Debt ceiling kabuki: Wall Street is "Out on a Limb" Again

[Karmadillo]

While your mileage may vary, I found this is a good summary of Obama's approach and the underlying crisis that is motivating the drive for an agreement. Whitney isn't opposed to a deal. He's simply opposed to the idea of cutting public services and entitlements instead of going after the Bush tax cuts and the defense budget. Worth reading for Whitney's claims about what would happen if there isn't an agreement.

http://www.counterpunch.org/whitney07152011.html

Debt Ceiling Kabuki
By MIKE WHITNEY

<edit>

It's just more political theater really. Are we supposed to be cheered by the fact that Obama finally found that spark of passion that liberals have been hoping to see for more than 3 years now? He certainly never got mad when workers were stripped of their collective bargaining rights in Minnesota, or when the GOP-led congress stopped him from shutting down America's torture-gulag at Guantanamo Bay, or when innocent women and children were killed in one of the many errant bomb attacks by US drones in Afghanistan or Northern Pakistan. But now he's pissed because the Republicans won't let him raise the debt limit and push through his savage $4 trillion cuts to public services and entitlements?

<edit>

Look, Obama 's goal is the same as the Republicans, to slash public spending as much as possible so more capital can be diverted to the wars and Wall Street. Period. The only difference is that Obama wants to make it look like the cuts were the result of hard-fought negotiations with GOP deficit hawks and not just part of his own corporate-friendly agenda. That way the Republicans take the hit public approval-wise ratings while the Teflon President sails to victory in 2012. It's all politics.

<edit>

By the way, notice how the Bush tax cuts--which Obama approved and which add another $3.3 trillion to the deficits in the next 10 years--haven't been a part of the current negotiations. Nor has the military budget. It's all cuts to popular social programs and public spending.

<edit>

As bad as it sounds, a US default would be much worse then Streetlight's dire predictions. Why? Because the so-called shadow banking system is propped up on US Treasuries. They're the foundation block in bank-funding operation that will experience sudden and significant haircuts if USTs are downgraded. And, we're not talking "chump change" here either. There's $4 trillion in Triple A collateral that could be marked-down if the debt ceiling isn't raised promptly. Here's a summary from the Economist

more...

[mzmolly]

1. I agree with Whitney that we should go after the Bush tax cuts

vs. entitlements. I hope there is a clean vote on the debt ceiling and a new Democratic Congress and stronger Democratic Senate soon, so we can do just that.

[Kolesar]

2. Unrec and eructate

Obama 's goal is the same as the Republicans, to slash public spending as much as possible so more capital can be diverted to the wars and Wall Street.:puke: