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Wednesday, September 22, 2021

Mark Zandi, chief economist at Moody's Analytics, found that a prolonged impasse over the debt ceiling would cost the U.S. economy up to 6 million jobs, wipe out as much as $15 trillion in household wealth, and send the unemployment rate surging to roughly 9 percent from around 5 percent.



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"This economic scenario is cataclysmic. ... The downturn would be comparable to that suffered during the financial crisis" of 2008, said the report, written by Zandi and Bernard Yaros, assistant director and economist at Moody's Analytics.

Failure to raise the debt limit would have catastrophic impacts on global financial markets. Interest rates would spike as investors demand a higher rate of return for the risk of taking on U.S. debt given uncertainty about repayment. An increase in interest rates would ripple through the economy, raising costs not only for taxpayers but also for consumers and other borrowers. The value of the U.S. dollar would also decline long term as investors questioned the security of purchasing U.S. treasuries. The cost of auto and home loans would rise.

"Stock prices would be cut almost in one-third at the worst of the selloff, wiping out $15 trillion in household wealth," the Moody's report finds. The market would rebound once the impasse is resolved, but some amount of the losses would be permanent. "Treasury yields, mortgage rates, and other consumer and corporate borrowing rates spike, at least until the debt limit is resolved and Treasury payments resume."

And all of this to own the libz yet again. Is there a single responsible adult remaining in the entire GOP Congressional contingent? While this nation and the entire globe are still dealing with the ramifications of Covid-19, Mitch McConnell and Kevin McCarthy think the time is ripe to play chicken with the US economy once again towards no reasonable end whatsoever.

The DOJ needs to charge the entire RNC as a RICO violator and disband the whole party as a criminal conspiracy organization for its repeated support of unconstitutional actions and actors before they really do destroy this republic for the sake of their warped, irrational politics. Undermining this nation's constitutional charge to pay its debts should be criminal in itself.

#1 | Posted by tonyroma at 2021-09-21 07:05 PM | Reply | Newsworthy 3

McConnell knows. That's why he's doing it.

To make fodder for 2022.

#2 | Posted by jpw at 2021-09-22 12:22 AM | Reply | Newsworthy 1

"Mark Zandi, chief economist at Moody's Analytics"

Who knows, maybe that fool will get it right this time. He doesn't exactly have a proven track record. As I said a while back, ending the federal dollars that increased unemployment to levels that people could actually exist would hurt the economy, well this past quarter prove I was right and continuing to use starvation as a motivator in our economy has never and will never lead us to success.
The right believes, and always has, that if we just make them hungry enough they will beg for low paying jobs just doesn't work because there is too much gig employment available, jobs that pay cash available, there are so many ways to survive without taking low paying regular jobs working for employers that view you as a commodity they can easily dispose of when it is more convenient for them.
So, millions of them are finding alternatives where they can avoid taxes and still realize, roughly, as much income as the cheakpskate employers used to offer.

#3 | Posted by danni at 2021-09-22 05:32 AM | Reply

McConnell knows. That's why he's doing it."
When Republicans are in power spend like crazy but then when Democrats gain power starve the beast. Nothing new here. Sort of should put pressure on ---- Joe Manchin but, hell, he isn't really a Democrat and has never been one. We need all real Democrats now, more than ever, to fight to pass the infrastructure bill, which will expand our economy. Sure, it will incur debt, but no more debt than continuing the tax cuts of Trump will anyway and we'll get our infrastructure prepared for the economy of this century which we have sadly neglected in order to pay for unnecessary wars and tax cuts for the rich.

#4 | Posted by danni at 2021-09-22 05:46 AM | Reply | Newsworthy 1

that is a small price for other people to pay in a reckless attempt to get his job of majority leader back.

Hopefully Biden will just mint a few trillion dollar coins, and put mcconnell on the obverse and newt gingrich on the reverse, and then say to the American people that this is the new Biden exception to the stupid gingrich/mcconnel rule that republicans always sabotage America for their own evil ends.

#5 | Posted by bus_driver at 2021-09-22 11:20 AM | Reply | Newsworthy 1

No one who will be voting in the mid-terms gives two farts how the debt ceiling is raised. Dems need to man up and pass using reconciliation without needing a single Repub vote.

Relying on any sense of decency from Repubs is just nonsensical. The traitor party has no allegiance to anything other than their quest for control.

Dems need to use the power they have while they have it and help the American people.

#6 | Posted by censored at 2021-09-22 11:46 AM | Reply | Newsworthy 2

Dems need to man up and pass using reconciliation without needing a single Repub vote.

It's not that simple. The Dems only have one more reconciliation attempt this year, so the debt ceiling would have to be incorporated into the BBB bill which isn't close to being passable in the near term, since it hasn't even been negotiated into its final form.

Unfortunately, you've uncovered the GOP's gambit here: They ARE trying to make the Dems use their last reconciliation to pass the debt increase so that they cannot use it for the $3.5T infrastructure bill. However, there is another avenue that the Democrats could use and that would be to either create another filibuster cutout or simply call the GOP's bluff and declare that unless 10 Republican Senators vote for cloture, THEN the Democrats have no alternative but to nuke the entire legislative filibuster because of Republican recklessness and obstinance, showing themselves to be destructors of the US economy for the sake of their own political agenda.

McConnell and McCarthy started this game of chicken, let's make sure Pelosi and Schumer finish it.

#7 | Posted by tonyroma at 2021-09-22 11:57 AM | Reply | Newsworthy 3

Two former GOP treasury secretaries held private discussions this month with Treasury Secretary Janet Yellen and Senate Minority Leader Mitch McConnell (R-Ky.) hoping to resolve an impasse over the debt limit that now threatens the global economy, according to four people aware of the conversations. The previously unreported talks involving the GOP economic grandees - Henry Paulson, who served as treasury secretary under President Bush; and Steven Mnuchin, treasury secretary under President Trump - did not resolve the matter and the U.S. is now racing toward a massive fiscal cliff with no clear resolution at hand.

According to the Post's reporting, both men had separate, private meetings with McConnell recently, and both came away with the impression that the Senate minority leader is not bluffing - Republicans really are prepared to hurt Americans deliberately. Paulson and Mnuchin have since conveyed their impressions to Democratic officials, explaining that the governing party will have to act unilaterally to prevent a global financial crisis.

Of course, that would be far easier if GOP senators were not also vowing to filibuster debt-ceiling extensions, making it vastly more difficult for Democrats to rescue the country from the Republicans' scheme.

McConnell is going to force Schumer to either nuke the filibuster or flatten the US economy and start a global recession in the middle of a pandemic. Wonder which path Manchin and Sinema will allow the Democrats to choose? Can Manchin put a "pause" on the GOP's debt increase brinksmanship?

#8 | Posted by tonyroma at 2021-09-22 12:03 PM | Reply


There's nothing in the constitution that limits the number of reconciliation bills per year. They can have as many as they want, reinterpreting the rules on that is a simple majority vote, just like ending the filibuster would be.

But I think it's time to go ahead and end this debt ceiling nonsense anyway. It's unconstitutional. The Biden admin should say so, proceed to ignore it, and let the GQP either live with that or get it shot down once and for all at the SCOTUS.

And if that's too hard for them, a couple trillion dollar coins struck at the mint would solve it too.

#9 | Posted by DarkVader at 2021-09-22 12:20 PM | Reply

There's nothing in the constitution that limits the number of reconciliation bills per year.

Totally wrong. Reconciliation bills are NOT in the Constitution, they were created by a law passed in 1974 and first used in 1980.

Budget reconciliation bills can deal with spending, revenue, and the federal debt limit, and the Senate can pass one bill per year affecting each subject. Congress can thus pass a maximum of three reconciliation bills per year, though in practice it has often passed a single reconciliation bill affecting both spending and revenue.

And there's this:
With the new decision from the parliamentarian, Elizabeth MacDonough, Democrats can now do a third budget reconciliation bill, which means they can push through more ambitious measures as long as they are related to taxing and spending. The decision is based on MacDonough's interpretation of Section 304 of the Congressional Budget Act of 1974, which allows lawmakers to revise a budget resolution before the end of the fiscal year that it covers. Given her decision, Democrats can now edit the 2021 budget resolution they already passed, and include instructions for another bill.

Schumer's spokesperson also noted that "no decisions have been made on a legislative path forward using Section 304 and some parameters still need to be worked out."

#10 | Posted by tonyroma at 2021-09-22 12:35 PM | Reply | Newsworthy 1

It's unconstitutional.

I'm really tired of people using this word constantly.

In any case, whether it's explicitly stated in the Constitution or not, there are real world consequences to these actions.

Just flat out ignoring that to press ahead with a wish list is short sighted and poorly thought out. Just like the "progressives" who are gonna throw a tantrum and tank the infrastructure bill because they're not getting everything they want.

#11 | Posted by jpw at 2021-09-22 12:37 PM | Reply

@7 Tony and @11 JPW

Good point Tony.

All of this insistence on maintaining the filibuster shows just what idiots Dems are.

The filibuster does nothing but give outsized power to Repubs who are already given outsized power by the structure of the Senate.

The general public does not care about preserving the filibuster, assuming they even know what it is, just as the general public did not care about the Senate violating its duties by refusing to vote on judicial nominees.

The longer Dems fall for these arguments about procedure and decorum, the longer Repubs will have to exploit this weakness to ensure GOP counter-majoritarian supremacy for the next couple of generations.

#12 | Posted by censored at 2021-09-22 12:54 PM | Reply


If the Wiki link in post #10 is correct, then there already is a debt limit reconciliation carve-out written into the law, which begs the question why haven't the Democrats spoken about this publicly as yet?

The ceiling crises during the Obama years happened while Republicans had the majority in at least the House, so the law never came into play. Now with the Dems holding control in the Senate - and with the House already having passed legislation - why is this debate happening at all if the Dems can simply flip Mitch the bird and extend the debt limit with no fear of a filibuster?

Can someone fill in the blanks on this, it would be greatly appreciated.

#13 | Posted by tonyroma at 2021-09-22 01:02 PM | Reply

The longer Dems fall for these arguments about procedure and decorum, the longer Repubs will have to exploit this weakness to ensure GOP counter-majoritarian supremacy for the next couple of generations.


It's delusional to think the Reps won't mop the floor with the Dems no matter what. It has nothing to do with Dems sticking to procedure and decorum and everything to do with a near complete inability to think long term with any amount of clarity.

That McConnel is willing to repeatedly play chicken with this shows the kind of person we're dealing with. Tanking the filibuster won't change that one bit.

#14 | Posted by jpw at 2021-09-22 01:21 PM | Reply

GOP debt default????? I know we would be doing alot better if it wasn't true but don't the Dems control the House, Senate and the WH?

#15 | Posted by fishpaw at 2021-09-22 02:28 PM | Reply | Funny: 1

GOP Debt Default Would Cost 6M Jobs, $15 Trillion in Wealth

And it's worth it, if it owns the libs.

#16 | Posted by snoofy at 2021-09-22 02:51 PM | Reply

Since this year will be over soon enough they should use reconciliation on the debt ceiling vote and aim for a finished infrastructure deal early next year.
We can't afford to let our credit rating take a dump, and who knows when they will get that $3.5tr deal worked out...if ever.

P.s. Republicans suck, as usual

#17 | Posted by 503jc69 at 2021-09-22 03:46 PM | Reply

Burn baby burn. Let the repubs take the heat when the economy implodes. Use the reconciliation for the 3.4 trillion dollars infrastructure bill. Tell Mitch to ---- off, I want climate change relief spending.

#18 | Posted by Effeteposer at 2021-09-22 04:19 PM | Reply

GOP debt default????? I know we would be doing alot better if it wasn't true but don't the Dems control the House, Senate and the WH?

#15 | Posted by fishpaw

Own it. Your cult is happy to do billions in damage to americans just to spite democrats.

#19 | Posted by SpeakSoftly at 2021-09-23 12:23 PM | Reply

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