US debt ceiling

"Dictators are horrible. Unless, of course, it's *our* dictator"

---Guy McPherson

Analyst: Obama Will Raise The Debt Ceiling On His Own And Worry About The Legal Consequences Later

Business Insider,

23 September, 20-13

In the summer of 2011, some Democrats urged President Obama to simply raise the debt ceiling himself if Republicans were decidedly against passing legislation.

There was the “trillion dollar coin” idea, whereby the government mints itself out of trouble via an arcane bullion law.

Then there was the 14th Amendment option. Here, the government would have to take a modern interpretation on the Civil War-era amendment about the “validity of the public debt of the United States,” and surely face legal action.

Now as the two parties gear up for another debt ceiling bout, Greg Valliere at Potomac Research thinks Obama may be coming around to the idea of acting on his own. Valliere writes to clients:

Obama is not shy about using executive authority, and he surely has heard from Constitutional scholars who believe he has the authority to raise the debt ceiling on his own. (Bill Clinton urged Obama to take this approach in the summer of 2011.) Fearless forecast:
if Treasury is out of money in early November and a default looks possible, Obama will simply raise the debt ceiling. He’ll face instant litigation, but that wouldn’t be resolved for months.

It seems the president is not willing to negotiate at all for a raise in the debt ceiling, as he made clear to Speaker John Boehner in a phone call last week. We’ll see what happens.

Step Aside Trillion Dollar Coin, Here Comes The Trillion Dollar Bill

Zero Hedge,

23 September, 2013

With just over a week left until a potential government shutdown, especially since the House just passed a stopgap funding measure which included an Obamacare defunding measure and which is dead in the Senate, the issue of a government shutdown with no counterproposal on the table is suddenly concerning to investors, as can be seen in the following Bloomberg chart comparing articles mentioning "government shutdown" vs "debt ceiling."

However, it should be the other way around: while Congress may gamble with the debt ceiling until the 11th hour and 59th minute, as it knows it can always punt to Bernanke and "Mr Chair(wo)man will get to work", it will hardly jeopardize paying itself a salary for a terrific job well done.

So as we await for the inevitable announcement when the government will promptly resume paying itself, we are far more interested in how long it will take until the debt ceiling fight takes front and center space, and the now annual tradition launched by a handful of monetary misfits, namely the pitching of the idiotic platinum trollin' trillion dollar coin idea, even though the Fed and Treasury took an unprecedented step and publicly told said misfits to kill the idea before they lose any more of what little credibility they had left by filling the internet with their vacuous stupidity.

Sadly, since US fiscal and monetary policy en masse has become just that, vacuous stupidity, we wish to introduce our own piece of monetary ridiculousness: the trillion dollar bill.

It is not made out of platinum - in fact Charmin' one-ply will do - but the good news is that the Treasury would merely have to issue a trillion dollar bond to net out the Fed's balance sheet upon its monetization (and the last thing Congress has problems with is authorizing the spending ludicrous amount of money). After all, under the auspices of the Magic Money Tree theory of money, infinite government debt is simply a manifestation of infinite wealth for the private sector, and as such it is a win-win for everyone.

So without further ado, here is the solution to all of America's debt problems: the Trillion Dollar Bill.

No mid-Oct. paycheck for troops if government shuts down, lawmaker says

With one week to go before a potential partial government shutdown, a key Republican lawmaker is warning troops to be financially prepared for the possibility of not getting a mid-October paycheck.

Army Times,

23 September, 2013

Rep. C.W. “Bill” Young, R-Fla., chairman of the House defense appropriations subcommittee, warns that the troops’ morale and readiness will suffer even though the Defense Department does not shut down when its funding stops.

“All military personnel will continue to serve and accrue pay, but will not actually be paid until appropriations are available,” Young said. The mid-month payday would be the first in jeopardy.

Additionally, he said most travel and permanent change of station moves “would be delayed or canceled” and benefits for line-of-duty deaths also would be suspended.

Military hospitals and clinics will remain open but would scale back on operations, “impacting routine medical and dental procedures,” Young said. He did not specifically mention any impact on Tricare health insurance benefits, but in past government shutdowns, payments to medical providers were delayed but treatment was still available.

Maintenance for facilities and weapons would stop, Young said, and most defense and service civilian employees would be “furloughed until appropriations are available.”

“Readiness and morale of our armed forces will suffer,” he said. “The impact of a shutdown on the department and the military and civilian families — many of whom live paycheck to paycheck — is simply catastrophic.”

On Friday, the House of Representatives passed a 76-day funding bill that would keep the government running from Oct. 1, the start of fiscal 2014, until Dec. 15. Most government agencies, including the Defense Department, could continue operating at existing funding levels.

A bill to keep the government running is not unusual, but this measure, H.J. Res. 59, is different. It includes a section defunding the 2010 Affordable Care Act health care reform. The White House has warned that President Obama would veto the bill if this provision is included.

There is a second, equally controversial rider on the bill, the Full Faith and Credit Act, which details a priority list for paying bills if the government exceeds its $16.7 trillion debt limit. Creditors would be paid first, with military and federal civilian paychecks, disabled veterans’ checks, Medicare payments to doctors, school lunch programs and other government debts ranking lower.

The Senate is due to take up the short-term spending bill Monday, but there is a deadline of midnight Sept. 30 for enactment of a bill to avoid shutdown.

Rep. Hal Rogers, R-Ky., the House Appropriations Committee chairman, agreed with Young’s assessment that troops won’t get paid if the government runs out of money.

“A government shutdown is a political game in which everyone loses,” he said, calling the House-passed bill one that “simply keeps the lights on in our government.”