Remind me who the actual Speaker of the House is again:
Congressional Democrats took aim Thursday at conservative Republicans who oppose raising the federal debt ceiling, with Senate Majority Leader Harry M. Reid (D-Nev.) charging that a top GOP negotiator, Rep. Eric Cantor (Va.), “shouldn’t even be at the table” in crucial White House talks on the issue.
Can you imagine Steny Hoyer even thinking about pulling this shit on Nancy Smash? If he did it in a dream, he’d wake up and apologize.
Brian R.
Democrats should be falling on their knees in thanks that Eric Cantor — a blow-dried, lip-snarled, dim-witted douche of a man — has stepped forward practically begging to be personified as the embodiment of Republican obstructionism.
This is Newt pouting at the back of Air Force One, but vastly more important as ordinary people will be impacted by his asshattery.
NobodySpecial
Except for that one time where everyone thought Nancy SMASH! was on her way out and Steny tried shoving the knife deep.
JS
I’m not sure they shouldn’t demand the opposite – if CAN’Tor is the one who can deliver the votes, Boehner should be kicked out of the meetings. Any salesman knows you’re wasting time dealing with anyone besides the ‘decision-maker’.
Plus it lets the Wall Street and CoC wings of the wingnut party know who they need to be leaning on.
Han's Solo
Yeah, well Nancy was a damn fine speaker and Hoyer is no fool.
Boehner is NOT a good speaker and Cantor and his Scrotum of Teabaggers are fools.
kc
Cantor shouldn’t be at the table not just ’cause he’s a WATB, but because he has a vested interest in the talks failing.
Zifnab
This could be an elaborate game of bad-cop / spoiled-twelve-year-old, or this could legitimately be the fault line in the party. Boehner was Tom Delay’s replacement as majority leader and represents the business-friendly corporate wing of the GOP. Cantor is the young gun that has made a lot of friends in the new Tea Party wing. They’re serving markedly different constituencies.
geisha gurl
someone needs to tell snotty-snot nose, Eric Cantor, that he smells like piss and should excuse himself to go change his diaper…
beltane
Eric Cantor should not only not be at the table, he needs to be thrown under the bus for the sake of the country.
Elizabelle
I am wondering if there is any possibility that Cantor’s tantrums and terrorism will alarm the sentient Republicans in his congressional district and throughout Virginia. There are many. John Warner was a moderate and popular Republican senator.
Wondering if we could turn some of them to support Tim Kaine for Senate against George Allen. It’s essential to keep Jim Webb’s seat in Democratic hands.
Granted, a lot of Cantor’s constituents are probably snickering at his telling off that Nobama dude.
But not paying your debts? Endangering your country’s credit rating?
People get this, like they “got” the Terry Schiavo circus.
Probably too much to hope Cantor loses his seat, but it would be great to see him — indirectly — help Tim Kaine.
Han's Solo
When I look at Eric Cantor and Paul Ryan I think, “I bet they got beat up a lot when they were kids.”
FSM, I hope I’m right. For some people, karma needs to be proactive.
Martin
Admittedly, Nancy has never had so divided a caucus. The Blue Dogs were a PITA, but they’d get on board with most stuff and weren’t so large a caucus that they really held many things up.
The teatards are a HUGE caucus (half the size of the Dems) and it seems they all arrived with well-tailored suicide vests.
I don’t think anyone could do markedly better than Boehner. He’s tried repeatedly to lead the teatards to at least peek at rationality, and within 12 hours he’s walking back his comments when they yank on the leash. I still think the solution will come from a deal between Nancy and Boehner to get the votes with Cantor and his army of inbreds refusing to the end.
NonyNony
@JS
You forget though – if a “liberal” suggests it it must be bad. Reid saying “hey if Cantor is the one who can get the votes he should be at the table” would be more likely to cause the ‘baggers to rally round Boehner instead.
scav
the traditionally feared well-oil repub machine is suddenly looking and sounding a lot more like a shopping cart with a dodgy wheel.
JonF
Cantor was told to stay home by Boehner. And shocker, they appear to be making progress.
Steve
I think Newt Gingrich did, in fact, pull this kind of stuff when he was a backbencher. I suspect Cantor envisions himself leading the party to glory much as good ol’ Newtie did back in the day. Now you and I know that it just ain’t gonna happen like that. Next to Cantor, Gingrich really does look like the super-genius idea machine that the media is always fluffing him as.
I don’t know the story of how Nancy Pelosi rose to a position of party leadership but I wouldn’t be surprised to hear that she had to slip someone the shiv a few times along the way, that’s for sure. She knows how politics works.
Martin
I think that only goes so far. The maneuvering going on right now is to rob Cantor of all power and hand it all to Boehner. Basically say to the tea party – if you want anything, you have to deal through Boehner. Boehner really doesn’t have enough power to get a deal done unless he gets the deal from Nancy, which he could probably work out over lunch, and which he’ll have to do as a last resort.
If the Dems really wanted to fuck the GOP hard, they’d hand Cantor power and let him blow the place up, taking public pride in doing so. But the Dems aren’t about to wreck the country for political gain.
Jim, Foolish Literalist
Eric Cantor—a blow-dried, lip-snarled, dim-witted douche of a man—
deserved repeating.
I suspect Cantor ideologically isn’t even that far from The Boner, but he wants the gavel and probably thinks, as The Boner and so many before him have thought, that he can tame the tiger. Republicans, with the aid of Broder, Cokie and rising Beltway Dimwit Ruth Marcus, have been dumbing down their party and the country for forty years, and none of them can figure out how we got where we are.
jl
Yet another post on the debt limit crisis insanity? Good, saves me an email, and resulting humiliation, to Cole and DougJ.
We have a new installment of GOP comedy gold.
From TPM blog:
GOP Demand Obama Protect Seniors From Default, Won’t Name What To Cut Instead
TPMDC
Benjy Sarlin | July 14, 2011, 2:46PM
‘ Republican lawmakers are pushing President Obama to put seniors, troops, and bondholders at the front of the line should Congress fail to raise the debt ceiling. The rest? Well, that’s up to him.
“We’re just calling on the president to assume the role of CEO and prioritize accordingly,” Rep. Rick Crawford (R-AR) said at a press conference on the issue. Participants repeatedly accused Obama of trying to “scare seniors” by suggesting Social Security payments might be suspended in the wake of a default crisis.
One reporter shouted a question as to whether things like, say, keeping criminals in federal prisons or securing the border might also be added to the list.
“They’re all priorities,” Rep. Louie Gohmert (R-TX). “As our colleagues here have said, we need to keep our promises and the money is there to do that.” ‘
http://tpmdc.talkingpointsmemo.com/2011/07/gop-demand-obama-protect-seniors-from-default-wont-name-what-to-cut-instead.php
I won’t waste your time going over how insane the new GOP tack is.
Well, OK, I can’t help wasting it for just one thing: They are apparently OK with things like the Ryan plan, and Bush II social security tax scam that will cut benefits MORE than if the US just changes nothing and, for example risks probably 50/50 chance that Social Security will only pay about 80% of scheduled benefits starting 30 years from now.
But they are upset that if they stop the government from any more net borrowing at all, that maybe, just maybe, any of their favorite programs will be cut?
The GOP is entering a fantasy land that I think even the average citizen will be able to detect through the filter of lazy and cowardly corporate media efforts at facile balance. I guess they think that magic teabagger righteousness can just will a magic unicorn in the rainbow garden of American Exceptionalism to poop the money into existence.
I was about to email the insanatic DougJ and Cole about their new hilarious gag.
NamelessGenXer
@Han’s Solo
Love it. Totally stealing it.
@geisha gurl
I believe the Prez did this yesterday.
NonyNony
@scav
The “traditionally feared well-oiled repub machine” is good in two circumstances: when they are the opposition party (and therefore only need to OPPOSE EVERYTHING and don’t actually need to accomplish anything) and when they have a strong leader figure in the White House who is setting their agenda.
Beyond that the well-oiled repub machine is useless. They’re basically a parliamentary-style party and so when their power is fractured like this they fall apart. They’re missing that centralized authority figure that can lead the whole party and frankly no Speaker could step up and do that for them (and Boehner is so far from being the kind of guy who could do it anyway it’s laughable).
Dennis SGMM
If Cantor is the only Republican to show up at negotiations then Obama might consider just kneeing him in the nuts. When Cantor recovers Obama can tell him to go and get his daddy.
Chris
Funny, innit? Liberals are supposed to be the circular firing squad with the People’s Front of Judea/Judean People’s Front wars going on, and from the battles that our sometimes fought on our blogs, you’d think they are (I’ve never, EVER seen an equivalent at PJMedia).
But as you say, I can’t remember the last time our caucus fell apart this completely. I may not even have been born.
jwest
It seems that the more the republicans follow Cantor’s lead, the farther Obama falls in the polls:
http://www.gallup.com/poll/148487/Republican-Candidate-Extends-Lead-Obama.aspx
Who do you suppose will be the democrat candidate in 2012?
Jennifer
Well, it’s impossible to have any sympathy for any of the players in this cast – the party, Boehner, the party supporters. When you put an obvious moron in a leadership position there is a cost. It’s not as if Cantor has been hiding his light under a bushel the past few years.
Still though, one wonders why rank idiocy isn’t enough for them. They’ve got a deep bench there with lots of possible choices. They had to dig deep to come up with as smarmy a son of a bitch as they’ve got in Cantor. I don’t think that’s a coincidence – I think these days, rank and file Repub voters AND elected officials think that “pissing off liberals” is a worthy goal in and of itself. Which is how you end up with petulant, self-satisfied brats like Cantor in leadership positions.
goblue72
Steny Hoyer’s attempted coup over Nancy SMASH lasted all of a day or two from what I remember. All it took was a “don’t even think about it, mothafucka” from Nancy to put the kibbosh on Hoyer’s wet dreams.
Nancy spent the last several decades climbing her way to the top as a woman in politics. Which means she’s had to work twice as hard as her male counterparts. Its no wonder she kept her caucus fully whipped, while Boehner is too busy working on his golf swing to bother.
Plus, she’s an Italian grandmother. She’s used to corralling a roomful of screaming rugrats.
General Stuck
Past all the smiley happy wingnut public persona , lurks a cauldron of confusion and instability, suppressed only by a codlock on the MSM and Mighty Wurlitzer. The debt ceiling debacle, fashioned a blow hole release for the poisonous gases building up below.
This is coming down to the House leadership, and especially Boehner to make a choice of driving all of us off the cliff, or scrounging enough GOP votes to save the realm, with some version of Mcconnell’s hail mary plan. Then we will see the full eruption and Boehner gets his ass sacrificed to the wingers spirits that be, and thrown head first, into the breach.
Either way, the GOP is fucked as a party for the short term, with more than a few voters who remain open to voting for them, recoiling from the unrestrained crazy. And lucky us, they will remain in control of the people’s house, to continue the reign of terror on the republic.
If they don’t pass something, then Obama will have to act unilaterally, and a lurch toward Peak Wingnut will occur as the crazies scream for impeachment. If they do go along, then another, more internal to the GOP, civil warring will dial up to eleven point five, and the teatard purity will be titered into a more elemental wingnut, with someone like Cantor in charge.
There is a rabid skunk loose in the American Castle, and nobody can do anything about it, for awhile.
Han's Solo
@NamelessGenXer:
I can’t take credit. It was from a couple blog postings back. Comment # 90, from “Bill O’Reilly.” (WTF is up with using that name?)
https://balloon-juice.com/2011/07/14/what-do-you-call-it-when-a-herd-of-pigs-takes-flight-a-wallow-of-swine-a-flutter-of-trotters/
Rick Taylor
As bad as things are, I can’t help but feel a bit of schadenfreude. We bailed out the banks, and in return got to put up with their resentment of the President saying things that hurt their feelings and pushing for the mildest of reforms that might protect them from themselves. They gave money to a bunch of know nothings, and now those they help get elected are on the verge of destroying them. As bad as a default would be for all of us, it will destroy the large banks. Sorry, we’d bail you again if we could, but in a second crash, we won’t have the funds.
Nutella
@jl:
Wow, I had said the Rs were inadvertently handing over the budgeting power of Congress to Obama but now it looks like they’re doing it deliberately.
NamelessGenXer
@jwest
Ooooooooh, scary. Think I’ll go cower in my church with my gun.
PreservedKillick
I love this quote:
http://tpmdc.talkingpointsmemo.com/2011/07/hey-wait-reid-praised-cantors-honesty-a-week-ago.php?ref=fpc
Translation: “Eric, you’re fucked.”
Rommie
I’m just going to make some popcorn when I get home (for real!) and enjoy the epic posts on the way because of the noise certain rats are making.
Jim, Foolish Literalist
DR HILLARY DEAN KUCNICH IS OUR ONLY HOPE!
PUMAbagger fail, vol MMDCLXVII
kindness
He’d wake up next to a decapitated horse’s head…
SpotWeld
The GOP seems to be really fraying at the edges.
scav
@NonyNony: I think the current lot of teabagger freshers don’t play well with others to an unusual degree, and that’s over and above the current lack of a repub leadership bench that knows how to wrangle cats. It’s just a bit unusual recently to have a two shopping cart race and damned if it doesn’t have to be on a cliff-edge.
Loneoak
NANCY SMASH! is still the only thing I have ever contributed to the Internet, but it is a good one.
If some Republicans are saying Cantor is an obstacle to a real deal, just get rid of him. If we assume a unified Democratic caucus, then there only needs to be 26 R votes.
rob!
Poor Eric Cantor. Not a girl, not yet a woman.
geisha gurl
@Stuck 26
that was a beautiful thing…
@Nameless 19
you’re right–my bad
The Tragically Flip
I still like Digby’s line on Cantor, from a couple years back, that he has “the wingnut shining” – if I believed in auras, I would say it is his aura of driven zealotry and certitude that makes my skin crawl every time I look at him. Boehner doesn’t have this. McConnell doesn’t either. But say, Bachmann does.
Whenever someone is sure that the GOP won’t let a default happen, I think of Cantor and I’m really not sure. Societies that allow insane people into powerful positions do crazy stuff. The Republican caucus elected this guy their #2. Default is a possibility.
jl
Though, I do think that if Social Security payments are not paid as scheduled next month, an explanation is owed to the people.
The fact that, over the long term, Social Security is not a current part of the deficit problem seems to conflict with a shutdown affecting scheduled payments.
I do not know the details, but think it has to do with two things. First, the federal government has borrowed most of the trust fund and has been encumbering incoming payments to fund deficit, so social security is tied to government net borrowing. Explaining that could be a good teaching moment for the country, since a big reason for increasing taxes is to pay back money owed to Social Security.
And also, my very outdated understanding of how payments works is that all payments come out of the general fund, and transactions move the money between general fund and other funds to settle accounts. So, if WH has no emergency plan B for funding set in place, and the current payment mechanism is in place, that means missed payments.
The commenter martin (note that name: MARTIN) seems to have current info on how payments are made, but has not replied to my requests for links and such.
martin: please explain the technical payment details, you seem to know.
Han's Solo
@rob!: Dude, he should be so lucky.
You know what his yearbook had as his credo? “I want what I want when I want it.”
This is a child that was spoiled.
His nickname should be “Polly Prissypants”
JGabriel
scav:
I’m shocked that a political movement prioritizing self-interest and making compromise it’s bete noir would be populated by people who don’t play well with others.
Who could have foreseen that?
.
beltane
@Han’s Solo
Spare the rod, spoil the wingnut.
JGabriel
@SpotWeld:
And all tied up in their own intransigence, which, of course, means that they are: a frayed knot.
.
jl
@29 That they are doing this publicly is amazing. Of course, it may be mostly GOP Congresspeople like Gohmert who might be, let’s fact it, somewhat mentally impaired.
They are like maladjusted adolescents who are stomping their feet and demanding that they can do what they like and some authority figure can just somehow make the world work they way they want it to.
A sad and scary, and very funny, thing to behold.
middlewest
I think Eric Cantor is one of the few human beings Obama truly and thoroughly hates. The only time you ever see Obama just dripping with contempt is when he’s forced to look at that little toad.
Also, I love it when repubs start crowing about their generic “republican candidate” surging in the polls. If only they could run a theoretical construct in 2012 instead of one of their shitty candidates.
Martin
Unfortunately for them, ‘Generic Republican’ is a euphemism for Zombie Reagan, and I don’t expect him to rise again anytime soon.
Rick Taylor
If I understand how the House works correctly, we also need Boehner to introduce the bill.
scav
@JGabriel:
I think the teapartyiers themselves over-estimate their internal coherency. A self-generated random set of restaurants/delis/ice-cream and pawn-shops all adopting the same logo does not make a multi-national.
jwest
“If we assume a unified Democratic caucus…”
Oh… you weren’t joking, were you?
NamelessGenXer
OT but bears repeating. Video Here
PreservedKillick
The basic problem that they have, here, is that the general public does like a generic republican candidate.
It’s just that the entire fucking republican party is way, way to the right of this hypothetical “generic republican”.
In reality, Obama is far, far closer to that generic republican than any candidate that they have – or will have, given how far right they’ve gone.
Han's Solo
@jl: I think the big problem is that if the debt ceiling doesn’t pass then we will have to cut 44% of our spending immediately.
People get that, but it doesn’t mean much until you get into the specifics of what spending won’t happen. And that is where Republicans are fucked.
Why? Ever since Ronald Reagan said, “The nine most terrifying words in the English language are: ‘I’m from the government and I’m here to help,'” Republicans have believed all government spending is wasted money, and that cutting 44% of spending won’t cause anything bad to happen.
But guess what? A lot of that government spending goes directly to the scrotum of teabaggers that think all government spending is worthless.
Can Republicans explain to their rubes that, “Okay, not all spending is bad?” Not without contradicting several decades of rightwing programming.
Dennis SGMM
“The Republican Party needs to rebrand itself.”
“The Tea Party will reinvigorate the Republican Party!”
“All true believers will meet for a Solidarity Ceremony at the Sportpalast.”
The Tragically Flip
Bolling probably was telling the truth. Someday I expect brain researchers will discover that wingnuts have an extra brain lobe that allows them to selectively edit out memories that don’t fit their worldview. He remembers Bush standing on the rubble with the bullhorn, but everything before that is a haze that somehow makes Clinton president during 9/11.
jl
$52: I heard some internet wag joke that about 30 percent of every country is insane, it is just a tragic fact of human nature that has to be dealt with for the continuing this ongoing experiment called human civilization.
So, if people still watch FOX, that would be evidence for the 30 percent hypothesis (though the BJ crowd knows the exact number to be 27 percent).
NonyNony
@LoanOak
Nope – not gonna work.
You see the remaining Blue Dogs in Congress are a bit reticent to vote for anything that doesn’t have Tea Party cover. They don’t want to be attacked from the right over a vote that the Republican-led House passes. So they are demanding sufficient Tea Party cover to vote for anything.
Which means there isn’t a unified Democratic caucus on this – you can count out the Blue Dogs and probably a good number of New Democrats both if you can’t get Teabaggers to vote for it.
And that means – you’re stuck with the most liberal part of the Democratic caucus for getting votes if you want this to pass at all. The remaining moderate Republicans or Republicans in safely red districts (who still have to worry about teabaggers in their primaries) have to join forces with Progressive Caucus Democrats if they want to pass this bill without any Tea Party support.
Do you see why Cantor was brought in? And why this situation is fucked? And why Mitch McConnell is out there spinning as fast as he can to move this whole thing off onto the Executive Branch so the dysfunctional Congress can get back to the only thing Republicans are good at – political posturing?
Jennifer
@ 38 rob!
Cantor’s theme song.
jl
@58: Uh… thanks for that. You will have to name some names to convince me that a significant number of Democrats that stone cold dumb and rock solid moronic.
Well, OK, I’ll start: Ben Nelson. I heard him on a news talkie with Sessions. Sessions beat Nelson into timorous defeat and temporizing with bald faced lies and obvious nonsense.
So, besides Nelson, what are some names?
Even the cowardly and somewhat dim Blue Dog from my home area, whatsisname, seems to be on board with mainstream Dems.
Edit: Cardoza
NamelessGenXer
@The Tragically Flip 56 @jl 57
I am now convinced that the 27%ers are indeed the lunatics who were let out of State Hospitals due to lack of funding, back in the glorious days of St. Ronnie Raygunz.
Belafon (formerly anonevent)
jl
Some of it has to do with paying the people who send the checks out, but yes, some of that is the general fund issue. The only reason SS would in this case contribute to the deficit is that when you’re pulling from the big pile of money to pay things, it doesn’t matter how the money went in there. From the POV of how the money went into the pile, SS was designed to only pull out what it put in. There should be a large chunk of that big pile that has “SS only” written on the bills.
ETA: And that is the ultimate reason the Republicans would like to dissolve SS. They have been counting the SS money as general fund money for years, and have been keeping their books that way. The are tired of the law telling them that they can’t use this money for their pet projects, like giving it to the rich.
Just Some Fuckhead
Zombie Reagan would be indistinguishable in the Republican caucus. Yer thinking of Mythical Reagan.
jl
@62: I forgot that the trust fund is declining now (which is the real Social Security crisis for the rich people and big corporations, the funds borrowed for Bush II tax cuts and wars will soon have to start being paid back). And most of that fund is lent out to general government.
But my info is out of date, and it is difficult to find info on current technical details of how the week to week flow of funds works.
Calouste
@Jim, Foolish Literalist:
As your numbers point out, the problem with Obama vs Generic Republican polls is that there are no “Generic Republicans”. Romney comes the closest to being a “Generic Republican”, and even he is polling about 5% behind, not 8% in front.
scav
We’ve been watching this Search for American Generic Idol for a while now. Fresh new shiny face blasts into the spotlight from nowhere, surges in the polls and then opens their mouth. My personal favorite episode was Trump.
jl
@63: I think ĀtmanGodhead Reagan exists only to teabaggers and their House reps, and not recognized by general population of sane people. And Zombie Reagan may have been a real person, the Historical Reagan began morphing into Zombie Reagan with Alzheimers onset, perhaps beginning sometime in his second term.
So, I agree, it is the Mythical Reagan we are talking about here.
Jim, Foolish Literalist
what is the noise made by a blink?
scav
!
Litlebritdifrnt
Eric Cantor = Veruca Salt. I hope the squirrels get him.
Comrade Mary
“Generic Republican” is a manifestation of nostalgia for classic, grown-up and genuinely fiscally conservative Republicans. While you’re at it, you might as well ask for a pet Dodo bird.
Thoughtcrime
Tea Party doesn’t really fit. How about something that’s more akin to their intellectual movement: The Brawndo Party.
Because Brawndo’s got electrolytes.
kalyarn
I’m hungry. Let’s get a taco.
ThatLeftTurnInABQ
@jl #8:
In the be-careful-what-you-ask-for dept, Okey dokey:
[Obama calls the Teaparty caucus to the WH for a meeting]
O: Gentlemen, from now on I intend to run this country like a business. Now what does a business do when revenues fall?
TPC: [mumbles, shuffles feet nervously]
O: Anyone? Come on now, you in the back!
TPC drone# 34 standing in the back [puts up hand sheepishly]: Ummm, they, ummm, “reorganize”?
O: That’s right! Very good (give the man a pen). But in my business we call things by their right names. “Reorganize” is a euphemism. What we do is to fire people. Do you understand what I’m saying?
TPC: [nods heads enthusiastically, not seeing where this is going]
O: Good. Gentlemen, we don’t need you any more. Any of you. You’re fired. Turn in your passes to the US Capitol building. Security will now escort you out. Don’t bother asking for references. Good luck finding a job. This meeting is now over. Good day.
lllphd
cantor is just raw ambition channeling thru a prissier (and pissier) version of jane hathaway (the banker’s secretary in beverly hillbillies for you youngsters); the drive is there, but he has no clue how to steer, so – like miss jane – he must navigate thru the dense forest of his imagined monsters and saviors relying on these hallucinations for guidance. all that bluster is just repressed sexual titillation, just like miss jane.
(the miss jane metaphor breaks down a bit, tho, on the dimension of miss jane’s intention to bring the clampett’s into sophistication; cantor is clearly deluded that this is his role in the party, but he’s really working in reverse, bringing the establishment down to the hillbilly/teabagger levels.)
the debt ceiling will be raised, and the deal will be brokered by friday, bet on it. not because obama put his foot down (that only punctuated the demand), but because a coalition of big and small businesses (not the CofC, i don’t think) delivered a letter to obama and each and every member of congress monday telling them to get this the hell done. the market is already complaining of the vapors, what with the ratings being threatened, and money talks. those letters amount to the principal coming into the classroom and grabbing collars and taking names; the principal in this scenario being essentially the gop’s daddy, so they have to scramble extra hard here. their life support system is really really pissed, and each and every one of those teabaggers will be brought to heel. there won’t be enough of the ‘principled’ ones left to amount to much. hence we’re getting republicans already begging obama to save the seniors’ SS checks. how’s that for a turnaround?
the quote from yesterday’s tense meeting that i’m loving is this one via politico:
not obama’s style to boast that, but after – repeat, after – negotiations are successfully completed and the debt ceiling has been officially raised, signed, and delivered, this picture will find its way into the picture. good; another bin laden moment would not be a bad thing.
Martin
Well, you’re describing this as a exception when it’s really the rule. Social Security is required by law to put all revenues into US Treasuries. About 1/6th of all debt is owed to Social Security. Basically, the government is endebted to a future version of itself.
So the SS trust fund *is* to a decent degree what we’re going to default on. We can’t ‘borrow’ from SS trust, because it’s not a big cash bank account sitting there. The SS trust and 1/6 of the bonds we owe are precisely the same thing, and you can’t borrow against the thing that you are trying to pay back.
What some people seem to have forgotten is that we hit the debt ceiling 2 months ago. At that point we couldn’t borrow any more, even though our bills keep coming due faster than we bring in revenue from other sources (at an average rate of about $100B per month). Geithner has been using various accounting tricks to keep us going, and some things are working in our favor. The budget doesn’t work like a smooth, well-behaved function. Some things like SS do – where payroll taxes come in at a nice steady rate and checks go out at a nice steady rate, but then you have times like April 15, where the government gets a big fucking pile of money all at once as people pay taxes due, and then they pay out refunds after that date. Treasury can dick around with what are effectively accounts payable and receivable, hold onto some of that refund money for a few extra weeks to bridge some other expenses until another round of revenue arrives, that sort of thing.
For debt service, we say it’s $400B per year, but it’s really about $25B per month and in December it’s a bit north of $100B. It’s good this isn’t happening in Dec, or I doubt we’d have gotten two months out of it.
Debt service isn’t how much money Treasury needs to pay out. It’s the net cost to the government beween what treasury needs to pay out minus what they can raise in new borrowing. In reality, they need hundreds of billions of dollars each month to pay interest but more importantly, to pay the principal on bonds that mature. Then can then replace those bonds with new bonds (once they mature, our debt momentarily goes down below the debt limit, and we can borrow back up to the debt limit again). We’ve been doing that for 2 months, and each time we have to borrow a little less, because of the interest that we need to pay. Think of it this way:
You have a credit card that you’re paying off. Each month you pay interest and some principal and you borrow a bit more. That’s not really how the bond market works, though. The bond market works a bit more like having 12 credit cards, knowing that each month you need to close one (pay in full, pay back a maturing bond) and get a new one to replace it (new bond auction to borrow more money). If you have enough room on the cards (the debt ceiling), you can borrow enough across those cards, or from your paycheck or wherever, to pay off the card you need to close in full, which lowers how much borrowing you have, allowing you room to get a new, empty credit card. Each month you repeat this cycle, but because you also have to pay interest on each of the cards (debt service), the amount of room you have to operate in gets smaller and smaller unless you either have the new cards issued be larger (raise the debt ceiling) or get more revenue (taxes, etc.) We’ve always been able to get larger and larger cards so that we could pay off the ones that came due, but now we can’t and next month, there won’t be enough money in the general fund or excess room on our existing cards to be able to pay off the card that is coming due. See, the problem isn’t that we can’t just make the interest payments – it’s that we can’t even pay off the card, and we can’t get a new card issued until the old one is paid off.
That’s what happens next month. We won’t have the cash available to pay off the bonds that are maturing, and if we can’t pay them off, we can’t auction new bonds because we’re at the borrowing ceiling. We’re not even allowed to momentarily go over the ceiling in order to not default, otherwise you could just do that forever and there’d be no point to having a ceiling. The problem is one of maintaining enough cash flow that you can pay debts until revenue arrives – it simply runs out next month, and it runs out in a big way. I’m convinced Obama opened the Strategic Petroleum Reserves not to bring gas prices down but to open up cash flow.
Part of the reason why SS checks might be in jeopardy is that 1/6th of what needs to be made whole next month is the bonds that SS holds as part of the trust. That’s where SS gets their money to write checks. They basically have no cash, by law. One option here to minimize the damage of default is to pay off everyone except SS (default only on the Treasuries that SS holds), and then borrow as much as we can afford to pay off. The reason that’s a better option is that SS can’t put their money anywhere except Treasuries (unlike the rest of the financial world) so the people that have a choice of where to invest get protected and the people that don’t (SS) get shafted. It’d hurt less to the nations overall long-term cost of operation at the expense of fucking over the people that the House is supposed to be representing. Can we take money from elsewhere? Sure, but that presents other problems, and many of them wind up being more expensive and harder to repair. Defaulting on SS might be the cheapest solution, and unfortunately, defaulting on SS has the benefit of waking people the fuck up about the magnitude of the problem. If Boeing was bitching about not getting their contractor payments, I doubt anyone outside of Boeing, and their shareholders would do much more than shrug their shoulders, and the GOP would go apeshit over how Obama hates business.
The cost of Geithner buying us 2 months is that things go bad quite quickly. Things blew up in May, and Geithner has managed to shield everyone from seeing the damage. Once he can no longer prevent that, I think it’s going to unravel very fast. There’s a few things apparently he can still do. He can sell our gold reserves to the Federal Reserve (which will cause Ron Paul to self-ignite) and some stuff like that, but we’re pretty much down to selling the silver to pay the rent.
HyperIon
jl @18 wrote:
yes, i’m sure both need an email telling them about what’s posted on TPM.
god, i feel sorry for the frontpagers here that have to endure inane emails from commenters who suffer from an inflated sense of self-importance.
Martin
Links:
http://www.treasury.gov/resource-center/data-chart-center/quarterly-refunding/Documents/dc_Q2_2011.pdf
http://www.morganstanley.com/views/gef/archive/2011/20110517-Tue.html
I’ll try and find some of the others.
jl
@76: And I was going to include a complaint about some other commenters too, with a request that they be smited mightily. But thanks about your important comment about something that I did not in historical fact, do. Very much appreciated.
Now, I have to go email Cole with a request to smite a certain commenter.
jl
Hi Martin,
thanks for your explanation and links. Very much appreciated. I did not know you were working up a dissertation on the topic, but thanks.
The Other Chuck
Ever notice how every Republican underperforms “Generic Republican” in the polls?
Basically a significant chunk of people are saying “I’d like a Republican, but sweet Jesus, not *that* crazy-ass motherfucker!” for each candidate.
Elizabelle
@ Chuck at 81: fascinating point.
Maybe term should be “Imaginary Republican.”
WaterGirl
Elizabelle
I don’t know whether Elizabelle is your actual name or just a screen name, but every time I see you post I think what a wonderful name that is.
Suffern ACE
@Martin: Thank you. That information that this has been going on since May when people were concerned with Anthony Weiner and then Nancy Grace’s pet project and DSK is going to create quite a bit of confusion if this doesn’t resolve. The idea that “there’s money for the seniors and soldiers but Obama just doesn’t want to spend it on you” as people will think we just hit the limit in August all of a sudden.
jenn
Martin – really nice explanation. Thanks!
SiubhanDuinne
@Han’s Solo #10:
Great line, HS! This should be a rotating tag!
Scott Alloway
Martin
Thank you for the well-written and clear explanation. I (probably among others) appreciate your knowledge.
James E. Powell
@jl:
The Democratic method is to hope that this happens.
The Republican method is to assume that the average citizen will not pay attention and instead drive home their message over and over and over and over, for years if necessary, until it becomes accepted as fact.
Which method works best?
Elizabelle
Epic smackdown by James Fallows.
http://www.theatlantic.com/politics/archive/2011/07/more-on-rep-cantor-as-least-valuable-player/241912/
Another face in the crowd
Cantor and Ryan weren’t beat up enough as kids. They were the ones with their hands surgically attached to the teacher’s skirt out on the playground during recess. They’d yell all they wanted; you couldn’t touch them… they’re just attached to the invisible teabagger now.