A second playbook is needed
The president's view of no negotiations could spark a constitutional crisis as shutdown looms.
It's pretty binary now.
You can write whatever you want, but in a default it is going to be game over and right now the stance from both sides -- not the president and not the GOP alone -- would definitely take us over the cliff. If it is not possible to dislodge the president from his view of no negotiations and it is not possible for the speaker to call for a majority-rule vote, then it is hopeless and we will have a default and there is no way this market can handle a default without giving up a huge chunk of gains.
Given the rhetoric, once again it seems odd that Treasuries aren't going down in price and up in yield. But there is a complacency -- and there has been a complacency -- that seems a little unrealistic considering the stances that both sides are taking.
What's odd for me is that if the president truly believes that it's the constitutional duty of Congress to raise the debt ceiling, then why isn't he preparing a constitutional initiative with the Supreme Court? If he truly believes no negotiations should occur, then he definitely believes that there is a constitutional imperative. It simply can't be anything else, can it? If the speaker has said point blank that he does not have the votes for a clean debt bill then the president must know that his debt ceiling non-negotiable stance will cause a constitutional crisis. Unless he, too, doesn't believe that a default is a constitutional issue.
Ironic, but we know that the 14th Amendment has a clause that says the bills must be paid. Sure, it is tied to the notion of an intransigent block that has seceded, but it is still in and it is a totally viable argument.
In the meantime we know the Oct. 17 date is looking specious given how much Treasury has been taking in from Fannie/Freddie and TARP, so it would help to know the real date, even as we know that a real date will be the date we get to plus one.
Also confounding me is what's the plan for a default? We know now that the plan seems to be that federal employees look to be paid for their time off. Does that mean there is some clause that will allow the president to pay bills in lieu of failure to raise the debt ceiling? Is there scrip? Is there a promise of some sort that would make it so a default is not catastrophic?
Or do we now begin the process of deciding which companies don't need credit to operate their businesses and so therefore don't need the full faith and credit of the U.S. to stand behind Treasurys. Do we just eliminate all banks from the equation? We just can't own their stocks? Do we have to eliminate owning all retailers because they need credit? Do we dust off the Lehman playbook? Wouldn't that be smart?
I think these are the issues that now will dog us. There's not much else to say other than a second playbook is needed given the binary nature of the ceiling debate.
To operate as if one isn't needed is to insist that a constitutional crisis is NOT on the table, just a political one. If that's the case, then a political one, at least right now, leads to debt downgrades, no credit to be given to anyone of any substance and a ripple around the world that can't be imagined.
More from TheStreet.com
Is America insane???? We have a federal debt of 17 trillion; we will have a budget deficit this year of 600 to 700 billion; we have more government programs then we can afford. And we are fighting over adding another government program (Obama care). Are we nuts????!!! Congress is voting to pay government employees to sit on their **** while the American people cannot find jobs and what they can find are minimum wage and part time. Are we insane????!!! When the hell does America start facing reality???!!
Obama is right and so are the Republicans. ACA is the law and you don't change it by blackmail but the US is spending way too much more than it's collecting in taxes. If the Republicans want to fix the budget deficit, debt ceiling, then they have to put everything on the table including defense, social programs and taxes. The US government should not be protecting the entire world using US taxpayers funds, it should not be educating citizens using federal tax dollars that's why have property taxes, it should not give Medicare and Social Security benefits above the amount individuals have earned. It should not spend more than 10% more then it collects in taxes. It's all pretty simple math but our politicians are crooks and lairs that buy votes with other people's money.
Don't like it ? Don't work for the Feds.
Time to bring this paper fraud down and let hard values prevail.
seems like the politicians are working to some new Social Media Standard of always having to have a calamity to deal with.
and if none exists, create one.
The unfortunate solution is to default on our debt. It is impossible to repay it. The US's Golden Age is over. We are now a consuming country, instead of a producing country. We cannot have economic growth that will be able to match the government's spending. And politically, polititions don't have the character to put the country's welfare ahead of their own careers.
If we defaulted, we would negotiate some kind of payment plan to our creditors (China), and we could start over, paying as we go. This would hurt, obviously, but it would also correct the problem. If the consequence of default is no more credit, than good; the government would need to pay for their programs instead of buying votes with my children's future.
If the US was considering a war, the government would need to levy taxes to pay for it, and the hawks would have to answer to the voters. I don't care about Dems or Reps; give me someone who will fix the real problems the country faces.
Seems to me the solution to the problem of Obama Care can be solved many ways.
First as it is a tax on the American people (Supreme Court) it needs to be tabled and introduced as an amendment to the constitution just like the income tax was. Also there are a few problems with it being a tax. The money is not being collected by a Federal Agency and then used to buy goods and services. Instead it is sent directly to the insurance companies with no checks or balances that the crooked insurance companies will not steal the premiums and put in their own pockets -- right now on average 40 percent of premiums going for insurance are used to pay executives huge bonuses and huge dividends to share holders.
Second the tax should be on income like the medicare and medicaid tax and extend to all income someone is making. About 7 to 10 percent tax on all income. As it stands now the older people are going to have to pay an unfavor tax burden for the Obamacare tax and having four favors of Obamacare bronze,silver,gold and platinum causes a four tier discrimination of the American people. Which is against the consitution and the equal rights act. After all it is a tax folks.
Third Obamacare will not solve the problem of health care in America as more than half of all Americans make less than $1 trillion dollars combined among all of them. This means that half of Americans on average only make $16,230 dollars a year which is enough for most of them to have a Obamacare tax credit of about $10,000 plus each for all 66 millions of them.
This alone will put a burden of $660 billions dollars on the US government paying for Obamacare for people who can not afford it.
Also another 46 million Americans will not qualify for the tax credits and will have to get Medicaid paid for by the state which can only pay for about 23 million Americans. So the burden to Medicaid will be about 23 million times $10,000 or about another $230 billion on the US government.
Altogether about $1 trillion extra tax dollars will have to be spent on Obama Care.
The silly people were using an average wage of $118,000 per person working (remember half the income in America is earned by only 1 percent of the population) so they figured most people could afford Obamacare. The opposite is true.
Pretty much a) Obamacare is illegal and b) Obamacare is going to cost the government $1 trillion more dollars and c) Obamacare will not fix what is wrong with health care.
Copyright © 2014 Microsoft. All rights reserved.
3 stocks will be in the spotlight Thursday as investors try to make sense of the numbers from the sector.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.