With the debt ceiling fast approaching, President Obama is caught between borrowing no more than Congress will allow him, or paying what Congress has instructed him to do, but not both. Either way, he breaks the law. Given the huge economic consequences of not paying our bills, President Obama must breach the debt ceiling. Should Congress take him to court over this, the judge would side with Obama.
Tag Archives: Congress
Lousy Legislators
The most active Congress, as measured by the number of bills passed into law, excluding private bills, was the 84th (1955-1956) which passed 1,028 bills. Eisenhower (R) was President; Lyndon Johnson (D) was Senate Majority Leader and Sam Rayburn (D) Speaker of the House. The least active was the 112th (2011-2012) which passed 238 bills. The current 113th Congress is on a pace to pass just 70!
Hazardous Headwinds
While the economy is improving, it’s now facing huge headwinds. They include the need for a Continuing Resolution, hitting the debt ceiling, Syria and its impact on oil prices, who will be the next Chairman of the Federal Reserve, the start date of tapering, fear about whether Abenomics will work in Japan, and concerns about US interest rate hikes reverberating across European peripheral nations and emerging-markets. Expect increased short-term volatility.
Costly Unemployment
As Congress considers–and eventually extends–a temporary payroll tax cut and extended unemployment benefits past 2/12, it should note that if both lapse GDP in ’12 would be reduced by 1%, when GDP growth is only 2%. They might also note that when workers lose their jobs when unemployment is below 6% they lose 1.4 years worth of income, but lose 2.8 years of income when they lose their jobs when unemployment is over 8%.