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Economy
US seeks deal to avoid 'economic Armageddon'
2011-07-22
The White House has said "momentum" has been seen towards a deal to avert a disastrous early August debt default, but denied media reports that a compromise with top politicians is in the works.

President Barack B.O. Obama and John It is not pronounced 'Boner!' Boehner
... the occasionally weepy leader of House Republicans...
, the speaker of the House of Representatives, were believed to be discussing a possible deal that would include tax reform and $3tn in spending cuts over 10 years to avert the unprecedented default, a senior Democratic congressional told the Rooters news agency on Thursday.

Finance and business leaders have warned failure to raise the US debt ceiling by August 2 then would send shock waves through the world economy, while Obama has predicted a default would trigger economic "Armageddon".

In reaction to the potential agreement, Harry Reid
... the charismatic former Senate majority leader ...
, the senate majority leader, underscored the divisive nature of the issue by saying any deficit-cutting deal aimed at winning a debt limit increase must contain revenue boosts as well as the spending cuts.

"This can't be all cuts, there has to be a balance," Reid said.

He was responding to news hounds' questions about the possible deal's stipulations that would leave tax reform and revenue increases for a later date.

Debt deadline looms

The report of a break in the partisan deadlock comes with time running short before the deadline to raise the $14.3tn US debt ceiling.

"We believe there is momentum behind the idea of a balanced approach to a significant agreement," Jay Carney, the White House front man, said.

But Carney rejected a New York Times
...which still proudly displays Walter Duranty's Pulitzer prize...
 report, citing anonymous congressional officials, that aides to Obama had informed important politicians that a deal was in the works with Boehner, according to the AFP news agency.

"There is no deal. We are not close to a deal," Carney said. "The fact is that there is no progress to report, but we continue to work on getting the most significant deficit-reduction package possible."

As AFP reported, such an agreement would likely anger Democrats pledged to protect the US social safety net as well as Republicans who have vowed to oppose increasing revenues, dimming its prospects for passage in the divided congress.
Posted by:Fred

#18  Boehner is just setting up his alibi when it all goes down. Whether the jury/tribunal buys it or not, it's a better hand to play than the other two have dealt themselves.
Posted by: Procopius2k   2011-07-22 15:43  

#17  Meanwhile, the word has leaked out that all this time, the FED has had a secret plan to prevent a US default, and is confident that they can prevent it. But it was a secret, because they wanted to keep the pressure on for sky high taxes.
Posted by: Anonymoose   2011-07-22 15:40  

#16  So Boehner, not Boner, and O'Bummer are playing a grand game of chicken while the whole world watches to see who blinks. My guess, sorry to say, is Boehner will. The big question is who can go to the voters and blame the other for a default. I'm thinking Bummer thinks he's the one who holds that card. Hope I'm wrong.
Posted by: Ebbang Uluque6305   2011-07-22 15:27  

#15  S: "Could be worse, could be raining."

Ka-boom! :-(
Posted by: Barbara   2011-07-22 12:03  

#14  Saw el prez give a speech to a bunch of terrapins not too long ago, quite awkward.

I've always wondered who would loan more money even if the debt limit was raised. Personally they only way I would buy any sort of bond is if it were at a 1:1 tax deduction. Problem is in DC that there would be pols who would go, hey sounds like a great idea!
Posted by: swksvolFF   2011-07-22 11:58  

#13  My guess is we chug along without a major riots or problems, but hiring, the job market and the economy stay pathetic until we have a new president. Then when things start to recover both sides take credit (Dems claiming their policies just took longer than expected).

The cycle continues.

Hopefully there will be a mandate at the next election that will allow us to break the cycle for good.
Posted by: rjschwarz   2011-07-22 10:19  

#12  JohnQC, I would not break it into Red States and Blue states so much as Red Counties and Blue Counties.

Urban centers are more likely to have trouble, they are also more likely to have democratic mayors who have encouraged dependency policies.

Posted by: rjschwarz   2011-07-22 10:13  

#11  Post by de Medici 2011-07-22 06:16||

There is the New Orleans Katrina scenario where it was Armageddon--Widespread looting, shootings, dog-eat-dog.

There also is the Nashville flood scenario where people did not loot, there were no shootings, people helped each other get out of a crisis.

Most likely, we will experience both scenarios in this country. Red states might follow the Nashville scenario; blue states the New Orleans scenario. The high crime cities--further breakdown of law and order under a crisis scenario.

If we do get into the Katrina scenario and people riot, there will be no holding them back. The ruling political class had best run for the hills.
Posted by: JohnQC   2011-07-22 10:04  

#10  ..if and when the poor riot, the pols eventually send in the National Guard.
The problem is that if and when the middle class riot, they are the National Guard.
Posted by: Procopius2k   2011-07-22 09:15  

#9  " crikey, people, the US is in deep s**t". Many see what is just ahead but it's like the frog story.Put a frog in hot water and he jumps out. Put that frog in water then turn the heat up. He stays till he's cooked or croaked (he he). People are doing just as our government. They are charging again to maintain the lifestyle they believe they have earned. 401's, retirements have been hammered also. This story is being played out in many parts of the world. We are not alone in this. We haven't had the Arab spring or the riots in Greece and others. We could and perhaps will.
Posted by: Dale   2011-07-22 08:53  

#8  crikey, people, the US is in deep s**t.

really deep. like oceanic trench deep .... you can't afford the wars, the foreign aid and the UN anymore

cut them all out and save yourselves

If the US goes down the one shining beacon of free speech will be snuffed out

SAVE YOURSELVES
Posted by: anon1   2011-07-22 07:57  

#7  The US govt. is going to argue right up to the deadline. They will then default and after that the dollar will be devalued. No one will take responsibility and each will blame the other.

Unemployment and crime will go up. Do you own a gun? The mail will be delivered three days a week. Gas prices will climb to $6/gallon in a year.

Houses in neighborhoods will be abandoned and nobody will collect the garbage or mow the lawns. Some women with kids to feed will become prostitutes at the Mall.
Your car will be broken into and you will learn to steal yourself or get your kids to do it.

Your daughter will move in with a man who owns a bar...or a grocery store. You will see young men loitering down at the corner after dark. Dogs will disappear. There may be a few houses that catch on fire for no apparent reason. The cops wont come when you call.

And your vote wont mean shit.

But HEY! Obama is The One. Hope and Change, brothaman.
Greek Columns and such wonderful speeches.....anybody remember any of the memorable lines from any of the speeches? Yeah?

Sing it for me.
Posted by: de Medici   2011-07-22 06:16  

#6  This can't be all cuts, there has to be a balance," Reid said.

Why start now, Harry? It's been spend, spend, spend for the last 75 years.
Posted by: Bobby   2011-07-22 05:54  

#5  Could be worse, could be raining.
Posted by: S   2011-07-22 04:16  

#4  Its either default or hyperinflation

I bet on them to manage to get both.
Posted by: g(r)omgoru   2011-07-22 03:14  

#3  Its either default or hyperinflation.
Posted by: phil_b   2011-07-22 03:00  

#2  Maybe for the governing class. For the average Joe trying to make a living and raise a family it will be a relief from the crushing burden inflicted on us by Those Who Spend Other Peoples' Money.
Posted by: Eohippus Phater7165   2011-07-22 01:13  

#1  US seeks deal to avoid 'economic Armageddon'

It's not if, it's when. The later the harder and deeper.
Posted by: Procopius2k   2011-07-22 00:02  

00:00