Thursday, September 26, 2013

GOP shifts attention from shutdown to debt ceiling; uncertainties seem as great as in previous fights

The Wall Street Journal has a front page story Thursday morning, by Damian Paletta and Kristina Peterson,  warning “U.S. Running Out of Cash More Quickkly: Treasury now sees crunch by Oct. 17; No deal to fund government in sight”, link (paywall) here
There is not a lot of detail, but the government would be unable to meet about 30% of its already spent obligations in November.  
Surprisingly, the article doesn’t seem to recognize that Social Security is itself a bondholder and probably gets first in line to be paid.  We visited this point last winter, and a discussion among law professors in the New York Times emphasized this point.
Other reports suggest that the GOP is willing to “negotiate” to avoid a government shutdown Oct. 1, and wants to focus on leveraging against the debt ceiling Oct. 17.
There is something evil about threatening to stiff ordinary citizens (like federal contractors, for openers, at least), to pay for “other people’s problems”.  Totalitarian governments do that all the time.  The United States must not.  But there seems to be some hidden virtue in keeping sudden sacrifice in the background.  

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