Tales from the Trail

A large majority of Americans say the United States is on the wrong track and nearly half believe the worst is yet to come, according to a  Reuters/Ipsos poll released on Wednesday.

The poll reflects growing anxiety about the economy and frustration with Washington after a narrowly averted government default,  a credit rating downgrade by Standard & Poor’s, a stock market dive and a 9.1 percent jobless rate.

The Reuters/Ipsos poll  — conducted from last Thursday to Monday — found 73 percent of Americans believe the United States is “off on the wrong track,” and just one in five, 21 percent, think the country is headed in the right direction.

The survey found that 47 percent believe “the worst is yet to come” in the U.S. economy, an increase of 13 percentage points from a year ago when this question was last raised.

President Barack Obama was politically bruised in the brutal debt ceiling debate and negative views on the economy are worrisome signs for his 2012 re-election bid. His approval rating dropped to 45 percent from 49 percent a month ago.

By Keith Hennessey
The opinions expressed are his own.

I cover three topics in this post: what important players won in this deal, the core concepts and tradeoffs within the deal, and what the different strategies might be this Fall under this bill when it becomes law. The President’s priorities

The President knows he will get debt limit increases through early 2013 no matter what House conservatives/Tea Party members do. Those Members can no longer “hold a debt limit increase hostage” before the 2012 election.

We could also describe this as eliminating liquidity risk through 2012.

Assuming someone doesn’t find a way out of the enforcement mechanisms in the bill (1 in 3 chance), there will be at least $2.1 T in deficit reduction over the next 10 years as a result. While I think that’s a big policy benefit, I’m not sure how important that is substantively to the President. (Is he for stimulus? Austerity? Who knows at this point.)

By David Cay Johnston
The author is a Reuters columnist. The opinions expressed are his own.

If the U.S. government voluntarily defaults, how are you going to get that tax refund? Or get paid for the work your company did for Uncle Sam?

While a last-minute agreement to raise the debt ceiling could still be reached, the risk of default as early as Tuesday is causing jitters in global financial markets and anxiety among people who depend on Social Security to eat.

Newt Gingrich says he “deeply opposed” to the proposal by Senate Republican leader Mitch McConnell for resolving the debt ceiling impasse because it cedes too much power to President Obama.

“It’s basically a surrender,” Gingrich said Tuesday on the Fox News Channel, imploring congressional Republicans to stand firm in the standoff with Obama.

Obama said on CBS that he could not guarantee Social Security checks would go out early next month if there’s no deal to raise the debt ceiling before Aug. 2nd.

Anyone in public office for more than a nanosecond is likely to have words and deeds come back to haunt them. New political realities sometimes demand a new world view 180 degrees from the old one. And then comes the explanation.

President Barack Obama, who is urging Congress to raise the debt ceiling, is finding his 2006 Senate vote against raising the debt limit when George W. Bush was president has come back to bite him.

The White House has decided to confront the discrepancy head-on.

Asked about the five-year-old vote, White House spokesman Jay Carney said the president “now believes it was a mistake.”

Minnesota Republican Michele Bachmann, champion-in-chief of the House Tea Party caucus, blames the media for all the recent chatter about her status as a potential presidential candidate.

“I’m not concerned about my own personal ambition,” she tells NBC News. “Right now, too many people in the media are concerned about who will be the nominee in 2012.”

That’s a wee bit odd given that the speculation began after her office announced a trip to the presidential field of frolic known as Iowa, with guidance that a White House run is not off the table.

While the ads are humorous, the subject is serious.

Fictional presidential candidate Hugh Jidette (pronounced huge debt) will soon be making a pitch for more U.S. debt held by foreign countries in television ads that will be appearing across the country.

The tongue-in-cheek spots are actually trying to drive home to the American public the consequences of failing to tackle huge debt increases facing the United States if lawmakers fail to balance the annual budget and continue to run deficits.

The nation’s debt now stands at $13.7 trillion and will hit the statutory credit limit of $14.3 trillion in the spring. At that point Congress must vote to raise the credit limit to keep the country from going into default.