That Pesky Debt Ceiling

122
Thu, Oct 17, 2013 - 10:54am

Little noticed in the coverage thus far is a clause/idea that likely eliminates the "debt ceiling" going forward.

Buried in the language of last night's bill was, in fact, the change giving Milhous (and likely every future prez) the ability to VETO any bill NOT authorizing a debt ceiling increase. This VETO would kick the measure back to Congress and, if Congress fails to muster the 2/3 majority to override said VETO, the debt ceiling gets raised to wherever the current president wants it. Pretty slick, huh? IF THIS PROVISION IS INCLUDED IN ALL OTHER FUTURE AGREEMENTS (and why wouldn't it be now that it has happened once?), you can say goodbye once and for all to that whole, pesky debt ceiling stuff. Print and spend ad infinitum.

The language for this can be found in this news link: https://www.politico.com/story/2013/10/government-shutdown-debt-ceiling-default-update-98390.html as well as this piece of analysis discovered earlier by Turdite "tread_w_care":

Nails in the coffin, boys and girls.
Reason Mag links through to the .pdf of the bill here: https://reason.com/blog/2013/10/16/house-passes-spending-bill-partial-gover
My read on this is they did give Obama the authority to suspend the debt ceiling, period. Pres. can send over a 'certification' to Congress suspending the debt ceiling, and the CONgress has 14 days to respond, either overturning it on vote (majority required is not clear), or . . . not.
The subsection is entitled "Default Prevention Act of 2013" - https://docs.house.gov/billsthisweek/20131014/BILLS-113hr2775-SAmdt-SCND...

(Perhaps our Attorney General, CaL, might be able to review this over the weekend. I'd love to get his opinion.)

Anyway, now that this language has been inserted into the current "compromise", it is highly likely that it will be inserted into every future "compromise". Say goodbye to "The Debt Ceiling", say hello once and for all to Debt/Deficit/QE to Infinity.

TF

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  122 Comments

senseiam
Oct 17, 2013 - 10:59am

Well

Not really at all surprising.

The Doc
Oct 17, 2013 - 11:00am

Latest Willie

Jim Willie: Gold Resurrection from Financial Disaster

The central bank concept is the Matrix in embodiment, but the Eastern nations led by BRICS and G-20 have a key to unlock the USDollar prison. A quick look at the Australian banking system reveals four global banks who own outsized portions, their reach extending to the largest gold producer in Oz as well. Incest is best. The fast decline in Money Velocity is the most convincing proof of the failure of monetary policy. It does not provide stimulus, but rather capital destruction. The foreign dumping of USTreasury Bonds actually accelerated this past summer, amidst the Taper Talk trial balloon offered by the hapless desperate Bernanke Fed. His legacy will be one of disproving his own PhD Thesis, since liquidity in torrents does not repair insolvency, and no traction comes to soaked ground.
A grand game of shuffling gold bars has begun, actually accelerated in a final phase. The big bullion banks wish to obscure that they are almost bone dry of gold in inventory. The COMEX will shut down from no gold, rather than criminal prosecution in a land where crime rules and treason is the syndicate bylaw.
The climax event will be the return of the Gold Trade Standard, discarding the USTreasury Bonds, converting them to Gold bullion. The early adopters and those who follow the viable solution will be the winners. Those who cling to their USTBonds and their other paper securities in indentured servitude will be the losers.

https://www.silverdoctors.com/jim-willie-gold-resurrection-from-financia...

Hammer
Oct 17, 2013 - 11:04am

Repost from last

Repost from last thread.

India's central bank governor, Raghuram Rajan, said India has a reserve of $280 billion which is 15% of its GDP. "The country can pay three-fourth of its debt from its Forex reserves," First Post cites him saying.

"We bought over $60 billion dollar gold last year. $60 billion accounts for three-fourth of our current account deficit," he said. "If the push comes to shove, we can pay the world in gold."

Rajan also said that India will not approach the IMF for financing in the next five years, adding that countries only go the IMF when they are "desperate."


Read more: https://www.businessinsider.com/rajan-india-will-sell-gold-to-pay-debt-2013-10#ixzz2hzY1C36q
TreeTop Dweller
Oct 17, 2013 - 11:05am

Nice Catch!

Thanks for pointing that out! All roads lead to print and print again!

Nigel Black
Oct 17, 2013 - 11:07am

IMF formally proposes wealth confiscation.

The International Monetary Fund Lays The Groundwork For Global Wealth Confiscation

The International Monetary Fund (IMF) quietly dropped a bomb in its October Fiscal Monitor Report. Titled “Taxing Times,” the report paints a dire picture for advanced economies with high debts that fail to aggressively “mobilize domestic revenue.” It goes on to build a case for drastic measures and recommends a series of escalating income and consumption tax increases culminating in the direct confiscation of assets.

Yes, you read that right. But don’t take it from me. The report itself says:

“The sharp deterioration of the public finances in many countries has revived interest in a “capital levy”— a one-off tax on private wealth—as an exceptional measure to restore debt sustainability. The appeal is that such a tax, if it is implemented before avoidance is possible and there is a belief that it will never be repeated, does not distort behavior (and may be seen by some as fair). … The conditions for success are strong, but also need to be weighed against the risks of the alternatives, which include repudiating public debt or inflating it away. … The tax rates needed to bring down public debt to precrisis levels, moreover, are sizable: reducing debt ratios to end-2007 levels would require (for a sample of 15 euro area countries) a tax rate of about 10 percent on households with positive net wealth. (page 49)”

Note three takeaways. First, IMF economists know there are not enough rich people to fund today’s governments even if 100 percent of the assets of the 1 percent were expropriated. That means that all households with positive net wealth—everyone with retirement savings or home equity—would have their assets plundered under the IMF’s formulation.

Second, such a repudiation of private property will not pay off Western governments’ debts or fund budgets going forward. It will merely “restore debt sustainability,” allowing free-spending sovereigns to keep tapping the bond markets until the next crisis comes along—for which stronger measures will be required, of course.

Third, should politicians fail to muster the courage to engage in this kind of wholesale robbery, the only alternative scenario the IMF posits is public debt repudiation and hyperinflation. Structural reform proposals for the Ponzi-scheme entitlement programs that are bankrupting us are nowhere to be seen.

If ever there were a roadmap for prompting massive capital flight and emigration of productive citizens toward capitalism’s nascent frontiers in Asia, this is it.

https://www.forbes.com/sites/billfrezza/2013/10/15/the-international-monetary-fund-lays-the-groundwork-for-global-wealth-confiscation/

CaribSurfKing
Oct 17, 2013 - 11:13am
opticsguy
Oct 17, 2013 - 11:16am

so is this the Day the Dollar Died?

The three men I admire most,

Blankfien, Dimon, and Bill Gross,

Took the Gulfstream to Davos,

The day the dollar died.

Note: paraphrased from Minyanville on TARP day 5 years ago (the first time we thought the dollar died)

¤
Oct 17, 2013 - 11:22am

Pseudo- Debt Ceiling

Back in Nov 2012 when Geithner first mentioned doing away with the debt ceiling you knew some variation of it would eventually happening. I remember catching some flak for suggesting some variation of this would indeed happen.

Here it is.

If Obama or any other President gets final say on the debt ceiling because of Congressional reticence then what you'll have is a faux debt ceiling that will continually get raised so that the Pol.'s up for election can wash their hands of it.

The President becoming the decision maker on the debt ceiling is politically expedient and convenient to say the least.

opticsguy
Oct 17, 2013 - 11:30am

That's awesome

Don McLean would be proud.

Mr. Fix
Oct 17, 2013 - 11:39am

I just watched the “liar in chief” give his victory speech.

Talk about spiking the football! Apparently, we were having a robust economy until the Republican brinksmanship drove it off a cliff.

according to the scumbag who lives in the White House, there was a lot of damage done to our economy in the past two weeks, but the impact will not be apparent immediately.

He continues to inform us that all that is wrong with the world is the direct result of conservatives in the house,

and without them, we would be the most prosperous nation in the world with unparalleled growth.

It's a freaking shame this country does not have a press corps anymore,

in a speech that contained one lie after another, it will now be reported as gospel.

So you heard it here first, when the economy falls off the cliff next month, it will all be because of the tea party.

Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

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Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

Key Economic Events Week of 10/7

10/8 8:30 ET Producer Price Index
10/9 10:00 ET Job Openings
10/9 10:00 ET Wholesale Inventories
10/9 2:00 ET September FOMC minutes
10/10 8:30 ET Consumer Price Index
10/11 10:00 ET Consumer Sentiment

Key Economic Events Week of 9/30

9/30 9:45 ET Chicago PMI
10/1 9:45 ET Markit Manu PMI
10/1 10:00 ET ISM Manu PMI
10/1 10:00 ET Construction Spending
10/2 China Golden Week Begins
10/2 8:15 ET ADP jobs report
10/3 9:45 ET Markit Service PMI
10/3 10:00 ET ISM Service PMI
10/3 10:00 ET Factory Orders
10/4 8:30 ET BLSBS
10/4 8:30 ET US Trade Deficit

Key Economic Events Week of 9/23

9/23 9:45 ET Markit flash PMIs
9/24 10:00 ET Consumer Confidence
9/26 8:30 ET Q2 GDP third guess
9/27 8:30 ET Durable Goods
9/27 8:30 ET Pers Inc and Cons Spend
9/27 8:30 ET Core Inflation

Key Economic Events Week of 9/16

9/17 9:15 ET Cap Ute & Ind Prod
9/18 8:30 ET Housing Starts & Bldg Perm.
9/18 2:00 ET Fedlines
9/18 2:30 ET CGP presser
9/19 8:30 ET Philly Fed
9/19 10:00 ET Existing Home Sales

Key Economic Events Week of 9/9

9/10 10:00 ET Job openings
9/11 8:30 ET PPI
9/11 10:00 ET Wholesale Inv.
9/12 8:30 ET CPI
9/13 8:30 ET Retail Sales
9/13 10:00 ET Consumer Sentiment
9/13 10:00 ET Business Inv.

Key Economic Events Week of 9/3

9/3 9:45 ET Markit Manu PMI
9/3 10:00 ET ISM Manu PMI
9/3 10:00 ET Construction Spending
9/4 8:30 ET Foreign Trade Deficit
9/5 9:45 ET Markit Svc PMI
9/5 10:00 ET ISM Svc PMI
9/5 10:00 ET Factory Orders
9/6 8:30 ET BLSBS

Key Economic Events Week of 8/26

8/26 8:30 ET Durable Goods
8/27 9:00 ET Case-Shiller Home Price Idx
8/27 10:00 ET Consumer Confidence
8/29 8:30 ET Q2 GDP 2nd guess
8/29 8:30 ET Advance Trade in Goods
8/30 8:30 ET Pers. Inc. and Cons. Spend.
8/30 8:30 ET Core Inflation
8/30 9:45 ET Chicago PMI

Key Economic Events Week of 8/19

8/21 10:00 ET Existing home sales
8/21 2:00 ET July FOMC minutes
8/22 9:45 ET Markit Manu and Svc PMIs
8/22 Jackson Holedown begins
8/23 10:00 ET Chief Goon Powell speaks

Key Economic Events Week of 8/12

8/13 8:30 ET Consumer Price Index
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Labor Costs
8/14 8:30 ET Philly Fed
8/14 9:15 ET Ind Prod and Cap Ute
8/14 10:00 ET Business Inventories
8/15 8:30 ET Housing Starts & Bldg Permits

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