Federal Reserve Chairman Ben Bernanke on Monday urged U.S. lawmakers to lift the country’s borrowing limit to avoid a potentially disastrous debt default, warning that the economy was still at risk from political gridlock over the deficit.
Likening Congress to a family arguing that it can improve its credit rating by deciding not to pay its credit card bill, Bernanke said that raising the legal borrowing limit was not the same as authorizing new government spending.
Not the same as authorizing new government spending? Has he met this president?
Welcome to the PermaCrisis, the political sleight of hand designed to create a permanent state of anxiety for the American public in the hopes that we don’t notice what else our “representatives” and an Executive Order happy POTUS are up to. And all the players have their parts in making sure we’re hitting the Xanax.
“We’re not out of the woods because we are approaching a number of other fiscal critical watersheds coming up,” Bernanke warned on Monday.
http://www.law.harvard.edu/faculty/hjackson/BriefingPaper41%20-%202011DebtLimitImpasse.pdf
Last time the Treasury said that it doesn’t have the authority to prioritize debts. It is required to pay in a first-in first-out manner.
Ie, default and ruin here we come!
*note the ruin part happens when we default on interest and principle on our bonds, countries lose faith in our ability to pay (as the Chinese press is already saying) and the interest on our further debts rise above our ability to keep up.
I think the situation is more analogous to a family that has a steady income, but decides to take out a new credit card to pay off the *minimum* required monthly payment on the old credit card, instead of cutting the cable TV.
But then, I don’t lean Progressive, so I can see the situation honestly, unlike Ben Bernanke and the overwhelming majority of journalists.