Here’s an exchange from last Friday’s Chris Hayes “All In” MSNBC show among Chris, Robert Costa of the National Review, and Ezra Klein of The Washington Post’s “Wonkblog.” In what follows I’ve slightly edited the MSNBC transcript to get rid of obvious verbal deviations but haven’t corrected for punctuation.
This post by Lynn Parramore makes the point that the next crash is coming and probably will be blamed on the Democrats. It’s a great point, but it needs to be pursued further.
What if we have another Republican sweep in 2014, like 2010, but worse? Then we’re going to have more policies that increase inequality. Even less regulation, causing even more domination of our politics by corporations and the financial sector.
We’ll have more military spending and more wars, along with more shredding and privatization of the social safety net. We’ll have even less environmental regulation, and even more global warming; more drill baby drill, and less and less of public education. At the State level, we’ll have more of the war on women, blacks, seniors, and hispanics; more corruption from corporations and the rich giving “gifts” to officeholders; more voter suppression, even more police brutality and denial of first amendment rights, more religion in our schools accompanied by more guns everywhere, and more Scalias, Alitos, Thomases, and Robertses subjugating everyone to corporations.
It is so because we’ve yet to go through the budget or continuing resolution-passing activities coming up in September, and also have yet to go through the debt ceiling conflict to come in October. Mainstream Washington commentators believe John Boehner is determined to avoid a government shutdown crisis of the budget/CR conflict and that one or the other will be passed before October 1. Assuming they’re right, that still leaves the matter of the debt ceiling “crisis,” which the same commentators are saying will happen because Boehner has to promise his tea party caucus a chance to coerce the Administration, if he’s going to get their acquiescence on the budget/government shutdown matter.
With the end of the Summer break, now comes the return of the debt limit dance. From Treasury Secretary Jacob Lew’s letter to John Boehner:
“Congress should act as soon as possible to protect America’s good credit by extending normal borrowing authority well before any risk of default becomes imminent.
“Based on our latest estimates extraordinary measures are projected to be exhausted in the middle of October. At that point, the United States will have reached the limit of its borrowing authority, and Treasury would be left to fund the government with only the cash we have on hand on any given day, The cash balance at that time is currently forecasted to be approximately $50 billion.
“. . . A cash balance of approximately $50 Billion would be insufficient to cover net expenditures for an extended period of time. And, on certain days, net expenditures could exceed such a cash balance.
“. . . Protecting the full faith and credit of the United States is the responsibility of Congress because only Congress can extend the nation’s borrowing authority . . .“
OK. So, only Congress can extend the nation’s borrowing authority. But it doesn’t follow from that fact that protecting the full faith and credit of the United States is solely the responsibility of Congress.
The public debt is the outstanding U.S. Treasury securities (USTS). It includes both marketable (T-bills, T-notes, T-bonds, TIPSs, and a few others) and non-marketable securities (United States notes, Gold certificates, U.S. savings bonds, Treasury demand deposits issued to States and Local Gov., all sorts of government account series securities held by Deposit Funds). What are the means to reduce the public debt? Continue reading →