Solarbird (solarbird) wrote,
Solarbird
solarbird

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Actually, I should clarify something; also, an amendment drama

Here's the thing:

If any of the governments involved overseas who will benefit from this fiasco actually are going to cut off T-bill purchases, and really mean it, that's their right; but if they plan to stop purchases and flood the market with the ones they already have, then this is extortion. In the latter event, it's a case where not paying the extortion money would, arguably, be worse. Pay it, and then next year's budget would have to be balanced, no matter what it takes, period, end of story.

Sadly, even if the former is true, the latter will not happen. So it's quite the mess.

Also, a quick update: a group of Republicans are trying to add this amendment in the Rules committee. It's apparently a big effort because reportedly it'd get the votes to pass the package in the house, but would also guarantee a White House veto. It's wild and wooly over there tonight.

eta: Brad Setser tallies out that the Fed is up to US$1.25T in liquidity injections already. He gives them credit for "holding things together" as long as they have.
Tags: economics
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