Sometime today, the House Republicans will hold a vote on whether or not to raise the debt limit with no strings attached, as the Obama administration has requested. The idea is to prove to the administration that the health of the global economy is now a hostage to the GOP’s extreme demands for massive, unprecedented cuts in domestic spending and entitlements. Essentially, the Republicans are saying, “Destroy your own base of political support, punish the elderly, the needy, and our veterans, or the global economy gets it.” It’s not a serious vote. It’s a joke vote.
And for all the talk of economic crisis should Congress fail to raise the debt ceiling by August, the financial markets are likely to yawn at this vote — if only because Republican leaders have privately assured Wall Street executives that this is a show intended to make the point to Mr. Obama that an increase cannot pass absent his agreement to rein in domestic programs.
“Wall Street is in on the joke,” said R. Bruce Josten, executive vice president of the U.S. Chamber of Commerce.
The stock market may yawn at today’s vote, but they’ll completely freak out if the the deadline for raising the limit gets close without some action.
This is an opportunity for you to make a lot of money. Just think back to the debate over TARP.
Mr. Josten of the Chamber of Commerce, who has met privately with Republican newcomers on fiscal matters since January, asked, “Am I the only one who remembers the split screen on TARP?”
He is not. Increasingly, worriers from Washington to Wall Street recall how House Republicans by a 2-to-1 margin first rejected the Troubled Asset Relief Program, better known as the bank bailout, on Sept. 29, 2008, though the financial system was near collapse and a Republican president, George W. Bush, was pleading for their support.
That afternoon, cable networks split screens to capture the stock markets going down simultaneously with the House vote; the Dow Jones industrial average fell more than 777 points, its largest single-day point drop. Four days later, following the Senate’s lead, the House approved a revised bailout and Mr. Bush signed it into law.
A time will come sometime in July when the Republicans fail to raise the debt ceiling and Wall Street starts a massive sell-off. This is when you buy shares. You might want to wait until the market has lost more a third of its value, though, because it could be a very long time before the global economy recovers and stock prices reach their pre-crisis levels.
Take the time to read this account of what may happen if the government defaults (or even comes close to defaulting) on its debts.
You need to pay close attention to where you have your money parked, and seek out advice about where you can find safety.
Everyone may think the Republicans are bluffing and that this is all a joke, but there is nothing funny about what’s going on, and there doesn’t seem to be any realistic prospect of the GOP backing down prior to a major adverse event on Wall Street.
Crap – you really think their bluff isn’t going to get called until the economy takes another huge hit?
“ou really think their bluff isn’t going to get called until the economy takes another huge hit? “
why would anyone call their bluff? The republicans ain’t backing down (by this point they may have made such a big stink about the debt that they CAN’T back down without losing the precious teabagger vote). And as evil as this sounds, the democrats have an interest in letting the GOP twist in the wind: i’d bet my bottom dollar there are already ads being crafted that talk about how the republican crashed to economy AGAIN, this time on purpose.
I’m talking to my broker-in-law tomorrow about safe havens for my pathetic “retirement” “savings”, but I fully expect the economy to get whomped. I’m very glad my mortgage/student loans rates are locked in, and that I paid off my credit cards. VERY glad.
we’re so thoroughly fucked.
I still need to schedule a meeting with some banks to figure out if I want — or even can — consolidate my loans. If I can’t, I’m stuck with variable interest rates. Although the rates are low now, they have nowhere to go but up. Consolidation would probably mean paying more in the long-run, but it would at least fix my interest rates.
The bluff isn’t going to get called. Just watch 35 dumbass Dems in the House vote along with not passing the clean ceiling raise. Because they can’t help themselves.
We have politicians of both parties who genuinely want to cut trillions of dollars of spending in the next decade. Only problem is one party is doing it in good faith, and the other just wants to burn government down. But either way, the pressure is all in one direction. Only Medicare and Social Security will be spared.
82 it turns out, not 35. 82.
My cynicism bone needs a tune-up.
It’s not a serious vote. It’s a joke vote.
So it’s your contention that irrespective of the political effect, the actual effect should the bill get signed into law would be no effect? Can’t buy it. Leave us not forget that the vast majority of Americans have no clue what’s going on in D.C., but are definitely aware of the economic destructive force of a failure to raise the debt limit.
I think the Democrats had better take a careful measure of voters in their districts before they decide. A ‘no’ vote on this one means losing mine.
Called and passed on the message. The gatekeeper will pass it on to the Congressman. Note that my rep signed on to the ‘no frills’ raise to the debt limit back in April.
Boo:
Did you see the write-up at TGOS on why this bill is so odious? They worded it to place all the blame squarely on the President. No Democrat should vote for it. They should either vote “no” or “present.” This country really is being run(partially) by jokers, sadists and idiots.
No. Didn’t see it.
Nice article! The difference between G.W. Bush begging Congress to raise the debt ceiling and a similar plea from Barack Obama is that Congress and Wall Street are loaded with LIBERTARIANS. These cats are pure died in the wool fanatics who don’t give a rat’s azz what financial depression their roadblock to raising the debt ceiling will cause. Americans need to wake up to the fact that Libertarians are dedicated to the goal of destroying America. Daily I read articles by political pundits who are perplexed over the behavior of Libertarian people like Senator Rand Paul. The pundits moan over the fact that Paul’s actions and his Senate voting record makes absolutely no sense. Rand is simply voting the sentiments of his Libertarian ideology, which gets completely scrambled when he has to pick and choose between the value of various legislative points drafted by outside special interests and introduced by his non-Libertarian Senate colleagues.
In terms of raising the debt ceiling, the House of Representatives is the real problem as the House is loaded with Libertarians. As a matter of fact a group of Libertarian House members have already threatened John Boehner with a Tea Party primary fight if he continues to work on attempting to find a compromise that will allow the debt ceiling to be increased. I really don’t know how much more plain you can make the intentions of the ultimate goal of Libertarians in this country.
Like an invasion of termites, America will have to deal with the current aggressive Libertarian population or otherwise this Grand Old House known as the United States of America will soon come tumbling down in the form of non-repairable rubble.
One last comment on “Wall Street being in on the joke” pertaining to the debt ceiling political theater currently in process. In other words Wall Street is confident that at the last moment the debt ceiling will indeed be increased. Wall Street likewise is also loaded with a fresh crop of wunderkind financial Libertarians who have created a myriad of transatlantic channels through which they can move their assets in the event the American investment market crashes. These are some of the brightest financial managers America has ever seen and they are well positioned to handle an American financial meltdown to the point of even handsomely profiting from such an event. Therefore adding more volume to the well publicized threat “that America faces a Wall Street debacle if the debt ceiling is not increased” is indeed a serious waste of time and energy.
This vote should be interesting to watch. C-Span says to expect the vote at 6:30 Eastern (3:30 Pacific.)
Apparently the R’s strategy is to get any Dems on record (for 30 second-ad purposes) voting for “raising the debt limit without any meaningful cuts. How can you trust someone so fiscally irresponsible managing your tax dollars?“
It’s a lame strategy and the Dems should not fall for this. No Republican is gonna vote for this bill today so no Dem should participate one way or the other. I hope every Dem votes “Present” today.
Watching Nancy Pelosi speak on the subject now. She’s good.
Some are not laughing. This from an expat commenter on Boo’s linked NYT article: