Just ignore the debt ceiling and keep issuing debt. What happens then? Janet goes to jail? Does anyone have standing to file suit? And how long would that take?
Printing is an even simpler to execute form of theft, as long as the entire populace, including the Junta itself, consists of virtually nothing but well indoctrinated, full blown illiterates.
Felix_Mish
2 years ago
Love those calendars! Noticed that social security is a simple $20 billion every week (i.e. 1 teradollar per year), and medicaid (not medicare!) is a surprising, constant flow of single digits.
Anyway, congress is in the position of making the rules while playing the game. So, we’re watching a Calvinball game.
In the end, DC must print money to cover the outgo – that is, broadly tax all holders of dollars and things tied to dollars – tax wealth. Hands will furiously wave to make the tax seem something else. But people, both as individuals and in groups, will crowd around the spigut and run away from the tax pump’s sucking maw. And life will go on.
KidHorn
2 years ago
The FED is worried about directly financing the government? I assume they’re also worried about interfering in the housing market or influencing stock prices.
I wonder if dropping an atomic bomb on NYC would effect Manhattan real estate prices.
Historically, the problem are the riders attached to increasing the debt limit. Congress should pass a law that increasing the debt limit must be passed on it’s own.
The debt ceiling is a lot of nonsense. If Congress passes a spending bill, it has an obligation to make sure the money borrowed to fund the program is repaid on time and in full.
“If Congress passes a spending bill, it has an obligation to make sure the money borrowed to fund the program is repaid on time and in full. “
Yes. THEY do. Emphasis THEY. Noone else have any obligation whatsoever, to bust their rear paying taxes, in order to help THEM fulfill that obligation. Certainly not anyone who wasn’t even of voting age when the trash passed those “spending bills.”
Captain Ahab
2 years ago
Let me put this in very-simplified naive taxpayer terms…
The Fed govt (IRS) collects income taxes, supposedly due on April 15th. By October of the same year, all the money is spent! IN SIX MONTHS!
This is beyond ‘pigs at the trough’. This is out-of-control profligacy, incompetence and inefficiency at all levels of government, wasteful wars…
“This is out-of-control profligacy, incompetence and inefficiency at all levels of government, wasteful wars…”
IOW, It’s America.
Casual_Observer2020
2 years ago
Nothing to see here. The Fed is ready and willing to be next BoJ.
Tony Bennett
2 years ago
“Republicans and Democrats are playing “Debt Ceiling Chicken”. The Fed has an emergency plan on deck.”
…
Elected and Unelected officials KNOW their statements drive markets … and since inside trading is “legal” for them … the opportunity to profit handsomely will be too much to pass up. Look for their brokers to be quite busy.
A very interesting read- with well over 15 pages of references.
RonJ
2 years ago
“Debt Ceiling Congressional Chicken and How the Fed Might Respond”
Debt ceiling fraud. It is always raised. Kabuki theater will not change that.
Bungalow Bill
2 years ago
Ah the theater of something that is going to happen no matter the drama that plays out before us…
The GOP is not a party of fiscal conservatism. It’s all an act.
whirlaway
2 years ago
The debt ceiling WILL be raised. The only question is – how many concessions will be made on behalf of the average American. Of course, the super-rich and the big corporations will emerge unscathed from the “crisis” – as always.
Castro was the richest person in Cuba and always emerged unscathed.
TechLover1
2 years ago
Looks like Democrats are getting ready to “blink” based on messaging from Pelosi.
I want to see how small the social spending package is. My best guess is 2 to 2.5 Trillion.
Not sure what the market has been discounting on the package to be. If it turns to be really “small”, i.e. less than 2 T, we may have a big decline in the market. It may even be relatively deflationary if everyone had expected 3T and it happens to be 1.5T.
The GOP is not a party of fiscal conservatism. It’s all an act.