I have been in many many negotiations, and I do believe that the most powerful force is the use of time. The one feeling the pinch of time the most is at a disadvantage, if they allow themselves to be pressured by it. I believe Boehner should not attend a meeting, and publicly demand that Obama put forth a plan, and challenge him on national television to the whole country.
He needs to take no further action until that happens.
That means also letter the US go into default if need be. It is time to stop this momentum and move it the other way.
If the republicans lose the election, so be it, but they will not.
http://nrinstitute.org/lmotw/2011/05/19/debt-limit-impasse-is-not-the-end-of-the-world/
Debt limit impasse is not the end of the world
This past Friday, Treasury Secretary Tim Geithner sent a letter to Sen. Michael Bennett (D-CO), claiming that “failure to raise the debt limit” would force the United States to default on its “legal obligations” thus inflicting “catastrophic, far reaching damage on our Nation’s economy.” None of this true.
This Monday, Geithner sent another letter to Congress, this time informing them that the Treasury Department had in fact reached the debt limit. The world did not end. In fact, the interest rate on Treasury notes fell that day.
So why is the market failing to implode as Geithner predicted? Well, for starters, he may have cried wolf one too many times. In his first letter to Congress in January of this year, Geithner warned of “catastrophic” consequences if the debt ceiling was not raised by March 31st. That date came and went without event.
Then on March 1st, Geithner warned that financial Armageddon would not occur until April 15th. On April 4th he moved the date back to May 16th. And then on May 2nd Geithner said there were “extraordinary measures” he could take as Treasury Secretary that would push the default date all the way back to August 2nd. The markets, and Congress, have detected a pattern of behavior here.
The reality is, as the Government Accountability Office has certified, Geithner has complete authority over how to prioritize federal government payments. And the U.S.’s expected tax revenue (approximately $2.2 trillion) far exceeds our expected $200 billion in interest payments on the debt. That also leaves plenty of cash to pay the troops, send Social Security checks, and pay providers for Medicare services. The only reason the U.S. would ever default on its debt, or miss a Social Security check, would be because Geithner chose to do so.
The debt ceiling has already been raised three times during Obama’s first two years in office. In February 2009, Obama asked for and received a $789 billion debt limit hike to help pay for his stimulus plan. In December 2009, Congress passed a stand alone $290 billion debt ceiling increase and in February 2010, the Democrats in Congress hiked the limit another $1.4 trillion to today’s $14.3 trillion max.
As former-George Soros fund manager Stanley Druckenmiller told The Wall Street Journal, the real danger may just be another debt limit hike without any real controls on future spending: “My guess is that the bond market would rally as long as it believed the ultimate outcome was going to be genuine entitlement reform—that we wouldn’t even have to find out about a meltdown because it wouldn’t happen. And I have some history on my side here.”
He does. Three times over the last thirty Congress has failed to raise the debt limit after the Treasury Department alerted them that their borrowing authority had been reached: 1985, 1995, and 2002. The longest stretch occurred during the 1995-1996 showdown when the debt limit was reached in November 1995 but Congress did not raise the limit until March 29, 1996. At no point during any of those episodes did markets lose faith in the U.S.’s ability to pay its bills. And out of the 1995-1996 impasse came spending cuts, balanced budgets, and a booming economy.
Sounds like the opposite of the end of the world to us.