Revenue Bills have to start in the house, but now that they have a bill to send to the Senate, can the Senate write their own bill, pass it and send both for conference? I’m not sure if that was covered in the School House Rock song.
Hurtling forward. Looks like a bumpy ride. treasury Dept and the CBO differ on exactly when the first defaults will occur. Hinges on the strength of tax receipts for returns due re 2022 FIT.
I’ll guesstimate mid June. Then some folks will see the payment for work already performed fail to materialize. Some in the GOP seems ok with burning the place to the ground. Makes it hard to advance any proposal.
I did not owe money this year. They are screwed.
The way we are going we will give away our status as the world’s reserve currency. Now it may be that this is something that would happen soon anyway but to just give it away is a massive unforced error and will significantly degrade the American standard of living.
For those that say what’s the alternative, there has not always been a single reserve currency. Trade is more complicated if everyone is settling trades in different currencies but if the US is not trustworthy in terms of paying bills people won’t want to invest here and without that the reserve currency status will not last.
US markets are currently very richly valued but we’ve seen that the markets can be fickle.
What are the odds that the Ds pow wow with their investment banker buddies and try this?
After years of exploiting the arbitrage opportunities associated with the different treatments in Stat,Gaap, and Tax accounting, I recommend the following. Issue some premium bonds. Premium bonds have coupons higher than their yield. Using a 7 yr bond, let’s assume the market yield is 3.15%. Now issue that 7 year note with an 8% coupon. That bond will trade at about $130. Govt collects $130 for each $100 of face amount it reissues.
Note it doesn’t change the face value. The note is still recorded as $100 of debt. Each time you do that “trade” you collect an extra 30% in cash flow. Use that cash to settle the accounts payable. Next year’s debt service is going to be a bit disquieting, but into every life a little rain must fall.
A number of different currencies have been the world’s reserve currency historically and 100 or so years seems to be a typical period of dominance……however it does seem premature for the US to give the dollar up now as the reserve currency given the current importance of the US in the global economy.
I agree it would be a massive unforced error to give this status away now but US politicians could manage to do so.
We have a debt deal probably, but wait…
… the media must let us know that we have to stay worried even longer.
For newly issued Treasury bonds, are the bids yields on a fixed face or prices for a fixed coupon rate?
Biden and McCarthy just kicking the problem down the road a bit with the current debt proposal rather than resolving it. But that is business as usual for US politicians. We could be having this discussion again in two years unless one party controls all levers of power at that time.
Given the current state of the Republicans in the House, kicking the can until after the next election rather than just next summer is a big win for the country. Obviously not an actual fix, but stopping the “burn it all down” crowd from burning it all down is a good thing.
Assuming the deal gets through. I wonder when the “freedom” caucus we force a vote on removing McCarthy from speaker.
Picking my brain for course 220/6 info…
I believe T-bills have a face value if 1000, so the bidding is “what do you pay today?”
Bonds, OTOH, have a 1000 face plus coupons, and the bidding is on the coupon amount, lowest bids win.
Totally agree that a short term solution is better than the apocalypse that would follow no deal. Hope the Biden-McCarthy proposal will be accepted.
Maybe we’re turning a bit of a corner in bipartisanship? Time will tell but I like how this came together. The vote indicates very broad support too.
I hope so. The sane republicans really need to tell the MAGA wing to shove it.
Same for the Ds. A fair number still voted no because of the work requirements or the pipeline deal. Choosing default to object to those compromises seems bad judgement imo. If it’s just some sort of symbolic vote, then I question the wisdom of those peeps. Those votes didn’t matter this time, but how accurate can they be when assessing the vote counts from the other party? Way too risky for my taste.
It’s somewhat theatre. Part of the Whip process is figuring out who is going to vote and who can be the dissenting voices, etc. Before folks are allowed to vote N they make sure they have enough Y’s. No big deal IMO either way. Also I would much prefer legislation be passed by both parties with the fringe of both being unhappy rather than single party votes where the fringes are ecstatic.
I’m sure that the one’s “permitted” to vote N are likely those in “vulnerable” districts where the No vote might help the candidate retain the office during the 2024 election.
And are you saying the R and D whips share details on how each member is going to vote? I rather doubt that is a reliable signal.
And second question is similar. Looking at just the Freedom Caucus…those are likely to be pretty safe seats. Are they asked to vote yes so some other purple district can vote no? That fringe is not known for “taking one for the team”. I got my doubts there.
When all is said and done, the whole vote is encouraging. It’s not unusual for extreme positions to feel they did not get what they wanted after a political compromise. WAI, I’d say
And just a fact or two before we all declare a return to normalcy. AOC voted no, and she won with over 70% of the vote. Hardly a vulnerable seat. It is better to characterize her vote as being based on ideological grounds, not “permission” to keep her seat. The ideological chasm is alive and well.
Maybe she has that 70% margin because she votes no on stuff like this. I imagine this is exactly the type of legislation you would want to vote for if you served a purple district. In a 70% Dem or 70% R district is where ideological purity is demanded or you get your butt primaried.