from MacroScope:

Congress “smashed the instrument panel” of U.S. economic data: Fed’s Fisher

October 18, 2013

Richard Fisher, president of the Dallas Federal Reserve and one of the U.S. central bank’s arch inflation hawks, took us by surprise this week – he told Reuters that, given all the uncertainty generated by the government shutdown, it would not be prudent for the Fed to reduce its bond-buying stimulus this month.

from The Edgy Optimist:

The benefits of a ‘de-Americanized world’

By Zachary Karabell
October 16, 2013

This current bout of Washington inanity is approaching its denouement, but however it ends, it has accelerated a trend that has been gathering steam for at least the last five years: the move away from a Washington-centric world and towards a new, undefined, but decidedly less American global system.

from MacroScope:

Can they kick it? Yes they can

October 15, 2013

Click here for suggested soundtrack to this blog 

During the recent round of financial crises, policymakers have done a whole lot of “kicking the can down the road”.

from Nicholas Wapshott:

The GOP’s age of unreason

By Nicholas Wapshott
October 10, 2013

If the federal government fails to pay its bills and the interest on its borrowing by the middle of the month, it is the overwhelming verdict of the nation’s smartest economists that financial mayhem will ensue.

from The Great Debate:

The budget is its own ‘debt ceiling’

By Daniel Alpert and Robert Hockett
October 10, 2013

It could be that President Barack Obama and the Republican House of Representatives will again be able to avert fiscal and financial chaos through a short-term, ad hoc agreement on government funding and the “debt ceiling” limit. This would be good news for the world and its markets.

from The Great Debate:

A 14th Amendment for all centuries

By Garrett Epps
October 9, 2013

During the 1980s, a colorful Washington figure used to stand in Lafayette Square near the White House holding a sign: “Arrest Me. I Question the Validity of the Public Debt. Repeal Section 4, Fourteenth Amendment to the U.S. Constitution.” That section reads: “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.” As far as I know, the whimsical “protester” was never arrested; he wasn’t breaking any law. Congressional Republicans, if they force the United States into default on its debt, will be.

from Breakingviews:

GOP’s best bargaining tactic: raise debt ceiling

October 8, 2013

By Daniel Indiviglio
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

from The Edgy Optimist:

Canceling the debt ceiling apocalypse

By Zachary Karabell
October 4, 2013

Before we begin, let it be said that the looming possibility of the U.S.’s default on its own debt is a not-insignificant issue. Let it also be said that the U.S. government may be unwilling to pay interest on its multi-trillion dollar publicly-held debt as of mid-October, and that this carries substantial risks. And, finally, let it be said that this is something we should most definitely avoid.

from Anatole Kaletsky:

Game theory and America’s budget battle

By Anatole Kaletsky
October 3, 2013

So far, the battle of the budget in Washington is playing out roughly as expected. While a government shutdown has theoretically been ordered, nothing much has really happened, all the functions of government deemed essential have continued and financial markets have simply yawned. The only real difference between the tragicomedy now unfolding on Capitol Hill and the scenario outlined here last week has been in timing. I had suggested that the House Republicans would give way almost immediately on the budget, if only to keep some of their powder dry for a second, though equally hopeless, battle over the Treasury debt limit. Instead, it now looks like President Obama may succeed in rolling the two issues into one and forcing the Republicans to capitulate on both simultaneously.

from MacroScope:

Economic damage from the shutdown? Small to start, say forecasters

October 2, 2013

The U.S. government shutdown probably won't hit the economy too hard, say economists. Some point to the fact the shutdown has come right at the start of the fourth quarter, meaning there's time before the year's out for the economy to recoup some of  lost output resulting from the downtime. But, the longer it goes on, the worse it will be.