know the complete picture. This is a very very evolving process with many many many intermediatte outcomes.
eemom — I respect you a lot and Lord knows, you may eventually be right, but who can tell much of anything in terms of what was effective or not? We don’t have an end point. We have a series, not even consecutive, but from many different parties at the same time, of intermediatte outcomes and are trying to tell who is “winning” or “losiing” from these. Maybe you are right, maybe you are wrong.
Its difficult to sit and wait and not be frustrated that we are in this situation. I certainly share that and wish that there had been some other way to avoid this. The motivation of the Republicans has always been to end Obama’s Presidency and its been stated outright by the leader of the Senate, McConnel, and by Boehner. Its explicit and as long as that is their goal, and not achieving an end that is about resolving this issue, it really probably doesnt matter WHAT Obama does, did or will do. They want only one outcome and that is to bring his tenure to an end by any means necessary.
If you accept that last sentence, it really doesn’t matter about the other issues. I think that Obama’s maddening at times, slow poke, calm approach has, for what its worth, played well to the public. At the end of the day, I believe his hope has to be that the public knows its just about him and not the debt ceiling, and that he can then move to whatever is necessary to save the republic with less trepidation.
I am no expert in negotiation, government financial policy or politics. I am just being me and expressing what I see just as a regular person.
General Stuck
Obama has been locked in to the wingnut psyche with regard to their innate and compulsive protection of the rich. And offering up versions of things that have the same name, that they are normally for on principle, but are a poor people version of whatever, tax cuts from payroll taxes, “cuts” to medicare, etcc……
The one time he had to give in with extending all of the Bush tax cuts to get the lower income ones. But not much more than that, have they actually extracted from Obama in legislation, very much at all.
Though the impression is, even with some of those on his own side, that he is giving them everything, but when the smoke clears, like the recent CR to keep the government functioning in the spring, all those BIG cuts he supposedly gave the wingers, turned to be nothing but a pig in a poke.
I’ve seen nothing deviating from this MO, and why the wingers, this time, will not fall for it, but run the likely risk of being dangerous fools with the voters.
It must be driving them nuts.
And Yea Yea, I’m an Obama fanbois. Heard it all before.
Mnemosyne
Whatever made you think that the Republicans were normal people who would act rationally?
Or is this more “If only Obama had done X, Y or Z, the Republicans would have magically returned to sanity” bullshit from you?
FlipYrWhig
@ Jay B:
Yes, but this is America.
OzoneR
This is not a functional democracy, but i suppose that’s also Obama’s fault
RP
Right — I keep hearing that Obama shouldn’t have made any effort to negotiate with the GOP. I understand the sentiment, but how would a refusal to negotiate have changed the outcome in any way?
FlipYrWhig
Here’s the thing. I still want to split up these discussions along different lines. I think there’s a camp that essentially says, “I would like to see different policies being pursued, and I would prefer Obama to speak and act differently about major issues.” Then there’s another camp that essentially says, “Ideally I would like to see different policies being pursued, but I understand why that isn’t happening and why Obama speaks and acts the way he does.”
I still say that the principal effect of Obama’s having adopted different rhetoric is that a small group of people who define themselves as “left” would be slightly more encouraged. I don’t think it would yield different results in terms of voting, or policy, or different opinions in the broader public.
FlipYrWhig
@ RP : IMHO the only way it would have changed the outcome would be through a Rube Goldberg contraption — Obama refuses to negotiate, people respond to his tough talk and barrage their Republican Congresspeople with gripes and threats, Republican Congresspeople get nervous and peel away from their leadership, Republican leadership softens its stance, Obama gets more of what he wants. But I’ve said repeatedly, and I feel pretty strongly about this, that Republican Congresspeople don’t give a shit what their own voters want, because they are confident that they can rely on tribal loyalty to get through the next election whatever they do.
Just Some Fuckhead
Godddddamn Obama! if this means Stuck and eemom break up.
Brachiator
@Jay B:
Obama and the Democrats didn’t have a choice, and you clearly have no clue as to what other tax issues were involved here.
“Functional democracy run by normal people” is an interesting phrase, but meaningless.
@Corner Stone:
It may have been a mistake, but the Democrats allowed themselves to be pushed into a corner where they had to make a deal.
The interesting thing is that the GOP keeps playing the same card, buttressed by a denial that their brinksmanship might cause any problems. But their persistent goal is to force the Obama Administration to make spending cuts as part of any budget related issue.
Corner Stone
@Just Some Fuckhead:
She shoulda known better than to get between President Stuck and his stash of President Obama pr0n.
Didn’t she see him violently break up with his mancrush John Cole when Cole had the temerity to ring the bell at 90% fealty?
Corner Stone
@Brachiator:
Did they?
Ash Can
@General Stuck:
It wasn’t just the lower income ones, it was an extension of unemployment insurance benefits as well.
I agree, although it helps to have very little legislation reaching his desk at all, as has been the case with the 112th Congress. :)
Ash Can
@FlipYrWhig: Bullseye.
Mike Lamb
eemom @ 57…with regards to the 14th Amendment, could the Courts do anything to prevent it? If he relies on the 14th to resume borrowing, doesn’t any subsequent court case get mooted? I would guess that any scenario involving the 14th Amendment would have Obama giving a brief speech/presser invoking the 14th Amendment, followed by almost instantaneous requests to borrow funds (or however it happens procedurally), followed by right wing apoplexy and lawsuits being drafted. I would think the borrowing would happen more quickly than the lawsuit could get into court. So then what?
OzoneR
I think they would see it as mere pandering and dismiss it.
dpcap
It’s just a grand conspiracy to make gold prices skyrocket.
eemom
@ Mike Lamb
Good question. There are ways to get time-sensitive matters heard quickly, of course, but I agree none would be quick enough to stop an initial borrowing. The lawsuits wouldn’t be mooted, though, because the question of whether the President violated the law, and the attendant question of whether the law is unconstitutional, would still remain to be litigated after it’s a fait accompli. As far as what relief the courts could order if they ruled against him, they could enjoin any further borrowing. Who knows what else.
One thing’s for sure — it would be the biggest judicial circus in history, making the ACA lawsuits look like probate proceedings.
Brachiator
@Corner Stone:
RE: but the Democrats allowed themselves to be pushed into a corner where they had to make a deal.
Do you have any evidence to the contrary?
The Blue Dog Democrats wanted to punt on pushing forward any tax legislation until after the midterm elections. This was a dumb ass strategy, since many Blue Dogs ended up losing anyway. To use a baseball analogy, this was Strike One.
The big fantasy, still believed in the Village and elsewhere is that Obama could have easily let the Bush tax cuts expire. But once the Republicans gained control of the House, the Democrats could not get any new tax bill brought up which formally killed the Bush tax cuts and extended Obama tax credits. Strike Two.
As has happened almost every year for the past few years (including under Bush), the Congress left consideration of expiring tax provisions languish until December.
The biggies here were some expiring tax credits, alternative minimum tax relief, and Estate Tax provisions. This meant that if the Republicans held out and did nothing, even though the Bush tax cuts would expire, you would end up with a tax disaster. Millions of Americans would have seen an automatic tax increase in 2010, and any relief would have been retroactive, forcing people to file amended tax returns. The Democrats would never have been able to recover from this fiasco.
Strike Three.
The Republicans could easily “play deal or no deal,” since the only thing they care about is spending cuts and tax cuts for the rich.
Joel
Gold is on a ridiculous bubble right now. Compare its commodity price history to platinum, for example.
Cliff
He is arguing that a pre-emptive downgrade might not be a big deal…An actual default, however, would be a big problem (and would cause downgrades).
Ooooooooh, that makes a lot more sense.
Between DougJ’s description of Kthug’s post and eemom doubting Obama, I thought I was losing my fucking mind this morning.
cleek
@Mike Lamb:
i’m not sure investors would really want to buy bonds that weren’t issued under Congressional authority. seems like a pretty risky investment; if it turns out that Obama didn’t have the authority to issue that debt (ie. it goes to court and Obama loses), the investors would be stuck holding garbage. that’s not an attractive proposition. at the very least, investors would demand seriously high yields from such debt.
ruemara
Well, the Bush Tax Cut deal kept my and mine afloat for the past 8 months and will do so for a bit more. Not to join the vapid stupidity of OBAMA PRO/CON wars, but fuck all of y’all who whine about it. I got to live, my president took a bullet for my family and for many others who have been out of work forever. There’s a huge host of things I think he should be doing, but the blame on the tax cuts and the EU trade he made should land squarely on the feckless Congressional Dems of ’09 who wasted so much time and did not do a budget even with a majority in both Houses. Not that anyone whining about the tax cut deals gives a damn.
cleek
@ruemara:
it’s easier to blame a president for failing to make ponies from the politics he has to deal with than it is to keep track of the politics that the 535 other people involved in legislation have to deal with.
Slippy
According to the Professional Hysterical Left, the alternative is to be as instransigent and childish as the GOP. Because, that’s going to work out for them so well.
General Stuck
I only keep corner stone prOn, and fuck that chicken till it squeals, and make fuckhead watch, till it’s his turn.
Mike Lamb
Cleek–but here’s the thing–could the Court invalidate the bonds without itself violating the 14th Amendment? Would the Court take that step? I can’t see it, even recognizing how conservative the SCOTUS is.
cleek
@Mike Lamb:
seems to me that if a court decided the President doesn’t have the authority to issue bonds in the name of the US government, any such bonds would be invalid regardless of what the 14th amendment says. they wouldn’t have to be invalidated because they’d never be valid to begin with. and then he’d be impeached.
Brachiator
@ruemara:
Good point. While I am not happy with some of the deals made as part of the tax cut, the hard fact (which oddly Obama gets no credit for) is that the various credits and UI extension that were retained provided real, tangible benefits to millions of people.
Meanwhile, the supposed new Boehner plan is ridiculous with a dash of stupid.
Corner Stone
@Brachiator:
Yep, and we’re all gonna pay for that now.
There was absolutely no reason, zero, zilch, to tie UI to an extension of the Bush Tax Cuts.
But Obama did it anyway.
Corner Stone
@cleek: Shorter cleek:
“Wahhh!! Waaaahhh!!”
Corner Stone
@Brachiator: The Blue Dogs were done. Done.
Even a not elected House of Representatives person like me saw it, called it, screamed it and knew it.
Months before the Nov election it was obvious. I said so here again and again.
If the D leadership wanted to protect as much turf as possible they could have done pretty easily.
This wasn’t too opaque to anyone paying attention at the time.
Brachiator
@Corner Stone:
RE: While I am not happy with some of the deals made as part of the tax cut
I have no idea what you mean. Absolutely none at all. Obama didn’t tie it to the Bush Tax Cuts, except to the extent that all the tax and benefits issues got left until December.
There are a lot of people who you could be angry with. Obama’s only chance to kill the Bush Tax Cuts was with a tax plan that was pushed through Congress before the 2010 mid terms. But that didn’t happen.
The idea that Obama could have let the Bush Tax cuts expire is a lie that just won’t die.
And we can also see the other side of this, that the Republicans are tying spending cuts and tax cuts for the wealthy to almost every money or budget bill that comes out of the Congress.
The only way this will ever be even slowed down is if the Democrats can get a majority in the Congress agan. Maybe not even then.
I agree with your assessment on this. However, obviously the Democrats didn’t see it as clearly as you did. And apparently, protecting turf was so easy that they couldn’t see that one at all.
Duckest Fuckingway: Ask not for whom the Duck Fucks. . .
Truely, this is the best of all possible worlds.
/juicebagger
Corner Stone
@Brachiator:
Of course he did. Where did that idea originate? From the administration. I can find my links to that, where I was screaming about it if I need to.
Why didn’t the UI get put up by a D majority Congress and dare the fucking R’s to veto it?
There’s a reason that didn’t happen.
Corner Stone
@Brachiator:
Or maybe…
Brachiator
@Corner Stone:
RE: I have no idea what you mean. Absolutely none at all. Obama didn’t tie it to the Bush Tax Cuts,
OK, I see what you mean. But you still miss the larger point.
The potential expiration of the UI benefits, a number of other tax major provisions, and the extension of the Bush tax cuts all happened in December because initially the Democrats decided to punt on tax legislation before the mid term elections, and then could not advance any tax legislation after the Republicans regained the House.
Whether Obama fought for or gave up the UI extension did not matter in that ALL of the expiring tax items had to be worked on and could not be moved forward if the Republicans did not get an extension of the Bush tax cuts.
Corner Stone
@Brachiator: I’m not missing the point, that is the point. The Democrats as a legislative body didn’t take that vote so they could protect Blue Dogs, who were always doomed to get routed. We all knew it.
Then, President Obama in negotiations mysteriously tied two things together that had no business being joined.
Like now how the debt ceiling limit is joined to other topics for negotiation. For like the first time in US history. For no reason anyone has been able to articulate.