The debt ceiling showdown is essentially over. But another manufactured crisis is stalking the recovery.
We are not deadbeats! We are not deadbeats! We are not, well, you get the point.
With the Treasury fast running out of "extraordinary measures" to keep the government from hitting the debt ceiling, and consequently defaulting on its obligations (and maybe the debt too), House Republicans voted to "suspend" the debt ceiling until May 19 -- which, as the Bipartisan Policy Center points out, means raising the debt ceiling until at least August. That's right: a three-month suspension is actually a six-month increase. Remember, there are really two limits when it comes to the debt limit. The first is when the Treasury "hits" the debt ceiling, and the second is when the Treasury really hits the debt ceiling. In other words, the former is when the Treasury has to resort to accounting shenanigans, those "extraordinary measures," to avoid the debt limit, and the latter is when those accounting shenanigans are no longer enough. The Republican plan suspends the debt ceiling until May 19, at which point 1) it will be raised by as much as the government borrows between then and now (probably $450 billion), and 2) the clock will re-set on the Treasury's extraordinary measures. Default day won't come until early August.
Not that default day will ever come. House Republicans don't actually want to play Russian roulette with Treasury bonds, and will raise -- or, if they prefer, "suspend" -- the debt ceiling again when the time comes. And that won't be long in coming. The sequester kicks in on March 1, and the continuing resolution that funds the government runs out on March 27, setting up Fiscal Cliff 2: This Time's It's Budget-y, with some kind of longer-term debt ceiling hike almost certainly figuring into the final deal. If history is any guide, Republicans will demand some smaller cuts in return for not shutting the government down, and try to turn the sequester into more palatable, for them, spending cuts.
For those of you who have trouble keeping all of our manufactured crises straight, the sequester is the $1.2 trillion of purposely painful cuts over the next decade, which was supposed to encourage the super-committee -- remember that one? -- to reach some kind of alternative, long-term debt deal. It didn't, and now Congress is left with a giant pile of automatic spending cuts it doesn't want. As you can see in the chart below from the Bipartisan Policy Center, it would cut almost half a trillion from defense, more than a quarter trillion from discretionary spending (which is already at 40-year lows), and $92 billion from Medicare.
As Jonathan Chait of New York points out, John Boehner has tried to claim the leverage in the upcoming sequester battle by saying he and his caucus really don't mind if it goes into effect. Maybe ... although it strains credulity that a party that has criticized Chuck Hagel for his willingness to cut defense spending doesn't care about cutting defense spending. The operative questions in this game of fiscal chicken are whether President Obama and House Republicans can find mutually agreeable cuts to replace the sequester cuts, and whether they will postpone whatever cuts come out of this latest (though certainly not last) cliff. The first matters more when it comes to protecting the recovery, while the second gets at the deep philosophical divide between the two parties. The risk, of course, is that wrangling over the latter prevents a deal on the former, and that the sequester subsequently starts on schedule, rather than at a later, more opportune, date.
With the default caucus within the Republican party fading into irrelevance, the specter of missing an interest payment on Treasury bonds has thankfully receded. Now we just have to worry about too much austerity too soon.
Hooray, we're not a banana republic. But we still might become Europe.
The Onion had a problem: It fell behind the times. The mock newspaper hadn’t printed an issue on actual paper since 2013, and in the period since, it never redesigned its website. As the media world changed—as the New York Times and the Washington Post adapted the ways they published stories online—The Onion lost a key satirical weapon. Visually, it no longer looked like many of the publications it parodied. And so, like it had done many times before, The Onion tagged along.
Infomercials are fond of marketing strategies that rely on a theory of psychological pricing. You don't pay a flat fee for your Shake Weight or Magic Bullet or Ginsu Knife; you dish out three easy payments. And your payments aren't $40, of course; they're $39.99.
Most of us, for better but probably for worse, are familiar with the sneaky logic of infomercials. That doesn't mean, however, that we are immune to their charms. Nor are we immune to the pull—ironic, and also very much not—of the products that are sold to us in the late night and early morning, our most vulnerable hours, via charismatic pitchmen and sad-sack stand-ins for human frailty. Oxyclean. The PedEgg. The Pocket Hose. The Clapper. The Socket Dock. The food dehydrator. GLH. Which is, I mean, hair that you spray onto your scalp! Even the most savvy consumers among us can find ourselves ensnared by the bleary promise of life-improvement that can be ours, we are told, for only two easy payments of $19.95 (plus shipping and handling).
In 2008, I was elected governor of Delaware. In politics, timing is everything. You can be a fantastic candidate and run in a bad year for your party and get clobbered. You can be an absolute dud and run in the right year and get the brass ring. 2008 was a good year to be a Democrat.
But beyond the political benefit, my timing was awful. A month before I took office at the depths of the Great Recession, Chrysler closed its assembly plant in Newark, my hometown. A few months after my inauguration, General Motors shuttered its plant a few miles away. That fall, Valero closed its refinery. Those three employers had represented the best opportunities for high school graduates to get middle-class jobs for decades. Within a year, all were gone.
In 2004, two women who were long past college age settled into a dorm room at a large public university in the Midwest. Elizabeth Armstrong, a sociology professor at the University of Michigan, and Laura Hamilton, then a graduate assistant and now a sociology professor at the University of California at Merced, were there to examine the daily lives and attitudes of college students. Like two Jane Goodalls in the jungle of American young adulthood, they did their observing in the students’ natural habitat.
The researchers interviewed the 53 women on their floor every year for five years—from the time they were freshmen through their first year out of college.
Their findings about the students’ academic success later formed the basis for Paying for the Party, their recent book about how the college experience bolsters inequality. They found that the women’s “trajectories were shaped not only by income ... but also by how much debt they carried, how much financial assistance they could expect from their parents, their social networks, and their financial prospects.”
Where did it come from, and what are its intentions? The simplicity of these questions can be deceiving, and few Western leaders seem to know the answers. In December, The New York Times published confidential comments by Major General Michael K. Nagata, the Special Operations commander for the United States in the Middle East, admitting that he had hardly begun figuring out the Islamic State’s appeal. “We have not defeated the idea,” he said. “We do not even understand the idea.” In the past year, President Obama has referred to the Islamic State, variously, as “not Islamic” and as al-Qaeda’s “jayvee team,” statements that reflected confusion about the group, and may have contributed to significant strategic errors.
The question that most people ask themselves as they walk into their boss's office to negotiate their salaries is likely some variant of "What am I going to say?" But according to hostage negotiator Chris Voss, that might be the least important thing to keep in mind when negotiating.
Voss, now an adjunct professor at Georgetown University's McDonough School of Business, spent 24 years at the FBI. It was as an FBI agent that he started to get interested in hostage negotiations. At the time, a supervisor told him to start by volunteering at a suicide hotline to gain the set of listening abilities that a hostage negotiator needs. By 1992, he was training at the FBI's school for negotiators, and from 2004 to 2007, he was the FBI's lead international hostage negotiator. After retirement, Voss founded The Black Swan Group to bring negotiation know-how to the business world.
Do you understand money? Let’s see how well you do with the following questions.
1. Suppose you had $100 in a savings account and the interest rate was 2 percent per year. After five years, how much do you think you would have in the account if you left the money to grow? A) more than $102; B) exactly $102; C) less than $102; D) do not know; refuse to answer.
2. Imagine that the interest rate on your savings account is 1 percent per year and inflation is 2 percent per year. After one year, would you be able to buy A) more than, B) exactly the same as, or C) less than today with the money in this account?; D) do not know; refuse to answer.
3. Do you think that the following statement is true or false? “Buying a single company stock usually provides a safer return than a stock mutual fund.” A) true; B) false; C) do not know; refuse to answer.
There are plenty of things to be gained from going abroad: new friends, new experiences, new stories.
But living in another country may come with a less noticeable benefit, too: Some scientists say it can also make you more creative.
Writers and thinkers have long felt the creative benefits of international travel. Ernest Hemingway, for example, drew inspiration for much of his work from his time in Spain and France. Aldous Huxley, the author of Brave New World, moved from the U.K. to the U.S. in his 40s to branch out into screenwriting. Mark Twain, who sailed around the coast of the Mediterranean in 1869, wrote in his travelogue Innocents Abroad that travel is “fatal to prejudice, bigotry, and narrow-mindedness.”