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’The vanishing debt ceiling deal
The Budget Control Act will reduce annual US federal deficits by at least $2,100bn by 2021, according to the CBO. But will it?
Analysis published Tuesday by Barclays Capital argues that it won’t. This is due to the overly optimistic growth assumptions underpinning the CBO’s new deficit projections.
Debt ceiling: losers
The winners have been profiled. Now for the ugly part.
Losers
1. The budgetary process. The debt ceiling is an anachronism that should be abolished but it has now supplanted the traditional process of budgets and continuing resolutions.
Debt ceiling: winners
Barring a Republican rebellion in the House of Representatives, the Budget Control Act of 2011 will be passed by both houses of Congress on Monday, and sent to the President for his signature.
Despite the resurrection of real market-shifting news on Monday,
Preparing for a US debt disaster
A deal required before an Asian markets drop on Monday. Bankers summoned to a joint meeting with officials in New York. Congress paralysed. Despite our continuing optimism and markets’ relative insouciance,
What the United States could learn from Denmark
That it should raise the debt ceiling to $42,000 billion.
Wait, hear us out…
We agree with James Surowiecki (and James Hamilton before him) that the debt ceiling is silly and should be abolished.
What the United States could learn from Chile
The many worlds interpretation of quantum physics posits that all alternative histories and futures are real. If true, somewhere out there is this version of the United States federal budget:
The chart is from the Congressional Budget Office’s “Budget and Economic Outlook:
August 10 may be the real debt ceiling deadline, says BarCap
Nobody tell Washington, but it may have another week to avoid debtmageddon. Perhaps Congress can have the weekend off after all.
In a note published on July 14, BarCap’s Interest Rates Research team looked at US treasury data from the day before and agreed with Tim Geithner that August 2 was the best guess for when his bag of accounting tricks would be empty.
Tim Geithner and stuffed elephants at the Harvard Club
The Harvard Club of New York hasn’t survived for 124 years without a haughtily dismissive attitude to irony. Stuffed elephant heads are nailed to nearly every wall, making it an appropriate venue for Tuesday evening’s ”Conversation with Tim Geithner”.
Guest post: Four fiscal deals—would any matter?
By David Gordon, Sean West and Helen Fessenden of Eurasia Group. The views expressed are strictly their own.
With all eyes on the Gang of Six, naïve hopes of a deficit deal are blossoming in Washington.
The ever-shrinking Budget deal
The House is currently debating and about to vote on the budget deal struck on Friday. But perhaps its members should’ve read the small print.
There was a mini-storm in the Tea Party cup on Wednesday evening when the $38bn of “cuts”
Further further reading
For the commute home, where no-one criticises your fiscal policies,
- More on Goldman’s bearish commodities turn.
- Richard Koo talks balance sheet recessions.
- A read-out from Soros’ bash in Bretton Woods.
Shutdown shenanigans: something for the weekend?
Across the tape a little while ago, from Reuters:
NO BUDGET AGREEMENT REACHED AT WHITE HOUSE MEETING, REPUBLICAN HOUSE SPEAKER JOHN BOEHNER’S OFFICE SAYS
FT Alphaville is struggling to say anything new about the consequences of a potential federal government shutdown — we’ve already covered the economics (twice),
USA, incorporated and indebted
Congress continues to argue over a continuing resolution to fund non-essential parts of the US federal government past March 4.
As silly season drags on we’re still unsure whether a deal will be struck.
More for less, regulatory edition
A late (for Congress) night on Thursday left the Obama administration’s budget request for the SEC in tatters. According to Politico’s David Rogers:
Democrats failed to restore $131 million for the Securities and Exchange Commission,
Chancing on the (debt) ceiling
When it comes to the debt ceiling, perhaps we should adopt that wise and time-honored maxim: don’t hate the player, hate the game.
With a hat tip to Self-Evident, David Greenlaw & Ted Wieseman from Morgan Stanley on Tuesday released a handy timeline detailing what to expect during the coming showdown.
The Congressional Budget Office does a US fiscal crisis
If you thought the Bank of England’s fan charts were bad in terms of err, fanning uncertainty, take a look at the below from the US Congressional Budget Office’s economic and budget issues brief:
According to the CBO’s forecast,
Who’s afraid of the US federal budget?
Never one to shy away from a good fiscal debate, Niall Ferguson, financial history professor at Harvard, sounds the alarm on the Obama administration’s looming federal deficit problem in a Tuesday FT comment piece.