USA - Cannot pay it PS wages ... again

[AiA in Atlanta]

A short-term deal seems to have been reached in the last few hours ...

[Super Nova]

Just heard it on the news. They have tomorrow to pass it.

[wog_girl]

Any changes to Obamacare?

[AiA in Atlanta]

Any changes to Obamacare?

No. The Republicans lost.

[AiA in Atlanta]

Looking more and more likely that the USA will have another Democrat as president in 2016 ...

[Chard]

No. The Republicans lost.

One of you needs to pick up the phone because I fucking called it!

[Super Nova]

No. The Republicans lost.

One of you needs to pick up the phone because I fucking called it!

The republican abroad rep here was arguing they did win a little, just not as much as they liked. What's the truth. What did Obama concede?

[AiA in Atlanta]

No. The Republicans lost.

One of you needs to pick up the phone because I fucking called it!

Give me a moment and I will ring you.

[IQS.RLOW]

http://www.heraldsun.com.au/business/dr ... 6741274631" onclick="window.open(this.href);return false;

JUST about everything you have read or heard about the US political brawl over spending, Obamacare and the debt ceiling, is almost certainly wrong.

In particular, that the whole world has been taken right to the edge of a financial crash at least as bad and indeed likely to be much more dramatic and more fundamentally destructive than the Global Financial Crisis, thanks to crazy Republican Tea Party extremists.

Specifically, that unless the US Congress votes to increase the US government ceiling overnight, the US will default on its debts, banana republic - or indeed Greek republic - style.

The truth is, that would only happen if the Obama administration deliberately chose to break not just the law but its fundamental constitutional obligations.

To refuse to repay debt even though it had the money to do so; itself, deliberately triggering an unnecessary default.

As rating agency Moody's said this week: "We believe the government would continue to pay interest and principal on its debt even in the event that the debt limit is not raised, leaving its creditworthiness intact.''

This turns on two simple truths.

First, the US government is constitutionally required to prioritise its debt obligations. Secondly, self-evidently, it can repay debt maturities with new borrowings - as that would not increase its total debt.

It just can't increase the amount of debt on issue. So, because it is running a budget deficit, it would have to cut back on its non-debt outlays. Things like social welfare and defence.

Yes, that would be damaging and disruptive. It would NOT be a debt default.

There's a third possibility which I have not seen raised anywhere. There would not appear to be anything to stop the Federal Reserve buying the maturing debt from bond holders and not presenting it to Treasury for repayment.

That would leave the government free to use the moneys otherwise to be paid to maturing debt holders, to spend on defence, social welfare and the rest.

We might never find out, at least not this time, if the issue has been rendered - temporarily - academic overnight by a deal in Congress.

The debt ceiling is one part of a much broader, more fundamental and indeed existential battle underway in the US - caricatured asininely by the media there and here as crazy extremist Tea Party types prepared - indeed wanting - to topple the whole structure of government in the US; and insouciant to or indeed happy if it topples the world as well.

It's driven by a mix of three media dynamics. The inherent government-is-good bias of the media. Sheer stupidity and incompetence. And what I describe as 'drive-by analysis'.

[Chard]

Wow, if you're going to attempt to analyze how the US government works it really helps if you actually know how our government works. How is this Obama's fault? See, Obama doesn't control the the fucking budget, that's Congress' job. All Obama can do is sign a bill passed by both houses of congress.

Goddamn, you people have terrible journalists, and that's coming from a guy in the US where Fox News is one of the three primary national outlets.