patrick.net

He-he, this is what I got in my inbox about 10 minutes ago:

"Friend -- Minutes ago, Senate Democrats voted to kill outright John Boehner’s "compromise” that would delay Obamacare for an entire year.

Thanks,
Stop the GOP"

sbh says

repeal the lost election....

If voters had a chance to vote solely on Obamacare, it would have lost. The election was about much more than that, with exit polls showing dramatic differences correlating with demographics: basically Republicans' nativist theocratic platform carried only among white churchgoers who attend church at least weekly, and alienated almost everyone else.

I'm not going to defend the Republicans, but they chose to focus on Obamacare because it's the only issue where their position (repeal) has majority support. If there is a shutdown, it will be due to the intransigence of both major parties. The Republicans have a platform so terrible they can't win, while the Democrats have insisted on a policy that most people don't want.

BTW, not raising the debt ceiling would probably be illegal, or at least self-defeating. The 14th amendment says specifically that the debt "shall not be questioned." If any disappointed bondholders don't receive payment on time, they can sue in federal court and get a judgment ordering the Treasury to pay, and the judgment would accrue interest at probably a higher rate than the bonds. And, the GOP can't shut down the courts either, because the Constitution says judges' salaries can't be reduced so long as they continue "good behavior" (i.e. so long as they don't get caught committing a crime, though traffic tickets are ok apparently).

curious2 says

If any disappointed bondholders don't receive payment on time, they can sue in federal court and get a judgment ordering the Treasury to pay, and the judgment would accrue interest at probably a higher rate than the bond.

This is not that clear, although it is understandable that that section was put in as an additional protection for the bond-holders:

http://am.blogs.cnn.com/2009/06/01/bondholder-furious-over-gm-bankruptcy/

http://www.reuters.com/article/2013/09/25/us-usa-court-argentina-idUSBRE98O1AH20130925

Will be interesting to see how these and similar cases will eventually pan out. In the end you could not see your money for a while (if at all), depending who you invest with, esp. if they run out of money ;)

mell, neither of those articles involved the U.S. public debt. GM and Argentina are not the U.S. Treasury.

During the bailout, certain non-Treasury bondholders were given the enormous gift of a Treasury guarantee, so that may have blurred the distinction in some instances. Nevertheless, GM bonds were issued by GM, not the United States Treasury.

sbh says

I really wonder what would have been the result of a straight up or down popular vote if all its elements were understood by the citizenry....

The question reminds me of an exchange I had with finehoe, who pointed out that a selection of certain provisions by themselves have majority support. The issue is, his cherry-picked selection was bundled together in a package that, as a whole, would be voted down. Both sides have published misleading claims and outright misrepresentations, with each side blaming the other and complaining about the other spending too much on its campaign (the Koch Brothers, official propaganda including Healthcare.gov, various industry shills, etc.). Through it all, public opinion has remained surprisingly steady. The Wall Street Journal published a great short article about this in 2010.

curious2 says

I'm not going to defend the Republicans, but they chose to focus on Obamacare because it's the only issue where their position (repeal) has majority support. If there is a shutdown, it will be due to the intransigence of both major parties. The Republicans have a platform so terrible they can't win

Exactly, but there is a reason why.The reason, as stated before many times is that the GOP just happened to become the conduit for various financial interests. The top three largest industries in the US are 1: Energy 2: Retail 3: Healthcare.

So there is an ENORMOUS amount of money tied to healthcare and the companies that are in it. By setting up the Tea Party thus was created a sort of fake populist movement where the well-meaning and passionate followers were told one thing: " Obamacare is sociaist!" and the actions out back was another: Spend tons of money to try and influence politics. So the GOP has basically become a kind of puppet for outside interests. This to me is why the party has started acting so bizarre and seemingly detached from reality.

edvard2 says

So there is an ENORMOUS amount of money tied to healthcare and the companies that are in it.

That money flows on both sides. I suggest reading the WSJ article that I was looking for a link to before, I found it while you were posting your comment. Basically, the air war hasn't moved public opinion, for the reasons explained in the 2010 article; the poll numbers have remained around same since 2009.

Oh, I'm not claiming money doesn't flow on both sides. But one could argue that the way money is used behind the scenes on behalf of the GOP is far more misleading and covered up- aka- the tea party I previously mentioned, which was purpose-engineered from the start to act as the mouthpiece for its backers.

curious2 says

mell, neither of those articles involved the U.S. public debt. GM and Argentina are not the U.S. Treasury.

During the bailout, certain non-Treasury bondholders were given the enormous gift of a Treasury guarantee, so that may have blurred the distinction in some instances. Nevertheless, GM bonds were issued by GM, not the United States Treasury.

Agreed, but the corporate bond laws are very similar in the sense that the bondholders come first, but those laws were selectively not enforced. Also, any country that has the power over their own central banking can print their way out of debt, that is not a privilege of the US (some can't because they obey to their overlord central banks such as countries of the EU). Or it can decide to default on its bonds (see the Argentina lawsuit) if they deem themselves bankrupt, apparently Argentina decided that this is better for them in the long run (despite people claiming here that it is utterly disastrous to do so for a country), and there is nothing the bond holders can do about it. The presumed problem for "other" countries is that the bond quality of these countries will deteriorate faster and the yields will rise faster because they are not the current reserve currency holders and have a smaller economy, still some deem it favorable (and they probably did the math), esp. if most are loans tied up with international banks that should have never been made in the first place or were forced upon them by special interests. That being said, there is no reason why this cannot happen to the US if they stay on this path, their credit rating has already been lowered due to the high debt and they are playing with fire. That and it is not fair to future generations.

mell says

there is no reason why this cannot happen to the US....

Umm, the Constitution is a reason the US cannot default. Unless section 4 of the 14th amendment gets repealed, we don't have the option of defaulting. Even if both major parties in Congress forget their oaths to uphold the Constitution, the courts would still issue judgments ordering payment, and those would remain enforceable, with probably interest at a higher rate than the bonds.

Printing is another matter, as Bubbles Ben and his TBTF Fed cronies have demonstrated ad nauseam.

curious2 says

mell says

there is no reason why this cannot happen to the US

Umm, the Constitution is a reason the US cannot default. Unless that part of the 14th amendment gets repealed, we don't have the option of defaulting. Even if both major parties in Congress forget their oaths to uphold the Constitution, the courts would still issue judgments ordering payment, and those would remain enforceable, with probably interest at a higher rate than the bonds.

Printing is another matter, as Bubbles Ben and his TBTF cronies have demonstrated ad nauseam.

Yes, they cannot default, but they can be left without any significant demand for their bonds, a currency crisis and more. If nobody wants their debt that is the same as a default for practical reasons. Any country who has control over their money and has that clause/amendment cannot go bankrupt, doesn't mean it's a good thing to keep printing. But yeah, I don't see that part of the 14th getting repealed anytime soon ;)

edvard2 says

one could argue that the way money is used behind the scenes on behalf of the GOP is far more misleading and covered up....

One could also argue the opposite, at least with regard to Obamacare: "Families USA", the Kaiser family empire, PhRMA's initially secret 2009 deal with the White House that the administration initially denied but then admitted, etc. Through it all, "One of the more amazing aspects of the health-care debate is how steady public opinion has remained." Year after year, hundreds of national polls from many different sources have reported around -10%.

Shut it down. I want to see what global investors of our debt decide to do. It's not nice to mess with someone's money.
I'm sure our rating will climb to AAAA+Awesome.