Boehner the weakest party leader in history

Originally posted by Sleepyguy
Yes, due to the debt, not the damned ceiling.

BS. Due to the fact that the politicians were willing to run up to the last minute with a (still) possible default. If default was possible NOW, it's possible in the future. Before the recent shenanigans, this was almost unthinkable.

Originally posted by Sleepyguy
Yes, due to the debt, not the damned ceiling.

No. Due to the inadequacy of the Republican proposal because they refuse to cut the military budget or increase taxes. And because the whole thing comes to another vote in December.

If it was the debt itself, the rating would have been lost already. Use your head.

Originally posted by Sleepyguy
Boehner's giving a barn burner speech on the floor right now. If he can just avoid crying and get the bill passed he may have redeemed himself.

If he would just get it passed so the Senate can reject it and then the Democrats with what's left of the sane wing of the Republicans can get to work on a real proposal, maybe something can be done.

No. Here's what Moody's said . . .

If the debt limit is raised again and a default avoided, the Aaa rating would likely be confirmed. However, the outlook assigned at that time to the government bond rating would very likely be changed to negative at the conclusion of the review unless substantial and credible agreement is achieved on a budget that includes long-term deficit reduction. To retain a stable outlook, such an agreement should include a deficit trajectory that leads to stabilization and then decline in the ratios of federal government debt to GDP and debt to revenue beginning within the next few years.

Increased taxation provides increased revenue.

Originally posted by Kunsoo
If he would just get it passed so the Senate can reject it and then the Democrats with what's left of the sane wing of the Republicans can get to work on a real proposal, maybe something can be done.

Yes Reid will probably table Boehner's bill even though his own bill has no better chance. So the Dems are economic suicide bombers as well, yes? Whatever Reid sends their way, I hope the house just attaches a BBA and sends it back.

Originally posted by Sleepyguy
Yes Reid will probably table Boehner's bill even though his own bill has no better chance. So the Dems are economic suicide bombers as well, yes? Whatever Reid sends their way, I hope the house just attaches a BBA and sends it back.

Actually, Reid's bill does have some chances in a coalition between house Democrats and sane Republicans (as few as there are).

Boehner's bill does not save the credit rating, and results in smaller cuts in spending. Reid's bill actually accomplishes the stated task (though it will still hurt the economy nearly as badly as Boehner's). What the crazies are holding out for is a balanced budget amendment.

Originally posted by Sleepyguy
No. Here's what Moody's said . . .

If the debt limit is raised again and a default avoided, the Aaa rating would likely be confirmed. However, the outlook assigned at that time to the government bond rating would very likely be changed to negative at the conclusion of the review unless substantial and credible agreement is achieved on a budget that ...[text shortened]... ederal government debt to GDP and debt to revenue beginning within the next few years.[/b]

Well, that's going to be hard to accomplish, because GDP is going to be negatively affected by spending cuts, as is revenue because the unemployment rate is going to skyrocket with either the Boehner or Reid bill.

Okay. It passed. Now the grown-ups can get some work done.

Originally posted by Kunsoo
Okay. It passed. Now the grown-ups can get some work done.

🙄

http://news.yahoo.com/vote-delayed-debt-bill-default-date-looms-010308473.html

190 Democrats (assuming the Black Caucus cooperates) and 30 reasonable Republicans can save our asses. All Boehner has to do is get out of the way.

Originally posted by Kunsoo
Well, that's going to be hard to accomplish, because GDP is going to be negatively affected by spending cuts, as is revenue because the unemployment rate is going to skyrocket with either the Boehner or Reid bill.

There was never any way to avoid that. Lower government spending leads to lower GDP, of course. Or was it your plan to continue spending 40% more than we make until we become Greek?

Originally posted by Sleepyguy
There was never any way to avoid that. Lower government spending leads to lower GDP, of course. Or was it your plan to continue spending 40% more than we make until we become Greek?

Make more by raising taxes...

Originally posted by no1marauder
BS. Due to the fact that the politicians were willing to run up to the last minute with a (still) possible default. If default was possible NOW, it's possible in the future. Before the recent shenanigans, this was almost unthinkable.

Agreed. But I’m not sure that the rating agencies would even be threatening a downgrade absent a combination of the current shenanigans, and their desire to redeem themselves for their utter failure with regard to the multi-tranched CDOs by “getting tough”, as they have in Europe (and, frankly, I don’t know why they should be trusted to get it right this time around). Further, absent the current shenanigans, the threat of a real downgrade by the markets would not be there—and wasn’t until quite recently. Any sign of a willingness to renege on any of the governments bills will, however, raise that threat level.

An article in last week’s Economist pointed out that investors (domestic and foreign) were still willing to acquire Treasury bonds (i.e., lend to the government), and Treasuries had not yet (as little as a week ago) lost their demand as a relatively safe security—any default, and they likely will.

“Whenever investors seek shelter, even from an American slowdown, they choose Treasuries, and thus the dollar. … American cannot wait forever to rein in its debt. It needs to lay out credible plans for medium-term deficit reduction. But it has more leeway to delay cuts [that would be fiscally damaging in the near term] than most countries thanks to continued demand for its debt. Another year of recovery will help confidence more than a premature swing of the fiscal axe.” (The Economist, July 16th 2011; brackets and italics mine.)

Further, this “let’s make sure we revisit this whole thing in six months” idea will only continue uncertainty, in the face of which businesses are still unlikely to engage capital in much long-term real capital investment—a further drag on the economy and employment.

All the partisans of “austerity now” and reneging on the government’s accounts payable, seem to think that they are immune from the impact of cuts—e.g., that their retirement savings, ability to get a car loan, etc. (or even keep their job in the face of the austerity wave). My prediction (which I hope does not get an empirical test) is that the people of Main Street will suffer from these “shenanigans” more than the people of Wall Street (again). The best thing would be to do away with this charade of the debt ceiling altogether; second best is to just raise it without prejudice; third best is, sadly, probably a compromise based on something like the Reid bill. But I also share your pessimism.