Boehner Actually Wins Again Despite Himself: His Position From August 22nd Was A Clean CR Keeping The Sequester, And That's What The Senate Compromise Is Going To Provide

The Washington Post reported, here, at the time:

House Speaker John A. Boehner said Thursday that he plans to avert a government shutdown at the end of September by passing a “short-term” budget bill that maintains sharp automatic spending cuts, known as the sequester.

“When we return, our intent is to move quickly on a short-term continuing resolution that keeps the government running and maintains current sequester spending levels,” Boehner (R-Ohio) said on a conference call with GOP lawmakers, according to a person on the call.

“Our message will remain clear,” Boehner said. “Until the president agrees to better cuts and reforms that help grow the economy and put us on path to a balanced budget, his sequester — the sequester he himself proposed, insisted on and signed into law — stays in place.”

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Well, that's what we're getting from the Senate at the very last minute after a two-week government shutdown: a short term continuing resolution which keeps the sequester cuts for that term.

It was libertarian Republicans who found this unacceptable and forced Boehner to try the shutdown gambit, which was incredibly stupid given the optics of the government running out of funding on September 30th and ObamaCare launching on October 1st. Clearly no one in Boehner's opposition was watching the news stories predicting problems with the internet exchanges, nor reflecting on what powerful weapons they were putting into Obama's hands when they've had five years' worth of examples of Obama usurping powers, acting unconstitutionally, and generally acting "out of character" for a president.

The president continues to go outside the experience of his enemy, but the enemy still hasn't figured that out. Now that they know how far Obama's willing to go, his enemies need to be more careful next time.

Boehner Knew The Political Danger Of A Shutdown. Republicans Should Have Listened To Him.

As always, Republican disunity becomes the Democrat opening, but Boehner deserves blame for not insisting on his preference and for letting someone else set the agenda, which unfortunately is his habit. The speaker of the House must assert the co-equality of it.

Politico, here:

Boehner allies strongly reject the idea that the speaker could be damaged by this latest debacle. After all, it was Sen. Ted Cruz (R-Texas) who was setting the terms of this debate, not Boehner. The Ohio Republican wanted to pass a clean government-funding bill more than a month ago, while organizing a tidy negotiating process around the debt ceiling. Instead, everything became one big mess, where House Republicans were unsure what they were asking for, what they should be seeking, and for what price.

Janet Yellen's Crystal Ball Utterly Failed Her In May 2007: She Never Saw The Crisis Coming

(as always, click on the image to enlarge)

“Taking a longer view, I anticipate real GDP growth over the next two and a half years [2008 & 2009] of about 2.6 percent, just a bit below my assessment of potential. My forecasts of both actual and potential growth are a tenth or two stronger than the Greenbook forecasts; but the basic story is very similar, and the underlying assumptions, including the path for the nominal funds rate, are essentially the same. I view the stance of monetary policy as remaining somewhat restrictive throughout the entire forecast period. The key factors shaping the longer-term outlook include continued fallout from the housing sector, with housing wealth projected to be roughly flat through 2008. Given the reduced impetus from housing wealth, household spending should advance at a more moderate pace going forward than over the past few years.” (Quoted here)

Obama Keeps Michelle's Website, letsmove.gov, Up During The Shutdown, But Not bea.gov

letsmove.gov is open for business during the shutdown

bea.gov is not

How Rep. Paul Ryan Is Just Like Sen. Ted Cruz

Here in The Wall Street Journal on October 8th, Rep. Paul Ryan says he is willing to swap sequester cuts for cuts to mandatory spending:

If Mr. Obama decides to talk, he'll find that we actually agree on some things. For example, most of us agree that gradual, structural reforms are better than sudden, arbitrary cuts. For my Democratic colleagues, the discretionary spending levels in the Budget Control Act are a major concern. And the truth is, there's a better way to cut spending. We could provide relief from the discretionary spending levels in the Budget Control Act in exchange for structural reforms to entitlement programs.

And the reason is there's more to be gained over the long haul from cuts to the mandatory side, which is 60% of annual outlays anyway:

These reforms are vital. Over the next 10 years, the Congressional Budget Office predicts discretionary spending—that is, everything except entitlement programs and debt payments—will grow by $202 billion, or roughly 17%. Meanwhile, mandatory spending—which mostly consists of funding for Medicare, Medicaid and Social Security—will grow by $1.6 trillion, or roughly 79%. The 2011 Budget Control Act largely ignored entitlement spending. But that is the nation's biggest challenge.

But just why Republicans like Paul Ryan expect us to believe they can negotiate cuts to mandatory programs from Democrats who have just rammed a new one called ObamaCare down our throats is quite beyond me. It's as unrealistic as Senator Ted Cruz thinking libertarian Republicans could get Obama to defund that program without unity in the party on the subject in the first place. Cynics quickly decided Cruz was just fundraising for 2016. And Rep. Ryan could just as plausibly be trying to re-establish some street cred with conservatives after his involvement with the Facebook-financed immigration amnesty debacle.

There's plenty of unrealism to go around in the Republican Party, which still hasn't figured out that Obama and the Democrats are the enemy, which is surprising since that's how he views them. But that seems to be a particularly libertarian penchant, expressed as it is in interminable losing electoral challenges throughout the country which do nothing but help elect Democrats. Maybe Paul Ryan and Ted Cruz are just libertarian spoilers on the national stage, for whom success is keeping Republicans from succeeding.

Figuring out how to proceed when your country has been taken over by a hostile foreign power without having fired a shot remains the central problem for an opposition which doesn't realize it is one, especially when your own ranks have been infiltrated by an enemy.

Where are the non-libertarian economic conservatives? 

Today's Average Price for Gas in GR is $3.35/gallon

The cheapest price for gas is at Sam's Club for $3.19/gallon at this hour.

The average inflation adjusted price for gasoline going back a hundred years is $2.60/gallon in June 2013 dollars, so gasoline remains about 29% too expensive by historical standards.

Without Issuing New Treasury Securities, Something Would Have To Give After Just 22 Days

How long can the government pay all its bills without selling any additional Treasury bills, notes or bonds? The answer is really about only 22 days.

The suggestion that the answer is indefinitely is completely wrong. The Sean Hannitys of the world who otherwise protest incessantly that we borrow 40 cents of every dollar that we spend are in denial about this.

Consider revenues in the last fiscal year: $2.712 trillion, or $226 billion per month.

Then consider outlays in the last fiscal year: $3.6849 trillion, or $307 billion per month, or $10.233 billion per day. So revenues will last about only 22 days, after which we'll need to find another $81 billion somewhere, or not pay some bills.

The monthly shortfall of $81 billion adds up to $972 billion over a year, or 26.4% of all outlays in the last fiscal year.

Discretionary spending in the Obama 2012 budget request was $1.510 trillion. Slashing that $972 billion across the board represents a 64.4% cut to discretionary spending.

By agency that means, for example, defense spending would have to be cut by $429 billion and Homeland Security by $35 billion, and the EPA by $5.9 billion and Agriculture by $17 billion.

That's why just about everyone in both parties wants to see the debt limit increased: no one can stand it that they'd have to take such a huge hit to live within our means. It's really all about that, not about "default" per se. Interest on the debt runs to only $34 billion to $35 billion per month. There's plenty of income to allocate to that. So we won't default, but spending cuts would of necessity be nothing short of draconian.

The squealing of the pigs continues.

CNBC Exaggerates That The Debt Party Is Back On

Debt is expanding year over year at a rate 33% faster than compared to the previous period, but even so, CNBC's Jeff Cox here is exaggerating the significance:

"Whether it's corporate loans, all quality levels of bonds or simple consumer credit, the debt party is back on in the U.S., whether it's in the boardroom or the living room."

Debt expansion between April 2012 and April 2013 is up at a rate of only 3.5% compared to the period a year earlier when total credit market debt outstanding (TCMDO) expanded at a 2.6% rate.

TCMDO increased from $55.592 trillion in April 2012 to $57.563 trillion in April 2013, the latest date for which figures are available. In April 2011, TCMDO stood at $54.150 trillion.

As welcome as the present higher rate of debt expansion might be from a monetarist perspective, it's still a far cry from the historic post-war pattern which has witnessed TCMDO double every 6-11 years, with an average doubling time of 8 years.

A doubling time of 11 years implies an annual rate of debt expansion of about 6.5%, not quite double the actual rate in the last year. At the present rate, it will take TCMDO 20 years to double, an unprecedented slowdown in the pattern since the end of World War II.

The United States remains severely hampered when it comes to its traditional post-war debt-based economy.

Larry Kudlow Says He Believes In Abraham Lincoln's Idea Of Political Persuasion

You mean like this, Larry?

Snowden Shmowden and Up Yours America: FISA Court Re-Authorizes NSA Collection Of All US Phone Calls

The announcement was unusual, but buried in the Friday night data dump, which is actually pretty thin because of the shutdown.

TheHill.com reports, here:

The Foreign Intelligence Surveillance Court has granted the National Security Agency (NSA) permission to continue its collection of records on all U.S. phone calls.

The Office of the Director of National Intelligence announced the court's approval in a statement late Friday. The court authorizes the program for only limited time periods and requires that the government submit new requests every several months for re-authorization.

The existence of the bulk phone data collection was one of the most controversial revelations from the leaks by Edward Snowden. 

Obama Purges Nuke Commanders Back To Back: "To Preserve A Tyranny Take Off Those Who Will Not Submit"

As reported here yesterday:

WASHINGTON (AP) -- The deputy commander of U.S. nuclear forces, Vice Adm. Tim Giardina, was notified Wednesday that he has been relieved of duty amid a military investigation of allegations that he used counterfeit chips at an Iowa casino, the Navy said.

The move is exceedingly rare and perhaps unprecedented in the history of U.S. Strategic Command, which is responsible for all American nuclear warfighting forces, including nuclear-armed submarines, bombers and land-based missiles.

And here today:

WASHINGTON (AP) -- The Air Force is firing the two-star general in charge of all of its nuclear missiles in response to an investigation into alleged personal misbehavior, officials told The Associated Press on Friday.

Maj. Gen. Michael Carey is being removed from command of the 20th Air Force, which is responsible for three wings of intercontinental ballistic missiles - a total of 450 missiles at three bases across the country, the officials said.

The officials disclosed the matter to the AP on condition of anonymity because it had not been publicly announced.

h/t Michael Savage

JFK, The So-Called Anti-Communist: "I'd Rather My Children Be Red Than Dead"

Quoted here:

At one point, after leaving the room to take another urgent phone call, he came back shaking his head and said to me, “I’d rather my children be red than dead.” It wasn’t a political statement or an attempt at levity. These were the words of a father who adored his children and couldn’t bear them being hurt.

Rush Says There's Nothing New, You Know, Like In The Book Of Genesis

"What has been is what will be, and what has been done is what will be done; and there is nothing new under the sun."

-- Ecclesiastes 1:9

Methodists these days.

Ann Coulter Should Just Shut Up And Stand There (and dance maybe)

John McCain Proves Yet Again Why We Who Supported Him In 2008 Were On A Fool's Errand

"It was pretty obvious that we were not going to defund ObamaCare."

Here.

Republicans' commitment to compromise means they are always defeated before they even begin.

ObamaCare Website Roll Out Fails Horribly, Despite Spending $500 Million

The conservative estimate of the cost of the website to date is $500 million, but in its first week just 51,000 nationwide are claimed to have completed applications successfully.

DigitalTrends.com:

[F]or the sake of putting the monstrous amount of money into perspective, here are a few figures to chew on: Facebook, which received its first investment in June 2004, operated for a full six years before surpassing the $500 million mark in June 2010. Twitter, created in 2006, managed to get by with only $360.17 million in total funding until a $400 million boost in 2011. Instagram ginned up just $57.5 million in funding before Facebook bought it for (a staggering) $1 billion last year. And LinkedIn and Spotify, meanwhile, have only raised, respectively, $200 million and $288 million.

The UK Daily Mail:

Just 51,000 people completed Obamacare applications during the first week the Healthcare.gov website was online, according to two sources inside the Department of Health and Human Services who gave MailOnline an exclusive look at the earliest enrollment numbers.

John Boehner Tries To Do The Mussolini . . .

. . . but not very convincingly.

First Time Claims For Unemployment Surge Above 300,000 Breaking Long Streak

Not-seasonally-adjusted first time claims for unemployment surged back above 300,000 for the first time in over two months in today's report, here, to nearly 337,000. First time claims in this category had been averaging 269,000 weekly for ten weeks.

Separate stories indicate computer problems still plague California reporting after all, and that figures today included some catching-up because of that, on top of furloughs of non-federal workers affected by the shutdown. Michigan also reported truncated data due to conversion to a new computer system there, so it may be some time before a more accurate picture emerges. 

The Department of Labor did not include the link to prior data in this week's report.

Self-Described Moderate Rep. Justin Amash To Receive Primary Challenge From Conservative

Grand Rapids businessman Brian Ellis is set to challenge Rep. Justin Amash in the Republican primary as a conservative because of Amash's idiosyncratically liberal voting record, as reported here:

Kevin Heine, chief strategist for iCaucus Michigan, said he's interested in hearing more of Ellis' platform. iCaucus is a Wyoming-based nonprofit that is "strategically allied" with the Tea Party, Heine said. "We saw this primary challenge coming because Congressman Amash's voting record is conspicuously sloppy on both military and veteran issues, as well as social issues," he said. "Neither of those play well in the 3rd District."

In April Rep. Amash famously described himself as a moderate in an interview with George Will when Amash was still flirting with the idea of running for Carl Levin's Senate seat:

He adds, “Because I do not fit neatly in the Republican box, some establishment Republicans and pundits think I am extreme,” but “I am a moderate” because “the point of the Constitution is to moderate the government.”

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This may well be a battle of the businessmen, DeVos and company vs. Chamber of Commerce types, not of conservatism vs. libertarianism per se. Both are what we used to call "shop and till" conservatives, hands familiar with the feel of coins but which fumble with the pages of Plato, the Bible and Shakespeare. Ellis is an accounting major and finance MBA who at least has a history in the real world of making a go of it and raising a family. Amash is an economics major and lawyer who went straight into politics and controversy, heir to a fortune made by his father, not by himself. As a representative he has taken as many courageous stands as he has controversial ones, but remains a mixed bag of predictable aloofness which is always at risk in elections where emotion, not reason, often carries the day. In a region where people think of old trees as members of their family, the advantage goes to the candidate who can tap into that sap. Ellis' entry from the right is a good opener.  

Why Money Market Funds Are Especially At Risk If The Government Defaults

the one-month T-bill settled at .27 after spiking to .32

Money market funds invest in ultra short term securities like T-bills with average maturities under 60 days. These came under pressure yesterday, as reported here:

The one-month U.S. Treasury bill yield spiked to a multiyear high on Tuesday amid mounting concerns that the U.S. may not fulfill its payment obligations to short-term bond holders. The yield on the one-month T-bill traded as high as 0.322 percent, levels not seen since the fourth quarter of 2008, before settling at 0.273 percent, according to data from Thomson Reuters. The yield stood at 0.083 at the start of the month. ... 

"If the U.S. was to default, T-bills are under real threat of not being paid... and the risk premium in the bond yields is reflective of that fear," said Evan Lucas, market strategist at IG. A large portion of demand for T-bills comes from institutional investors, such as money market funds. "Ten-year bonds [by comparison] are relatively unaffected by the shutdown and debt ceiling as coupon payments will flow over the life of the instrument and one or two missed coupons can be recuperated," he added.

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To put the fear in perspective, a 2-year Treasury yields only 0.373% this morning, so the spike in the one-month to 0.322% shows how seriously the bond market can react to the prospect of debt default.