[P2P-F] McConnell: ‘The debt ceiling will not be clean anymore’

[Michel Bauwens]

Important insight, thanks Kevin,

Michel

On Wed, Aug 3, 2011 at 7:39 AM, Kevin Carson <
free.market.anticapitalist at gmail.com> wrote:

> There's an interesting analogy here to Peak Oil. Those who say high oil
> prices are the result of "above ground" factors like speculation rather than
> declining rates of extraction miss the point: rising speculation, terror
> attacks on pipelines, etc., are all secondary epiphenomena of the declining
> rate of extraction. The less elastic supply becomes, the more it becomes in
> someone's interest to leverage that inelasticity by attacks on supply. The
> less elastic oil supply becomes, the higher the ROI on terror attacks on
> pipelines and other obstructions of supply.
>
> Likewise, the closer states approach to fiscal exhaustion, the more
> leverage can be extracted by threats of default.
>
>
>
> Sent to you by Kevin Carson via Google Reader:
>
>
> McConnell: ‘The debt ceiling will not be clean anymore’<http://feeds.washingtonpost.com/click.phdo?i=02bd3bc7187b5e9d1eb412fd5ca6eeed>
> via Ezra Klein <http://www.washingtonpost.com?wprss=blogs> by Ezra Klein
> on 8/2/11
>
>   The most honest man in Washington<http://www.washingtonpost.com/blogs/ezra-klein/post/column-in-praise-of-mitch-mcconnell/2011/05/19/AGoMj1oH_blog.html>did some more truth-telling on CNBC last night. Speaking to Larry Kudlow,
> Mitch McConnell made perfectly clear that the hostage situation we just went
> through wasn’t a one-shot deal. It’s the new normal<http://jaredbernsteinblog.com/adventures-in-tv-land/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+JaredBernstein+%28Jared+Bernstein%29>:
>
>
> What we have done, Larry, also is set a new template. In the future, any
> president, this one or another one, when they request us to raise the debt
> ceiling, it will not be clean anymore. This is just the first step. This, we
> anticipate, will take us into 2013. Whoever the new president is, is
> probably going to be asking us to raise the debt ceiling again. Then we will
> go through the process again and see what we can continue to achieve in
> connection with these debt ceiling requests of presidents to get our
> financial house in order.
>
> Previously, I’ve compared the debt ceiling to a bomb ticking away at the
> base of the economy. We don’t much notice it because it’s always been there
> and, despite a couple of close calls, it’s never gone off. But that doesn’t
> mean it won’t ever go off. Particularly if these sorts of showdowns become
> the norm.
>
> And even if it doesn’t go off, Congress’s decision to make the risk of
> default more visible might well be enough to scare the markets. If you were
> an investor, would you want to put your money in a country that regularly
> held bitter partisan brawls over whether you would be paid back? Or would,
> say, German bonds begin looking like a comparatively better bet?
>
> We have an increasingly polarized country. We have an increasingly
> dysfunctional Congress. One way to respond would be to make it easier for
> Congress to operate in a partisan manner and to work to reduce the risk that
> gridlock and grandstanding could harm the country. But that, of course,
> won’t happen, as the people who could rewrite the rules are part of that
> dysfunctional system, and answer to our increasingly polarized political
> parties. And so we’re raising the stakes rather than lowering them. We’re
> setting up the exact sort of catastrophe we should be laboring to avoid.
>
> Hearing McConnell’s comments last night, economist Jared Bernstein was
> shocked. “This is not the way of great nations,” he wrote<http://jaredbernsteinblog.com/adventures-in-tv-land/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+JaredBernstein+%28Jared+Bernstein%29>.
> I disagree. The political system that doesn’t modernize and eventually finds
> its vulnerabilities exploited by interest-group pressure, internal divisions
> and reckless politicians? This is certainly the way of great nations. It’s
> the way they fall.
>
>
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>
>
> Things you can do from here:
>
>    - Subscribe to Ezra Klein<http://www.google.com/reader/view/feed%2Fhttp%3A%2F%2Ffeeds.washingtonpost.com%2Frss%2Frss_ezra-klein?source=email>using
>    *Google Reader*
>    - Get started using Google Reader<http://www.google.com/reader/?source=email>to easily keep up with
>    *all your favorite sites*
>
>
>
>
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