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It's now less than two weeks to the debt deadline, when the Treasury Department feels it will run out of ways to meet America's debt obligations unless President Obama begins shutting down government operations. In recent days we've seen a lot of proposed solutions but nothing that all sides can accept.
House Republicans did manage to get the House to pass a package of their preferred solutions including a Constitutional amendment to balance the budget, but the margin of passage fell short of vetoproof, and on Thursday the measure failed passage altogether in the Senate.
President Obama and House Speaker John Boehner were reportedly back to discussing a broad compromise to reduce the deficit by $3 trillion - last time, Republicans opposed it; this time Democrats are complaining about not being in the room. Boehner denies any agreement is near.
I'm intrigued by two developments outside Washington, D.C., that are nonetheless connected to it.
The first is that the CEO of Caterpillar, reporting lower-than-expected quarterly profits, complained that the uncertainty in Washington is causing his corporate customers to be shy about investing.
The second is that the treasury for the state of California is talking to lenders about short-term loans because he wants to be prepared with cash in case the government defaults and California finds itself locked out of credit markets.
The largest holder of U.S. Treasury bills, the paper used to constantly refinance the federal debt, is China, and China issued a statement last week urging America to do the right thing for investors.
to me it just seems weird to think that China is looking at the US as a company in which it has spent money and expecting a return. In my gut, that just doesn't sit right.
Posted by: Joel | 07/22/2011 at 06:58 AM