I’ve long believed that neither Paul Ryan nor Mitch McConnell were quite nuts enough to fail to extend the debt ceiling. It’s not even mainly that McConnell at least likely understands how terrible it would be for the US to default on its obligations. No, it’s that failing to pass a debt ceiling increase would be political suicide for Republicans. Their major claim (however undeserved) to the public’s trust — that Republicans are the party of fiscal probity — would be exploded for a generation or more.
So I’ve been confident that if push came to shove McConnell runs something through by unanimous consent, or some other means. And I’ve been almost as confident that when Ryan finds he cannot tame the crazies in his own party, he accepts Democratic votes to get a majority. So while the debt ceiling vote is easily the biggest domestic political issue on the near-term horizon, and even today there is no obvious road from there to there (not to mention precious few legislative days when Congress is actually in session), I wasn’t worrying about it all that much.
Indeed, both Sen. McConnell and now Speaker Ryan have promised to get a bill out of Congress.
But now there’s a new wrinkle: suppose Congress passes an eleventh-hour bill and Trump vetoes it? He hasn’t said he would in so many words, but the signs are there in his fued with McConnell; there may be no geological formation known as Trump Peak, but Trump pique could be a giant crater.
After all, Trump has tweeted that he wants the budget to be tied to funding for the Gran Muralla, and wouldn’t mind a government shutdown if he doesn’t get it. In terms of really dumb ideas, t’s not that far to the debt ceiling. And Office of Management and Budget director, Mick Mulvaney originally argued that a US default was not such a big deal — although he’s now recanted and said he wants it raised too.
If there’s a veto, and I think at this point there’s really nothing we can’t put past the guy, we don’t just need a majority in both houses, we need a super-majority — and maybe in a hurry. Are the votes there?
Image by DonkeyHotey, subject to CC BY 2.0 license.
Not that I have much choice in my 403(b) – it’s stocks or bonds, no cash option.
We study the local economic spillovers generated by LeBron James’ presence on a team in the National Basketball Association. Mr. James, the first overall pick of the 2003 NBA draft, spent the first seven seasons of his career at the Cleveland Cavaliers, and then moved to the Miami Heat in 2010, only to return to Cleveland in 2014. Long considered one of the NBA’s superstars, he has received the league’s MVP award four times, won three NBA championships, and been a part of two victorious US teams at the Olympics. We trace the impact a star of Mr. James’ caliber can have on economic activity by analyzing the impact his departures and arrivals had on business activity close to the Cleveland Cavaliers and Miami Heat stadiums. We find that Mr. James has a statistically and economically significant positive effect on both the number of restaurants and other eating and drinking establishments near the stadium where he is based, and on aggregate employment at those establishments. Specifically, his presence increases the number of such establishments within one mile of the stadium by about 13%, and employment by about 23.5%. These effects are very local, in that they decay rapidly as one moves farther from the stadium.
— Taking My Talents to South Beach (And Back) by Daniel Shoag, Harvard Kennedy School & Stan Veuger, American Enterprise Institute (AEI).
The papers say the US is spending $3.1 billion per month on the war in Afghanistan. And I’m sure that doesn’t count the long-term care costs for wounded soldiers after they get home.
At $37.2 billion per year our spending is about half the Afghani GDP at purchasing power parity – or, if you prefer, about double their GDP at the official exchange rate. The population of Afghanistan is about 33.3 million persons. So we are spending about $100 per Afghani per month; call it $1200 per Afghani per year.
The average income in Afghanistan has been estimated at US$ 1,883 I suspect this is a PPP number, and quite inflated. The Asia Foundation did a study which found that The average monthly income in households where women contribute to family earnings was 10,197 Afs (approximately USD $158). By comparison, in households where women do not contribute, the average monthly income was 10,851 Afs (approximately USD $168). (Study at p. 63.) Whatever the truth may be, I’m betting the US spends more in Afghanistan than the entire earnings of at least 98% of the population.
Are we getting our money’s worth? How, if our goal were to influence Afghanistan might we put that money to work in income support (bribes if you will), building things (nation-building if you will) and creating institutions designed to keep things modern and running after the subventions stop (imperialism if you must)? We could probably do worse than just give $500 per year to every Afghan woman for starters, and wait for the animal spirits of capitalism to explode.
Previously: A Modest Dinner-Party-Based Proposal For An Iraqi Exit Strategy (Sept 27, 2003) ($3000/year per Iraqi)
What you call it can determine how it is regulated. Businesses are lobbying hard to be allowed to repatriate “$2 trillion in untaxed profits outside the United States”. Seems to me they practically have won the war by labeling this money “stranded cash” when in fact it should be called “sheltered cash”.
Thus we get stuff like this:
But this much is clear: There is a growing political consensus that the time has come for change in the tax rules to encourage repatriation of the vast troves of corporate earnings held outside the country. Companies, ordinary American taxpayers and thousands of investors have substantial and sometimes conflicting stakes in the outcome.
“Everyone agrees that something is going to be done about this,” said Edward D. Kleinbard, the former chief of staff of the congressional Joint Committee on Taxation, and now a law professor at the University of Southern California. “The question, of course, is exactly what.”
Well, I don’t agree. Let’s just close the loophole going forward as a first step, so as not to make foreign investment more profitable than domestic. Then maybe we can talk about wealth taxes?
Meanwhile, please can we call this $2 trillion what it is: tax-sheltered cash stored in offshore bank accounts.