Courtesy of Mish.
I am pleased to report the debt-limit charade is progressing in order, right on cue, perhaps slightly ahead of schedule.
In Trillion Dollar Coin Idea Dies Sudden Death; Treasury, Fed Oppose Using Platinum Coin; Republican Strategy I proposed this seven-stage sequence of events.
Politics of the Debate
- Obama will chastise Congress with talk of financial Armageddon if Congress does not raise the debt ceiling.
- Congress will pretend to hold the president hostage
- The secretary of the Treasury will get into the act with its own version of the default debate
- Perhaps a few payments on non-critical budget items will be temporarily skipped
- Wall Street will feign panic
- Constituents will pressure Congress to approve a new debt ceiling
- Congress will raise the ceiling with another useless warning about next time
Obama Chastises Congress With Talk of Financial Armageddon
Exhibit 1A: Bloomberg reports Obama: No `Ransom’ for Debt Ceiling
“The issue here is whether or not America pays its bills,” Obama said. “We are not a deadbeat nation.”
He also issued a warning about the potential tactics that House Republicans in particular are discussing, including demanding a new round of spending cuts attached to each incremental increase in the debt ceiling.
“They will not collect a ransom for not crashing the American economy,” Obama said.
Increase the Debt Ceiling or Else
Exhibit 1B: CNBC reports Obama: Congress Must Increase Debt Ceiling or Else
President Barack Obama warned Congress on Monday that it must raise the debt ceiling or risk a “self-inflicted wound on the economy.” Fed Chairman Ben Bernanke and Treasury Secretary Timothy Geithner also delivered ominous calls for action.
“We’ve got to stop lurching from crisis to crisis to crisis,” Obama told reporters at the White House in the last news conference of his first term.
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