Central Perk

luni, 1 august 2011

Get the Facts on the Debt Deal

Monday, August 1, 2011

Yesterday evening the President spoke in support of a bipartisan deal to reduce the nation’s deficit and avoid default. This deal will extend the debt limit until 2013, ensuring stability and economic confidence, and it puts in place a framework for balanced long term fiscal discipline. The bipartisan compromise assures that the United States meets its obligations, providing monthly Social Security checks and veterans’ benefits, and fulfilling contracts with thousands of American businesses.

Watch the video of the President’s remarks, and read the fact sheet for a comprehensive breakdown of the new plan.

Have questions about the deal? White House advisors are taking time this week to answer your questions as part of White House Office Hours. Use the hashtag #whchat to ask your questions, and Brian Deese and Jason Furman of the National Economic Council will answer a selection of them directly. Check out this week's schedule below, and follow @WhiteHouse for more updates.

Monday, August 1
5:00 p.m. EDT: Office Hours with Brian Deese, Deputy Director of the National Economic Council
Tuesday, August 2
4:00 p.m. EDT: Office Hours with Jason Furman, Principal Deputy Director of the National Economic Council
Wednesday, August 3
4:00 p.m. EDT: Office Hours with Brian Deese, Deputy Director of the National Economic Council

We’ve already answered dozens of questions from fellow Americans, and we look forward to hearing from you. For more information about Office Hours, including a wrap-up from last week, click here.

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Debt Deal Reached: Get the Facts

Your Daily Snapshot for
Monday, August 1, 2011

Debt Deal Reached: Get the Facts

On Sunday night, President Obama informed the nation that an agreement had been reached between both parties to raise the debt ceiling, preventing our country from defaulting for the first time in its history. Read the factsheet for details of the deal and check out White House Office Hours on Twitter this week to get your questions answered.

In case you missed it: watch the video of the President outlining the deal or read his full remarks.

In Case You Missed It

Here are some of the top stories from the White House blog.

Office Hours 7/29/11 or "Time Flies When You're Tweeting": Brian Deese Answers Your Questions on Twitter
During White House Office Hours, Deputy Director of the Economic Council Brian Deese answers your questions live via Twitter about the ongoing debt negotiations.

Gayle Smith on Aid & Development: Twitter Interview Follow-up
Gayle Smith, Special Assistant to the President and Senior Director for Development and Democracy, answers follow-up questions from her live Twitter interview.

Over 1.5 Million Records Released
A new release of White House visitor records brings the grand total of records that this White House has released to over 1.5 million records.

Today's Schedule

All times are Eastern Daylight Time (EDT).

9:30 AM: The President receives the Presidential Daily Briefing

10:00 AM: The President meets with Commerce Secretary Locke

10:30 AM: The President meets with Senior Advisors

11:00 AM: The Vice President meets with the Senate Democratic Caucus at the U.S. Capitol

11:45 AM: Press Briefing by Press Secretary Jay Carney

12:00 PM: The Vice President meets with the House Democratic Caucus at the U.S. Capitol

Indicates events that will be live streamed on WhiteHouse.Gov/Live

Get Updates

Stay Connected

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Seth's Blog : Responsibility and authority

Responsibility and authority

Achievers in traditional organizations often say, "I want more authority." They mean that they want the power to make things happen, the mantle of authority that will allow them to get things done.

This is an industrial-era mindset. Management by authority is top-down, risk-averse, measurable and perfect for the org chart. It's essential in organizations that are stable, asset-based and adverse to risk.

There's a different approach, though, one that's based on responsibility instead of authority. "Anyone who takes responsibility for getting something done is welcome to ask for the authority to do it."

Ah, your bluff is called. And so is your boss's.

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duminică, 31 iulie 2011

Mish's Global Economic Trend Analysis

Futures Surge on "Pathetic" Debt Deal; Congress Should be Ashamed; US Deserves Debt Downgrade; Is Boehner Balking Over Cuts to Military Spending?

Posted: 31 Jul 2011 07:51 PM PDT

After spending a day in the garden weeding and transplanting I arrive at my computer to see S&P futures up 20 points, 1.5% on news a compromise was reached. Quite frankly this is ludicrous given that anyone not brain dead knew a deal would be reached.

Let's pick up the action starting with U.S. Stock Futures Advance as Obama, Lawmakers Agree to Raise Debt Limit

U.S. stock futures rose, indicating the Standard & Poor's 500 Index may rebound from its worst weekly loss in a year, as President Barack Obama announced an agreement to raise the federal debt limit and avoid a default.

Obama said in remarks at the White House that both parties in the U.S. House and Senate had reached an agreement to raise the nation's borrowing limit and cut the federal deficit.

"A lot of people were short the dollar and U.S. equities into the weekend, betting that we wouldn't have a deal," Frederic Dickson, who helps oversee $28 billion as chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon, said in a telephone interview. "Now investors will be reversing those positions as things are looking better than they did on Friday, even though there are still some hurdles to climb in the next 48 hours."

Let's stop right there and point out genuine BullSweet starting with a US dollar intraday chart.

US$ 15-Mimute Chart

Does anyone see a short covering rally in the dollar? I sure don't.

Had there been an agreement to reduce the deficit by $4 trillion we might have seem one, but this deal changes nothing. Bear in mind this is coming from someone who is currently bullish on the US dollar.

Let's ask another question: Who did not expect a deal?

I accuse Frederic Dickson of genuine BullSweet.

The article continues ...

The framework of the debt agreement would raise the $14.3 trillion debt ceiling through 2012, cut spending by about $1 trillion and call for enactment of a law shaving another $1.5 trillion from long-term debt by 2021 -- or institute punishing reductions across all government areas, including Medicare and defense programs, according to congressional officials.

Senate Majority Leader Harry Reid, a Democrat, endorsed the emerging accord among Republican leaders and the Obama administration even as negotiators were working out the final details. Senate Minority Leader Mitch McConnell told senators tonight that the U.S. will not default on its obligations.

Both S&P and Moody's Investors Service are weighing a reduction of the U.S. credit rating. The impasse boosted to 50 percent the chance S&P will cut the grade from AAA within three months, the ratings company said last month.

Pathetic Deal

This is a pathetic deal. It's no wonder futures are rallying. My dead grandmother could find more cuts than this. The S&P, Moody's, and Fitch should all downgrade US debt on this deal.

$1 trillion up front and promises to cut another $1.5 trillion is the wimpiest of wimpy deals. The deficit is 1.4 Trillion. The immediate cut is a back loaded $100 billion. Then there is a possibility of another $150 billion back loaded cuts.

Anyone voting for this monstrosity should be ashamed.

Is Boehner Balking?

Here is something I picked up from Zero Hedge.

The Wall Street Journal "Washington Wire" comments on the The U.S. Debt Battle

5:24 pm: House Speaker John Boehner (R., Ohio) appears to be balking at the debt ceiling deal that Senate Democratic Majority Leader Harry Reid of Nevada has signed. Mr. Boehner is concerned about provisions in the deal that could lead to sharp cuts in military spending, say people familiar with the situation. House aides have warned that just because Mr. Reid has signed off on the deal doesn't mean the deal is done.

Ludicrous Deal Solves Nothing

This deal is ludicrous because it does not cut enough. Congress should be ashamed.

If Boehner is concerned about excessive cuts to military spending in this deal he has truly lost his marbles.

If it was up to me, I would pull all our troops out of Iraq, Afghanistan, Japan, Europe, and 140 countries where we have troops. If we did that, we could concentrate on protecting our borders instead of being the world's policeman. The savings would be enormous.

By the way, it would be fitting if this futures ramp was the mother of all gap-and-craps. This deal solves nothing.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Weekend Diversions: "Spectacular" Double Meteor Shower This Week; Space-Time Cloak Could Make Events Disappear; Invisibility Cloaks from Calcite

Posted: 31 Jul 2011 11:26 AM PDT

Had enough of the debt ceiling fiasco? If so here are a few interesting weekend diversions courtesy of National Geographic.

"Spectacular" Double Meteor Shower This Week

One of the best shooting star events of the year is the annual August Perseid meteor shower. However this year's peak, on August 12, happens to coincide with a bright full moon—drastically cutting down the number of meteors visible to the naked eye.

Yet while the main event might be blocked out by the blinding moonlight, the opening act promises to be much better.

This year the lesser known Delta Aquarid meteor shower is expected to peak on Friday night, when the Delta Aquarids' more productive Perseid cousin is just starting to ramp up.

Together the showers will produce anywhere between 15 and 30 shooting stars per hour under clear, dark skies.

On average, the Perseids begin falling at a rate of around five meteors per hour. They're visible for a couple of weeks before mid-August, when they peak at hourly rates of 60 to 120 meteors.

Most people around the world can see the showers, best seen with the naked eye in a dark, rural area away from city lights. Since meteors will be streaking across the overhead skies, lie down on a blanket or recline in a lawn chair and allow your eyes to become adapted to the darkness, Samra suggested.

"Meteor shower activity always increases as the night progresses towards dawn. If you are a night owl, then staying up to catch a more spectacular show might be worth it."

But all may not be lost with the Perseids—observing the sky show a few days before the August 12 peak may work too, noted astronomer Geza Gyuk of the Adler Plaentarium in Chicago.

"For example, on the night of the ninth, morning of the tenth, there will be a couple hours after the moon has set [about 2 a.m. local time] and before the morning twilight begins when it's close enough to the peak that one might expect 15 per hour."

"They are also known for the occasional nice fireball with a long-lasting 'smoke trail,'" Gyuk said. "If we get more of these than usual, then even moonlight won't spoil the fun."

Perseid Pictures: Meteor Shower Dazzles Every August

One of many images in the link.

Space-Time Cloak Possible, Could Make Events Disappear?

It's no illusion: Science has found a way to make not just objects but entire events disappear, experts say.

According to new research by British physicists, it's theoretically possible to create a material that can hide an entire bank heist from human eyes and surveillance cameras.

"The concepts are basically quite simple," said Paul Kinsler, a physicist at Imperial College London, who created the idea with colleagues Martin McCall and Alberto Favaro.

Unlike invisibility cloaks—some of which have been made to work at very small scales—the event cloak would do more than bend light around an object.

(Also see "Acoustic 'Invisibility' Cloaks Possible, Study Says.")

Instead this cloak would use special materials filled with metallic arrays designed to adjust the speed of light passing through.

In theory, the cloak would slow down light coming into the robbery scene while the safecracker is at work. When the robbery is complete, the process would be reversed, with the slowed light now racing to catch back up.

If the "before" and "after" visions are seamlessly stitched together, there should be no visible trace that anything untoward has happened. One second there's a closed safe, and the next second the safe has been emptied.

Currently, nobody knows how to do that except in fiber optics, in which the speed of a signal can be varied by a few percent by changing the intensity of the light.

There are still a few hitches to address, though, before attempting such an experiment, according to the University of St. Andrews's Leonhardt.

For instance, being able to cloak an event lasting more than a few femtoseconds—one-millionth of a nanosecond—would require light from an immensely powerful laser, he said.

"The experiment is not entirely impossible, but it is at the limit of what one can do with present technology in an ordinary university laboratory," Leonhardt said.

New Invisibility Cloak Closer to Working "Magic"

A pink object seems to vanish behind a chunk of calcite, underwater and illuminated by green light.

Harry Potter and Bilbo Baggins, take note: Scientists are a step closer to conquering the "magic" of invisibility.

Many earlier cloaking systems turned objects "invisible" only under wavelengths of light that the human eye can't see. Others could conceal only microscopic objects. (See "Two New Cloaking Devices Close In on True Invisibility.")

But the new system, developed at Massachusetts Institute of Technology and the Singapore-MIT Alliance for Research and Technology (SMART) Centre, works in visible light and can hide objects big enough to see with the naked eye.

The "cloak" is made from two pieces of calcite crystal—a cheap, easily obtained mineral—stuck together in a certain configuration.

Calcite is highly anisotropic, which means that light coming from one side will exit at a different angle than light entering from another side. By using two different pieces of calcite, the researchers were able to bend light around a solid object placed between the crystals.

"Under the assembly there is a wedge-shaped gap," said MIT's George Barbastathis, who helped develop the new system. "The idea is that whatever you put under this gap, it looks from the outside like it is not there."

It is quite amazing the stuff scientists are working on and the images from National Geographic are spectacular. Inquiring minds will want to give some of those articles a closer look.

My weekend diversion is gardening and golf.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Seth's Blog : Difficult conversations at work

Difficult conversations at work

When the outcome of a conversation is in doubt, don't do it by email. And show up in person if you can.

The synchronicity of face to face conversation gives you the chance to change your tone in midstream. Ask questions. A great question is usually better than a good answer.

And don't forget--the value of a long pause is difficult to overstate.

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sâmbătă, 30 iulie 2011

Mish's Global Economic Trend Analysis

Deal or No Deal? ABC Says Tentative Deal to Raise Debt Ceiling Reached; White House Aid Denies Report; Does it Matter?
Canada GDP Declines .3%, Largest Drop in Two Years - Don't Worry It's "Temporary"; Canadian Apologists Be Warned
43 Senate Republicans Sign Letter Opposing Reid’s Plan, Impasse Continues; Exchange with a Reader Over Tax Hikes

Deal or No Deal? ABC Says Tentative Deal to Raise Debt Ceiling Reached; White House Aid Denies Report; Does it Matter?

Posted: 30 Jul 2011 09:14 PM PDT

I was just getting ready to make a post titled After "Angry Exchange" Reid Postpones Senate Vote on His Plan; Majority Leader Conrad Hints at Raising Revenue Measures; Compromise in the Air.

Just before I hit enter on posting, word came that a deal was reached. I will continue with my original post (so that you can see sausage in the making) followed by the a description of the alleged yet White House denied deal.

Hints Compromise Amid Feud

Talk of compromise is in the air. House Majority Leader Conrad is surprisingly hinting at revenue raising measures. Meanwhile Senator Kyle suggests more progress is being made than it seems, even though Senator Reid postpones a vote on his proposal after an "angry exchange" with Republicans.

This negotiation smacks of a "don't blame me" effort from both parties that will put off all hard choices until later.

Reid Postpones Vote After Angry Exchange

The New York Times reports Hint of Deal as Congress Wrangles Over Debt Crisis

After a tense day of Congressional floor fights and angry exchanges, Senator Harry Reid, the majority leader, called off a planned showdown vote set for after midnight, but said he would convene the Senate at noon on Sunday for a vote an hour later. He said he wanted to give the new negotiations a chance to produce a plan to raise the federal debt limit in exchange for spending cuts and the creation of a new Congressional committee that would try to assemble a long-range deficit-cutting proposal.

The first indication off a softening of the hard lines that have marked weeks of partisan wrangling over the debt limit came in the afternoon when the two leading Congressional Republicans announced that they had reopened fiscal talks with the White House and expected their last-ditch drive to produce a compromise.

Following the House's sharp rejection of a proposal by Mr. Reid to raise the debt limit and cut spending, Senator Mitch McConnell of Kentucky, the Republican leader and a linchpin in efforts to reach a deal, said he and Speaker John A. Boehner were "now fully engaged" in efforts with the White House to find a resolution that would tie an increase in the debt limit to spending cuts and other conditions.

The deal they were discussing, this person said, resembled the bill that Mr. Boehner won approval for in the House on Friday more than it did the one that Mr. Reid had proposed.

It would immediately raise the debt ceiling by about $1 trillion, accompanied by a similar range of spending cuts, and set up a new bipartisan committee that would work to find deeper cuts in exchange for a second debt limit increase that would extend through the 2012 election.

A failure of the new committee to win enactment of its proposal could then set off automatic spending cuts across the board, including to entitlement programs.

After Mr. McConnell sounded a hopeful note, Mr. Reid called members of the Senate to the floor to hear him dispute the claims by his Republican counterpart and accuse Republicans of failing to enter into serious negotiations even as the Treasury risked running out of money to pay all its bills after Tuesday.

"The speaker and Republican leader should know that merely saying you have an agreement in front of television cameras doesn't make it so," Mr. Reid said after returning from a visit to the White House with Representative Nancy Pelosi of California, the Democratic leader in the House.

The Treasury Department calculates that the government will exhaust its ability to borrow money at the end of Tuesday, forcing the government to pay its bills from a dwindling pile of cash. Independent analysts estimate the government has enough money on hand to pay all of its bills for another week, more or less, before it starts missing payments.

That sounds like more feud than compromise so let's take a look at the viewpoint on Bloomberg posted roughly three hours later at 10:41.

Majority Leader Conrad Hints at Raising Revenue Measures

Bloomberg reports Senate Postpones Vote on Reid Debt Plan as Talks Continue

"There are negotiations going on at the White House now," Reid said on the Senate floor, and those involved in the talks wanted more time before a vote was held on whether the Senate moved ahead with his measure.

A planned 1 a.m. vote was pushed forward 12 hours, to 1 p.m. Reid said the Senate would convene at noon tomorrow.

"There are many elements to be finalized and there is still a distance to go before any arrangement can be completed," Reid said of the talks involving Obama and congressional leaders.

Reid's plan, which the House symbolically rejected earlier today, would lift the $14.3 trillion debt limit by $2.4 trillion.

Conrad, a North Dakota Democrat who is chairman of the Senate Budget Committee, said a few bipartisan groups of senators have drafted three alternative plans to supplement a proposal offered by Reid. The Republican-run House today defeated Reid's plan.

The alternative plans include possible new revenue as part of their formula for cutting the federal deficit, according to Conrad. Republican leaders have said from the start of negotiations that a net increase in tax revenue is unacceptable.

"All three involve the possibility of revenue," Conrad said. McConnell wasn't among the Republicans involved in the alternative bipartisan plans, according to Conrad.

White House, Republicans Strike Tentative Deal To Raise Debt Ceiling

What follows now is breaking news of a deal. Please consider White House, Republicans Strike Tentative Deal To Raise Debt Ceiling

ABC News' Jonathan Karl reports:
ABC News has learned that Republicans and the White House have struck a tenative deal to raise the debt ceiling before the Aug. 2 deadline. It's not done yet, but here is the framework of the tentative deal they have worked out, according to a source familiar with the negotiations:

Debt ceiling increase of up to $2.8 trillion
Spending cuts of roughly $1 trillion
Vote on the Balanced Budget Amendment
Special committee to recommend cuts of $1.8 trillion (or whatever it takes to add up to the total of the debt ceiling increase)
Committee must make recommendations before Thanksgiving recess
If Congress does not approve those cuts by late December, automatic across-the-board cuts go into effect, including cuts to Defense and Medicare.

A senior White House aide pushed back against the idea that a deal was struck.

"Talks continue, but there is no deal to report," the aide said.

Deal or No Deal?

Even if there is a deal, it is no bargain to anyone. A vote on a balance budget will not pass so why bother other than for political finger-pointing purposes?

$1 trillion in presumably back-loaded spending cuts is a farce.

The special committee will not accomplish a thing. Even if by some miracle it achieves another $1.8 trillion in spending cuts, that still only brings the total to a lousy $2.8 trillion, or $280 billion a year in a $1.4 trillion deficit.

This is not even a reasonable down payment on what needs to happen.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Canada GDP Declines .3%, Largest Drop in Two Years - Don't Worry It's "Temporary"; Canadian Apologists Be Warned

Posted: 30 Jul 2011 01:59 PM PDT

Lost in the US deficit battles and the pathetic US GDP statistics comes yet another surprise: Canada's Economy Shrank 0.3% in May Posting the Largest Drop in Two Years

Canada's gross domestic product fell in May by the most in two years due to temporary disruptions in the mining and oil and gas sector, government data showed.

Output fell 0.3 percent in May to C$1.26 trillion ($1.32 trillion) on a seasonally adjusted basis, after being little changed in April and gaining 0.3 percent in March, Statistics Canada said today in Ottawa. Economists in a Bloomberg survey forecast the economy would grow 0.1 percent, based on the median of 24 responses.

The Bank of Canada said July 20 the economy's growth probably slowed to 1.5 percent in the second quarter of this year, its slowest pace since the country emerged from recession in 2009, because of "supply disruptions" related to the earthquake and tsunami in Japan, slowing government spending and the impact of higher food and energy prices. Governor Mark Carney has kept the central bank's benchmark policy rate at 1 percent since September.

"The weakness is slightly over-stated" in May because of temporary factors, said David Tulk, chief Canada macro strategist at TD Securities, though the numbers highlight how expansion in the second quarter has been a "lost cause."

Canadian Apologists Be Warned

Canadian apologists say weakness is overstated and temporary. I say it's understated because few realize what is happening and how serious this is.

Global stimulus has faded. It's gone. Kaput. And that stimulus was the only thing holding this global economy together.

Strip out government spending, QE madness in the US, and unsustainable credit growth in China and you have a flatline global economy at best.

It's Not Temporary

Headline be damned, it's not temporary.

Europe is now in austerity-mode, US cities and states are cutting back, the odds of more fiscal stimulus in the US are roughly zero, the US might (and should) lose its AAA rating, Australia is a basket case on the bursting of its property bubble, Canada has the second or third largest property bubble next to China and Australia, the bond market is targeting Italy and Spain, Brazilian defaults are soaring, China is overheating and needs to slow, yet the average economist is looking for a robust second-half. Go figure.

In aggregate, economists are the most optimistic group on the planet.

For a look at the US GDP situation, please consider US GDP on Verge of Contraction in 1st Quarter, Mere 1.3% Annual Rate 2nd Quarter; Summary of Massive Revisions; Second-Half Recovery Nonsense

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

43 Senate Republicans Sign Letter Opposing Reid’s Plan, Impasse Continues; Exchange with a Reader Over Tax Hikes

Posted: 30 Jul 2011 11:13 AM PDT

The impasse continues. Bloomberg reports Senate Republicans Will Reject Reid's Debt Plan.

Senate Republicans will block Majority Leader Harry Reid's debt-limit plan this weekend, Minority Leader Mitch McConnell said as a partisan impasse over deficit reduction continued days before a threatened default.

Reid's bill "will not pass," McConnell said today as the Senate resumed debate on the measure. He said 43 Senate Republicans signed a letter opposing Reid's plan.

Reid, a Nevada Democrat, who offered modifications to a Democratic plan that he said are designed to attract Republican support, has accused Republican leaders of rebuffing his efforts to negotiate.

Reid said when he attempted to engage McConnell, a Kentucky Republican, in talks, "we had no one to negotiate with." The majority leader plans a 3 p.m. news conference today.

Shortly after the Senate rejected Boehner's plan, the House scheduled a preemptive vote for today on Reid's proposal -- planning to defeat it even before the Senate takes it up. The House, back in session, plans to vote at about 2 or 2:30 p.m.

The Senate plans a procedural vote on Reid's plan at about 1 a.m. tomorrow. A Senate vote on the plan then could be held at about 7 a.m. on Aug. 1, allowing the measure to return to the House before the Aug. 2 deadline.

The new plan would yield debt savings of $2.2 trillion -- about the same as the total borrowing authority extended -- and call on a 12-member bipartisan congressional committee to draft legislation to lower the deficit to 3 percent or less of gross domestic product.

Senator Scott Brown, a Massachusetts Republican, said his staff has been working with Reid's to put "more teeth" in the joint committee plan.

Senator Lisa Murkowski, an Alaska Republican, said "absolutist" lawmakers aligned with the Tea Party have put the U.S. "on the brink."

"If we don't come to an agreement, we could lose our country's AAA credit rating, not because we didn't have the capacity to pay our bills -- we do -- but because we didn't have a AAA political system to match our AAA credit rating," Obama said earlier yesterday at the White House.

Senate Budget Committee Chairman Kent Conrad expressed confidence that lawmakers will head off a default.

Once again, and as recently noted in Great Divide; Boehner Rams Through Bill that Senate Quickly Rejects; Obama's Idle Threats and Fear Mongering the idea of a default is complete silliness.

Nonetheless, expect both parties and president Obama to crow when a gaseous plan is passed that will allegedly have "saved the US from default"

Fear Mongering

Caroline Baum repeated my message on Friday in Obama, Geithner May Regret Threats of Default

Instead of dangling the default threat every chance they get, Obama and Geithner should be telling the world that the U.S. has every intention, and the resources, to meet its debt obligations. They should shout it from the rooftops, put a banner on the Treasury Direct website, and use the Sunday talk shows to reassure investors, not frighten them.

Toothless Details

Senator Scott Brown wants to put "more teeth" in the joint committee plan. One tooth would suffice because the plan is currently toothless.

Guaranteed Vote is Meaningless

This whole idea of McConnell's about abdicating responsibility to a "powerful" committed with a "guaranteed" vote on proposals is of course ridiculous.

Look at the rejection of Reid's plans in the Senate and House, and the Rejection of the Boehner's plan in the Senate. Look at the whining of Nancy Pelosi about cuts to Medicare and Medicaid, and Social Security.

So what does the "guaranteed vote" do but put lipstick on a turkey?

The "Gang-of-Six" put together a $4 trillion proposal that was a down payment on attacking the deficit and that could not pass. Somehow a "Gang-of-Twelve" is going to do better. Please be serious.

The more people you put into a mix, the harder it will be to get an agreement. Even if by some miracle an agreement from the "Gang-of-Twelve" is reached, you still have a hurdle of passing the "guaranteed vote" in the House and Senate.

This "Gang-of-Twelve" idea is nothing but a plan to put off doing anything about the deficit until after the election. Republicans and Democrats will both have wimped out if that is the "solution".

Exchange with Reader "Grant"

Reader "Grant" responded to my post, and we had the following exchange.

Grant: Why you take Obama at his word when he says he was willing to make "hard choices" continues to elude me, especially given his track record of reneging on pretty much every campaign promise he made (wars, transparency, civil liberties, indefinite detentions, etc.) still mystifies me.

Mish: Nowhere did I say the Democrats would have accepted. Indeed I think and have stated several times before they wouldn't. However, the offer would put Republicans in a No-Lose situation.

Would Democrats have gone along? If not, Obama and the Democrats would have been seen as the deal-killers, not Republicans. If the Democrats accepted, it would have been well worth it.

Republicans win if the deal was accepted, they win if the deal was rejected.

Grant: Except this scenario already played out. Who got the blame? Not Obama. Not the Democrats. Boehner and the GOP did.

Mish: And why is that Grant?

The answer is Republicans would not accept any tax hikes. My deal allowed them.

Some Things Far More Important than Trivial Tax Hikes

Some things are far more important than concession on closing a few loopholes to get $1 trillion in tax hikes. President Obama repeatedly said he was willing to make "hard choices". Republicans could easily have put him to the test.

My proposal was to challenge Obama to accept the tax hikes he asked for on a 3-1 ratio of cuts-to-to hikes in return for these three things Republicans want.

Scrapping Davis Bacon
Ending collective bargaining of public unions
National right-to-work legislation

I would gladly trade $1 trillion in tax hikes for those badly needed measures. Would Democrats have accepted? Probably not but one never knows unless one tries. However, either way the Republicans would have won.

Had Obama backed down it would have been his fault. Had he accepted the bargain would have well worth it.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

luni, 1 august 2011

Get the Facts on the Debt Deal

Debt Deal Reached: Get the Facts

Seth's Blog : Responsibility and authority

Responsibility and authority

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duminică, 31 iulie 2011

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

Seth's Blog : Difficult conversations at work

Difficult conversations at work

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sâmbătă, 30 iulie 2011

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

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luni, 1 august 2011

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