For anyone who is keeping track: House and Senate final sessions before recess are on October 13. The recess lasts from October 14 until October 18. Debt ceiling will be breached on October 17. Therefore, October 13 is a key day for Congress to pass legislation to extend the debt ceiling and possibly end the ongoing government shutdown.
However, according to the Treasury, the US has enough emergency cash reserves to pay its debts until the end of October. If Congress anchors on this expectation, they might leave the debt ceiling issue unresolved before the recess, only to return for last minute negotiations in the final two weeks of October. By then, we would face magnified risks of permanent harm to the US economy and to international confidence in the country.
I was thinking last night how nice it would be if congress got together and said, “you know, let’s go ahead and raise the debt ceiling without a big fight to show the people we’re not insane.” Imagine what stocks would do if they passed it today without a fight.
Just throw us a bone congress. Show us you’re not completely inept.
To the best of my knowledge, there is nothing that prevents them from not taking their recess.
In any case, if I were a member of the house I would introduce legislation that reopens the government and increases the debt ceiling to $17.4 trillion (I believe that covers current debt and the projected deficit for fiscal 2014), but would also require a balanced budget for fiscal 2015 and thereafter. If fiscal 2015 is too soon to eliminate $675 billion in deficit spending, I’d be open to a compromise that allows for 1/2 of that in 2015 but requires a balanced budget in 2016 and a $100 billion surplus in 2017 and thereafter until net debt is reduced to 35% of GDP (that’s the level in Canada - dems love the Canadian healthcare system so much, they should support their fiscal responsibility as well). The surpluses need to be real surpluses too, not the faux Clinton surpluses where we just borrow from social security and spend it now.
I doubt I’d get much support from either side, but that’s my common sense answer to the problem.
The bad thing it affects the rest of the world. Had this situation happened in Congo, is one thing. With the US it is a different thing. The whole world is now watching how the two idiots are afraid to make the first step and harm their ‘pride’.
From the start, Mr Obama has been a clown to anyone in the World, apart from the Americans voting for him, now he re-confirmed his reputation.