Reuters reports that the mainstream Republican Party has decided to jump the shark:
David Frum, a former speechwriter for President George W. Bush and a Republican advocate for raising the debt limit, said he holds regular question-and-answer sessions with Republican congressman over a beer.
“I have yet to meet one Republican who actually says a failure to raise the debt limit scares them,” Frum said. “It is deeply, deeply troubling the number of Republicans I now talk to – and I include the mainstream – who think a technical default is manageable.”
Many on Wall Street disagree.
They fear even the briefest default would cause a steep climb in interest rates worldwide and a tumbling U.S. dollar, which would tip a fragile economy back into recession and cause financial market upheaval on a scale not seen since the collapse of Lehman Bros.Let us be clear: a “technical default” is manageable. It is being managed right now. We’ve been in “technical default” since around May 15th. Vendors are seeing payments delayed, contract signings are being put off, funding is being delayed. We cannot pay soldiers, after all. They’re getting food and lodging in Afghanistan or Iraq or Libya anyway; they don’t need money.
Pat Toomey appears to believe that would be a good idea:
Republican Senator Pat Toomey has even introduced legislation directing the U.S. Treasury to prioritise debt service over other payments if the debt limit is not raised. It has 22 Republican co-sponsors in the Senate and 98 in the House of Representatives, although no members of the Republican leadership have backed it.
Good thing Toomey thinks those ungrateful Chinese bondholders are important. But who are they more important than?
Short answer: Republican voters.
Longer answer: Social Security recipients, who traditionally receive their checks and direct deposits on the 3rd of the month.
Which means the funding has to be available—to authorise scheduled ACH transfers, if nothing else—on the 2nd.
Which means— since for purposes of the “deficit,” Social Security is part of the “unified budget”—that Social Security’s EOD balance will decline on August 2nd, since there will be no coupon receipts or security redemptions that day.
In short, Toomey wants to pay bondholders and screw Social Security recipients. And he has at 110 Senators and Representatives who believe that is a good idea.
I want to see all 111 of them meet with all of their SocSec recipients on 3 August 2011 and tell them, “Well, we had to balance the suffering. And it was either you or the Chinese government. And they mean more to us than you do.”
UPDATE: Felix focuses on the same paragraph, reaching half of the same conclusion. Take the next step, mate.
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