Friday, March 10, 2017

Trump's idea of making a deal could be challenged by the next debt ceiling crisis (Beware the Ides of March)


Damian  Paletta has primed us to apprehend another debt ceiling fight this summer, in an article on p A6 of the Washington Post Friday, March 10, 2017, “Treasury calls on Congress to raise debt limit, begins steps to delay default.” 

Treasury Secretary Steve Mnunchin has started his “extraordinary measures” already, as Congress-passed immunity from the debt ceiling runs out on the Ides of March, that is, March 15, 2017. 
The possibility of a default could occur as soon as August. 

  
Trump, remember, has claimed he could “make a deal” and not raise the debt ceiling (story ).  He has also made statements that seem to suggest it could be OK to “default” (at least maybe on debts overseas like to China).  He does seem to be promising Social Security would never be interrupted (and maybe it wouldn’t be, for legal reasons we have covered before).

Here is CNBC’s article by john W. Schoen on Feb. 17.  CNBC continues the discussion (Jacob Pramul) with charts March 9. 
   
I can live with Parlor Timocracy, but not “t_Rump-ocracy”.  

But maybe the fact that Trump is nominally from the same party as Congress means there won't be the partisan bickering we saw in the summer of 2011.  (Trump had at one time tried to get the Reform Party nomination, in 2000, and wrecked the party, Jesse Ventura notwithstanding. 




Update: March 20

FEE has an article by Richard M/ Ebeling arguing against extending the debt ceiling, but fails to note the government would actually default on what it actually owes.  Whether current social security beneficiaries are actually owed is a good question (Flemming v Nestor) as I've covered, but the Trust Fund intermediary tends to protect beneficiaries. The writer seems to think a balanced budget alone would cover this, but it wouldn't. 

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