Have A Great Weekend

Update early Saturday: On the most fateful weekend for this country in quite some time, the New York Times chose to print a story lauding the House TPers for their political victory in turning a simple act of legislative housekeeping into an international crisis, in order to hack away at the federal government they hate, but that so much of this country and so many of its people absolutely need.  But these people are not operating as politicians, let alone governing partners.  They are extortionists, holding a gun to the head of the entire world economy.  Their philosophy of government is theocratic dictatorship.  Their actions are in any other context criminal.  In this context, their actions are even worse crimes.  They shouldn't be lauded.  They should be arrested.  And that goes for John Banal, Eric Cant and now Mitch McConnell.      

This blog is supposed to be about dreaming up the future.  And while that process is still happening out there (as in the three books I highlight at Books in Heat), the drama going on in Washington is emphasizing the nightmare side--"it's not dark yet, but it's getting there."

Some of what we're facing is being repeated often enough that it's sinking in.  On Friday, this will probably become even clearer as federal officials talk more about what really will happen should the debt ceiling not be raised by Tuesday.  For instance, if the federal government chooses to pay interest on the debt plus Social Security, Medicare and Medicaid for August, it will have no money left over for anything else.  It can't pay soldiers and sailors overseas, or for the fuel and technology they use, and can't even pay to bring them back.  It can't pay federal employees--and we profoundly hope that would start with members of Congress.  Even scarier for some folks, it can't pay federal contractors.  The FAA is already dealing with this, thanks again to GOPer zealots.  How about food inspectors?  Air traffic controllers?  The federal government would be paralyzed, which soon would paralyze state governments, and on down.  

The economic ripple effects would be immediate.  The amount of money withdrawn from the economy just in August will likely be enough to plunge the country into recession.  Unemployment will rise in September, as people are layed off by contractors who aren't getting paid by the federal government, etc.  And that's before the downgrade in the credit rating--leading to instant losses to pension funds, home mortgages, etc.  The spiral quickly continues and may encompass the world in the first elective Depression in recorded history.

Meanwhile, Capitol Hill is an utter mess.  John Banal couldn't pass his plan with members of his own party on Thursday, and as the sun slowly rises in DC, it's uncertain whether he will try again on Friday.  Instead of worrying about the country, he has to worry about his job as Speaker.  This failure was caused by some TPers actually acting rationally in a political sense: everyone knew that even if the Banal plan passed, it would be instantly voted down in the Senate.  So why should they go on record voting for a plan they didn't believe in?  They'd be damn primaried!  So forget about the country there too.

So besides dire and detailed warnings from Treasury and perhaps the White House, what exactly happens Friday is uncertain.  But what seems likely is that the result will be still no solution in sight.  No plan.  Which leaves Saturday.

A plan to hike the debt ceiling and cut the deficit without hurting the economy right now, which Democrats and enough Republicans could support--not a bad year's work, but they have to polish it off on a hot summer Saturday.  And if no plan emerges, then President Obama will have to ask directly: do you all have the votes for a simple raising of the debt ceiling?  And if the answer is no, he is going to face a big decision, which (many voices were saying Thursday) might involve something like the scenario I outlined for last Sunday: President Obama directs the Treasury to pay the nation's bills and ignore the debt ceiling.   Unless there is real progress by Saturday night or Sunday morning on a viable legislative way out, the 14th amendment option may turn out to be the only option.  For the drops in the stock market all this past week could very well turn into a panic on Monday.

Expect to hear the President at least once this weekend, and probably twice.  Once to say clearly that the Republicans in Congress are about to plunge the world into Depression.  He gave the ball to Congress and so far they've tripped over it, and are sitting dazed in the mud.  Beyond that everything's a guess.  The country may be going down big time early next week. And even the least destructive scenarios will be terrible for the economy and the country.   But in the meantime, have a great weekend, and enjoy what's left of the high tide.