The Debt Limit for Dummies

Artist – RJ Matson

JM Ashby
Bob Cesca’s Awesome Blog! Go!

We don’t have to actually default for the Republican’s brinkmanship to begin causing harm to the nation.

As previously noted, hiring for the month of June weighed in at a anemic 18,000 new jobs added to the economy, and now the rating agency Moody’s Investors Services has announced they will begin reviewing the United States’ credit rating.

WASHINGTON (AP) — Moody’s Investors Service is threatening to lower the United States’ credit rating, saying there is a small but rising risk that the government will default on its debt.

The credit rating agency says it will review the federal government’s triple-A bond rating because the White House and Congress are running out of time to raise the nation’s $14.3 trillion borrowing limit and avoid a default. […]

A downgrade would raise interest rates on U.S. treasury bonds, increasing the interest paid by U.S. taxpayers. It would also push up rates for mortgages, car loans and other debts, which are linked to Treasury rates.

Of course, John Boehner didn’t help the situation this morning when he categorized the chances of both parties coming to an agreement as a“crapshoot.” A statement which was followed by this:

U.S. stocks pared gains, almost erasing a 164-point gain in the Dow Jones Industrial Average, after the Associated Press reported that House Speaker John Boehner said it’s a “crapshoot” whether the federal debt limit will be boosted if an agreement isn’t reached by Aug. 2.

Nice going.

In other news, the Chamber of Commerce is signaling that it may supportMitch McConnell’s plan to give total authority over the debt ceiling to the president. What a shocker.

Copyright 2011 Bob Cesca’s Awesome Blog! Go!

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