by Michael
We’re being warned that there could possibly be some real serious economic doom at first of next month if the Democrats and the Republicans cannot agree on a deal to lift the debt ceiling. Experts are telling us that the stock market will crash, the economy will immediately plunge right into a recession, and tens of hundreds of thousands of Americans is not going to get their Social Security payments. Treasury Secretary Janet Yellen says that a U.S. debt default would begin somewhere around June 1st. She will be able to’t nail down the date precisely, because there’s some uncertainty regarding how much tax money will are available over the following few weeks. But what’s exceedingly clear is that point could be very short, and there are only 4 days when the House and the Senate are each scheduled to be in session before June 1st. So the clock is ticking, and right away either side are still far apart on any form of a deal.
After all the Republicans within the House have already passed a bill to lift the debt ceiling, nevertheless it will not be acceptable to the Biden administration.
The Biden administration has chosen to play hardball, and so we actually are facing the potential of a nightmare scenario. The next description of what could possibly be ahead comes from the Washington Post…
Federal staff furloughed. Social Security checks for seniors on hold. Soaring mortgage rates. A worldwide economic system sent reeling.
Leaders from Congress and the White House try to forge an agreement to lift the federal debt ceiling, with only just a few weeks before the Treasury Department may now not give you the option to avert an unprecedented U.S. default. In the event that they fail, and the federal government can’t meet its payment obligations, economists and financial experts predict chaos.
According to the Post, there are 7 major things to observe for if a U.S. debt default actually happens…
-Stocks crash
-A sudden recession
-Federal staff in limbo
-Social Security and Medicare miss payments
-U.S. borrowing costs soar
-Economic problems spread worldwide
-The dollar drops, together with U.S. prestige
The severity of the crisis will depend on the duration of the default.
If the federal government can’t meet its obligations for just a few days, it won’t be a really big deal.
But when there is no such thing as a deal for several months, things could get really crazy. In actual fact, the White Home is projecting that stock prices could fall by 45 percent…
Moody’s Analytics has estimated that stock prices could fall by roughly one-fifth, wiping out $10 trillion in household wealth and devastating the retirement accounts of hundreds of thousands of Americans. The White House has estimated that the decline could possibly be closer to 45 percent.
That will be quite a crash.
And picture what our country would appear like if over 60 million Social Security recipients didn’t receive any payments for several months.
People can be going out of their minds.
The longer a debt ceiling crisis lasts, the more pressure the American people will placed on their politicians.
And I feel that it what the Biden administration is counting on.
After all there are various Democrats that truly want Joe Biden to invoke the 14th Amendment so as to avoid a debt ceiling crisis altogether…
The 14th Amendment, passed by the Senate in 1866 shortly after the top of the Civil War, states “the validity of the general public debt of the US, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing rebellion or riot, shall not be questioned.”
Biden says that he has been “considering” such a move, but Janet Yellen is publicly telling reporters that it will be “legally questionable”…
“I even have been considering the 14th Amendment,” Biden told reporters Tuesday after meeting with congressional leaders on the White House and making little progress on the debt-limit stalemate.
Treasure Secretary Janet Yellen last week, nonetheless, acknowledged serious problems with the 14th Amendment as a solution to the debt crisis.
“There would clearly be litigation around that; it’s not a short-run solution,” she said at a news conference in Japan, adding it will be “legally questionable.”
We will see what happens.
Ultimately, I don’t think that Biden will try to make use of a tortured interpretation of the 14th Amendment to finish this crisis.
As a substitute, I consider that he’ll simply wait for the Republicans to fold like they at all times do.
For many years, Democrats have watched Republicans fold like a 20 dollar suit at any time when some major deadline approaches.
And there are some Republicans which are already talking like they intend to fold this time around too…
House Foreign Affairs Committee Chairman Rep. Michael McCaul, R-Texas, said Sunday he doesn’t think the US will default on its debt.
Appearing on ABC’s “This Week,” McCaul said he was optimistic the nation would raise the debt ceiling by June 1, noting that defaulting would embolden the country’s adversaries.
“Our adversaries take a look at this very closely. They give the impression of being at once we’re divided. … I feel they’d love nothing more, particularly China, to see us default in our full faith and credit under the Structure,” McCaul said. “I feel defaulting will not be the suitable path to go down.”
But there’s one key difference now.
Kevin McCarthy is the one holding the cards for the Republicans, and he doesn’t intend to be steamrolled like other Republican leaders have been up to now.
There are particular things that he wants, and at this moment he’s saying that there will probably be no deal if he doesn’t get them.
Having said that, I still expect the Republicans to fold.
I just can’t help it.
I even have seen it occur time after time, and it is evident that a lot of them simply would not have a stomach for this form of a fight.
So I consider that doom will probably be averted since the Republicans will eventually cave in and provides the Democrats almost every thing that they need.
Nonetheless, I even have to confess that there’s a probability that I could possibly be improper about this.
Possibly Kevin McCarthy and his team are manufactured from sterner stuff than I suspected.
If that seems to be the case, you’ll want to keep a really close eye on early June, because that’s when things would begin to get really “interesting”.
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