這次提高美國舉債上限的爭執或我稱為「猴子戲」的過程，將所謂「美式民主」的正、負面表露無遺。

「美式民主」是「代議政治」的典範。大前提或此制度的正面效應是大家必須為「整體利益」著想；小前提或此制度的負面效應是政客必須討好「選民」中積極問政的少數群體。在這次爭執過程中，後者突顯於共和黨議員被茶黨選民綁架。政客的終極目標是連選連任；或者當下撈一點油水；或者更上層樓撈更多油水。因此，她/他們演出一幕又一幕的「猴子戲」來表示自己代表「民意」。

「高瞻遠睹」在「代議士」身上是看不到的。但在最後圖窮匕見的時刻，她/他們還是得以「大局為重」，做出該做的決定。在效率上自然不能望「一黨專政」之項背；但在其他方面，如順應多數民意和尊重個人權利上，後者則有其「結構性」的缺陷。

Few, if any, winners emerge from debt debate

Holly Bailey, The Ticket, 08/02/11

After weeks of ugly partisan sniping, Congress approved, and President Obama has signed, legislation that will raise the nation's debt ceiling. The debt deal, which comes on the heels of a dramatic month and a half of confrontation in Washington, will help United States avoid a financial default that could have further sent the country into economic crisis.

Today's action on the agreement was a rare sign of compromise in Washington. For many observers, the debt-ceiling showdown marked a new low in the capital's divisive political warfare.

But in the wake of the tumult over the debt ceiling, it appears there are few winners; hardly any prominent lawmaker emerged from the ordeal unscathed. Indeed, with a deal finally on the table, the public appears to think even less of Washington politicians--scorning lawmakers from both parties, even as (or perhaps because) they professed to be acting in the country's best interests. The latest dismal poll numbers for Congress represent a fall from the institution's already historically low approval numbers in opinion surveys.

A new CNN/ORC poll released Tuesday found a whopping 77 percent of those polled believe the elected officials involved in the debate acted like "spoiled children," while just 17 percent believe they acted like "responsible adults." Those are damning numbers for any Washington lawmaker, but it's sure to prompt nervousness for President Obama and members of Congress who face tough prospects for re-election in 2012.

Here's a quick look at how the major players in the debt debate fared--and at how the fallout from the battle might affect the 2012 campaign:

President Obama: For the president, the debt deal is both a victory and a defeat. On one hand, he can argue to the American people that he fought for and won a long-term debt compromise that will ease fears of default and cut spending at least through the 2012 campaign. But the debate only further accentuated the nation's anger and distress over the struggling economy--the single issue most likely to determine whether he wins a second term.

Obama won a major concession in postponing another debt ceiling increase until after 2012. But his image took a major hit in the process. A Gallup poll released Friday found Obama's approval rating at just 40 percent--the lowest number recorded during his presidency. A Washington Post/ABC News poll found that he especially has taken a hit with his own political base, with just 31 percent of "liberal" Democrats supporting his economic policies. That number is certain to go down, as most on the left came out in opposition to the final debt compromise, in part, because the agreement didn't roll back tax cuts for the wealthy.

House Speaker John Boehner: Political observers have taken varying appraisals of the Ohio Republican's clout has over the past month, as Obama and even some Republicans questioned his ability to control his own caucus. Indeed, Boehner faced an embarrassing setback last week, when he and his lieutenants were forced to delay a vote on his debt bill once vote counts within in the tea party wing of the GOP caucus came up short.

But on Monday, Boehner convinced a majority of the House GOP to support the debt compromise brokered with Obama and the Democrats, in spite of public reservations. In an interview with CBS News, Boehner said he was "pretty happy" because he had gotten "98 percent of what he wanted" in the legislation. But still, it came at a price: Not unlike Obama, the congressional GOP faces dismal poll numbers of its own. Just 30 percent approve of how the congressional GOP handled debt negotiations, according to the CNN/ORC poll.

Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi: While the GOP's image took a major hit in the polls, Democrats in Congress didn't exactly emerge unscathed.  Approval ratings for House and Senate Democrats hit new lows, while the CNN/ORC poll found just 35 percent of those surveyed approve of how the Dems handled the debt debate. House Minority Leader Nancy Pelosi took a back seat during much of the debate, prompting some to question her political clout. In the Senate, meanwhile, Majority Leader Harry Reid tried to broker a last-minute deal, only to see it go down in flames. On Tuesday, Reid acknowledged again that the deal reached largely between the White House and Boehner was not perfect, but was preferable to seeing the nation head into default.

Senate Minority Leader Mitch McConnell: McConnell took heat early on in the debate, thanks to his warning several weeks back that a stalemate leading to default would create major political problems for the GOP. McConnell also fielded a good deal of derision from congressional conservatives and tea party activists for his efforts to broker a last-minute deal permitting Obama to raise the debt ceiling without the approval of Congress. But he was still able to hold his caucus together to help broker a final debt compromise--proving that he remains one of the most influential Republicans in Washington.

Tea party Republicans: Many tea party lawmakers voted against the debt compromise, suggesting that it didn't go far enough to cut federal spending. But movement leaders are still taking credit for the deal, pointing to the debate as proof that tea party lawmakers are changing the "culture" of Washington. However, with a majority of Americans even more disgusted with Congress's political dysfunction, it's not clear that this is an optimal moment for claiming any sort of influence in Washington. A Washington Post/Pew Research Center poll released Monday found 37 percent of those polled had a "worse impression" of tea party lawmakers after the debt debate, while 45 percent were unchanged.

Congress at large: All told, lawmakers on both sides of the aisle facing re-election in 2012 could pay a price for the tumultuous debt debate. In recent weeks, the number of Americans who say they are looking to replace their congressional representative has hit historic highs. Sixty-three percent of those surveyed in a recent Washington Post/ABC News poll said they are inclined to "look around" for other candidates next year.

http://news.yahoo.com/blogs/ticket/few-winners-emerge-debt-debate-173011898.html

House OKs debt; Giffords brings down the House

DAVID ESPO, 08/01/11

WASHINGTON (AP) — Emergency legislation to scrape past an economy-rattling national financial default sped through the House Monday night a scant day before the deadline for action. The moment was made all the more electric by Rep. Gabrielle Giffords' first appearance in Congress since being shot in the head six months earlier.

The vote was 269-161, but all eyes were on Giffords, who drew thunderous applause as she walked into the House chamber unannounced and cast her vote in favor of the bill.

A final Senate sign-off for the measure is virtually assured on Tuesday.

"If the bill were presented to the president, he would sign it," the White House said, an understatement of enormous proportions.

After months of fiercely partisan struggle, the House's top Republican and Democratic leaders swung behind the bill, ratifying a deal sealed Sunday night with a phone call from House Speaker John Boehner to President Barack Obama.

"The legislation will solve this debt crisis and help get the American people back to work," Boehner said at a news conference a few hours before the vote.

The Democratic leader, Rep. Nancy Pelosi, was far less effusive. "I'm not happy with it, but I'm proud of some of the accomplishments in it. That's why I'm voting for it."

So, too, many of the first-term Republicans whose election in 2010 handed the GOP control of the House and set the federal government on a new, more conservative course.

"It's about time that Congress come together and figure out a way to live within our means," said one of them, Sean Duffy of Wisconsin. "This bill is going to start that process although it doesn't go far enough."

The measure would cut federal spending by at least $2.1 trillion over a decade — and possibly considerably more — and would not require tax increases. The U.S. debt limit would rise by at least $2.1 trillion, tiding the Treasury over through the 2012 elections.

Without legislation in place by the end of Tuesday, the Treasury would run out of cash needed to pay all its bills. Administration officials say a default would ensue that would severely damage the economy.

Beyond merely avoiding disaster, Obama and congressional leaders hoped their extraordinary accord would reassure investors at home and around the world, preserve the United States' Aaa credit rating and begin to slow the growth in America's soaring debt. In a roller-coaster day on Wall Street, the Dow Jones industrial average surged, then sank and finally finished down for a seventh straight session but only slightly.

In all, 174 Republicans and 95 Democrats voted for the bill, while 66 Republicans and 95 Democrats opposed it. After months of suspense, the vote was anti-climactic,

Not so the moment when Giffords' presence became known.

She greeted some fellow lawmakers who crowded around her and blew kisses to others, beaming the whole while. Her hair was dark and close cropped and she wore glasses — nothing like the image America had of her six months ago when she was shot while greeting constituents outside a supermarket in Tucson.

She did not speak with reporters.

As for the legislation, after months of wrangling over a deal, there was little time left for lawmakers to decide how to vote.

The White House dispatched Vice President Joe Biden to the Capitol to lobby recalcitrant Democrats in both houses.

"They expressed all their frustration," he conceded after a session with lawmakers of his party in the House.

He said the deal "has one overwhelming redeeming feature" — postponing the next debt limit battle until 2013 and putting the current fight behind. "We have to get this out of the way to get to the issue of growing the economy," he said.

Republicans lobbied their rank and file as well, and the results were far more positive for them than a week ago when they were forced to delay a vote on an earlier measure.

GOP leaders swiftly drew public pledges of support from some first-termers as well as veteran defense hawks — two areas of concern with the agreement.

Rep. C.W. (Bill) Young, chairman of the committee that handles the defense budget, said, "We're confident that we can make this happen without affecting readiness and without affecting any of our soldiers."

There were critics on both sides of the aisle, some of them anguished.

"I did not come to Washington to force more people into poverty," said Rep. Jim McGovern, D-Mass.

"At the end of the day, Washington's spending still has us sprinting toward a fiscal cliff. And this bill barely slows us down," said Rep. Mark Mulvaney, R-S.C.

There is little suspense about the outcome for the debt-limit legislation in the Senate on Tuesday.

A member of the Republican leadership in the Senate predicted strong GOP support. "Maybe 35 (of 47) will support it in the end. There will be some who will pull back," said Sen. Mike Crapo of Idaho.

Already, the legislation was emerging as an issue in the 2012 presidential campaign.

Rep. Michele Bachmann of Minnesota and former Massachusetts Gov. Mitt Romney announced their opposition, while Newt Gingrich issued a statement without saying how he would vote.

The final legislation reflected the priorities of the two political parties.

It would immediately increase the debt limit by $400 billion, with another $500 billion envisioned unless Congress blocks it. At the same time, it would cut more than $900 billion over 10 years from the day-to-day operating budgets of Cabinet agencies. For the budget year that begins Oct. 1, spending would be held $7 billion below current levels.

The measure also establishes a 12-member House-Senate committee that will be charged with producing up to $1.5 trillion in additional deficit cuts over a decade. If the panel succeeds, Congress will be required to vote on the recommendations without possibility of changes.

If the panel deadlocks or fails to produce at least $1.2 trillion in deficit savings, then spending cuts are to take effect across much of the federal budget. The Pentagon, domestic agencies and farm subsidies would be affected, as would payments to doctors and other Medicare providers. But individual benefits under Social Security, Medicaid, Medicare and programs for veterans and federal retirees would be exempt.

At the same time, the debt limit would rise by at least another $1.2 trillion, and perhaps — depending on the results of the committee's work — as much as $1.5 trillion.

Additionally, the legislation requires both the House and Senate to vote on a balanced-budget amendment to the Constitution.

The measure also increases funding for Pell Grants for low-income college students by $17 billion over the next two years, financed by curbs on federal student loan subsidies.

The result of weeks of negotiations and harsh arguing, the final result represented a product of divided government that gave neither side everything it wanted. Leaders in both parties were emphatic on that point.

"As with any compromise, the outcome is far from satisfying," conceded Obama in a video his re-election campaign sent to millions of Democrats. In a tweet, the president was more positive: "The debt agreement makes a significant down payment to reduce the deficit — finding savings in both defense and domestic spending."

Associated Press writers Jim Abrams, Stephen Ohlemacher, Alan Fram, Julie Pace, Donna Cassata, Andrew Taylor and Larry Margasak contributed to this report.

http://news.yahoo.com/house-oks-debt-giffords-brings-down-house-232303134.html

Congressional leaders reach agreement to raise the debt ceiling

Chris Moody, 07/31/111

Republican and Democratic leaders have agreed on a plan to raise the debt ceiling, President Obama announced Sunday night.

The announcement arrives after months of intense closed-door negotiations, and just two days before the deadline set by the Treasury Department.

According to the details available, the agreement would slow the growth of government spending over the next decade by $2-$3 trillion and allow enough borrowing to put off another vote to raise the ceiling to 2013. About $1 trillion will be cut immediately, and the details of the remaining spending reductions will be handled by a bipartisan committee of 12 lawmakers from both chambers, who will recommend cuts for Congress to vote on. To appease the GOP's conservative wing, the deal would also require a vote in both chambers on an amendment to the Constitution requiring the federal government to balance its budget each year.

"I want to announce that the leaders of both parties, in both chambers, have reached an agreement that will reduce the deficit and avoid default--a default that would have had a devastating effect on our economy," Obama said. "Now, is this the deal I would have preferred? No. . . .  But this compromise does make a serious down payment on the deficit reduction we need, and gives each party a strong incentive to get a balanced plan done before the end of the year."

House Speaker John Boehner held a conference call Sunday evening with House Republicans in which he urged them to support the package, declaring that the deal in place "meets our principles of smaller government."

"There is a framework in place that would cut spending by a larger amount than we raise the debt limit, and cap future spending to limit the growth of government," he said, according to a transcript provided by Boehner's office. "Now listen, this isn't the greatest deal in the world. But it shows how much we've changed the terms of the debate in this town."

With the approval of leaders of the House and Senate, and Tuesday's deadline looming, Congress must act quickly to convince enough members to seal the deal with a vote on Monday. The deal will require bipartisan support due to the opposition within factions of both parties.

Senate Minority Leader Mitch McConnell and Majority Leader Harry Reid will both present the deal to their caucus Monday at 11 a.m. with a vote expected afterward.

http://news.yahoo.com/blogs/ticket/congressional-leaders-reach-agreement-raise-debt-ceiling-015244838.html

House Narrowly Passes Doomed GOP Debt Bill as Focus Shifts to Senate

Alex Altman, 07/29/11

Read more: http://swampland.time.com/2011/07/29/house-narrowly-passes-boehner-debt-bill-in-party-line-vote/#ixzz1TZqicQYJ

House Republicans passed Speaker John Boehner’s debt bill 218-210 on Friday, eking out little more than a symbolic victory in the heated debt-ceiling debate by sending the measure to the Democratic Senate, where it was hastily tabled in a 59-41 vote. Friday night’s are a precursor to a frenzied weekend of negotiations in Washington as the U.S. slides toward the brink of a potential financial catastrophe.  Boehner’s measure, heralded by Republicans as a bipartisan solution to the looming debt crisis, earned zero Democratic votes. Twenty-two Republicans voted against the legislation, including presidential candidates Ron Paul and Michele Bachmann as well as 11 members of the fiery freshman class, who said it didn’t do enough to stem the tide of federal red ink even after Boehner and his deputies tweaked the measure to include an additional balanced-budget amendment requirement.

After days of wrangling, the intraparty standoff ended not with a bang, but with a whimper. There was little celebration when the gavel closed the tight vote, during which Republican Whip Kevin McCarthy stalked the floor, occasionally collaring members yet to vote. The deep division between Democrats and Republicans was on full display in the speeches leading up to the vote. In remarks to close debate on the bill, Boehner angrily blasted Democrats for failing to put forth a plan. “I have worked with the President and the administration from the beginning of this year to avoid being in this spot. I have offered ideas. I have negotiated,” Boehner said, his voice bristling with frustration. “I stuck my neck out a mile to try to get an agreement with the President of the United States.”

In response, Democrats hissed at the Speaker, who had twisted arms furiously on Thursday but was unable to secure enough votes for the bill, forcing an overnight delay on the final vote. While House minority Nancy Pelosi was powerless to stop a bill once Boehner and his deputies finagled enough votes, the Democratic-controlled Senate moved quickly to put it aside just two hours after it cleared the House. As lawmakers head into a final weekend of political combat on the debt ceiling, the upper chamber is now the lone arena for negotiations between Democrats and Republicans.

Updated, 8:38 p.m.

http://swampland.time.com/2011/07/29/house-narrowly-passes-boehner-debt-bill-in-party-line-vote/

Obama: Halt '3-ring-circus' of debt-limit debate

DAVID ESPO , 07/26/11

WASHINGTON (AP) — Decrying a "partisan three-ring circus" in the nation's capital, President Barack Obama criticized a newly minted Republican plan to avert an unprecedented government default Monday night and said congressional leaders must produce a compromise that can reach his desk before the Aug. 2 deadline.

"The American people may have voted for divided government, but they didn't vote for a dysfunctional government," the president said in a hastily arranged prime-time speech. He appealed to the public to contact lawmakers and demand "a balanced approach" to reducing federal deficits.

Obama stepped to the microphones a few hours after first Republicans, then Democrats drafted rival fallback legislation Monday to avert a potentially devastating government default in little more than a week.

Obama said the approach unveiled earlier in the day by House Speaker John Boehner would raise the nation's debt limit only long enough to push off the threat of default for six months. "In other words, it doesn't solve the problem," he said.

The president had scarcely completed his remarks when Boehner made an extraordinary rebuttal carried live on the nation's networks.

"The president has often said we need a 'balanced' approach, which in Washington means we spend more, you pay more," the Ohio Republican said, speaking from a room just off the House floor.

"The sad truth is that the president wanted a blank check six months ago, and he wants a blank check today. That is just not going to happen."

Directly challenging the president, Boehner said there "is no stalemate in Congress."

He said the Republicans' newest legislation would clear the House, could clear the Senate and then would be sent to Obama for his signature.

The back-to-back televised speeches did little to suggest that a compromise was in the offing, and the next steps appeared to be votes in the House and Senate on the rival plans by mid-week.

Despite warnings to the contrary, U.S. financial markets have appeared to take the political maneuvering in stride — so far. Wall Street posted losses Monday but with no indication of panic among investors.

Without signed legislation by day's end on Aug. 2, the Treasury will be unable to pay all its bills, possibly triggering an unprecedented default that officials warn could badly harm a national economy struggling to recover from the worst recession in decades.

Obama wants legislation that will raise the nation's debt limit by at least $2.4 trillion in one vote, enough to avoid a recurrence of the acrimonious current struggle until after the 2012 elections.

Republicans want a two-step process that would require a second vote in the midst of a campaign for control of the White House and both houses of Congress.

There were concessions from both sides embedded in the competing legislation, but they were largely obscured by the partisan rhetoric of the day.

A Senate Republican leader Mitch McConnell of Kentucky urged Obama to shift his position rather than "veto the country into default."

And Reid jabbed at tea party-backed Republicans who make up a significant portion of the House GOP rank and file. The Nevada Democrat warned against allowing "these extremists" to dictate the country's course."

The measure Boehner and the GOP leadership drafted in the House called for spending cuts and an increase in the debt limit to tide the Treasury over until sometime next year. A second increase in borrowing authority would hinge on approval of additional spending cuts sometime during the election year.

Across the Capitol, Reid wrote legislation that drew the president's backing, praise from House Democratic leader Nancy Pelosi — and criticism from Republicans.

By design or not, the two sides' harsh remarks obscured concessions that narrowed the differences among the nation's political leaders as they groped for a way to resolve the economic crisis.

With their revised plan, House Republicans backed off an earlier insistence on $6 trillion in spending cuts to raise the debt limit.

And Obama jettisoned his longstanding call for increased government revenues as part of any deficit reduction plan.

Pending the president's televised speech, the White House also declined repeatedly to say whether Obama would veto the revised House measure.

White House communications director Dan Pfeiffer called the proposal "not a serious attempt to avert default because it has no chance of passing the Senate."

Not all Republicans were happy with their leadership's decision to scale back legislation that had cleared the House last week, only to die in the Senate.

Among House conservatives who have provided the political muscle for the Republican drive to cut spending, the revised legislation was a disappointment. "I cannot support the plan," said Rep. Jim Jordan of Ohio, one of the leading advocates of legislation that cleared the House last week and died in the Senate.

But two rank-and-file Republicans said their constituents were voicing concerns other than the rising federal debt.

Rep. Tom Rooney, R-Fla., said his office is getting calls from constituents saying, "If I don't get my Social Security check, it's your fault."

Rep. Tom Reed, a New York freshman, said many of his constituents are telling him to stand firm in his drive to cut spending. "But I will admit there's some anxiety in the district" about Social Security and other programs, he added.

As Boehner readied his legislation, Senate Democratic leaders called a news conference to announce their own next steps.

The Democrats' measure would cut $2.7 trillion in federal spending and raise the debt limit by $2.4 trillion in one step — enough borrowing authority to meet Obama's bottom-line demand.

The cuts include $1.2 trillion from across a range of hundreds of government programs and $1 trillion in savings assumed to derive from the end of the wars in Afghanistan and Iraq.

Boehner ridiculed the $1 trillion in war savings as gimmicky, but in fact, they were contained in the budget the House passed earlier in the year.

The legislation also assumes creation of a special joint congressional committee to recommend additional savings with a guaranteed vote by Congress by the end of 2011.

Yet in the maneuvering it appeared another of the president's long-held conditions appeared to be in danger of rejection.

Neither Boehner's measure nor the one Reid was drafting included additional revenue, according to officials in both parties.

In addition to a two-step approach to raising the debt limit, the House measure would require lawmakers in both houses to vote later this year on a constitutional amendment requiring a balanced federal budget.

An earlier bill, passed in the House last week but then scuttled in the Senate, would have required Congress to approve an amendment and send it to the states for ratification.

That same bill would have made $6 trillion in spending cuts in exchange for raising the debt limit.

Obama promised to veto that bill even before the House voted on it.

Each side offered accounts of secret maneuvering designed to put the other side in a poor light.

Democratic officials said Obama called Boehner on Saturday night, one day after the collapse of compromise talks, and offered to reduce his demand for new tax revenue by $400 billion.

In return, Obama said that he wanted Republicans to abandon their demand to cancel parts of the year-old health care law if future deficit cuts did not materialize.

This official said Boehner rejected the proposal on Sunday.

Republicans disputed that account — and offered one of their own.

In their version of events, Reid agreed on Sunday night to a two-step approach to raising the debt limit that Obama has rejected.

Democrats denied it.

None of the officials involved would agree to be quoted by name.

Associated Press writers Andrew Taylor, Donna Cassata, Alan Fram, Ben Feller and Jim Kuhnhenn contributed to this story.

http://news.yahoo.com/obama-halt-3-ring-circus-debt-limit-debate-012245858.html

Don't Get Caught Holding Dollars When The U.S. Default Arrives

Addison Wiggin, 07/24/11

Greece can’t solve a problem of too much debt by taking on even more. We will note, however, that by some measures, the United States is even more deeply in hock than Greece.

Greece’s debt-to-GDP ratio is 143%. America’s is officially 97%. But the $14.3 trillion national debt, stacked up against a $14.7 trillion economy, doesn’t tell the whole story. Look at these numbers:

• $14.3 trillion: “official” national debt

• $5 trillion: Amount Uncle Sam is on the hook for Fannie Mae and Freddie Mac

• $62 trillion: Total liabilities and unfunded obligations for Social Security and Medicare

That doesn’t count the black box of bailouts.

We know how much the Federal Reserve doled out in emergency loans: $16.1 trillion between Dec. 1, 2007, and July 21, 2010. We know that because yesterday the Government Accountability Office completed its first-ever audit of the Fed, made possible largely through the persistence of Rep. Ron Paul (R.-Tex.) making that audit, however incomplete, the law.

What we don’t know is how much of that has been paid back.  “We have literally injected about $5.3 trillion,” said Dr. Paul earlier this month during his questioning of Fed chief Ben Bernanke, “and I don't think we got very much for it. The national debt went up $5.1 trillion.”

Bernanke did not challenge those figures.

“To get our overall fiscal gap under control,” writes Boston University professor Laurence Kotlikoff in Bloomberg, “the U.S. must cut spending or raise tax revenue by $20 trillion over the next decade, far more than either the president wants or the House Republicans seek.”

Yep: The latest number we see bruited in Washington is $3 trillion. Whatever the final number -- and there will be a last-minute deal; there always is -- it will be substantially less than $20 trillion over 10 years. The can will be kicked as it keeps getting kicked in Greece.

We note here that the total of outstanding credit default swaps on U.S. Treasuries crested $4.8 billion this week. Uncle Sam has now surpassed Greece in this category.

Measured in year-over-year change, America is number one: Net notional CDS outstanding grew 109%. That means there’s double the bets out there on a U.S. default compared with a year ago.

“You may not know this, but the U.S. has actually defaulted a number of times already,” writes Chris Mayer this morning. He cites five instances:

• 1779: The government was unable to redeem the continental currency issued during the Revolutionary War

• 1782: The colonies defaulted on the debt they took out to pay for the war

• 1862: During the Civil War, the Union failed to redeem dollars for gold at terms stated by the debt contracts

• 1934: FDR defaults on the debt issued to finance World War I, refusing to redeem it in gold. The dollar is devalued 40% against gold

• 1979: A bureaucratic snafu results in interest going unpaid on some small bills.

“With the exception of 1979,” Chris says, “which was mostly due to administrative confusion -- the U.S. simply ran out of money each time. The end result was the dollar had to be devalued. Meaning it lost significant purchasing power.

“My guess is that the U.S. will default again. It may not technically be called that, but the only way for the U.S. to meet its financial obligations is to print a lot of money.”

What does that mean in practical terms?  In Greece, professor Savas Robolis at Panteion University in Athens reckons that by 2015, the average Greek employee and pensioner’s standard of living will have fallen 40% compared with 2008.

Even now, Americans are turning to their credit cards to pay for groceries and gas. According to First Data Corp., the volume of gasoline purchases put on credit cards jumped 39% over the last 12 months.

You don’t want to be the average American in a default scenario, whenever it arrives. Ray Dalio, the head of Bridgewater Associates, the world’s biggest hedge fund, puts that day in “late 2012 or early 2013.”

The Path to Debt in America by Addison Wiggin originally appeared in the Daily Reckoning.

http://news.yahoo.com/dont-caught-holding-dollars-u-default-arrives-191153227.html

U.S. leaders struggle to reach debt deal as deadline clock ticks

CNN Wire Staff, 07/24/11

Washington (CNN) -- Leaders from both parties are eager to reach a deal on the nation's debt-ceiling crisis Sunday to head off a negative reaction in Asian markets when they open for the week, according to both Democratic and Republican aides.

Angry Democrats rejected a proposal from Republicans Saturday for a two-step approach to raising the debt limit as congressional leaders raced against the clock to find a solution, Democratic sources said.

Congressional leaders met again Saturday evening to discuss the two-step approach put forward by House Speaker John Boehner, which would raise the country's debt ceiling in stages, the sources said.

Boehner; Senate Majority Leader Harry Reid; Sen. Mitch McConnell, the Republican Senate leader; and House Democratic Leader Nancy Pelosi, participated in the meeting.

Under the two-step plan, the nation's debt ceiling would be raised through 2011 in exchange for spending cuts totaling around $1 trillion, the Democratic sources said. The ceiling would be raised again, through 2012, after a special commission is set up to find ways to reduce the long-term debt through entitlement and spending cuts and tax reform, they added.

While Democrats and Republicans agreed on the first stage of the plan, they split over how a second ceiling increase would be approved, the sources said.

Specifically, Democrats do not like the idea of tying future debt increases to a commission, which could deadlock and thrust the nation back into the uncertain position it is in today, they said.

"The Democrats who run Washington have refused to offer a plan," Boehner aide Michael Steel said soon after the meeting.

"Now, as a result, a two-step process is inevitable. Like the president and the entire bipartisan, bicameral congressional leadership, we continue to believe that defaulting on the full faith and credit of the United States is not an option," he said.

Pelosi similarly found fault with her counterparts, in a Saturday-night statement issued after the latest meeting.

"The delay in bringing forth a solution springs from the Republicans' decision to walk away from 98 percent of the American people to protect the assets of the top 2 percent of the wealthiest people in our country," she said in a statement.

Reid was even more targeted in his criticisms.

"I hope that Speaker Boehner and Leader McConnell will reconsider their intransigence. Their unwillingness to compromise is pushing us to the brink of a default on the full faith and credit of the United States. We have run out of time for politics. Now is the time for cooperation," the Senate majority leader said in a statement.

Earlier Saturday, Boehner and other congressional leaders met with President Barack Obama in the White House, one day after Boehner broke off talks with the Obama administration on how to prevent a national default.

Boehner favors a plan to cut spending by $3 trillion to $4 trillion in the two-step process, a Republican aide said.

"He (Boehner) said he wanted to get something agreed to prior to Asian market trading (in the new week)," the aide told CNN.

Asian markets are the first major market group to open worldwide each day, with some opening for the work week Sunday night in Washington.

Obama held a special one-hour meeting Saturday morning with congressional leaders following the collapse of direct talks between him and Boehner.

Participating in that meeting were Boehner, Reid, McConnell, Pelosi and Vice President Joe Biden. Treasury Secretary Tim Geithner and Jacob Lew, director of the Office of Management and Budget, joined after media cameras left the room.

The negotiations -- necessary to stave off an unprecedented national default that could prove economically devastating -- are testing the ability of leaders on both sides of the aisle to legislate effectively in an era of increasingly shrill and unyielding partisanship.

Republicans, who have railed against the growth of government, remain staunchly opposed to any tax increases. Democrats are trying to protect some of their party's primary legacies -- entitlements such as Social Security and Medicare, programs forged at the height of the New Deal and Great Society.

One Democratic official involved in the talks said the meeting was not contentious, and the participants did not rehash what went wrong with the Obama-Boehner talks. Rather it was very focused on "just how do we fix it," and "everybody is pretty serious" about finding a way forward that prevents a default, the official said.

However, there was a recognition that the congressional leaders -- all of whom say they want to prevent default -- can only do so much about the opinions and actions of their caucuses, the official said.

"Different people put different ideas on the table" resulting in a mishmash of things that need to be sorted through to see what might be viable, the official said. Congressional staff will be sorting through the different ideas, the official added.

The president repeated his insistence that the debt ceiling be raised through the end of 2012, the source said.

Asked if Republicans pushed back on the idea of an extension through the end of 2012, the source said: "I just think it was an honest discussion about what might happen to this country if we default. It was like, everyone knows where everyone is at this point."

But a House GOP aide told CNN that Republicans are "considering calling the president's bluff" on his refusal to sign a bill that doesn't raise the debt ceiling beyond the November 2012 election.

The aide said that party members are "struggling to see how they reach an agreement with significant debt reduction without buying time to work out the details."

Boehner aide Steel had told reporters earlier that "it would be terribly unfortunate if the president was willing to veto a debt-limit increase simply because its timing would not be ideal for his re-election campaign. We want the most significant deficit reduction possible, but linking the full faith and credit of the United States to presidential campaign politics is not a defensible position."

Reid, the Democrat Senate majority leader, reiterated Saturday afternoon that he sided with the president on rejecting any short-term extensions on debt-ceiling discussions.

"I will not support any short-term agreement, and neither will President Obama nor Leader Pelosi," Reid said in a statement. "We seek an extension of the debt ceiling through at least the end of 2012. We will not send a message of uncertainty to the world."

If Congress fails to raise the $14.3 trillion debt limit by August 2, Americans could face rising interest rates, a declining dollar and increasingly jittery financial markets, among other problems.

A Republican source familiar with the negotiations said Boehner told Republican lawmakers Friday that to get the debt ceiling raised by August 2, the House must vote on legislation by next Wednesday -- and that means it must be posted online Monday.

http://edition.cnn.com/2011/POLITICS/07/24/debt.talks/index.html?hpt=hp_t2

中央社, 07/24/11

美國總統歐巴馬譴責共和黨政敵棄協議於不顧後，國會今天火速展開行動，希望在48小時內擬定削減赤字計畫，避免美國在短短幾天後發生災難性的債務違約。

美債會談昨天在尖銳言語中破局後，歐巴馬今天在白宮召開緊急會議，要求國會領袖尋找雙方一致的領域。

白宮發言人卡尼（Jay Carney）今天會後表示：「國會應避拿美國經濟來玩魯莽的政治遊戲，而是應該負起責任，做好份內工作，避免違約並削減赤字。」

根據卡尼，歐巴馬告訴國會議員，他不會接受短期解決方案，因為任何短期計畫仍可能造成美國信評受挫。

白宮聲明說：「目前情況清楚顯示，若讓我國經濟在短短幾個月後再陷危機、再度因為債務上限爭執不下，是非常不負責任的作法。」聲明說，白宮「這1整天」會不時和民主黨盟友和共和黨政敵聯繫。

共和黨高層幕僚表示，國會議員正研擬10年內撙節3兆至4兆美元的計畫，但另1名共和黨高層官員表示，數目尚未確定。幕僚也說，共和黨領袖希望明天下午4時前能「拿出進展」。

鑒於美國信用評級及美國在金融市場地位正面臨威脅，共和黨籍眾議院議長貝納（John Boehner）告訴共和黨同僚，高層希望能在明天下午以前拿出進展，避免驚動在該時開盤的亞洲市長。

共和黨眾議員鄧特（Charles Dent）透過電話告訴路透社：「我擔心市場可能會有負面反應。」他表示，貝納告訴黨員，倒債不是1個選項，國會議員必須達成協議。（譯者：中央社盧映孜）1000724

http://news.chinatimes.com/focus/50109233/132011072400415.html

先是(美國)眾院多數黨領袖耍性子，接著是眾院議長耍性子。為了鞏固自己在一群狐群狗黨中的地位，所謂政治領袖不惜拿國家的債信及經濟情況當賭注。

這些人明知美國及全世界不能承擔美國倒債的後果，圖窮匕見時一定得做出某種妥協。但應付一些豬頭選民的戲還是要演。而且越演越荒腔走板。沒有人願意拿出勇氣，把現實報告和分析給人民知道。