Oh, And One More Thing

The price tag for Teahadism on the debt (and John Boehner’s week of kabuki in the House)?

$1.7 billion in extra interest $17 million to be paid on this week’s auctioned T-bills, at rates inflated over the prior weeks due to the feral craziness of our friends on the right.

Update:  Ooops.  The CNN article at the link has now been corrected to reveal a number much more plausible, on moment’s reflection.  $17 million is still real money — three years worth of a quality middle reliever or so — and I’d much rather see it spent on something useful, like, for instance an 17% or so boost in the FAA’s research budget on aviation safety. But it’s a far cry from the kind of sum required to purchase both the New England Patriots and Manchester United.  My colleague Alan Lightman emphasizes over and over again the need to put any number one encounters to the smell test.  I did not on this one.

You can pick the program of choice, but to take an federal expenditure I particularly value, that sum would amount to a 25 .25% increase in NSF funding over 2010 levels, now forever forgone.

Thanks, clowns.

Image:  Francisco de Goya, The dream sleep of reason produces monsters.  1799 (Per Becca’s suggestion here.)

43 replies
  1. 1
    KG says:

    yes, yes, but what’s a few extra billion dollars in interest when you have a presidency to destroy and an election to win?

  2. 2
    Lee Hartmann says:

    The perfect illustration.

  3. 3
    Stillwater says:

    You have to increase the debt to destroy it. It’s an old Sun-tzu principle.

  4. 4
    Zifnab says:

    It amazes me that the markets took the political madness so stoically. August 1st rolled around and it didn’t even look like people were hedging their bets.

    That we got away with a $1.7 billion slap on the wrist makes me think we made it out easy.

  5. 5
    Mike Goetz says:

    Here’s a conservative’s take on the deal, with which I agree:

    “All you need to know is this: in a year of supposed Tea Party convulsions, there are no cuts to this year’s budget. No cuts. It’s all future tense. Right now Congress, the president, and the elitocrats are mopping their brows, counting the wounded, and congratulating themselves on an adult moment. All fake, I’m afraid.

    Any politician who comes with a ten-year plan to make cuts, with no cuts now–come on, it’s bogus. We all know it, don’t we?”

    Unfortunately, no, we don’t. We are using it as yet another excuse to floridly lose our shit.

    Nobody even seems to notice that the Demos hold all the hostages now.

  6. 6
    Rick Taylor says:

    And McConnell has helpfully sworn that they will pull this stunt again the next time the debt ceiling comes up for a vote, publicly telling the world that maybe you want to think twice about investing in T-bills. You know, I remember when Republicans were supposedly the party of patriots.

  7. 7
    Butch says:

    I think the better translation would be “sleep of reason,” as in “lack of reason.”

  8. 8
    slag says:

    @Butch: Gotta agree with that.

  9. 9

    Our situation results almost entirely from three factors.

    One, the ruling class provides funds for election campaigns that dwarfs all other sources of funds.

    Two, right-wing voters turn out for every election and they only vote for candidates who respond to their demands. The remaining, non-right-wing voters are inconsistent both with respect to turnout and whether the candidate completely matches their issue positions.

    Three, the corporate press/media promotes Republicans and Republican policies while pretty much ignoring anything remotely progressive.

    It is hard for me to figure how even one of these factors can be changed by ordinary people. I cannot even imagine how to change all three.

  10. 10
    Mike Goetz says:

    The Democrats are on the point of cutting a trillion bucks out of defense and the Republicans can’t say boo about it because they all voted for it! Their worst-case scenario on taxes is total expiry of the Bush tax cuts!

    Nobody sees the total lunch-eating Obama performed here?

  11. 11

    Senate getting ready to vote on the now-infamous bill.


  12. 12
    Davis X. Machina says:

    $1.7 billion in extra interest to be paid on this week’s auctioned T-bills,

    I’m pretty sure this is just evidence that we could have gone into default for a couple weeks without any dire consequences, and that whatever consequences there might have been, they would have been worth it, considering the message we would have sent to the GOP.

    I haven’t got the details worked out, but I’m sure I’ll come up with something.

  13. 13
    kindness says:

    @James E. Powell: The guillotine worked for the French….

  14. 14
    ppcli says:

    @Butch: Or perhaps “unreasoning monsters produce monsters.”

  15. 15

    I think that what McConnell said was just an effort to assure the Republicans that they actually won something.

    This bill seems to be designs to go around congress as much as possible. I do have concerns about that from a constitutional point of view but I do think that it makes McConnell’s threat less impressive.

  16. 16
    Doug Kahn says:

    $1.7 billion in extra interest compared to what? Compared to the unusually low rates on 3- and 6-month bills sold at the end of June, when the Greek debt drama was driving even more investors to safety in U.S. debt instruments. The auctions had been unusually over-subscribed for at least a month (because of the Greek crisis) and lower rates on all of our debt instruments saved us a lot of money, far more than this $1.7 billion.

    You can look at the reports of the auctions of our debt instruments here:

  17. 17
    Mino says:

    I could be totally off on this but I think SS is not running a surplus right now because of the lost income from unemployed Americans. SS surplus is used to buy T-bills. With SS out of the market, wouldn’t you expect less demand to lead to higher interest?
    Not to mention the fact that all the world sees who is running things here now and it wouldn’t tend to make anyone a little worried about our stability, financial and political.

  18. 18
    ppcli says:

    @James E. Powell: And don’t forget 4) The Supreme Court is in the bag to the point where any government effort (at either the federal or state level) to restrict the impact of 1) or 3) will be ruled unconstitutional. (I’m still astonished at the ruling stating that if you are spending a ton of money stating a message, then giving money to someone expressing a view opposed to yours is a violation of *your* free speech. Especially in the case where “you” are a corporate entity, not a person.)

  19. 19
    joeyess says:

    You know, there comes a time when you just have to admit that you’ve been lied to. I don’t know how many of you appreciate Matt Taibbi — I know I do and suspect many of you do as well — He now has a piece up at Rolling Stone that unfortunately, in my opinion, makes a boatload of sense and cannot be dismissed with a wave of the hand.

    The Democrats aren’t failing to stand up to Republicans and failing to enact sensible reforms that benefit the middle class because they genuinely believe there’s political hay to be made moving to the right. They’re doing it because they do not represent any actual voters. I know I’ve said this before, but they are not a progressive political party, not even secretly, deep inside. They just play one on television.
    For evidence, all you have to do is look at this latest fiasco.
    The Republicans in this debt debate fought like wolves or alley thugs, biting and scratching and using blades and rocks and shards of glass and every weapon they could reach.
    The Democrats, despite sitting in the White House, the most awesome repository of political power on the planet, didn’t fight at all. They made a show of a tussle for a good long time — as fixed fights go, you don’t see many that last into the 11th and 12th rounds, like this one did — but at the final hour, they let out a whimper and took a dive.
    We probably need to start wondering why this keeps happening. Also, this: if the Democrats suck so bad at political combat, then how come they continue to be rewarded with such massive quantities of campaign contributions? When the final tally comes in for the 2012 presidential race, who among us wouldn’t bet that Barack Obama is going to beat his Republican opponent in the fundraising column very handily? At the very least, he won’t be out-funded, I can almost guarantee that.

    I don’t know about you, but that last bit is a very revealing tell. This feels almost like the Washington Generals Vs. The Harlem Globetrotters.

    We win one once in a great while but the show is really about clowning the Democratic Party on the floor in every arena.

  20. 20
    Montysano says:

    @Mike Goetz:

    Nobody even seems to notice that the Demos hold all the hostages now.

    I noticed. Boehner finally caved when the corner-paint was lapping at his Gucci loafers.

  21. 21
    Mark says:

    I’ve never had cause to call my congresswoman before (Jackie Speier, CA-12; an amazing woman) but I can’t believe she voted for the debt ceiling bill. A pleasant intern answered on the first ring and told me she was tracking calls for and against, and took my name and address in order to send me a form letter.

  22. 22
    Doug Kahn says:

    @Mino: The SS Trust Fund doesn’t participate in the Treasury debt auctions; it buys a special instrument which pays an average of a range of US Treasury Debt. So no, it hasn’t lessened demand for the short-term bills.

  23. 23
    Loneoak says:

    FWIW, Josh Marshall is walking back the $1.7B number.

  24. 24
    gene108 says:


    Yeah, Democrats are just corporate whores. They hate liberals and love to punch hippies and ignore what Americans really want.

    That’s why they kept pushing for achieving universal health care, because no one wanted it.

    I mean look at the backlash it caused in 1994 and 2010.

    They should’ve just let the status quo on health care remain in place.

  25. 25
    Nutella says:

    An interesting discussion about the debt deal here.

    Greenwald haters please note that the discussion was sparked by a Greenwald piece but it’s not by or about GG.

  26. 26
    kindness says:

    Is the fight fixed? The DLC types would like to think as much but they have less power (and votes) than they believe they have. I think it’s more

    1) Democrats seem to prefer to make ‘their own name’ to distinguish themselves from the pack. Sadly that means the long knives come out (to other Democrats).

    2) Republican rules which designate committee assignments on ‘secret’ ballot enforce hard liners, especially when compared to Democratic senority assignments.

    3) The MSM’s willingness to knowingly be lied to their faces and not call out the liar. Again, sadly this makes most Americans dumber than they really are.

    What’ll it take to change this (besides a revolution or a bunch of assasinations)? Nothing I want to see happen but I’m afraid too many on the other side would like nothing more than to start a shooting civil war to clean the playing field. I don’t like that too much as that would mean me.

  27. 27
    Belafon (formerly anonevent) says:

    @joeyess: Actually, watch me. He’s paying attention to what’s in his head rather than what’s going on in the world. You know, like the other party that controls the House. And the fact that the President doesn’t write laws.

  28. 28
    Legalize says:

    @Rick Taylor:
    Which is reason # eleventy billion that “progressives” need to get Obama a better Congress in 2012. We can do it easily if we don’t pout and stay home this time.

  29. 29
    Poopyman says:

    @Zifnab: Just FYI, the Dow is about to break the 12,000 floor. I’m not saying this is due solely to the debt “crisis” of course. There are a lot of things weighing on investors these days. Try not to look at the slow train wreck in Europe, for example. Still, there is a sense that things are falling apart, the center cannot hold ….

    ETA – And now I see the next post by Cole. Damn it! (Shakes fist.)

  30. 30
    Legalize says:

    @Mike Goetz:
    I’m coming around to this view. But the desired result presupposes that the Dems won’t cave on the Bush tax cuts before the election. All the Dems have to do is *nothing* to “trigger” the lunch-eating.

  31. 31
    NonyNony says:


    Just FYI, the Dow is about to break the 12,000 floor. I’m not saying this is due solely to the debt “crisis” of course. There are a lot of things weighing on investors these days.

    Trying to figure out what motivates investors is a mugs game, and stock market journalism is mostly crap where they throw a bunch of shit at the wall to try to explain what’s going on.

    That caveat under my belt – apparently the Commerce Department released a report today saying that Consumer Spending was lower than expected in June. THAT’S the kind of thing that starts kicking off the automated trading programs, which in turn freaks out the day traders, which then leads to volatility.

    We’ll see if it stays below 12,000 – but if money is fleeing the stock market where is it going? Typically it goes into the bond market. But if the stooopid over the last month is causing the stock market volatility, you’d think the bond market would be worse.

    I maintain, though, that it isn’t the stooopid over the last month that is causing these problems. That’s as sideshow – the problem is austerity worldwide. And things aren’t going to change until some massive government tax-and-spending starts happening. Which probably means that a World War III scenario has to kick in given how stupid global politics seems to be about attempting to stimulate economies.

  32. 32
    arthur says:

    The linked Article was off by a magnitude of 100, and was just corrected. The actual cost by their calculation method was $17 million, not $1.7 billion.

  33. 33
    Felanius Kootea says:

    @Nutella: Thanks. I like Alex Gourevitch’s take on this, which I found through your link.

  34. 34
    Chris says:


    I could be totally off on this but I think SS is not running a surplus right now because of the lost income from unemployed Americans. SS surplus is used to buy T-bills. With SS out of the market, wouldn’t you expect less demand to lead to higher interest?

    Yes—but the surplus was quite small, in relative terms, in the last however many years anyway, so it only represents a tiny part of demand for Treasuries.

    Demand is (still) quite strong anyway. In a liquidity trap, people are willing to buy “safe” vehicles even at negative returns (as is the case today on 5-year TIPS).

  35. 35
    Tom Levenson says:

    @arthur: Yup. Fixt. See above.

  36. 36
    Perspecticus says:

    “$17 million is still real money—three years worth of a quality middle reliever or so—and I’d much rather see it spent on something useful, like, for instance an 17% or so boost in the FAA’s research budget on aviation safety.”

    Or, at the very least, a quality middle reliever.

  37. 37
    TG Chicago says:

    Feeling a touch of gastritis, Mr. Levenson?

  38. 38
    Duane says:

    D’oh………Mcardled……… sucks when that happens…

  39. 39
    fbihop says:

    No such thing as a quality middle reliever. Giving a three-year contract to a reliever is pretty dumb as the Dodgers have learned with Matt Guerrier.

  40. 40
    4tehlulz says:

    This post needs more strike.

  41. 41
    Tom Levenson says:

    @TG Chicago: Nope. I screw up; acknowledge it, and try to remember to use both fingers and toes to count next time.

  42. 42
    bartkid says:

    I always had a more Jungian view of “The sleep of reason produces monsters”.

    When I hear that phrase, I still think about how a person who portrays himself as so rationale and clear-headed has the most horrendous id.

    As CGJ put it, “Everyone carries a shadow, and the less it is embodied in the individual’s conscious life, the blacker and denser it is.”

    Somehow, when I see or read “The sleep of reason produces monsters”, through my mind’s ear, I always hear Bowie sing of “The Supermen”, “Nightmare dreams no mortal mind could hold“.

  43. 43
    D-Chance. says:

    Stick to old cartoons; your math sucks.

    Or should we just call you “Megan”, Mr McLevenson?

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