Standard & Very, Very Poor

Over the weekend, and into today, there has been much sound and fury about Standard and Poor's downgrade of the United States' credit rating to AA.  Unfortunately for S&P (or fortunately for the rest of us), it turns out that it is signifying nothing.  It is now left to the rest of us to wonder: what is happening here, what does it mean for us, and what does it mean for S&P?

Our Long National Nightmare Is Finally Over

It appears to be the beginning of the end for this round of debt ceiling talks.  The House has now passed a plan, and the Senate should shortly do the same.  This bill will presumably be signed by President Obama as well.  Finally, we can stop dealing with this stupid, stupid manufactured crisis and move on to other things.  So the real question is: what's in this (hopefully final) deal, and what does it mean?  It seems to me that while this deal is bad, it's...somewhat less bad than it could or should have been.

I Have To Talk About the Debt Ceiling Again, Don't I

And yet, unfortunately, this is more than likely not even close to the end:

House Republicans on Friday narrowly approved legislation authorizing a limited increase in the $14.3 trillion debt limit in exchange for more than $900 billion in spending cuts.  The 218-210 vote occurred nearly a full day after it was originally scheduled as Speaker John Boehner (R-Ohio) agreed to revise the legislation to win enough conservative support to carry the House.

Lost Transcript of Rep. Boehner's Actual Speech

Good evening.  I’m John Boehner, and you may remember me as the most orange man in America.  I serve as Speaker of the whole House – of the members of both parties that you elect – but I try to pretend the Democratic members don’t exist.  These are difficult times in the life of our nation, which is at least half the fault of my inability to deal with the raving psychos that inhabit my party.   

Balance This!

So I'm watching Meet The Press today and listening to Jim DeMint (R-SC) blather on about his truly idiotic balanced budget amendment that he's been championing for a while now.  After I stopped laughing, it occurred to me that maybe, not everyone realizes why it's a stupid idea, even if it is exceedingly inane.  What does the balanced budget amendment actually do, and why is it stupid?

Strange Deficit Magic

With all of this debt ceiling shenanigans going on, and all the hemming and hawing about the deficit, it's worth it to take a look at how all of this stuff actually functions.  What does it mean, really?  Why do we care?  How many angels can dance upon the head of a pin, and so on?  I've been thinking about it a lot recently (taking time away from more important things, like the NHL offseason).  Today though, I read this post by Yglesias which put a lot of what I was trying to say into shape...

Why The Debt Ceiling Is Stupid

First things first: the debt ceiling is stupid.

It seems very obvious that the concept of a debt ceiling is outdated and approximately as useful as a driver's license for a microwave. The ceiling was first established on bonds only via the Second Liberty Bond Act, and was then modified to apply to all debt. Since then, the ceiling has been raised approximately eighty-five thousand times (not intended to be a factual statement) with effectively no controversy whatsoever. This is because of spending is already authorized, un-authorizing it via refusing to raise the debt ceiling is pretty stupid. Furthermore, to not raise the debt ceiling would cause the United States to default on its debt, and anyone above the age of about eight understands that this is probably a bad thing. Observers who say that it would basically destroy the U.S. and global economies are not actually exaggerating.