USA - Cannot pay it PS wages ... again

[Super Nova]

I see that a new crisis like what occurred under Clinton has emerged in the US and an increase in the borrowing limit for the country is blocked leading to Public Sector stand downs because they cannot be paid.

The US borrowing limit must be huge and it still needs to be pushed up. The US needs to get it's house in order or the entire economics of the world that it designed may fail.

WTF is going on over in the US?

[Super Nova]

Obamacare is the key lever in this games.

Voting for shutdown?

One of the key areas of debate between the Democrats and the Republicans has been President Barack Obama's healthcare law, popularly known as Obamacare.

Early on Sunday, the Republican-run House of Representatives passed an amended version of the Senate spending bill that removed funding from the healthcare law, raising the chances of a shutdown.

US Senate Majority leader Harry Reid has vowed that his Democrat-led chamber will reject the Republican bill.

"Tomorrow, the Senate will do exactly what we said we would do and reject these measures," said Adam Jentleson, a spokesman for Senate Majority Leader Harry Reid.

"At that point, Republicans will be faced with the same choice they have always faced: put the Senate's clean funding bill on the floor and let it pass with bipartisan votes, or force a Republican government shutdown."

Speaking for the president, White House spokesman Jay Carney said: "Any member of the Republican Party who votes for this bill is voting for a shutdown." The president, he said, would also veto the Republican bill.

If the government does shut down on 1 October, as many as a third of its 2.1 million employees are expected to stop work - with no guarantee of back pay once the deadlock is resolved.

National parks and Washington's Smithsonian museums would close, pension and veterans' benefit cheques would be delayed, and visa and passport applications would be stymied.

Programmes deemed essential, such as air traffic control and food inspections, would continue.

The defence department has advised employees that uniformed members of the military will continue on "normal duty status", but "large numbers" of civilian workers will be told to stay home.

'Far more dangerous'

The looming shutdown, which would be the first for 17 years, is not the only crisis the US government is facing.

The US government and Republicans are also at loggerheads over extending the government's borrowing limit.

Strictly speaking, a default occurs when a borrower has broken the terms of a loan or other debt, for example if a borrower misses a payment. The term is also loosely used to mean any situation that makes clear that a borrower can no longer repay its debts in full, such as bankruptcy or a debt restructuring.
A default can have a number of important implications. If a borrower is in default on any one debt, then all of its lenders may be able to demand that the borrower immediately repay them. Lenders may also be required to write off their losses on the loans they have made.

The US Treasury Secretary has warned that the US will hit its debt ceiling by 17 October, leaving the government with half the money needed to pay its bills.

Earlier this month Jack Lew said that unless the US is allowed to extend its borrowing limit, the country will be left with about $30bn to meet its commitments, which on certain days can be as high as $60bn.

A failure to raise the limit could also result in the US government defaulting on its debt payments.

President Obama has warned that "failure to meet this responsibility would be far more dangerous than a government shutdown".

Washington faced a similar impasse over its debt ceiling in 2011. Republicans and the Democrats only reached a compromise on the day the government's ability to borrow money was due to run out.

That fight was resolved just hours before the country could have defaulted on its debt, but nevertheless led to ratings agency Standard & Poor's downgrading the US for the first time ever.

The 2011 compromise included a series of automatic budget cuts known as the "sequester" which came into effect earlier this year.

http://www.bbc.co.uk/news/business-24327411

[Chard]

I see that a new crisis like what occurred under Clinton has emerged in the US and an increase in the borrowing limit for the country is blocked leading to Public Sector stand downs because they cannot be paid.

It's happened before, nothing much came of it except it gave Clinton the highest approval ratings he had during his entire presidency and made the Republicans look like a pack of assholes. Shook the GOP up enough that instead of sending out another old fart like Dole they sent a younger guy name of Bush. The economy didn't crash, we didn't under go another civil war, and the world didn't explode.

The US borrowing limit must be huge and it still needs to be pushed up.

Or, our borrowing limit is more of a notion than a hard limit. Been happening like that ever since Johnson first figured out that deficit spending and borrowing from the SSI fund can do magical things for the budget. Nixon really got the ball rolling when he knocked on China's door and started them on purchasing T-bills.

The US needs to get it's house in order or the entire economics of the world that it designed may fail.

Think about the history of just the past decade and ask yourself if the rest of the world is willing to allow us to default or if they'll just smile, nod and business will continue as normal.

WTF is going on over in the US?

;;

Typical US Politics is what is going on. The Republicans are so ideologically tied to this myth of a benevolent free market that anything that even vaguely sounds like social services makes them run around screaming "socialism". Really, if they keep this up the GOP is just going to shoot itself in the foot. Again. Honestly, I give the GOP maybe another two to three elections before they start changing with the times of they finally fragment into two or more other parties.

[Super Nova]

I see that a new crisis like what occurred under Clinton has emerged in the US and an increase in the borrowing limit for the country is blocked leading to Public Sector stand downs because they cannot be paid.

It's happened before, nothing much came of it except it gave Clinton the highest approval ratings he had during his entire presidency and made the Republicans look like a pack of assholes. Shook the GOP up enough that instead of sending out another old fart like Dole they sent a younger guy name of Bush. The economy didn't crash, we didn't under go another civil war, and the world didn't explode.

Excellent, it is good to get an American's view. Watching the news and CNN ...etc gives me no feel for what is really happening and it is difficult for outsiders to have a real view.

The US borrowing limit must be huge and it still needs to be pushed up.

Or, our borrowing limit is more of a notion than a hard limit. Been happening like that ever since Johnson first figured out that deficit spending and borrowing from the SSI fund can do magical things for the budget. Nixon really got the ball rolling when he knocked on China's door and started them on purchasing T-bills.

It's clearly a limit set to force the president back to congress for approval. A fiscal safety checkpoint. I see that as a prudent thing to have in place. Like a company delegates limits of authority around budget and fiscal limits. Exceptions or forecasts to exceed require further approval from a higher executive.

I don't understand the "magical things" but expect you mean the sorts of tricks accountants and Enron types get up to but since it's the government it's OK.

The US needs to get it's house in order or the entire economics of the world that it designed may fail.

Think about the history of just the past decade and ask yourself if the rest of the world is willing to allow us to default or if they'll just smile, nod and business will continue as normal.

Like the banks the US is too big to let fail. It would be the end of world economy as we know it. It would let China and the cashed up to take control of the worlds economy. The depression would last a very long time. Yep, too big to fail.

The average punter across the western world will fund the US' rescue if it came to this.

WTF is going on over in the US?

;;

Typical US Politics is what is going on. The Republicans are so ideologically tied to this myth of a benevolent free market that anything that even vaguely sounds like social services makes them run around screaming "socialism". Really, if they keep this up the GOP is just going to shoot itself in the foot. Again. Honestly, I give the GOP maybe another two to three elections before they start changing with the times of they finally fragment into two or more other parties.

I think Obamacare is a good thing even though I don't know the detail. Will be in the US next week. Was there 2 months ago. When I chatted with the locals on the west coast they agreed that if you don't have money, you just die. Not a good thing for the riches country in the world to have as a social policy in my view. Looking after the sick is not socialism. It is a policy to ensure the disenfranchised can benefit from the wealth of the society, keep society healthy and to keep them in their place so they don't rebel

[Chard]

Your post is largely based in the complete misunderstanding of the president having a real say in how our budget is arrived at. The president can only put forth his own version of a budget or veto a budget bill passed to him after it has passed consideration by both houses of congress. You want to really blame some then blame congress, not the president.

[Super Nova]

Your post is largely based in the complete misunderstanding of the president having a real say in how our budget is arrived at. The president can only put forth his own version of a budget or veto a budget bill passed to him after it has passed consideration by both houses of congress. You want to really blame some then blame congress, not the president.

On the budget understanding you would be right and your clarification helped.

However I do understand it is congress that is causing the problem (like not passing a supply bill in the west minster system) and this is not the president's fault. I thought they were using this to negotiate changes in Obamacare trying to make it look like the presidents fault because that has/would contribute to even more budgetary pressure leading to a bigger overdraft on the US budget.

[Chard]

I thought they were using this to negotiate changes in Obamacare trying to make it look like the presidents fault because that has/would contribute to even more budgetary pressure leading to a bigger overdraft on the US budget.

They are trying to do exactly that with Obama. The problem for the GOP is that Obama already caved on many of the provisions that made up his original healthcare proposal, so threatening to cut more is effectively a non-starter. All they republicans can do at this point is try and force a government shutdown and that such a shutdown will last just long enough to cast discredit on Obama and not on the GOP. Problem for the GOP is that a lot of voters are old enough to remember the last three times the GOP has tried this shit and we're no looking at the GOP for blame and not the president.

[Super Nova]

Watching the news. 6 hours to go. Lets see the outcome tomorrow.

Be interesting how far Obama backs down.

[Chard]

Watching the news. 6 hours to go. Lets see the outcome tomorrow.

Be interesting how far Obama backs down.

At this point I really don't see Obama caving on this. He just appeared on national TV essentially telling the GOP in congress that Obamacare was happening and that even if the GOP shuts down the government, Obamacare will still be there when the government resumes operations. The man was stopping just short of flipping the bird at the camera and dropping the mic on the ground.

I can tell you this much though. If the shutdown happens it will pretty much sign the death warrant for the Tea Party, which will hopefully get rid of some of the crazy fuckers that the GOP has been aligning themselves with recently.

[Neferti]

What about Michelle and the girls?