The Dow has slid around 2.6% today, and yet the 10-year Treasury rate is down to 2.37%. Paul Krugman explains what this means: S&P declared that US debt is no longer a safe investment; yet investors are piling into US debt, not out of it, driving the 10-year interest rate below 2.4%. This amounts to [...]

I was tied up with other matters this weekend, so couldn’t offer a take on S&P’s downgrade decision. Jane has done most of the spade work here. But I wanted to make a few points. First of all, if the rating agency’s entire argument was that the political system showed itself to be “less stable, [...]

This is a good piece of data to take into the Catfood Commission II hearings. Remember how Bernie Sanders and other Social Security defenders insist that Social Security is solvent and on track to pay full benefits for the next 26 years? It turns out they’re wrong. It’s able to pay in full for 28 [...]

The White House definitely wants the Catfood Commission II to negotiate their grand bargain that they can tout along the lines of “getting things done” with a “bipartisan compromise.” And they believe that the automatic cuts that would be triggered if the Catfood Commission II recommendations don’t come about are so distasteful to both sides, [...]

Both Nancy Pelosi and Harry Reid are making some bold predictions about the Catfood Commission II and their roles in it. Pelosi said she wouldn’t appoint anyone to the committee who didn’t oppose benefit cuts to Medicare, Medicaid and Social Security. And Reid tried his own dollar-for-dollar pledge by stating there must be a 1:1 [...]

I have a piece in the American Prospect today on five turning points in the debt limit fight. I think they’re actually in descending order of importance, and the biggest one is right at the top – this deal is the function of horrible economic stewardship in 2009 and 2010. OBAMA AND DEMOCRATS COULD HAVE [...]

As I first brought to you on Sunday afternoon, Harry Reid is working on a debt limit proposal that would satisfy two key Republican demands. It would sustain the dollar-for-dollar relationship between spending cuts and an increase in the debt limit, and it would not include any revenue increases. Reid made the formal announcement in [...]

CNN has reported that Harry Reid is working on his own debt limit proposal that would cut deficits by $2.5 trillion total, include no revenue increases, and raise the debt limit by that same $2.5 trillion amount. Reid, Nancy Pelosi, the President and Vice President are scheduled to meet in the White House tonight starting [...]

Conservatives are already attacking President Barack Obama for cutting Social Security, before the ink is even dry on any deal that would accomplish this. While this tactic should in theory collapse under the weight of its own hypocrisy, it’s essentially the same script that won the Republicans the House of Representatives in 2010, and would [...]

We’re very close to a grand bargain endgame, it appears, where the White House will claim they got revenues and the Republicans will claim that the revenues are only theoretical. A lot rides on a “trigger” for additional revenues and entitlement cuts if goals are not reached. This allows lawmakers to defer tough questions on [...]

Sam Stein had an amusing moment with President Obama in today’s press conference, when the President said to Stein “I might enjoy negotiating with you, but I don’t know how much juice you’ve got in the Republican caucus.” Stein made a gesture showing a small measure between his thumb and forefinger, the President responded, and [...]