A banner month for the Bund, huh?

Four posts? Really?

{sigh}

Let's talk about the art of compromise.

Obama walked out of a debt negotiation meeting with Congressional GOP leadership, saying "Enough is enough." At this point, I'm afraid I have to agree with the President.

If no agreement is reached by Aug 2, the US defaults on as much as 20% of its $1.8 trillion debt load, and its credit rating will be reduced by global economists. This will mean an instant increase in the cost of borrowing money for every single American, not just the US Government. Interest rates on mortgages will go up between 5% and 15% within hours of the default. Interest return rates on government bonds and bills will fall by as much as 2%. Some economists predict that the bank failure rate will reach record levels by the end of 2011... bringing us right back to 2008 and its painful economic climate.

17 of the most "conservative" Tea Party favorites (including two prospective 2012 Presidential candidates) have vowed to NOT vote to increase the debt limit... standing on principle, I guess. Most of the rest of the GOP find that agreeing to increases in the debt limit that coincide with decreases in budgetary spending over the next decade is a viable alternative. In fact, many Democrats think that's a good idea, too.

The nation is in deep, no question, and hard choices will have to made in the near future... but refusing to increase the debt limit based on partisan political agendas does nothing to help the nation at all. I can't help but think that all the "doom and gloom" predictions about out-of-control spending in the US are about to come true because no compromise could be reached between conservatives and liberals in Congress.