News
Washington Times | U.S. debt default could be ‘real nasty’
The International Monetary Fund’s new chief foresees “real nasty consequences” for the U.S. and global economies if the U.S. fails to raise its borrowing limit.
FT | EU stance shifts on Greece default
European leaders are for the first time prepared to accept that Athens should default on some of its bonds as part of a new bail-out plan for Greece that would put the country’s overall debt levels on a sustainable footing.
WSJ | Deficit Negotiators Hit Reset
Divisions on Spending Cuts and Tax Increases Remain as Debt-Limit Clock Ticks.
NY Times | Italian Debt Adds to Fears in Euro Zone
Top European officials planned to meet on Monday to wrestle with threats to the currency union as fears mounted that Italy could become a victim of the debt crisis even as discussions stalled over a second bailout for Greece.
CNN Money | Minnesota shutdown: No resolution in sight
More than a week after Minnesota shuttered all but essential government services, there's no end in sight to the budget impasse.
Econ Comments
National Journal | Why This Default Debate Is Different
Wall Street’s warnings will carry far less weight than they did in the ‘90s.
Washington Times | DONATELLI: Federal budget can be balanced with spending cuts
Republican-led states already have succeeded with no new taxes.
FT | Obama’s failed debt ceiling gamble
Amid disturbing signs that the US recovery has stalled, President Barack Obama took a huge gamble in his approach to the debt-ceiling talks last week.
NY Times | Choices for Greece, All of Them Daunting
WITHOUT outside help, Greece is probably insolvent right now. In evaluating the country’s prospects, it’s worth asking what it would take for Greece to pay all of its bills and what kind of damage we might expect along the way.
AEI | Not Taking Other People's Money
The problem with socialists, according to Margaret Thatcher, is that "they always run out of other people's money." We haven't hit that point just yet, but we have hit our nation's legal credit limit of $14.3 trillion. To avoid defaulting on our loans, policymakers must raise that limit.
Minyanville | Why Congress Won't Lift the Debt Ceiling By August 2
The stakes are huge, as everyone knows. So why isn't it going to happen? Here, the four important constituencies in play.
Blogs
Atlantic: McArdle | Hoover Was No Budget Cutter
According to the historical tables of the Office of Management and Budget, spending in 1929 was $3.1 billion, up from $2.9 billion the year before. In 1930 it was $3.3 billion. In 1931, Hoover raised spending to $3.6 billion. And in 1932, he opened the taps to $4.7 billion, where it basically stayed into 1933 (most of which was a Hoover budget).
Atlantic: McArdle | Why the 14th Amendment Doesn't Solve the Debt Ceiling Problem
I've always thought this was a long-shot--even if you think the president does have this authority, actually carrying through on it would trigger a pretty ugly constitutional crisis, as the House would almost certainly impeach the president.
Reports
CRS | A Balanced Budget Constitutional Amendment: Background and Congressional Options
One of the most persistent political issues facing Congress in recent decades is whether to require that the budget of the United States be in balance. Although a balanced federal budget has long been held as a political ideal, the accumulation of large deficits in recent years has heightened concern that some action to require a balance between revenues and expenditures may be necessary.
