You know what mattered this week? If it happens, that is: the decision to require birth control to be covered by health insurance. That's a big one, no? If, as I said, it happens. Way farther along the line of the decision/enactment/actually happening sequence, we also had the official end of DADT, and the remnants of the overall ban on gays in the military.
Oh, yeah, there's the debt limit/deficit talks. I don't really know what to say about it...the day-to-day stuff matters a whole lot less than everyone thinks, but of course there's plenty of reality here, too. The problem is it's hard to tell, at this stage, which is which. In the sense of unexpected events that will have long-term implications, though, there's nothing obvious this week that would count. As far as anyone can tell.
What else? What do you think mattered this week?
whatever happened to Libya?ReplyDelete
I think the biggie from this week was Obama's willingness to raise the Medicare age and cut Social Security. It's clear now that this is something he actually really wants to do, and it will be easy for the GOP to insist on it in the future. It's also going to be an electoral disaster for the Democratic Party, which is relinquishing its single greatest strength with voters.ReplyDelete
The likelihood that U.S. credit will be downgraded.ReplyDelete
Last week (July 14), S&P said "U.S. AAA Ratings Placed On CreditWatch Negative On Rising Risk Of Policy Stalemate....We believe that an inability to reach an agreement now [on "fiscal consolidation", i.e. the deficit] could indicate that an agreement will not be reached for several more years."
At the time, S&P saw a 50% chance for a U.S. downgrade. What mattered this week is that downgrades now look likely.
S&P says there's a 50% chance that S&P will say something.ReplyDelete
Even if I thought they were sincerely worried about the debt level (which I don't), this kind of talk is maddening.
From the same statement: "Standard & Poor's still anticipates that lawmakers will raise the debt ceiling by the end of July."
They're not worried about the debt ceiling or debt level, they're worried about the deficit.
What appeared to be the high likeliehood that the Republican base stood in the way of any agreement that the Obama Administration would agree to on the debt ceiling lift was confirmed.
Murdoch saved his job and may have staunched the Newscorp bloodletting -- partly by looking old and doddering, partly with the revelation that so many other British papers had phone hacked, and partly because of the pie in his face (the debt ceiling fight probably helped -- wonder if Fox was ardently opposed to an earlier settlement :)).
As far as default risk is concerned (the only thing relevant for S&P's analysis) the deficit is a concern because it increases the debt level. Eventually we could reach a debt level where we could not afford to pay the interest (absent inflation, new currency issuance, etc). Several years' deficits are irrelevant if the final debt level remains manageable. So it is nonsensical to say that one is worried about the deficit but not the total debt, from a default risk point of view.*
S&P are not giving sincere financial analysis. They are trying either to meddle in politics or to get attention.
*It is reasonable from an economic policy perspective in an overheated economy, but we're not in such an economy, and that's not relevant for S&P's rating anyway.