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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

September 27, 2013 at 10:31 AM

Vote: The debt ceiling and the economy

Jonathan Chait offers an insightful look at the politics behind the debt-ceiling fight, including this quote from House Majority Leader Eric Cantor: “The reason this debt limit fight is different is, we don’t have an election around the corner where we feel we are going to win and fix it ourselves. We are stuck with this government another three years.” The consequences for the economy are less examined in the press but serious.

The truth is that the deficit is falling. As University of Oregon economics professor Mark Thoma writes, the real reason the debt ceiling is not being routinely raised, as was done in the past, “is not, of course, a fight about how much government debt we should have.” Rather, it is a battle about “the size and role of government.” But if the dispute isn’t resolved, the Bipartisan Policy Center predicts that sometime between October 18th and November 15th, the Treasury will exhaust its borrowing power. The consequences for the economy, already growing only slowly, will be dire. A default would have world-wide repercussions, as the stock market is already sensing.

What do you think?

Read on for some of the best economic and business stories of the week, and the haiku…

This Week’s Links:

The cost of climate change | Economix

The Wall Street takeover | Baseline Scenario

Shipping the good apples out | Tim Taylor

Obamacare: 42 questions, 42 answers | Wonkblog

Robert Reich: Inequality’s intellectual fraudster | Naked Capitalism

The state that taxes the poor the most…is a blue one (guess who) | Washington Post

The new normal? Slower R&D spending | Atlanta Fed

Resetting expectations on the Fed | Tim Duy

Moody’s, which rated hundreds of billions of subprime securities as investment grade, claims public pension liabilities are much higher than reported | Beat the Press

Today’s Econ Haiku:

Climate deniers

Will never accept science

So burn, baby, burn

 

 

 

Comments | More in Debt ceiling debate, Deficit

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