News
WSJ | IMF Sees Global Impact From U.S. Debt Woes
Downgrade Would Be 'Very Damaging'.
WSJ | Downgrade Threat Looms
U.S. Could Lose Top Rating; Obama Issues Stark Warning as Boehner Slams Spending.
Econ Comments
Washington Times | MILLER: Congress agrees: Keep spending
Democratic and Republican leaders preserve status quo on Capitol Hill.
Daily Caller | Don’t expect promised spending cuts to materialize
Voters should be wary of congressional promises to cut spending or taxes at some future date. Even when such promises are embedded in current legislation, politics, not law, will determine whether they are kept.
RCM | The Truth About the Debt-Ceiling Fight
The federal government can and will continue making all its payments on the debt whether it is authorized to spend past the current debt ceiling or not. The Obama administration is not telling the truth when it claims that the government will run out of money to make debt payments on August 2. It will cut spending elsewhere before it defaults.
Bloomberg | History Suggests Debt-Ceiling Fights May Be Good for Us: Echoes
...perhaps, debt-ceiling fights force presidents who would rather not focus on the glum details of economics to look more closely into the abyss of debt, rather than spending away and passing on the bill yet again.
Blogs
EconLog | Hennessey on the Debt Ceiling and the Budget Process
Keith Hennessey of Stanford University's Hoover Institution talks with EconTalk host Russ Roberts about the debt ceiling and the budget process.
Heritage Foundation | Lessons for Today from Reagan’s 1982 Deficit Reduction Compromise
You might want to consider a cautionary tale dating back to 1982 when President Ronald Reagan agreed to a deficit-reduction compromise—and a result he didn’t bargain for.
American: Enterprise Blog | Only in Washington
So what does Washington do with the money that citizens send in to reduce the debt? Turns out the federal government … spends it.
Atlantic: McArdle | The Subliminal Message of Tonight's Speeches: We're Doomed
Coupled with Boehner's rebuttal, the most plausible explanation to my mind is also the most troubling: both sides have given up making a deal, and are now just working on fixing the blame.
WSJ: Real Time Economics | Vital Signs: Increasing Wariness of U.S. Default
The spread on five-year credit default swaps on U.S. debt rose to 0.57 percentage points Monday — the highest since early 2010 — meaning the annual cost of insuring $10 million in U.S. debt against default is $57,000.
Reports
RCM: Wells Fargo Economics Group | Is the Greek Debt Problem “Solved”?
Our calculations show that the package should stabilize the government’s debt-to-GDP ratio at approximately 160 percent over the next few years. However, the calculations are sensitive to assumptions about nominal GDP growth and the government’s primary budget surplus.
