No one knows exactly what will happen if the United States passes the deadline for raising the debt limit on Oct. 17. That includes the Treasury Department, which calls a possible breach economically “catastrophic.” But that characterization is not stopping 39 percent of Americans from thinking that there’s nothing major to fear.
That fact alone should be terrifying.
A new poll from Pew shows that, while 47 percent of Americans think raising the debt ceiling is “absolutely essential to avoid crisis,” 54 percent of Republicans, 28 percent of Democrats, and 38 percent of independents think the U.S. can go past the deadline “without major problems.” Just 36 percent of Republicans think raising the limit is crucial.
The 39 percent of Americans who think exceeding the deadline would be no big deal are likely very, very wrong. For now, the Treasury has set the deadline at Oct. 17. After that point, the government will just have $30 billion cash-on-hand to meet its obligations. By Nov. 1, those obligations would include $18 billion in Medicare payments, $25 billion in Social Security payments, and $12 billion in military payments.
Failing to make those payments alone sounds really, really bad. But this wouldn’t just impact the people reliant on government money. Per BloombergBusinessWeek:
Failure by the world’s largest borrower to pay its debt — unprecedented in modern history — will devastate stock markets from Brazil to Zurich, halt a $5 trillion lending mechanism for investors who rely on Treasuries, blow up borrowing costs for billions of people and companies, ravage the dollar, and throw the U.S. and world economies into a recession that probably would become a depression. Among the dozens of money managers, economists, bankers, traders, and former government officials interviewed for this story, few view a U.S. default as anything but a financial apocalypse.
Another way of looking at the impact on the global economy, as they put it, is as an immediate economic crisis that’s, at a minimum, way larger than anything faced in the fall of 2008.
But as long as a sizable number of Americans — and a majority of Republicans — view default as something less than toxic, the possibility of default remains.
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When it comes to name-calling among America's upper echelon of politicians, there may be perhaps no greater spat than the one currently going on between Sen. Elizabeth Warren and Donald Trump. While receiving an award Tuesday night, she continued a months-long feud with the presumptive GOP presidential nominee. Calling him a "small, insecure moneygrubber" who probably doesn't know three things about Dodd-Frank, she said he "will NEVER be president of the United States," according to her prepared remarks."We don't know what Trump pays in taxes because he is the first presidential nominee in 40 years to refuse to disclose his tax returns. Maybe he’s just a lousy businessman who doesn’t want you to find out that he’s worth a lot less money than he claims." It follows a long-line of Warren attacks over Twitter, Facebook and in interviews that Trump is a sexist, racist, narcissistic loser. In reply, Trump has called Warren either "goofy" or "the Indian"—referring to her controversial assertion of her Native American heritage.
The House on Tuesday voted 403-12 "to pass an overhaul to the nation’s chemical safety standards for the first time in four decades. The Frank R. Lautenberg Chemical Safety for the 21st Century Act aims to answer years of complaints that the Environmental Protection Agency lacks the necessary authority to oversee and control the thousands of chemicals being produced and sold in the United States. It also significantly clamps down on states’ authorities, in an effort to stop a nationwide patchwork of chemical laws that industry says is difficult to deal with."
"Leaders of the Republican Party have begun internal deliberations over making fundamental changes to the way its presidential nominees are chosen, a recognition that the chaotic process that played out this year is seriously flawed and helped exacerbate tensions within the party." Among the possible changes: forbidding independent voters to cast ballots in Republican primaries, and "doubling the number of early states to eight."
Citing the unpredictable nature of this primary season and the possible leverage they could bring at the convention, John Kasich is hanging onto his 161 delegates. "Kasich sent personal letters Monday to Republican officials in the 16 states and the District of Columbia where he won delegates, requesting that they stay bound to him in accordance with party rules."
"Speaker Paul Ryan is changing the rules of how the House will consider spending measures to try to prevent Democrats from offering surprise amendments that have recently put the GOP on defense. ... Ryan announced at a House GOP conference meeting Tuesday morning that members will now have to submit their amendments ahead of time so that they are pre-printed in the Congressional Record, according to leadership aides." The change will take effect after the Memorial Day recess.