re: #191 Dark_Falcon

The problem is that this isn’t a center-driven discussion. The middle is crying out for a deal, but it doesn’t matter because what legislators in both parties are afraid of is pissing off their base and facing a strong primary challenge. My best friend and I were talking about this earlier. Right now, the party bases are so far apart that no “grand bargain” can succeed. We both think the best thing now is a five-week extension of the debt ceiling, followed by a week where no talks take place, to allow the parties to take stock and the temperature to cool off. And sad to say, we reached this conclusion knowing that no grand bargain means a credit downgrade. But there’s nothing for it: the actions needed to avoid a downgrade are simply politically impossible.

They’ve had more than enough time. If they extend it for another 5 weeks they will only return to where they started from and being the process all over again. During those 5 weeks market uncertainty would remain including the bond market. Many firms have already borrowed billions to prepare for worst case scenarios.

Some major investors and borrowers already have taken steps to protect themselves from potential market turmoil. California had planned to borrow in August by selling short-term notes to investors, but instead on Tuesday took a $5.4-billion loan from eight major banks to bypass the U.S. debt drama.

The 5 week extension will cost us dearly and out a dent in the recovery. It may be better then allowing a full collapse but it’s not the desired outcome.