From 2011 to 2013, Americans were up in arms over the debt ceiling. The Treasury was statutorily unable to borrow any more money to pay for things Congress has already bought. Republican brinksmanship over what was normally considered a piece of housekeeping legislation led to US credit being downgraded. They were demanding policy concessions, wipeouts of program funds and other draconian cuts before approving anything.
If we reach a debt cap without any relief, the Treasury can take “extraordinary measures” to keep the government solvent and/or open. They can suspend statutory “investment” into certain pension or other funds in order to meet day-to-day operating costs. But that is merely a temporary stop-gap, buying you months, only.
The same problem raised its ugly head in 2015, but through a deal executed by Weeper of the House John Boehner and President Obama, the debt ceiling was suspended without any cap until a future date, at which point a calculated ceiling would be reinstated.
That future date, March 16, 2017, is upon us in 5 weeks.
The next day, the ceiling will be reset to cover all of the debt issued up until that time. That new ceiling is estimated to be $20.1 trillion. At that point, any new spending will not be covered by the ceiling. Experts estimate that extraordinary measures will keep us afloat until mid-summer, and then the United States of America will default.
Da Guy ostensibly in charge of all this made headlines last year by saying he would renegotiate the debts rather than raise the ceiling. By which he means renege on the debts and get the debtors to accept partial payments, which technically is what bankruptcy does. He vaguely walked it back when professionals pointed out he was talking out his ascot. Like all his vague walkbacks, he’s a little confused on what he believes, but he still thinks he’s right.
Toward that end, he has nominated for Director of the Office of Management and Budget (OMB) a 3-term backbench Tea Bagger from South Carolina who denies that the US can default, and the ceiling is all smoke and mirrors; Former Rep. Mick Mulvaney (R-Arson Hole, SC) wants to burn it all down:
MULVANEY: It depends, if we don’t make structural changes, if we don’t actually send the message to the markets, to the people to businesses that we’re going to be fiscally responsible then yeah I won’t vote to raise the debt ceiling I have no difficulty in doing that. I think it’s important that that message does get out and if that’s the opportunity we have to force a discussion on that issue then I say we do that.
Dat Guy’s nominee for Treasury Secretary, however, the guy who has to PAY for all these shenanigans, is Steve Mnuchin, a hedge fund and bank predator dude who, for all his corporate plundering, recognizes that most of his holdings won’t be worth a plugged nickel if T-bills, -notes and -bonds collapse. He wants this debt ceiling thing taken care of immediately, if not sooner. Suspend the ceiling or raise it, he doesn’t care which, so long as he’s not responsible for a global bonfire of the Treasuries.
This means that, once again, the White House is in the middle of a crisis it can’t understand, beset by the voices of corporatism on one side and nihilism on the other. The key players aren’t even in place yet: neither has been confirmed by the Senate, although both have passed out of committee. For that matter, the appointment and hiring of executive branchers is so far behind, that even in the West Wing people are rattling around like six dried peas in a quart tin can. So there’s no one to deal with the burgeoning tragedy.
Mixed messages and a dim understanding at the top. Mixed messages and competing visions among the staff. Empty heads in the West Wing; Empty desks throughout the Executive branch. The United States is going to default on its debt in 5 weeks.
It is unclear whether the United States Government is going to let it do so, or not.
Meanwhile, Nero Twittles.
Crossposted at JuanitaJean.com