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US May Default Half Month Earlier Than Thought

From a white-knuckled Washington Post:

U.S. may default on its debt half a month earlier than expected, new analysis shows

By Zachary A. Goldfarb | January 7, 2013

The U.S. government may default on its debt as soon as Feb. 15, half a month earlier than widely expected, according to a new analysis adding urgency to the debate over how to raise the federal debt ceiling.

The analysis, by the Bipartisan Policy Center, says that the government will be unable to pay all its bills starting sometime between Feb. 15 and March 1.

The government hit the $16.4 trillion statutory debt limit on Dec. 31, but the Treasury Department is able to undertake a number of accounting schemes to delay when the government runs into funding problems.

The Treasury has said that the accounting schemes, known as “extraordinary measures,” ordinarily would forestall default for about the first two months of the year, though officials were clear that they could not pinpoint a precise date because of an unusual amount of uncertainty around federal finances.

“Our numbers show that we have less time to solve this problem than many realize,” Steve Bell, senior director of economic policy at the Bipartisan Policy Center, said in a statement. “It will be difficult for Treasury to get beyond the March 1 date in our judgment.” …

If Congress does not raise the debt ceiling by the deadline, the White House has said that the nation probably will default. In a previous episode — in the summer of 2011 — officials determined that the best course would be to withhold all of a given day’s federal payments until enough money became available to pay them.

Of course, this could just be another attempt to dramatize the next big crisis.

Meanwhile, we also have this from "The Fix" blog at the Washington Post:

Pew poll: Obama won ‘fiscal cliff’ debate, but deal gets low marks

by Sean Sullivan | January 7, 2013

* A new Pew Research Center survey shows that most Americans believe President Obama won the battle over the “fiscal cliff,” but they don’t think too highly of the deal that that was reached. Fifty-seven percent of Americans say that Obama got more of what he wanted from the deal, but just 38 percent approve of the resulting tax legislation, with 41 percent disapproving

So people give Obama credit for the ‘bad’ fiscal cliff deal?

This article was posted by Steve Gilbert on Tuesday, January 8th, 2013. Comments are currently closed.

8 Responses to “US May Default Half Month Earlier Than Thought”

  1. Someday people will look back on this period and marvel at the level of denial, delusion, and national psychosis.

    Obummer told Boehner that, “There is no spending problem, John. We have a health care problem, and I fixed that.” (Wall Street Journal).

    The CBO just said the recent “deal” will cost an extra $4.6 TRILLION.

    Pelosi and the Demonicrat leadership say we need more tax increases. Alright!

    Meanwhile, in France, President Hollande is in political trouble. The French are shocked, shocked, that he’s done nothing. Unemployment surges and their debt soars.

    Guess what? It’s what Socialism does. It destroys productivity and national wealth. And were following in their footsteps.

    • Rusty Shackleford

      Not sure who said it so I’ll say it. “Lies come in and make themselves to home while the truth sits at your doorstep waiting for you to let it in.”

      Maybe we’ve just simply become a nation of dolts; Happy in our ignorance. “How can the richest nation in the world be broke?”, right?

      The farmer looks at the economist and says, “I hear what you’re saying but it all sounds like crap to me” and the economist looks at the farmer and thinks, “Ha! Ignorant rube….no degrees, no education…he just runs his farm.”

      Of course, anyone who has ever looked at farms and farming knows they have to watch every single penny. Feed, seed, veterinary bills, etc. Structural repairs, storm damage, water supply issues, finding lost critters, or just managing crops is not some simpleton’s game. Lacking mathematical ability is a farmer’s sure ticket to insolvency. They have to quickly assess how a sale on something they need will benefit or hurt them; IN THEIR HEAD, without consultants, economists/and or other self-appointed ‘experts’.

      I do hope the nation survives this dalliance with socialism and learns from it. The bottom-feeders, which the socialists have been very successful in increasing in number for decades now, think that the gravy train will go on forever. The blacks think they will get their just rewards for all those years of slavery. The mexicans think they will be allowed in to the US without papers on a continual basis. The muslims don’t care what the government does because they will always claim immunity from federal law and the feds will allow it.

      All of which undermine what real ‘fairness’ is all about. Back in the earliest years of this nation white people, of which the majority was made, took advantage of a non-intrusive government and set about innovating, capitalizing on the ideas of others, inventing and building things that by 1950, the rest of the world wanted. No, we didn’t take an imperial stand on anything. Coca-Cola is the single most popular drink in the world. It didn’t get that way by the US forcing it on anyone. THEY WANTED IT. THEY DEMANDED IT. It’s in every nation on the face of the earth. Capitalism…not imperialism.

      The list is actually endless, from refrigerators to television sets to airplanes to cars, they want what the richest nation in the world takes for granted. I once looked at a photo in National Geographic that had a mud hut in Africa, with a generator to power a single light bulb and a portable 13″ television set. This was in the 70’s. The generator, wiring, light bulb and TV were all purchased on the black market, probably stolen from someone who was well-off or even from someplace in Europe and transported to the nether-regions for sale.

      The owner of said hut defended ‘his’ property with the weapon of choice in that region; A machete.

      Hm

  2. You’re spot on, Rusty. When the majority of Americans were farmers, authentic economics was a hands-on, daily reality. The supply and demand curve, and how pricing works, were part of real life.

    Now that we’re living in cities and working in great towers of glass and steel, pushing papers around, staring at screens and numbers, we’re subject to many delusions and unreal scenarios. We can’t see markets working, or being destroyed secretly by governments and cabals.

    I have no idea how we can recover Adam Smith, and our lost wisdom.

  3. Astravogel

    I think Pelosi, Reid, and TCP know they’re riding
    the financial tiger, but are too scared to get off.

  4. Start with saving money and defund Planned Parenthood, NPR, no foreign aid to Egypt and other countries that are hostile to America, cut federal workers pay by 15%, cut out Obama’s Czars, repeal Obamacare and no more vacations for Moooochelle.

  5. dramatize the next big crisis –That’s really part of the show isn’t it? Make government the focus of your every day life, make a nail-biting crisis out of everything. You can’t go to work, eat your dinner, go on a trip, invest your money, make future plans because it all hinges on what the government will do, week to week, day to day, or even hour by hour. — It’ gotten this bad, this unpredictable, this unstable.

    While the population diligently fills out their tax forms by the DEADLINE of April 15th, just remember that:
    ♦ Government doesn’t pay it’s bills.
    ♦ Government doesn’t live within a budget.
    ♦ Government doesn’t follow it’s own rules, but you must follow all of them.
    ♦ If the government owes you money, it will pay you whenever it feels like it, w/o interest, but if you owe, you will be penalized WITH interest.
    ♦ Government can waive whatever cumbersome rules are in its way, you must hire a lawyer or accountant to be in perfect compliance.
    ♦ Government can prosecute you on a whim (that you pay for), but it will cost you time and money no matter the outcome.

    I have said this before, but with a heavy heart to my friends and family, I hope this system collapses under it’s own weight, and is replaced with nothing. Perhaps then the people will make their own food, and protect their own borders the way it was centuries ago. But this ridiculous system of perpetual failure can’t go on forever, and it won’t. I am just waiting for the day when the American people and our foreign creditors just give up. It’s really not worth it to support the 47% parasitic citizens and the 25 million or so public sector parasites.

  6. mr_bill

    As Ted Cruz noted yesterday, reaching the borrowing limit does not cause the government to shut down. It only restricts the government from borrowing more money.

    Given that about 40% of government expenditures are based on borrowed money, the government will experience an instant budget cut of that amount. It will not cause the government to default on obligations if the expenditures are prioritized so that payment obligations to creditors are met before new spending items are funded. The government will have to figure out how to pay the bills within the constraints of the revenue it receives without borrowing. For our beltway critters and liberals: it’s called a balanced budget and if the only way to get there is to prevent the US from borrowing more money, I say fine.


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