Quotes of the day

posted at 10:37 pm on April 21, 2011 by Allahpundit

“You dash into your office and arrive by 5 a.m., finding a whole lot more than the Tokyo traders hanging out. Dozens of panicked associates are already there, flipping the TVs from CNBC and Bloomberg to C-SPAN and CNN. Analysts are reading The Hill and Politico, trying to figure out where the congressional negotiations, which lasted all night and have dragged on for months, now sit. You take a look at some of your company’s positions, and reaffirm to yourself that you are in good shape, at least on paper: solidly profitable, light on crummy assets, and carrying a considerable cushion of cash and some foreign currencies. But you receive the first of a few bad calls at 6 a.m.

“Foreign investors are spooked, and they’re dumping Treasury bonds—billions of dollars’ worth. They had been selling them off for weeks, of course, possessing much less stomach for the idiocy of the U.S. political system than you and your fellow Americans. But now, investors in Asia and Europe are practically using tractors and pitchforks to move the bonds onto the markets. You and your fellow principals meet: Will the bond market finally force Congress to act? Will this sell-off prove temporary? Should you buy what everyone else is terrified of? Should you all be worrying about hunkering down and battening the hatches and hoarding cigarettes for the barter economy?…

“Within 72 hours, Congress has a deal on President Obama’s desk, raising the ceiling to $16 trillion in exchange for balanced budgets to take effect in fiscal-year 2015 and some serious cuts now. Treasury starts issuing new bonds and making all payments on existing ones. But the market panic requires the Federal Reserve to reboot its emergency programs, disrupts the housing market, permanently raises the United States’ borrowing costs, reshapes the world bond market, and shaves more than a percentage point off GDP growth—enough to throw the economy back into recession. Globally, investors no longer consider the dollar the reserve currency of choice.”

***
“One day after being named to a presidential task force to negotiate deficit reduction, House Majority Leader Eric Cantor fired off a stark warning to Democrats that the GOP ‘will not grant their request for a debt limit increase’ without major spending cuts or budget process reforms.

“The Virginia Republican’s missive is a clear escalation in the long-running Washington spending war, with no less than the full faith and credit of the United States hanging in the balance.

“In the most recent budget battle — over a six-month spending bill — Republican leaders carefully avoided threatening to shut down the government. Now, Cantor says he’s ready to plunge the nation into default if the GOP’s demands are not met. People close to Cantor say that he hopes to make clear that small concessions from Democrats, including President Barack Obama, will not be enough to deliver the GOP on a debt increase.”

***
“Just 27 percent of Americans support raising the debt limit, while 63 percent oppose raising it.

“Eighty-three percent of Republicans oppose raising the limit, along with 64 percent of independents and 48 percent of Democrats. Support for raising the debt limit is just 36 percent among Democrats, and only 14 percent among Republicans.

“Seven in ten who oppose raising the debt limit stand by that position even if it means that interest rates will go up…

“If the debt limit is not raised, the United States will default on its bonds for the first time in history.”

***

***


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If the debt limit is raised at all it should be at a reduced rate commensurate with the goal of balancing the budget in X number of years. I would argue X should be 2 or 3, 5 at most.

If we don’t raise the ceiling at all it will eliminate the deficit in one year, of course, but we could also reduce the deficit by half or a third instead to disperse it over a few years.

I want to see real cuts in the ’12 budget and this is the only way to accomplish it, IMO. This is what ‘checks and balances’ are for. The increase in the debt limit must be tied to the ’12 budget.

FloatingRock on April 22, 2011 at 12:50 AM

It’s game over for the U.S. More than half of all Americans (59%) receive a Government payout in one form or another. This is not a sliver of the population. It is endemic to the system. So those who complain endlessly about Government spending need to consider they as well as half of everyone they know, likely gets some kind of assistance in the form of social security, Medicare, food stamps or what have you.

Here’s another zinger: Government payouts account for 79% of household growth since 2007. In other words, the only thing that has kept the US consumer afloat in the last four years is payouts from Uncle Sam. Put another way, the private sector has contributed roughly one out of every five dollars in household growth since the Great Depression 2.0 started in 2007.

To say that these policies are unsustainable is the understatement of all time. The only reason the US hasn’t seen a complete debt implosion followed by hyperinflation is because the Federal Reserve is propping up the debt market with money printing.

Heckle on April 22, 2011 at 1:12 AM

Thanks Candy for making sure we all know what Obama’s talking point is regarding his flip flop on raising the debt ceiling. Glad you are there to defend him. /s

Mallard T. Drake on April 22, 2011 at 1:15 AM

I don’t know about the rest of you…

… but when I am out of money, I can’t spend it.

More to the point…

… Why are we listening to anything coming out of our Government or the Media?

Your a%s is on the line, period!

… In a true and just world, not only would the people responsible for this crisis held accountable, they would be jailed in a very, very, very deep, dark, damp, cold, hole in the earth for them to ponder their misdeeds.

SHUT. THIS. DOWN. NOW!!!

Seven Percent Solution on April 22, 2011 at 1:19 AM

What is the matter with the 14% of the Rs?

Schadenfreude on April 22, 2011 at 1:21 AM

here’s a view that basically assumes we have a few years left. The assumption is that the Rs will win the Senate, and that O (if still prez) will work with the R house and senate to save the country….else, well, can you say Greece?

Our bottom line finding is that the relatively low risk the market attaches to US public debt belies a substantially higher degree of riskiness (indeedone about on a par with the euro periphery)indicated by standard measures of internal andexternal deficit and debt. While the debt ceiling hurdle will likely be jumped with only moderate disruption to the Treasury market, the challenges to a much needed fundamental reworking and redirecting of US fiscal policy are great. Failure of US political leadership to make substantial progress in this area in the next few years will substantially raise the risk of a bond market crisis.

this is from Deutsche Bank

http://www.scribd.com/doc/53561921/US-Minsky-Moment

and of course the ever valuable ZH

http://www.zerohedge.com/article/americas-fiscal-dead-end-2013-minsky-moment

and, btw, minsky moment…that ain’t good.

r keller on April 22, 2011 at 1:23 AM

Who can afford gold these days?

MeatHeadinCA on April 21, 2011 at 11:03 PM

I think the question should be more appropriately asked: “Who can afford to be without gold today”.

JohnGalt23 on April 22, 2011 at 1:26 AM

It’s game over for the U.S. More than half of all Americans (59%) receive a Government payout in one form or another.

Heckle on April 22, 2011 at 1:12 AM

There are enough ants still to do the work while the grasshoppers sing about how hard their life is. If taxes and spending keep going up Obama style, there will be fewer and fewer ants as they decide it is easier to be a grasshopper. Standard of living goes down and the grasshoppers do what they learned to do in the Soviet Union, which is to escape through drugs and drinking.

pedestrian on April 22, 2011 at 1:28 AM

Don’t Let Alinsky Win

http://spectator.org/archives/2011/04/21/dont-let-alinsky-win

It’s not what you think… Quin Hillyer says don’t go all or nothing…

ninjapirate on April 21, 2011 at 10:41 PM

Excellent article! Never thought I’d need to study Alinsky in this lifetime. Course I never thought I’d need to learn about the cult of death, either.

Sad realities. “Know thy enemies.”

Opinionator on April 22, 2011 at 1:31 AM

What is the matter with the 14% of the Rs?

Schadenfreude on April 22, 2011 at 1:21 AM

Those are the people that decided to play the game and make money off of government stupidity.

pedestrian on April 22, 2011 at 1:32 AM

That Rand Paul… sharp young man. Truly a man of principles.

Must have had a helluva tutor in the art of politics.

JohnGalt23 on April 22, 2011 at 1:38 AM

So much stupid in the above Slate article it is hard to know where to begin. Let’s start here:

“But the market panic requires the Federal Reserve to reboot its emergency programs…”

Regardless of whether or not we raise the debt ceiling, the Fed’s emergency programs are not going to end any time soon.

“…disrupts the housing market…”

You mean the housing market that has seen prices and sales continue to collapse?

“…Permanently raises the United States’ borrowing costs…”

Higher interest rates are inevitable. At least by not raising the debt ceiling we won’t have to pay higher interest rates on an even larger principal amount.

“…reshapes the world bond market…

What’s the alternative to U.S. Treasuries? Greek debt that is about to take a 50% haircut? Irish and Portugese debt that the Finns are demanding be restructured? Japanese or Chinese debt? Never going to happen.

“…and shaves more than a percentage point off GDP growth—enough to throw the economy back into recession.”

The recession is actually a depression and it never really ended. GDP is going to dramatically contract anyway as commodity price ramps destroy corporate profits and consumer purchasing power. Incidentally these commodity price ramps are a direct result of the Federal Reserve’s policy of debt monetization.

“Globally, investors no longer consider the dollar the reserve currency of choice.”

Once again what is the alternative to King dollar? The Euro? It might not exist in five years. The Japanese Yen? Demographics and a natural disaster of biblical proportions are going to insure that the rising sun has set. And no one is going to trust the the secretive and autocratic Chinese Communists enough to make the Yuan the reserve currency, so what is left?

Mike Honcho on April 22, 2011 at 2:12 AM

Found this on “Big Govt“…

Gohawgs on April 22, 2011 at 2:29 AM

Gohawgs on April 22, 2011 at 2:29 AM

Corkers plan takes forever to balance the budget. Balanced budgets should be the rule rather than the exception, IMO.

FloatingRock on April 22, 2011 at 2:43 AM

McCain in “Lybia”

Gohawgs on April 22, 2011 at 2:45 AM

Mike Honcho on April 22, 2011 at 2:12 AM

Interesting post. Thank you for the analysis.

Kataklysmic on April 22, 2011 at 2:48 AM

FloatingRock on April 22, 2011 at 2:43 AM

Yep, 10 years is an eternity when bankruptcy is right around the corner…The Corker plan seems more “serious” than Ryan’s or whatever the dems lie up since his includes automatic cuts if Congress doesn’t fulfill it’s duty…It may, however, have a stabilizing effect on the dollar and world markets if passed…We can’t count on the Spelunker of the House taking any constructive role in the debt/deficit fight — and that’s a crying shame…

Gohawgs on April 22, 2011 at 2:51 AM

You two have to be two of the biggest idiots I’ve seen post here in a long time. Go back to looneyville where you belong.

BruceB on April 20, 2011 at 9:35 PM

canopfor on April 21, 2011 at 11:28 PM

Reminds me of a famous line in the very old Paul Hogan show: “P!ss off, Bruce!”

OldEnglish on April 22, 2011 at 3:53 AM

People with something to hide

Heckle on April 22, 2011 at 5:08 AM

Mornin’

OmahaConservative on April 22, 2011 at 5:11 AM

“Just 27 percent of Americans support raising the debt limit, while 63 percent oppose raising it.

I don’t think a lot of people understand what raising the debt limit means. They think it just means giving Washington permission to borrow more money. My understanding is that it means we honor the debt we already have or we begin to go into default. And that can hurt ordinary tax payers.

I think they probably should raise the debt ceiling, but real spending reforms need to be in place..something like a balanced budget amendment and/or spending caps. Something so that we don’t continue to go down this road.

Terrye on April 22, 2011 at 6:35 AM

I…….DO NOT support a “shutdown” with Palpatine in the Oval Office.

You could have MILLIONS in the streets in DC…….and we know this “Crisis” would not go waste.

PappyD61 on April 22, 2011 at 6:59 AM

Keep the Change, Scooter.

kingsjester on April 22, 2011 at 7:25 AM

Gohawgs on April 22, 2011 at 2:29 AM

thanks for the linky

cmsinaz on April 22, 2011 at 7:28 AM

mornin OC, may you have a very blessed Easter

cmsinaz on April 22, 2011 at 7:28 AM

kingsjester on April 22, 2011 at 7:25 AM

EXCELLENT post KJ, can’t blame W anymore, it just won’t work now….

cmsinaz on April 22, 2011 at 7:31 AM

cmsinaz on April 22, 2011 at 7:31 AM

Thank you, ma’am.

kingsjester on April 22, 2011 at 7:37 AM

OmahaConservative on April 22, 2011 at 5:11 AM

How’s your back?

Cindy Munford on April 22, 2011 at 7:53 AM

Someone crown Rand.

Notorious GOP on April 22, 2011 at 7:53 AM

You know how having too many credit cards makes it harder to get a new loan? Well I think that’s the situation we’re in. I don’t believe raising the debt limit will create confidence. Just the opposite. Raising the debt limit is just building your house of cards even higher. Reducing your debt is the only way to instill confidence.

What we REALLY need is legislation prioritizing our creditors. If that isn’t part of any agreed upon “package” then I’ll completely lose my tenuous faith in our representatives.

Dee2008 on April 22, 2011 at 8:00 AM

Opinionator on April 22, 2011 at 1:31 AM

That AmSpec article is very good, but the comments are even better. It is difficult for me to buy the idea that now is thte time to bid our time and play defensively, which seems to be what Hillyer is advocating. He is talking in football analogies about the Saint’s offensive game and how it is built on small pushes forward rather than hail Mary passes. While I agree that the idea is to always be pressing forward, can we agree that Obamacare was a hail Mary pass that succeeded for Democrats in that we now have to spend a lot of political energy unraveling it?

Frankly, like most people who attended Tea Parties, I have no interest in going to rallies for the next two years. They served their purpose – to remind the silent majority that there is a majority who believes in the founding principles of this country. Now, is the time to take to heart the election of 2010, when Democrats and Beltway Republicans were sent a warning shot that We the People are fed up with the partisan bickering game they play while all of them line their pockets and set up their lobbying careers for their post-elected politician days. It is no longer acceptable to play the game of “nice reasonable folks” while Obama sets about amassing power through executive orders and czars.

I want to see Republicans in front of the Capital every day explaining what increasing our debt limit means, why Paul Ryan’s budget is just the beginning, and telling Americans to look at their children and grandchildren and explain why they are kicking the can down the road for them to solve.

Republicans may not get much tradtitional media screen time, but they need to remember that Sarah Palin had 20 million online viewers for her Wisconsin speech. How many more watched it afterwards and read the transcript? They don’t need the MSM, they’ve got alternatives and it’s time to exploit them.

piglet on April 22, 2011 at 8:28 AM

Dee2008 on April 22, 2011 at 8:00 AM

VERY good point! I totally agree. How does raising the debt limit another $2 trillion communicate that we’re REALLY serious about our spending problem?

The Dems are playing chicken, hoping to blame collapse on Repubs to keep/recapture their power in 2012. Which is absolutely sickening…

But what if we raised the debt limit enough to force a 50% budget deficit cut? ($800 billion) Wouldn’t that put the Dems back on the defensive? Or would they just move the goalpost again and fight again in 6 months? Just thinking out loud…

dominigan on April 22, 2011 at 8:39 AM

Here is what the 2010 Congress was elected to do: Stop The Spending.

Do not increase the debt limit, which will mandate the US government lives within its means. That means is $2 Trillion per year. Any government, on this planet, should be able to live within that.

Our government was formed to pay off debt. That is its primary reason to exist as the government under the Articles of Confederation had left that up to the States and the Nation was near an internal collapse as farmers had property seized in the North to pay off debts levied on them in the way of taxes by their city brethren.

Does that sound familiar?

The electoral map is Blue in cities, Red in countryside.

What is the Great Divide in America? It isn’t race. It isn’t wealth. It isn’t religion. It is city and rural. Divide America not into Coasts and Flyover, but at the Interstate bypasses. Look inside the bypass and you see a culture of dependence upon government cronyism. Look outside and you see more self-reliance and DIYism, even survivalism. It is the divide between Subjects and Citizens, and the Citizens are refusing to become Subjects and want equality of taxation for all, even the poor, as the poor also benefit the MOST from government, so should they pay in something to help keep it up.

Absolutely equal taxation means that those in power must weigh their taxes not on how they impact the rich, but how it impacts the poor and keep them moderate or light. When you exempt the poor you make them Subjects and deny their vital input to supporting the government that supports them. Citizens support government, Subjects are beholden to it. And the concentration of the poor is in? Cities.

That is the divide of America.

Our crumbling cities show us the result of ‘Progressive’ government and taxation. People become beholden to government and the infrastructure goes to hell in a handbasket. Worse still is that the morals and ethics of the Subjects become corroded by their inability to fend and think for themselves and not understand their overhead to their fellow citizens by paying taxes to ALL levels of government. That is an encouragement to work harder to stop being poor, instead of encouraging them to stop thinking of themselves as Citizens so as to accept government ‘help’ levied on the backs of those who are Citizens.

Stop The Spending.

Free our fellow Citizens from the bondage of government kindness and let them realize they can do good by no longer shielding them from the harsh reality of life that one must work with one’s liberty to survive. You were born free. No one guarantees your maintenance costs will be paid for your entire life but you, because if they can then you are no longer free at all.

End this system of spending.

Life costs far too much in the hands of government and the ends of that is tyranny at every stage.

ajacksonian on April 22, 2011 at 9:43 AM

The only way the US would default on its bonds would be if the Administration fails to properly ration the seven billion dollars a day the feds take in every day. Given that Obama has never managed anything let alone a financial enterprise, I doubt he knows how to rationally prioritize government spending.

eaglewingz08 on April 22, 2011 at 10:52 AM

An historic default on bonds as a first would prove better for the country than the historic first we got in 2008.

chickasaw42 on April 22, 2011 at 3:59 PM

Comment pages: 1 2