Kabuki Theater
Debt ceiling and budget talks are set to resume at 3PM. Of course we would hope they would announce by the end of the day an agreement since Biden leaves tomorrow for the G7 meetings in Japan. I don’t think an agreement will be reached, YET. I think the administration wants a crisis, for now. They have said all along no budget negotiations without lifting the debt ceiling first and the GOP has already passed a bill that does both. The only way to avoid a default is for Biden to cave, which he will eventually, but not just yet. The headlines will end up blaring, NO DEAL and ON THE BRINK. Just what the administration wants. They probably have the credit rating agencies lined up to put the USA on credit watch and warning of a possible default.(downgrade but not an actual downgrade.) This gives Biden and the Dems cover to cave and also minimize the size of the cuts they end up having to go along with. The Republicans can claim a victory but with the country on the brink they will have to take half a loaf as well. Next week when Biden returns they complete the “deal” and everyone breathes a sigh of relief in time for the Memorial Day Holiday weekend. https://www.zerohedge.com/political/mccarthy-says-debt-ceiling-talks-not-good-place-yellen-warns-time-running-out
Headline from a ZH article. “US Now Spends More Servicing Its Debt Than On National Defense”. Instead of Yellen threatening to not be able to make SS payments they should stop ALL defense expenditures except salaries. Enough money down the Ukraine rabbit hole. Let the defense contractors have to wait a short while for their dough as well.