July 29th, 2011

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Debt Ceiling Friday Fun

Well, been a fun 24 hours. I found myself rooting for the Boehner Bill because it alone did not have stupid provisions on sale of spectrum as one of the non-tax revenue increases. Also, I suspect Boehner and other House Rs know that their only hope for auctioning D Block (rather than giving it back to Public safety) is to do this later, when they can whip more Rs and hopefully get some Ds. Right now, Ds remain united on reallocating D Block to public safety, so any version in the debt ceiling/deficit reduction package will almost certainly include D Block reallocation and funding for the national public safety network -- which House fiscal hawks oppose. But there is sufficient R support for reallocation (led by NY Rep. Peter King) that House Rs lose on this if it is part of a package that passes.

Alas, Boehner couldn't get enough votes to ensure passage, so they are reworking again. I worry that Boehner will be forced to include spectrum auctions to boost his bill score higher.

Which brings the maneuvering back to Reid. Reid's bill now becomes the form horse. Conventional wisdom in DC at the moment is that because Senate Rs are much less beholden to Tea Party interests, and much more beholden to Wall St. and the Chamber, Reid will get his bill passed sometime today or tonight. It then bounces to the House, where a coalition of Ds and Rs can get it passed and signed by Obama by Monday. (This even gets Obama somewhat off the hook for backing away from taxes as necessary in the mix -- if he wants to do so. Under the constitution, all bills for raising revenue must originate in the House.) (Unfortunately for me, "revenues" is narrowly defined as "taxes" and does not include revenues in the ordinary sense of "things that raise money," such as spectrum auctions.)

But as always, life is complicated -- especially when done in a rush. Because Reid is now the form horse, there is a lot of lobbying going on around specific provisions (like spectrum auctions). Further, ANY change is going to need to be rescored by CBO, which is not easy and takes time. Finally, you have a number of Senators who are not happy and either believe a default is not a big deal, or that it is worth it, who may use various procedural means to slow things down. OTOH, for all that August 2 is a hard date for when we project running out of money, there is nothing magic that expires at 12:01 a.m. August 2. Disruption will be limited at first. Bondholders will get paid, so if things are on track but spill over to August 3 or August 4 it is probably not the end of the world.

Unless folks in various financial markets finally panic hysterically. So far, panic has been muted, largely by the serene confidence that a default is so unthinkable a deal will be reached. If that belief finally breaks, it could get very ugly.

Meanwhile, Boehner is still trying to get a rewritten bill for the House to pass. I suspect the objective here is too have something to take to conference when the Senate passes Reid's bill. If Boehner can show he has a bill with House R support, he can negotiate more strongly than if he is going to have to go to the floor knowing he needs Dems, since Dems will stand behind the Reid bill knowing that Boehner and the Senior Rs taking orders from Chamber will pass Reid rather than allow default.

Fun times. See what happens when you elect True Believers who do not understand real economics and love drama? That's what happens when you vote with your anger goggles on America.
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Obama GDP Politics Fail

Marketwatch has an interesting round up of statements from folks in light of the impressive downward revision of the GDP. The last two quotes are nice on the political side because the illustrate how the Obama Administration has boxes itself in rhetorically.

If you look at what the actual financial analysts and economists say, they note that government spending has declined and is not offset by an increase in private sector spending. Hence, contraction. They also note other drains on the economy (higher energy prices) and observe that this much slower rate of GDP growth seems to more accurately reflect reality in light of weak job growth than the previous GDP estimate.

The correct political response from Obama would be to say "when we had my stimulus, we were recovering. When the Rs imposed austerity, growth stopped. Clearly we need my policies not their policies."

But Obama can't say that, because he has embraced austerity and deficit cutting. He can defend how his stimulus spending averted disaster, but he can't say how this shows he was right, Rs are wrong, and America has a clear economic choice in the next election. All he can do is say how he thinks everyone ought to pay their fair share on deficit reduction -- which is not about creating jobs in the short term (other than by invoking the Confidence Fairy for investment).

So all Obama can say is "Gosh, this is so terrible. We must try harder to create jobs." Meanwhile Republicans, whose policies on austerity are essentially being followed (the Republican complaint on budget cuts is "not deep enough yet"), get to say the President's policy is a failure.

Moral: embracing your opponents talking points does not make you reasonable, it screws you over.
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New Filk: Blasting off to LEO

On the plus side, SpaceX plans to launch a test supply capsule to ISS in November.

Which brings us back to the original plan long ago, before we went for the moon shot. Build Earth to orbit transport. Build platform in space. Use space platform to build ships that go to other places without needing to escape Earth gravity first.

But will I live to see it?

Title: Blasting Off to LEO
TTO: Rolling Down to Rio (Kipling/Longcour)

I've never been to ISS, I've never reached the Moon
But the Dragon and the Falcon may fly there very soon.
Soon weekly from New Mexico or perhaps from Hampton Roads
We'll blast off from Earth to LEO, the transfer point at LEO
I'd like to fly to LEO
Before I get too old

I'd love to fly in Spaceship3 or in Black Armadillo
Rising up 'till we reach LEO, but I suppose I never will
But I still save for tickets, for flights from Hampton Roads
Where they'll blast off for LEO, the transfer point at LEO,
I pray I get to LEO
Before I get too old

Yes someday we'll reach LEO, the transfer point at LEO
I just pray they build at LEO
Before I get to old