Budget/ Debt Crisis — What’s coming?
So we’re 10 days into the partial govt shutdown and 7 days from a debt disaster. In fact the sky is already gloomy — Obama is posturing to be the level-headed guy and blames Boehner’s party to be too pro-business and/or too pro-tea-party. Boehner refuses to discuss, because he doesn’t want to be seen as budging, much less wants to be tricked. It is a classic lock-out scenario. The key to the door that opens the room is inside the very room.
By October 17th, Lew says he will only have $30 billion left in treasury. That’s less than 50% of its daily debt obligations, not to
mention almost another $10 billion required to run the government.
Here are few possibilities:
1. US goes bankrupt on 10/17
2. Congress raises debt ceiling by another trillion or two, magically on the night of 16th
3. GOP agrees to some indirect form of increased borrowing (continuing resolution or whatever it’s called)
4. Obama/ Lew decide to use taxpayer money (my estimate — approx. $6 to 7 billion) to send payments to chosen creditors — which also means govt will move from a partial shutdown to a complete shutdown — a possibility which is almost unfathomed. Of course, the unchosen ones will get angry too.
Personally I think #2 will happen again. Strong currencies will grow stronger, gold value will go up, USD will become toxic and then all of a sudden, people will start talking about how US is back on track in terms of resurfacing from the recession — not recognizing the real burden of the greatest power in the world.
#1 and #4 are extremely unlikely and #3 is somewhat unlikely.
So will Obama relax his terms on ACA? I guess not. There’s a reason its called Obamacare.