Another Speed Bump For The Bush/Cheney Trainwreck

By Mimikatz

This was originally a comment to Kagro's post on Defunding the War, but it may be important enough to merit a separate post.  Kagro was trying to game out what would happen if Congress defunds the war.  Could the Bush/Cheney regime just go on spending money?  The picture is even more complicated than Kagro suggests, because very soon we are going to hit the debt ceiling, and at that point there simply may be no money period.  Conventional wisdom four months ago was that the Dems would just wince and raise the limit.  But we know how much has changed since March.  So don't count on it.  What happens when we hit the limit, likely around the magical turning point in September?

March, 2006 was the last time that Congress had to raise the debt ceiling. At that point, Congress raised the debt ceiling to $9 trillion. The national debt is now over $8,897,854,000,000. We are getting very close to that limit. This would mark the fifth time that the debt ceiling has had to be raised under Bush, and would mean that the federal debt has gone from $5,807 trillion when Clinton left office to over $9 trillion, and would probably double while Bush is in office. Spending $12 billion a month on a worthless war will do that to you. Raising the debt limit yet again is political treasure for the Dems, and is going to be a huge issue for some Republicans. It will get some added traction because it is basically Ron Paul's issue among the GOP, and he is sure to press the other candidates on the issue.

Last time Congress didn't raise it before the limit was hit, Treasury Secretary Snow, like Robert Rubin before him, borrowed from pension funds for a time. But those eventually run out.  But without an increase in the debt ceiling, the government legally can't issue more debt.

And debt is how we run.  The government is funded, in addition to tax receipts, by quarterly sales of T-notes in varying denominations (3-6-9-12-28-24 months, IIRC) and T-bills (2-5-10-30 year). The short-term notes especially have to be rolled over every time they come due, because we don't have the funds to actually pay down the debt. The next treasury refunding is in early August, then November, by which time we will surely be over the debt limit. The riskier the paper, the higher interest that buyers will demand.  And interest rate hikes, whether by the Fed or by the markets themselves, are historically a big factor in triggering recessions.

So ultimately, we depend on the kindness of the buyers of Treasury bills and notes, many of whom are foreigners. The debt limit is thus one more thing to factor into the mix--potentially a very big thing.

When I am not depressed, I see this playing out as a multi-level chess game, with Bush/Cheney in a strong position, but with waters of various kinds eroding the sand on which their tower sits. Each bit of defiance, on Iraq, on subpeonas, on spying etc costs him support because it ups the price which the GOP is going to pay for defending him. The fiscal issues are going to be a particularly bitter pill for them to swallow.  The House Dem leadership surely sees all this, and is factoring it into their strategy. Another metaphor might be a tightening noose.

Maybe Bush/Cheney will attack Iran as a diversion and nation-rallyer, but I think that will fail, and the costs to the country's fiscal position are as bad as the costs militarily and in terms of world opinion. So maybe the bond buyers and Wall Street will try to exercise some restraint.

In any event, these guys are truly playing chicken, with their own party, the Congress and the country, and fewer and fewer are going to stay with them for the whole ride off the cliff.

Comments

[emptywheel]

Interesting point, M-Katz

Any idea when this will hit? Presumably, it'll hit in August, which means the fight will be in September, just when (Mitch McConnell promises) Republicans will be at their limit.

[Laura]

"...and would mean that the federal debt has gone from $5,807 trillion when Clinton left office to over $9 billion..."

???? Am I just misreading this sentence, or is there an error here?

[bluebird]

"...and would mean that the federal debt has gone from $5,807 trillion when Clinton left office to over $9 billion..."

???? This seems backwards? ???

[pol]

... perhaps they'll declare they have to take money from Social Security to fund the debt?

[ab initio]

Mimikatz

To understand the totality of the debt situation its important to also take into account all the unfunded liabilities.

"Taxpayers are now on the hook for a record $59.1 trillion in liabilities, a 2.3% increase from 2006. That amount is equal to $516,348 for every U.S. household. By comparison, U.S. households owe an average of $112,043 for mortgages, car loans, credit cards and all other debt combined.

Unfunded promises made for Medicare, Social Security and federal retirement programs account for 85% of taxpayer liabilities. State and local government retirement plans account for much of the rest."

[Dismayed]

Senator Russ Feingold (D-WI), a member of the Senate Judiciary Committee, is calling on Congress to censure President Bush, Vice President Cheney, and other administration officials for "misconduct relating to the war in Iraq and for their repeated assaults on the rule of law."

This worries me as Fiengold went on to say that while recognizing public sentimate that he does not support impeachment.

I could get behind this if he were pushing for impeachment of say Gonzo, or others but this appears to me to be a cap on the wrongdoings of Chairman Bush.

RUSS FEINGOLD you have lost my RESPECT. And you were my favoite Senator.

This move coupled with the Vote to condem Iran convinces me that we are mearly seeing political theatre. Hate to say it guys, but Congress has left the building, they've been bought, they aren't going to fullfill their constitutional duty.

[kaleidescope]

Don't underestimate the importance of political theater. At one time, Richard Nixon signed into law the Endangered Species Act and the legislation creating the Environmental Protection Agency. That was because the dominant political narrative of the time forced him to do it.

Impeachment is political theater -- it is more a political act than a legal or moral one. Impeachment as a political act is something the Republicans blew, big time. For impeachment to work, the political narrative in this country must continue to change. As Mimikatz noted, "Each bit of defiance, on Iraq, on subpeonas, on spying etc costs [them] support because it ups the price which the GOP is going to pay for defending him. The fiscal issues are going to be a particularly bitter pill for them to swallow." And, ultimately, these acts of defiance, the failures, all add momentum to what is now a clearly changing national political narrative.

Blogs like this one also help drive and steer this change.

Unfortunately, the change is not happening fast enough to make impeachment a successful political strategy during what Bush has left of his tenure. At least unless he does something dramatically stupid, like blocking Congress from jailing Meiers for inherent contempt. Or if he tries to institute a draft. Or if he invades Iran. Or, in the alternative, if the Greenland glacier slips off the island into the ocean and sea level rises instantly by fifteen feet worldwide.

A dramatic event could suddenly change things. But absent something like that, attempting to actually impeach Bush and Cheney right now would be bad politics. And politics are the only justifiable reason to attempt to impeach them.

I'll never forget that when Dianne Feinstein was first mayor of San Francisco and she turned out to be much more conservative than George Moscone, there was an attempt to recall her. Enough signatures were gathered to force her into a recall election, which she won handily. Feinstein was politically untouchable in San Francisco after that because the forces that had tried to defeat her were clearly defeated and their defeat became a cornerstone of San Francisco's political narrative for almost a decade.

[masaccio]

This year's projected deficit is around $205bn. That comes out to about $16bn monthly, so we should hit the ceiling in 7 months. Next year's projected actual deficit is higher, at $258bn. If that is starting now, then we will hit the ceiling earlier.

[masaccio]

The fiscal wake-up tour came to my town recently, and we heard a consistent theme: health care is the curve-wrecker. If we don't do something, it will bankrupt us. Even the Heritage Foundation is on board there. Of course, the prescriptions of the Heritage and Brookings people are quite different. And everyone seems to think single-payer is not in the cards.

[bmaz]

massacio - Unless something has changed, keep in mind that the Iraq moneys are off budget so that needs to be added into your monthly calculation above. I am not positive I am right about this, but I think so...

Kaleidoscope - I could not disagree more than I do with the statement "And politics are the only justifiable reason to attempt to impeach them". The act of impeachment is indeed a political one, but politics alone is never the reason to implement it. What you have said here is incredibly shortsighted. The reason to impeach is to protect, uphold and honor the Constitution; and there has never been a time that more demanded exactly that than we face right now. Furthermore, at this point, due to the pernicious obstruction and deception by the Administration, there is no other option left to halt the evisceration of the separation of powers, allow proper oversight, and hold the malfeasants in the Administration responsible so that accountability is had and they are not allowed to raise their ugly head again with impunity like occurred after Watergate and Iran Contra. Sometimes you just have to do what is right, even if there are potential political pitfalls. Impeachment is both right and necessary. I am fine if the inquiry starts with Gonzales and is allowed to proceed where it leads from there; but it MUST start.

[Dismayed]

Well put, Bmaz. And hey, I'm not a wingnut. Just a guy who thinks the constitution is a good thing, and that it must be defended.

This is a people's country, not an elitist's country, at the end of the day that's what the constitution is all about.

The balance is way off, we dare not cross the tipping point. The powerful in this country will have a feeding frenzy on the bones of democracy with not a glance back if we don't hold the line - and soon.

[big brother]

Bankrupting our national treasury is Repub/Corporate slave makers way of restricting any entitlement funding or other government spending unless it is private enterprise siphoning it off. They knew they would be gone in 2009 they are setting the table to be obstructionist. That is the way they played their hand. How can we infuse their spinal columns if they do not have to stomach to fight for us. Embarassment does not work well. Maybe what is at stake is to big for them as politicas to grasp or they are being threatened, like the Brooks Brother gang in Florida recount in 2000.) I watched that is disbelief as the coup was implemented by Baker never ever could that happen in my America). Fear is a great motivator while hope of reward takes a second seat.
Impeachment is about stopping the bleeding, censure is about placating as many of the base as possible. If you do not insist on Impeachment for this group after their Impeachment against Clinton you are ringers for the Repubs infiltrating the liberal movement. You can wear that from now on Dismayed and the rest of the "keep the gloves on" politicians doing business as usual.
Patrick Henry said: "give me liberty or give me death"
http://libertyonline.hypermall.com/henry-liberty.html

Give Me Liberty Or Give Me Death
Patrick Henry, March 23, 1775.

No man thinks more highly than I do of the patriotism, as well as abilities, of the very worthy gentlemen who have just addressed the House. But different men often see the same subject in different lights; and, therefore, I hope it will not be thought disrespectful to those gentlemen if, entertaining as I do opinions of a character very opposite to theirs, I shall speak forth my sentiments freely and without reserve. This is no time for ceremony. The questing before the House is one of awful moment to this country. For my own part, I consider it as nothing less than a question of freedom or slavery; and in proportion to the magnitude of the subject ought to be the freedom of the debate. It is only in this way that we can hope to arrive at truth, and fulfill the great responsibility which we hold to God and our country. Should I keep back my opinions at such a time, through fear of giving offense, I should consider myself as guilty of treason towards my country, and of an act of disloyalty toward the Majesty of Heaven, which I revere above all earthly kings.

Mr. President, it is natural to man to indulge in the illusions of hope. We are apt to shut our eyes against a painful truth, and listen to the song of that siren till she transforms us into beasts. Is this the part of wise men, engaged in a great and arduous struggle for liberty? Are we disposed to be of the number of those who, having eyes, see not, and, having ears, hear not, the things which so nearly concern their temporal salvation? For my part, whatever anguish of spirit it may cost, I am willing to know the whole truth; to know the worst, and to provide for it.

I have but one lamp by which my feet are guided, and that is the lamp of experience. I know of no way of judging of the future but by the past. And judging by the past, I wish to know what there has been in the conduct of the British ministry for the last ten years to justify those hopes with which gentlemen have been pleased to solace themselves and the House. Is it that insidious smile with which our petition has been lately received? Trust it not, sir; it will prove a snare to your feet. Suffer not yourselves to be betrayed with a kiss. Ask yourselves how this gracious reception of our petition comports with those warlike preparations which cover our waters and darken our land. Are fleets and armies necessary to a work of love and reconciliation? Have we shown ourselves so unwilling to be reconciled that force must be called in to win back our love? Let us not deceive ourselves, sir. These are the implements of war and subjugation; the last arguments to which kings resort. I ask gentlemen, sir, what means this martial array, if its purpose be not to force us to submission? Can gentlemen assign any other possible motive for it? Has Great Britain any enemy, in this quarter of the world, to call for all this accumulation of navies and armies? No, sir, she has none. They are meant for us: they can be meant for no other. They are sent over to bind and rivet upon us those chains which the British ministry have been so long forging. And what have we to oppose to them? Shall we try argument? Sir, we have been trying that for the last ten years. Have we anything new to offer upon the subject? Nothing. We have held the subject up in every light of which it is capable; but it has been all in vain. Shall we resort to entreaty and humble supplication? What terms shall we find which have not been already exhausted? Let us not, I beseech you, sir, deceive ourselves. Sir, we have done everything that could be done to avert the storm which is now coming on. We have petitioned; we have remonstrated; we have supplicated; we have prostrated ourselves before the throne, and have implored its interposition to arrest the tyrannical hands of the ministry and Parliament. Our petitions have been slighted; our remonstrances have produced additional violence and insult; our supplications have been disregarded; and we have been spurned, with contempt, from the foot of the throne! In vain, after these things, may we indulge the fond hope of peace and reconciliation. There is no longer any room for hope. If we wish to be free-- if we mean to preserve inviolate those inestimable privileges for which we have been so long contending--if we mean not basely to abandon the noble struggle in which we have been so long engaged, and which we have pledged ourselves never to abandon until the glorious object of our contest shall be obtained--we must fight! I repeat it, sir, we must fight! An appeal to arms and to the God of hosts is all that is left us!

They tell us, sir, that we are weak; unable to cope with so formidable an adversary. But when shall we be stronger? Will it be the next week, or the next year? Will it be when we are totally disarmed, and when a British guard shall be stationed in every house? Shall we gather strength by irresolution and inaction? Shall we acquire the means of effectual resistance by lying supinely on our backs and hugging the delusive phantom of hope, until our enemies shall have bound us hand and foot? Sir, we are not weak if we make a proper use of those means which the God of nature hath placed in our power. The millions of people, armed in the holy cause of liberty, and in such a country as that which we possess, are invincible by any force which our enemy can send against us. Besides, sir, we shall not fight our battles alone. There is a just God who presides over the destinies of nations, and who will raise up friends to fight our battles for us. The battle, sir, is not to the strong alone; it is to the vigilant, the active, the brave. Besides, sir, we have no election. If we were base enough to desire it, it is now too late to retire from the contest. There is no retreat but in submission and slavery! Our chains are forged! Their clanking may be heard on the plains of Boston! The war is inevitable--and let it come! I repeat it, sir, let it come.

It is in vain, sir, to extenuate the matter. Gentlemen may cry, Peace, Peace-- but there is no peace. The war is actually begun! The next gale that sweeps from the north will bring to our ears the clash of resounding arms! Our brethren are already in the field! Why stand we here idle? What is it that gentlemen wish? What would they have? Is life so dear, or peace so sweet, as to be purchased at the price of chains and slavery? Forbid it, Almighty God! I know not what course others may take; but as for me, give me liberty or give me death!

[Semanticleo]

Jodi......Jodi......

What, no snark about how the Bush Tax disembowelment is
creating a vast surplus of Revenue.................?

[knut wicksell]

Thanks MimiK for the reminder. I'd like to see Nancy Pelosi call in the Secretary of Treasury for a hearing on the debt, and get someone to ask him why it isn't a good idea to raise taxes to cover the next round of funds going to the Occupation. It would be put up or shut up time for the Republicans in the Senate, who will have to explain to their constituents why they think it's a good idea to send kids over to get killed but not to tax ourselves so they have a fighting chance.

[Heimyankel]

"..The House Dem leadership surely sees all this, and is factoring it into their strategy.."

lol lololol

The truth is, the dem leadership is neither.

[dan]

Masaccio

It's relatively easy to do the maths on this.

The debt ceiling was raised 16 months ago from 8.184 trillion, and currently stands at 8.898 trillion - by my calculations federal debt is rising at around $45 billion per month. This means that the debt ceiling will be breached some time in October.

By the time the Bush administration hands over the keys to the White House, the federal debt will be north of 9.5 trillion

[Mimikatz]

The actual debt ceiling is $8.965 trillion. There is an approximately $80 billion gap between the "debt sdubjct to limits" and didal debt. While they can calculate the debt to the penney each day, they can't make that calculation for gov't expenditures--there is a lag of a month or two. There is less than $200 billion left in the debt ceiling, and perhaps as little as $50-60 billion. Not a lot of maneuvering room, in other words. The budget committees are very aware of the issue, btw.

[JEP]

When does a soldier have the legal right to refguse to follow the orders of his commander in chief? Didn't we cross that threshold long ago?

The Generals have given Bush and Cheney a resounding "NO" so many times, (so much for listening to his generals) Bush should have realized he was at the limits of his authority.

It may not be as easy to get everyday Americans to do your dirty work any more, Mr. Bush. Who you gonna call when rank and file soldiers refuse your orders based on solid legal grounds?

Look at the statutes that provide for soldires to refuse orders...

The Bush policy is well described in those guidelines. It has become everything they were written to prevent.

[WILLIAM]

Cash on the nail

[SPENCER]

Queer the pitch

[CALLIE]

Blue-plate special