This seems like a banner year for single economists, politicians, and journalists who want to blame their lack of Valentine’s Day dates on something. We’re headed right toward debt ceiling crisis and the Bipartisan Policy Center projects it will occur sometime between February 15-March 1 (including the extension due to “extraordinary measures”). Some highlights of their extensive analysis:
- The Federal Government was able to use “extraordinary measures” in the Summer of 2011 to buy some time, roughly 2.5 months. They’ll be able to buy some more time, but due to seasonal cash flows, this looks like 1.5-2 months max.
- There aren’t any “silver bullets” left like the much tweeted about Titanium $1T Coin (#mintthecoin), or simply ignoring the debt ceiling citing the 14th amendment.
- We’re in truly uncharted territory. “There is no precedent; all other debt limit impasses have been resolved without reaching the X date”
- The treasury has to make 100 million (100,000,000) MONTHLY payments. They could choose to pay some bills and not others, but the headache alone seems prohibitive.
- Slides 25 and 26 show the “options” available if you were to pick programs to fund (should we pay tax refunds…or social security benefits). Relatively speaking, Solomon had it easy when he proposed to cut the baby in half.
- Lastly, they have a day by day calendar for estimated revenues and expenses…it goes downhill quickly.This would make a great desktop calendar for someone who felt like they were too happy and needed to tone it down.
Debt Limit Analysis