Maybe August 2nd Isn't the Real Debt Deadline After All


Debt and loving it

ABC News is running a "Countdown to Default" clock on the Web front page. It's timed to next Tuesday at midnight. But as a report in The Washington Post notes this morning, despite all the calamitous warnings, August 2nd isn't a hard-and-fast deadline:

Although failing to raise the debt ceiling by the early August deadline would plunge the United States into a sea of uncertainty, the government might be able to pay the bills and avoid a default on obligations for longer than expected, economic analysts said.

As lawmakers and President Obama rush to craft an agreement to increase the $14.3 trillion debt ceiling, the Treasury Department is standing by its estimate that the government will need to borrow more money after Aug. 2 to pay for all its obligations.

But several new reports — from UBS, Barclays and Wells Fargo — have cast doubt on that estimate. Analysts have said that daily tax receipts have been higher than anticipated and that the Treasury has quite a bit of cash on hand.

Earlier this year, Reason columnist Veronique de Rugy and Jason Fichtner of the Mercatus center estimated although it would require resorting to various "unattractive options," the United States had enough money in the bank to pay its bills through the fiscal year's end in September, and perhaps even longer. 

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  1. Even the Jug-Eared Jesus’ (formerly) most slavishly devoted groupies and freelance fellators aren’t buying the bullshit any longer.

    1. oh, I’m sure they’re still eating up the idea that the rich aren’t being taxed enough or corporations are evil, etc etc. But they’re just mad that ol’ Bama ain’t winning the battles.

  2. Analysts have said … the Treasury has quite a bit of cash on hand.

    You’re welcome!

    1. Curses, foiled again!

    2. Well fuck it. Let’s just add $5T to the debt ceiling and pass some christmas tree spending bills. Crisis averted.

      1. … and trains, dammit! Don’t forget CHOO-CHOO TRAINS — !!!

        1. Who are all these sockpuppets?!
          Why do they spend so much time sockpuppeting??!!
          Do they have sand in their vaginas or are they passive-aggressive douches?

          1. It’s really me, dammit! Why, oh why, won’t anyone take me seriously?

            1. Either you are a mendacious fuck or you are a passive-aggressive cunt-nugget, anonypussy. Either way I don’t care. Good luck with your sickness, Commodore.

              1. “Anonypussy,” my ass!

            2. [::bangs tray on high chair more violently with ObamaBear sippy cup::]

            3. God knows.

              1. Arghh! Another sockpuppet!! Why do they spend so much time sockpuppeting?? What is wrong with these anal-retentive douches? Why don’t they just let it go??!!

              2. I’m gonna plagiarize the holy living hell out of that!

                1. Either you are a mendacious fuck or you are the real Joe Biden. Either way, I don’t care. Please don’t feed the trolls. Please don’t trolls sockpuppets. Commodore. Feezt

                  1. Jesus Christ Rectal….just go over for a booty call for shit sake. This stalker nonsense is just embarrassing!

                    1. Lol, not me but keep going; I’ve been so bored with the comments

                  2. Either you are a mendacious fuck or you are the real Joe Biden.

                    False binary. Party foul! [::drinks::]

                  3. “Either you are a mendacious fuck or you are the real Joe Biden”

                    Either or?

                    The real Joe Biden IS a mendacious fuck.

                    1. Do you have sand in your vagina, Commodore?
                      Either way, I don’t care.

    3. Jane, part of the deal I’m negotiating will require you to make it more like $200 per month… or maybe even $300… and, umm, it will no longer be voluntary (although I guess you could still do a little more on the side if you want to, wink wink).

      But that’s OK, because you are a generous, patriotic American, and you’re doing your fair share. Many thanks and look for a bill from me sometime early next year.

  3. July 26, 2011

    As of 8:21 Barack Obama has not told a lie today.

    And nothing else happened.

  4. Analysts have said … the Treasury has quite a bit of cash on hand.

    “Mine! “No, mine!” “LEGGO, YOU BASTARDS — !!!”

  5. Why is that countdown clock not moving?

    Now I’m really scared!

  6. Yesterday one of the liberal troll talking points was “wait until a Dem speaker uses the debt ceiling to force a Republican President to enact single payer”. I was thinking about this. Because of the budget act of the 1970s, the President can’t impound funds anymore. If Congress appropriates the money, the executive has to spend it. But in the case of the debt ceiling it seems like this would not be true.

    Suppose we have a President who actually wants to reduce the size of government (work with me here). He could veto any debt ceiling increase. Then when the limit is reached, just pay the interest on the debt and Social Security Payments and such, and then spend whatever is left over on the programs he considers important and have a balanced budget. And short of overriding his veto of the debt ceiling increase, there wouldn’t be a damn thing Congress could do about it. A President and a decent and committed minority could balance the budget in one year under these circumstances.

    1. short of overriding his veto of the debt ceiling increase

      We would never (work with with us) do that.

    2. liberal troll talking points

      Thanks for watching those liberals for us, John! You’re doing God’s work.

      1. It is good of Reason to provide threaded comments so you can shit on every substantive point while avoiding the need to add anything intelligent whatsoever to the conversation.

        1. I’m serious! If not you, who? If not now, when?

    3. Technically, Social Security is fully funded by Treasury bonds. Something like $5T. The President is required by current statute to make the payments on Social Security, one would assume by monetizing those bonds if necessary. This wouldn’t change our overall debt level, just transfer some debt from the intergovernmental column to publicly held column. Although one might have to actually pay interest on stuff in the publicly held column. So I guess there is some net effect.

      1. You would pay the public debt and then pay the amount that social security is in the red, which would reduce the amount of publicly held debt. So, I think you could do better than a balanced budget under my scenario. You could actually run a cash basis surplus.

        1. Yes. In the long run it would be net reduction because you’d be servicing debt with cash rather than just rolling it back into new debt. What we would technically doing since SocSec is still a net revenue gain, is paying off some of the money we borrowed from that cash stream to throw at roads to nowhere, shovel ready projects, military adventures and countless other congresscritters’ pet boondoggles.

          1. But since you are running a cash basis balanced budget, a lot fewer boondoggles.

            1. Oh sure. This is just like when people give up cable and eating out on the Dave Ramsey plan to pay off their $80k in credit card debt, plus another $240k in cars and houses that they manage to run up on a $40k salary. If you lived large on credit, you gotta live small on cash to get back to even.

          2. For some reason I thought social security was already in the red

            1. I thought they just moved the number forward. At 10% unemployment, it might be.

            2. IIRC, it was for a year (2010), then it went back in black for ’11 and ’12, and then the party ends in ’13.

      2. It makes O’s threat to not pay Social Security if the meany head republicans don’t do what he wants extra stupid.

        If the the debt ceiling is the what actually counts, then the Social Security “trust fund” actually functions as if it contained real assets.

    4. Yesterday one of the liberal troll talking points was “wait until a Dem speaker uses the debt ceiling to force a Republican President to enact single payer”.

      The republican president’s response to any threat like this should be “Go for it, schmuckface.”

      It’s incredible that the lefties still haven’t gotten it through their little pea-brains that this isn’t 1995 any more, when there virtually no deficit to speak of. We’re now running deficits of around $1.5 trillion a year; the threat of shutting down the government doesn’t frighten people any longer.

    5. One would hope we’d have a Congress with the ability to pass and override the veto of a repeal of the debt ceiling requirement if we ever had a president as reckless with the economy and as cavalier with the legislative process as current House Republicans.

  7. A President and a decent and committed minority could balance the budget in one year under these circumstances.

    I pointed that out on a Garrett Epps thread. No liberal responded. Precedents are only for them; they’ll find some overly complicated argument to explain why Obama can do it but Pres. Jeb Bush can’t.

    1. Twelve links or it didn’t happen.

    2. And a committed President could also dictate spending priorities. “Oh sorry, we just don’t money to fund the Department of Labor and still avoid default. Too bad”.

    3. Committed Minority? RACIST!!!1!

      1. I agree. They’re usually too lazy to commit to anything.

  8. Here is the actual definition of default:…..?region=us

    1. Default means you renounce some or all of the debt all together. At worst this is missing a payment. That is not default.

      1. No, default means failure meet your obligations. In this case, the main concern is a possible failure to meet the obligation to creditors.

        Repudiation of the debt is another question altogether.

        1. No, default means not paying contractual debt service on Treasury bonds, bill and notes.

          It does NOT relate to refraining from paying anything other than that.

          1. Legit amounts owed to contractors and stuff could also probably be considered default. But thats all I can think of. Failure to pay Paul even though you already robbed Peter ain’t a default. I’m sick of MSNBC not knowing this.

  9. This whole debt ceiling thingy is silly. Why waste time “negotiating” a deal to raise the debt ceiling, when the fed can invent a few trillion, buy back some of our debt, and voila! crisis averted.

    I’m sure Boner and Obama have more important things to spend their time on, like keeping up with NFL free agency.

    1. The debt the Fed holds is still on the books. The Fed would have to forgive some of the debt it holds for this to work.

      I’m thinking that even the MSM would figure out that the Fed is printing money then.

  10. I’ve got $50 on the Morning Links being by Riggs if they ever pop up.

  11. They must. They must!!

  12. The post might be reporting this but, judging from the tone of the piece, they’re still incredulous about it and think raising the debt ceiling is not only necessary but also a foregone conclusion. God bless Obama for doing the hard work of making sure we can spend more money we don’t have. Not that Boehner and Co. aren’t completely complicit in this whole mess, the Post just doesn’t want to give them credit for what it sees as a good thing.

  13. Maybe August 2nd Isn’t the Real Debt Deadline After All

    This can’t be true. Every single article I’ve read for two months states, without question, that the US will default on 8/2. No options. Default is guaranteed.

    Every single article.

    1. TOP. Men.

  14. And in other news, the sun rose in the East this morning, all across the globe.

  15. I say we hit up Oprah for any shortfall in the budget – she helped get this Joker elected. Besides she’s rich and “needs to pay her fair share.”

  16. This makes a lot of sense when you think about it. Wow. NEver thought about it like that. Wow.

  17. It drives me crazy that everyone, absolutely everyone, with access to any media outlet whatsoever, including the Republicans, talks about default on 08/02 if the ceiling isn’t raised.

    A complete, utter, outright falsehood, that is propagated by every single stupid fuckstick who can figure out how to turn a microphone on.

  18. The parties kidding us? Not only Obama can bring us out of the debt risk

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