U.S. eat up most of debt limit in one day - Washington Times

What happens if tax revenues are so weak that we hit the new limit sooner than expected?

 

Then we're going to have this ugly fight again right around election time in 2012.

 

Which is exactly what the Repubs want, even though this is almost entirely a cleanup of "W"s mess.

DD

 

Oh yippee.

But I thought there was a commission and automatic cuts if their program doesn't pass?

 

Oh yes - sorry. That larger extension is supposed to take us into early 2013. But if tax revenues fall short and it only takes us into late 2012, that's where we get the election fight. I'm not sure how much of a buffer they put in there.

 

Ah ok. So there is no plan after the larger extension from the commission.

 

Exactly - we get $900B now and then $1.5T from the commission and then that's it. We have to hope that carries us into 2013, not only to avoid an election fight, but if it doesn't, it means the economy went south too.

 

The article doesn't do a good job of explaining why there's a big bump, but it sounds like the government was delaying expenses and then let it all catch up at once. So, it's probably a level we should have hit a month ago. They knew what the real level was when they set the new limit, right?

 

Borrowing costs are at record lows not seen in 60 years - would you prefer they time out their borrowing until when it's more expensive?