THE CONGRESSIONAL GAME OF CHICKEN AND THE DEBT CEILING

WIKI:

The game of chicken, also known as the hawk-dove or snowdrift^[1] game, is an influential model of conflict for two players in game theory. The principle of the game is that while each player prefers not to yield to the other, the worst possible outcome occurs when both players do not yield.

RAISING THE DEBT CEILING LARGELY A SYMBOLIC BATTLE:

As readers know, the only way the US government can really “run out of” money is if we decide to. That means our politicians have to essentially shut down the shop. After all, there is no such thing as an autonomous issuer of currency who has monopoly supply of that currency being able to not produce that currency. And since all of our debt is denominated in a currency that we can create out of thin air there is no such thing as a traditional insolvency constraint (as in not being able to make a debt payment). So, aside from the other ridiculous reasons for a debt ceiling, the most glaring should be the one that is the most obvious (and the one that escapes most people).

Of course, that hasn’t stopped the political grandstanding in the last few weeks. Lord forbid we waste another perfectly good crisis (since the politicians sure wasted the last one). But what’s so sad about all of this is that the markets are getting truly nervous by this grandstanding. In other words, it’s starting to have a broader impact than just in the halls of Washington.

WHAT THE BATTLE IS REALLY ABOUT IS THIS: DEMOCRAT DON;T WANT THE ISSUE COMING UP DURING NEXT YEAR'S ELECTION. PERIOD.

AND THEY ARE HOLDING THE NATION HOSTAGE.

HERE'S THE LATEST:

The Senate majority leader, Harry Reid of Nevada, said Senate Democrats would move immediately Thursday night to set aside the House proposal if it wins passage and then take steps to force a vote on Mr. Reid’s own proposal to raise the debt limit through 2012 in exchange for more than $2 trillion in cuts.

“No Democrat will vote for a short-term Band-Aid that would put our economy at risk and put the nation back in this untenable situation a few short months from now,” Mr. Reid said.

But the House Republican leaders, all but declaring that they now had the votes in hand, said that would put blame for the continuing crisis on the Senate Democrats.

“When the house takes action, the United States Senate will have no more excuses for inaction,” said the House speaker, John A. Boehner, just before taking his bill to the floor for debate.

As they prepared to open debate, he and his fellow Republican leaders seemed confident that they would indeed pass the bill soon and send it to the Senate.

Lawmakers and top aides expressed confidence that they could win over enough members to prevent a humiliating defeat on the House floor for the speaker and the party. Even as they pushed for the plan, the leadership said the proposal fell short of their desires.

“Is this as much as I want? No,” Mr. Boehner told them. “But it advances our goals and doesn’t violate our principles.”

I AGREE.

LET'S FORCE REID AND HIS COMRADES TO "KILL IT".

AND LET'S WATCH THE ,MARKETS.

I BETCHYA THEY GO UP WHEN THE HOUSE PASSES IT AND DOWN WHEN THE SENATE'S "KILLS IT".

ADDENDUM: NICE NON-VITRIOLIC RHETORIC THERE HARRY! (/SARC)