I’ve got about five minutes to blog this morning, so … I want to call your attention to a column by David Leonhardt in the New York Times on the way forward for the economy. It makes sense to me, but let me know what you think.
Reid Wilson reports for the National Journal that GOP congressional leaders are trying to educate House freshman and other death-eaters that the debt ceiling really does have to be raised, like it or not.
Privately, House Republicans have been driving home the message that a failure to increase the debt ceiling would be a disaster. Sources said Boehner has been “aggressive,” in one aide’s words, in articulating the need to reach a deal.
In a presentation to the House Republican Conference on Friday, Jay Powell, a former Under Secretary at the Treasury Department under George H.W. Bush and a visiting scholar at the Bipartisan Policy Center, laid out just what would happen if a deal isn’t reached.
On August 3, according to Powell’s presentation, the federal government would be on the hook for $32 billion in committed spending, including $23 billion in Social Security checks, $500 million in federal worker salaries, $1.4 billion owed to Defense Department vendors and $100 million in refunds the IRS owes to businesses. On the same day, the government will take in only $12 billion in revenue, giving the government a $20 billion cash deficit. By August 15, when the federal government is on the hook for a $29 billion interest payment, the cash shortfall will have grown to $74 billionâ€”and possibly more, if interest rates on U.S. debt rises.
In other words — you’ve had your fun posturing on Fox News, boys. Now it’s time to get serious. Whether the pea-brains can be educated is an open question, of course