The recent Congressional impasse in the United States over raising the federal government’s debt limit caused some gyrations in financial markets. Every dip was a gilt-edged buying opportunity. I am sure George Soros, Warren Buffet, and company, made their killings. Me, I have no spare money, unfortunately.
There was zero probability that the debt limit would not be increased. Even the Tea Party crowd in Congress would have blinked — if they hadn’t known that the wets among the Republicans would blink first. No-one would want to carry the responsibility of bringing the United States into ruinous disrepute; and then there is the ‘small’ matter of bringing down the international monetary system.
Of course, the biggest poseurs in the history of the world — the rating agencies – made noises about lowering their ratings on US debt. It’s worth me repeating for those who don’t get it: Unlike the debt of other governments, the debt of the United States is all denominated in the currency for which it (the US government) has unlimited issuing rights. It can issue / print dollars at will. Ergo, the United States cannot default unless the Congress suffers a collective bout of insanity and refuses at some point to lift the debt ceiling. I think we can rule that out.
If I am right, and I am, why in the world would Republicans, or a large body of them, ever think it was a good idea to use the debt ceiling as leverage to get concessions from the President and/or Democratic congressmen on Obamacare or anything else? The epithet, ‘The Stupid Party ’, often attached to GOP by friends and foes alike, is surely fitting on this occasion.
Total debt is the final cumulative rolling tally resulting from all of the expenditure and taxation battles won and lost over past years. You can’t undo the past – nor all thy piety nor wit can lure it back to cancel half a dollar; nor all they tears wash out a cent of it (with due acknowledgement to Omar Khayyam).
Why adopt a negotiating stance which even a half-wit could see was patently untenable and unwinnable? It was nothing short of Lois Lane threatening to feed Superman kryptonite unless Lex Luthor desisted from his criminal activities. It is feasible to leverage off the budget or particular expenditure or taxation measures that the Democrats have set their bleeding hearts on; but not the debt ceiling.