Monday, September 27, 2021

Last Call For Spinning The Chambers In Debt Ceiling Roulette

If even old hands like NY Times reporter Jim Tankersley are sounding the alarms about Senate Republicans being willing to default on America's debt in order to crash the economy and warning that it's definitely not the usual Capitol Hill Kabuki show, then things are a lot worse than I feared.

For nearly two decades, lawmakers in Washington have waged an escalating display of brinkmanship over the federal government’s ability to borrow money to pay its bills. They have forced administrations of both parties to take evasive actions, pushing the nation dangerously close to economic calamity. But they have never actually tipped the United States into default.

The dance is repeating this fall, but this time the dynamics are different — and the threat of default is greater than ever.

Republicans in Congress have refused to help raise the nation’s debt limit, even though the need to borrow stems from the bipartisan practice of running large budget deficits. Republicans agree the U.S. must pay its bills, but on Monday they are expected to block a measure in the Senate that would enable the government to do so. Democrats, insistent that Republicans help pay for past decisions to boost spending and cut taxes, have so far refused to use a special process to raise the limit on their own.

Observers inside and outside Washington are worried neither side will budge in time, roiling financial markets and capsizing the economy’s nascent recovery from the pandemic downturn.

If the limit is not raised or suspended, officials at the Treasury Department warn, the government will soon exhaust its ability to borrow money, forcing officials to choose between missing payments on military salaries, Social Security benefits and the interest it owes to investors who have financed America’s spending spree.

Yet Republicans have threatened to filibuster any attempt by Senate Democrats to pass a simple bill to increase borrowing. Party leaders like Senator Mitch McConnell of Kentucky want to force Democrats to raise the limit on their own, through a fast-track congressional process that bypasses a Republican filibuster. That could take weeks to come to fruition, raising the stakes every day that Democratic leaders decline to pursue that option.

The problem is further compounded by the fact that no one is quite sure when the government will run out of money. The Covid-19 pandemic continues to ravage the United States in waves, frequently disrupting economic activity and the taxes the government collects, complicating Treasury’s ability to gauge its cash flow. Estimates for what’s known as the “X-date” range from as early as Oct. 15 to mid-November.

Amid that uncertainty, congressional leaders and President Biden aren’t even attempting to negotiate a resolution. Instead, they are sparring over who should be saddled with a vote that could be used against them, raising the odds that partisan stubbornness will propel the country into a fiscal unknown.

It all adds up to an impasse rooted in political messaging, midterm campaign advertising and a desire by Republican leaders to do whatever they can to protest Mr. Biden’s economic agenda, including the $3.5 trillion spending bill that Democrats hope to pass along party lines using a fast-track budget process.

Republicans say they will not supply any votes to lift the debt cap, despite having run up trillions in new debt to pay for the 2017 tax cuts, additional government spending and pandemic aid during the Trump administration. Democrats, in contrast, helped President Donald J. Trump increase borrowing in 2017 and 2019.

“If they want to tax, borrow, and spend historic sums of money without our input,” Mr. McConnell said on the Senate floor this week, “they will have to raise the debt limit without our help.”

Thus far, Mr. Biden and Democratic leaders in Congress have declined to do so, even though employing that process would end the threat of default.

Jon Lieber, a former aide to Mr. McConnell who is now with the Eurasia Group, a political-risk consultancy in Washington, wrote in a warning to clients this week that there is a one-in-five chance the standoff will push the country into at least a technical debt default — forcing the government to choose between paying bondholders and honoring all its spending commitments — this fall.

“That’s crazy high for an event like this,” Mr. Lieber said in an interview, noting that the odds are significantly higher than in past standoffs. “But I feel really confident that’s the level of panic we should be having.”
Remember, Republicans tried to do this to Obama too, and it worked. Republicans got what they wanted: a decade of massive "sequestration" spending cuts, $2.4 trillion over ten years. What people are saying now is that there's a significant chance that the GOP burns the economy down in the weeks ahead, and that there's no deal that they are willing to make.

I don't know where we go from here, and anyone who tells you otherwise is lying.


MAGA Runs Out Of Gas In Cincy

A threatened "Patriot shutdown"of some of America's busiest interstates and bridges today has yet to materialize after Ohio cops and prosecutors got word of it on social media and vowed publicly to start throwing MAGA assholes in prison on felony terrorism charges over the weekend.
There's no sign Monday morning that truckers are staging protests of COVID-19 vaccination and mask mandates by causing disruptions on local highways.

Ohio officials are monitoring after reports of calls on social media for truck drivers to participate in a "Patriot Shutdown" on Monday.

The Ohio State Highway Patrol is keeping an eye on the situation, but saw no sign of a demonstration in the Cincinnati area or elsewhere in the state this morning.

“We continue to monitor the situation closely and there are no known issues at this time,” Lt. Nathan Dennis, a spokesman with the Ohio State Highway Patrol in Columbus, said.

Both the Cincinnati Police Department and the Hamilton County Sheriff's Office are on alert, officials said Monday morning.

"We are actively monitoring the situation and have been for days," said Emily Szink, spokewoman for the Cincinnati Police Department.

Hamilton County Prosecutor Joe Deters warned over the weekend that any demonstrators participating in a nationwide call on social media such as Facebook and TikTok for truck drivers to participate in a "Patriot Shutdown" on Monday would be put behind bars.

"I want to be perfectly clear," Deters said in a news release. "Anyone who attempts to shut down the highways in Hamilton County will be removed from their vehicles, charged with felony disrupting public services, and they will go to jail.

"To those who claim to be supportive of law enforcement - law enforcement is not with you. This would pose a serious danger for our first responders and the community at large.

"I have always been supportive of a citizen’s First Amendment right to protest. But, this is not lawful and it is reckless. It will not be tolerated," he said.
A miserable failure, even in deep red Ohio. 
Blocking the Brent Spence Bridge carrying I-71 and I-75 traffic definitely would have caused chaos across the region, especially if they had blocked the supporting bridges on the I-471 spur into NKY and the I-475 loop.

But nobody showed up.Vaccine mandates continue to be rolled out. We're muddling through it all.

Terrorism doesn't work if it's not allowed to work.

It's A Gas For Boris And It's All On Fire

Brexit on top of COVID-19 supply chain shortages means the UK is in dire straits right now when it comes to the basics, and panic buying of fuel around the country and massive shortages means PM Boris Johnson is calling in the British Army to handle distribution.

Boris Johnson is preparing to draft in hundreds of soldiers to tackle the UK’s fuel crisis as at least half of petrol stations outside the motorway network have run out of fuel after Britons engaged in panic buying.

The prime minister will meet senior ministers and officials on Monday to examine the latest data following the disruption to fuel supplies caused by a scarcity of tanker drivers. One senior government insider said: “The situation in England is very bad.”

Johnson will consider plans on Monday to use the army to drive tankers around the country, under contingency planning known as Operation Escalin. One Whitehall official said that petrol sales on Friday were up 180 per cent on normal levels as the result of panic buying.

Brian Madderson, chair of the Petrol Retailers Association, a trade body, said a survey of members on Sunday indicated 50 to 85 per cent of all independent service stations had now run dry, excluding motorway forecourts and some supermarket sites that had been given priority by oil companies.

The government announced on Sunday evening that it would temporarily exempt the energy industry — including producers, suppliers, hauliers and retailers — from the 1998 competition act, allowing companies to share information and prioritise deliveries to areas of greatest need.

Officials are receiving updates up to four times a day. But there was some hope in government that the panic buying had calmed by Saturday. Those with knowledge of the situation said that the best-case scenario was that disruption would clear within five days. “There is a crisis in data, we are trying to get a better picture on when the panic will pass,” one insider said.

Madderson said what had been a “manageable issue” of localised shortages at a small number of retail sites last week had quickly spiralled after media reports of supply problems had set off panic buying by motorists, with some members stating demand had surged “500 per cent above the normal level” on Saturday, quickly draining forecourt fuel tanks.

The UK has about 8,000 petrol stations, the majority run by independent retailers, some of whom operate franchises using the big oil companies’ brands.

Madderson told the Financial Times that while the short-term issue was “panic buying”, the root cause was “a government that’s been dragging its feet over the issue of the number of haulage drivers on the ground”.

Ministers bowed to business pressure on Saturday and announced they would issue temporary visas to 5,000 foreign heavy goods vehicle drivers to help tackle major labour shortages in the logistics industry.

The government move came after panic buying followed BP saying last week that as many as 100 service stations had been disrupted and several forecourts closed because of a shortage of tanker drivers.
Brexit continues to be an enduring disaster for Boris and the boys, and the shortages aren't just in the energy sector.
The United Kingdom is facing possible shortages in meat, poultry and packaged foods as a rise in energy costs may lead some companies to stop production, the Associated Press reported.

British Business Secretary Kwasi Kwarteng said Tuesday that he's trying to ink a deal with CF Industries, the main provider of food-grade carbon dioxide, which is used to stun animals preceding slaughter, preserve fresh produce and carbonate beverages. The company stopped production at its U.K. plants last week because of high natural gas prices and said that it couldn't provide an estimate for when operations would resume.

"We're hopeful that we can get something sorted today and get the production up and running in the next few days," Kwarteng told the BBC. "It may come at some cost. We're still hammering out details. We're still looking at a plan."

Ian Wright, chief executive of the Food and Drink Federation, said that unless a deal is worked out soon with food-grade carbon dioxide providers, U.K. residents could start seeing food shortages "in about 10 days. Meanwhile, the production of poultry and pork is projected to decline by the end of the week.

Four small energy providers have failed in recent months, and the U.K. government is in talks with larger firms to ensure that gas and electricity keeps flowing to customers this winter if any other suppliers collapse.

The squeeze on Britain's food processing industry is among the most visible impacts of a spike in natural gas prices as the global economy recovers from the COVID-19 pandemic—boosting demand for energy. Wholesale gas prices have tripled this year in Britain.
It's going to get a lot worse in the UK before it gets better, and this winter may be painfully bad for a lot of Britons.  The fuel shortages are only going to make distribution of other goods that much harder, in what could be a nasty spiral that gets out of control and wrecks the "just in time" delivery system that most companies run on these days.

I've been in automotive manufacturing, and for all the talk of Six Sigma and lean manufacturing techniques as a groupthink brain fart situation, it really is a system where a couple of large delayed or missed shipments can throw off everyone down the line in a number of areas, especially when it comes to perishable goods like food.

Britain is finding this out in the worst possible of ways, with Brexit already breaking most of those shipment, distribution, and labor systems. Brexit during COVID-19's resurgence, see the results.

It's not going to be pretty, and folks here in the US should definitely be paying attention.


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