Another Republican President, Another Recession.

[mooray]

Ha, that's awesome. The "fucking sink hole" is the Glory Hole at Lake Berryessa.

 

[hanimmal]

https://apnews.com/article/house-passes-budget-blueprint-0a1258e07b1a8b9aeddb69980093c838

WASHINGTON (AP) — Striking a deal with moderates, House Democratic leaders muscled President Joe Biden’s multitrillion-dollar budget blueprint over a key hurdle Tuesday, ending a risky standoff and putting the party’s domestic infrastructure agenda back on track.

The 220-212 vote was a first move toward drafting Biden’s $3.5 trillion rebuilding plan this fall, and the narrow outcome, in the face of unanimous Republican opposition, signaled the power a few voices have to alter the debate and the challenges ahead still threatening to upend the president’s agenda.

From the White House, Biden praised the outcome as “a step closer to truly investing in the American people.” He said at a news conference that he had called to congratulate House leaders for the work.

Tensions had flared during a turbulent 24 hours that brought the House to a standstill as a band of moderate lawmakers threatened to withhold their votes for the $3.5 trillion plan. They were demanding the House first approve a nearly $1 trillion bipartisan package of other public works projects that’s already passed the Senate.

Backed by the White House, Speaker Nancy Pelosi huddled privately with lawmakers and leaders to engineer an offramp. In brokering the compromise, Pelosi committed to voting on the bipartisan package no later than Sept. 27, an attempt to assure lawmakers it won’t be left on the sidelines. It’s also in keeping with with Pelosi’s insistence that the two bills move together as a more complete collection of Biden’s priorities. Pelosi has set a goal of passing both by Oct. 1.

Pelosi told her colleagues before the vote that the legislation would lead to a federal investment on par with the New Deal and the Great Society.

She brushed aside the delays. “That’s just part of the legislative process,” she said, according to an aide granted anonymity to discuss a closed-door caucus meeting.

“Not only are we building the physical infrastructure of America, we are building the human infrastructure of America,” Pelosi said on the House floor.

Easing off the stalemate will shelve, for now, the stark divisions between moderate and progressive lawmakers who make up the Democrats’ so-slim House majority. But as the drama spilled out during what was supposed to be a quick session as lawmakers returned to work for a few days in August, it showcased the party differences that threaten to upend Biden’s ambitious rebuilding agenda.

With Republicans fully opposed to the president’s big plans and arguing that Congress should be focused instead on the crisis in Afghanistan, the Democratic leaders have just a few votes to spare. That gives any band of lawmakers leverage that can be used to make or break a deal, as they are in position to do in the weeks to come as moderates and progressives draft and vote on the broader $3.5 trillion package.

“I think it’s important to those of us who are moderate Democrats to make sure that our voices are heard,” said Rep. Jim Costa, D-Calif., one of the negotiators.

Challenging their party’s most powerful leaders, nine moderate Democrats signed onto a letter late last week raising their objections to pushing ahead with Biden’s broader infrastructure proposal without first considering the smaller public works plan of road, public transit and broadband spending that has already passed the Senate.

Their ranks grew as other moderates, including Rep. Stephanie Murphy, D-Fla., a leader of the Blue Dog caucus of centrist Democrats, raised similar concerns.

Progressives were outraged at the moderates, blaming them for potentially jamming Biden’s agenda, which is stocked with hard-fought party goals like child care, paid family leave and Medicare expansion, along with green infrastructure spending.

Outside groups, including Justice Democrats, started running campaign ads and members of Our Revolution, the organization aligned with Bernie Sanders, protested Tuesday outside the New Jersey office of Rep. Josh Gottheimer, a leader of the moderate effort.

“This is a ‘which side are you on‘ moment,’” said Our Revolution executive director Joseph Geevarghese, who promised to “organize like never before to hold Democrats accountable and get this bill over the finish line.”

The budget measure is at the heart of Biden’s “Build Back Better” vision for helping families and combating climate change and is progressives’ top priority, all of it largely financed with tax increases on the rich and big business.

The House committees are already fast at work drafting legislation to fill in the details of the $3.5 trillion package for consideration later this fall.

Progressives signaled early on they wanted the Biden budget priorities first before they agree to the smaller Senate package, worried it would be an insufficient down-payment on his goals.

But the moderates want the opposite, insisting Congress quickly send the smaller, bipartisan infrastructure measure they helped shape with the senators to Biden so he can sign it before the political winds shift.

While the moderates insist they also want to support Biden’s broader package, progressives are skeptical. Senate centrists Sen. Joe Manchin, D-W.Va., and Sen. Kyrsten Sinema, D-Ariz., have said they cannot support a $3.5 trillion package.

In fact, the moderates were also trying to win assurances from Pelosi that whatever version of the broader bill they draft in the House will be the same in the Senate — setting up another showdown between the party’s competing flanks and their vision for the rebuilding priorities.

“We have established a path forward,” Gottheimer said in a statement.

The compromise structured Tuesday’s vote to include passage of the budget resolution and the commitment for the September vote on the bipartisan package as part of a procedural vote, called the Rule.

So far, the White House has backed Pelosi as she has led her party in a tightly scripted strategy.

Republicans plan to reject the the $3.5 trillion effort as big government spending, and GOP support for the slimmer $1 trillion bipartisan measure is now uncertain.

The conservative House Freedom Caucus said it opposes both the Biden budget and the bipartisan bill.

Republicans blasted Democrats for pursuing their priorities at a time when they said all focus should be on Afghanistan, as thousands of people including Americans are trying to flee the country as the U.S. withdraws its forces.

“We should be doing nothing else on this floor until every single American is home,” said Rep. Kevin McCarthy, the House minority leader.

Inserting his own wedge into the politics of the situation, Senate Republican leader Mitch McConnell said Tuesday on Fox News that he was rooting for the House moderates.

“I wish the moderates in the House success,” McConnell said. “I’m pulling for them.”

 

[hanimmal]

https://apnews.com/article/health-courts-pandemics-coronavirus-pandemic-us-supreme-court-dcd2da5f88b0396c05d85c00591755f9

WASHINGTON (AP) — The Supreme Court’s conservative majority is allowing evictions to resume across the United States, blocking the Biden administration from enforcing a temporary ban that was put in place because of the coronavirus pandemic.

The court’s action ends protections for roughly 3.5 million people in the United States who said they faced eviction in the next two months, according to Census Bureau data from early August.

The court said late Thursday in an unsigned opinion that the Centers for Disease Control and Prevention, which reimposed the moratorium Aug. 3, lacked the authority to do so under federal law without explicit congressional authorization. The justices rejected the administration’s arguments in support of the CDC’s authority.

“If a federally imposed eviction moratorium is to continue, Congress must specifically authorize it,” the court wrote.

The three liberal justices dissented. Justice Stephen Breyer, writing for the three, pointed to the increase in COVID-19 caused by the delta variant as one of the reasons the court should have left the moratorium in place. “The public interest strongly favors respecting the CDC’s judgment at this moment, when over 90% of counties are experiencing high transmission rates,” Breyer wrote.

White House press secretary Jen Psaki said the administration was “disappointed” by the decision and said President Joe Biden “is once again calling on all entities that can prevent evictions — from cities and states to local courts, landlords, Cabinet Agencies — to urgently act to prevent evictions.”

Rep. Cori Bush, D-Mo., who had camped outside the Capitol as the eviction moratorium expired at the end of last month, said Congress must act to reinstate the protections.

“We are in an unprecedented and ongoing crisis that demands compassionate solutions that center the needs of the people and communities most in need of our help. We need to give our communities time to heal from this devastating pandemic,” she said in a statement. “We didn’t sleep on those steps just to give up now. Congress must act immediately to prevent mass evictions.”

It was the second loss for the administration this week at the hands of the high court’s conservative majority. On Tuesday, the court effectively allowed the reinstatement of a Trump-era policy forcing asylum seekers to wait in Mexico for their hearings. The new administration had tried to end the Remain in Mexico program, as it is informally known.

On evictions, President Joe Biden acknowledged the legal headwinds the new moratorium would likely encounter. But Biden said that even with doubts about what courts would do, it was worth a try because it would buy at least a few weeks of time for the distribution of more of the $46.5 billion in rental assistance Congress had approved.

The Treasury Department said Wednesday that the pace of distribution has increased and nearly a million households have been helped. But only about 11% of the money, just over $5 billion, has been distributed by state and local governments, the department said.

The administration has called on state and local officials to “move more aggressively” in distributing rental assistance funds and urged state and local courts to issue their own moratoriums to “discourage eviction filings” until landlords and tenants have sought the funds.

A handful of states, including California, Maryland and New Jersey, have put in place their own temporary bans on evictions. In a separate order earlier this month, the high court ended some protections for New York residents who had fallen behind on their rents during the pandemic.

The high court hinted strongly in late June that it would take this path if asked again to intervene. At that time, the court allowed an earlier pause on evictions to continue through the end of July.

But four conservative justices would have set the moratorium aside then and a fifth, Justice Brett Kavanaugh, said Congress would have to expressly authorize a new pause on evictions. Neither house of Congress has passed a new evictions moratorium.

The administration at first allowed the earlier moratorium to lapse July 31, saying it had no legal authority to allow it to continue. But the CDC issued a new moratorium days later as pressure mounted from lawmakers and others to help vulnerable renters stay in their homes as the coronavirus’ delta variant surged. The moratorium had been scheduled to expire Oct. 3.

Landlords in Alabama and Georgia who challenged the earlier evictions ban quickly returned to court, where they received a sympathetic hearing. U.S. Judge Dabney Friedrich, an appointee of former President Donald Trump, said the new moratorium was beyond the CDC’s authority.

But Friedrich said she was powerless to stop it because of an earlier ruling from the federal appeals court in Washington, D.C., that sits above her. The U.S. Court of Appeals for the District of Columbia Circuit likewise refused to put the CDC order on hold, prompting the landlords’ emergency appeal to the Supreme Court.

The earlier versions of the moratorium, first ordered during Trump’s presidency, applied nationwide and were put in place out of fear that people who couldn’t pay their rent would end up in crowded living conditions like homeless shelters and help spread the virus.

The new moratorium temporarily halted evictions in counties with “substantial and high levels” of virus transmissions and would cover areas where 90% of the U.S. population lives.

The Biden administration argued that the rise in the delta variant underscored the dangers of resuming evictions in areas of high transmission of COVID-19. But that argument did not win broad support at the high court.

 

[hanimmal]

https://apnews.com/article/mississippi-fe0eb84245c9f41f5b764b0be47d1602

LUCEDALE, Miss. (AP) — Two people were killed and at least 10 others were injured when their vehicles plunged into a deep hole where a highway collapsed after Hurricane Ida blew through Mississippi.

Torrential rain may have caused the collapse, and the drivers may not have seen that the roadway in front of them had disappeared Monday night, Mississippi Highway Patrol Cp. Cal Robertson said.

“Some of these cars are stacked on top of each other,” he said. Seven vehicles were involved, including a motorcycle. A crane was brought in to lift them out of the hole.

WDSU-TV reports state troopers, emergency workers and rescue teams responded to Highway 26 west of Lucedale, about 60 miles (96 kilometers) northeast of Biloxi, to find both the east and westbound lanes collapsed. Robertson said the hole is around 50 to 60 feet (15 to 18 meters) long and 20 to 30 feet (6 to 9 meters) deep.

The identities and conditions of the of those involved in the accident have not yet been released.

More than 8 inches (20 centimeters) of rain fell in the area during Ida, according to the National Weather Service.

Between 3,100 and 5,700 vehicles drive along the stretch of two-lane highway on an average day, according to Mississippi Department of Transportation data.

Hurricane Ida blasted ashore Sunday as a Category 4 storm, one of the most powerful ever to hit the U.S. mainland. It knocked out power to much of southeastern Louisiana and southern Mississippi, blowing roofs off buildings and reversing the flow of the Mississippi River.

 

[hanimmal]

 

[hanimmal]

https://apnews.com/article/technology-business-health-coronavirus-pandemic-d935b29f631f1ae36e964d23881f77bd

Ask for a roast beef sandwich at an Arby’s drive-thru east of Los Angeles and you may be talking to Tori — an artificially intelligent voice assistant that will take your order and send it to the line cooks.

“It doesn’t call sick,” says Amir Siddiqi, whose family installed the AI voice at its Arby’s franchise this year in Ontario, California. “It doesn’t get corona. And the reliability of it is great.”

The pandemic didn’t just threaten Americans’ health when it slammed the U.S. in 2020 -- it may also have posed a long-term threat to many of their jobs. Faced with worker shortages and higher labor costs, companies are starting to automate service sector jobs that economists once considered safe, assuming that machines couldn’t easily provide the human contact they believed customers would demand.

Past experience suggests that such automation waves eventually create more jobs than they destroy, but that they also disproportionately wipe out less skilled jobs that many low-income workers depend on. Resulting growing pains for the U.S. economy could be severe.

If not for the pandemic, Siddiqi probably wouldn’t have bothered investing in new technology that could alienate existing employees and some customers. But it’s gone smoothly, he says: “Basically, there’s less people needed but those folks are now working in the kitchen and other areas.”

Ideally, automation can redeploy workers into better and more interesting work, so long as they can get the appropriate technical training, says Johannes Moenius, an economist at the University of Redlands. But although that’s happening now, it’s not moving quickly enough, he says.

Worse, an entire class of service jobs created when manufacturing began to deploy more automation may now be at risk. “The robots escaped the manufacturing sector and went into the much larger service sector,” he says. “I regarded contact jobs as safe. I was completely taken by surprise.”

Improvements in robot technology allow machines to do many tasks that previously required people -- tossing pizza dough, transporting hospital linens, inspecting gauges, sorting goods. The pandemic accelerated their adoption. Robots, after all, can’t get sick or spread disease. Nor do they request time off to handle unexpected childcare emergencies.

Economists at the International Monetary Fund found that past pandemics had encouraged firms to invest in machines in ways that could boost productivity -- but also kill low-skill jobs. “Our results suggest that the concerns about the rise of the robots amid the COVID-19 pandemic seem justified,” they wrote in a January paper.

The consequences could fall most heavily on the less-educated women who disproportionately occupy the low- and mid-wage jobs most exposed to automation -- and to viral infections. Those jobs include salesclerks, administrative assistants, cashiers and aides in hospitals and those who take care of the sick and elderly.

Employers seem eager to bring on the machines. A survey last year by the nonprofit World Economic Forum found that 43% of companies planned to reduce their workforce as a result of new technology. Since the second quarter of 2020, business investment in equipment has grown 26%, more than twice as fast as the overall economy.

The fastest growth is expected in the roving machines that clean the floors of supermarkets, hospitals and warehouses, according to the International Federation of Robotics, a trade group. The same group also expects an uptick in sales of robots that provide shoppers with information or deliver room service orders in hotels.

Restaurants have been among the most visible robot adopters. In late August, for instance, the salad chain Sweetgreen announced it was buying kitchen robotics startup Spyce, which makes a machine that cooks up vegetables and grains and spouts them into bowls.

It’s not just robots, either -- software and AI-powered services are on the rise as well. Starbucks has been automating the behind-the-scenes work of keeping track of a store’s inventory. More stores have moved to self-checkout.

Scott Lawton, CEO of the Arlington, Virginia-based restaurant chain Bartaco, was having trouble last fall getting servers to return to his restaurants when they reopened during the pandemic.

So he decided to do without them. With the help of a software firm, his company developed an online ordering and payment system customers could use over their phones. Diners now simply scan a barcode at the center of each table to access a menu and order their food without waiting for a server. Workers bring food and drinks to their tables. And when they’re done eating, customers pay over their phones and leave.

The innovation has shaved the number of staff, but workers aren’t necessarily worse off. Each Bartaco location — there are 21 — now has up to eight assistant managers, roughly double the pre-pandemic total. Many are former servers, and they roam among the tables to make sure everyone has what they need. They are paid annual salaries starting at $55,000 rather than hourly wages.

Tips are now shared among all the other employees, including dishwashers, who now typically earn $20 an hour or more, far higher than their pre-pandemic pay. “We don’t have the labor shortages that you’re reading about on the news,” Lawton says.

The uptick in automation has not stalled a stunning rebound in the U.S. jobs market -- at least so far.

The U.S. economy lost a staggering 22.4 million jobs in March and April 2020, when the pandemic gale hit the U.S. Hiring has since bounced back briskly: Employers have brought back 17 million jobs since April 2020. In June, they posted a record 10.1 million job openings and are complaining that they can’t find enough workers.

Behind the hiring boom is a surge in spending by consumers, many of whom got through the crisis in unexpectedly good shape financially -- thanks to both federal relief checks and, in many cases, savings accumulated by working from home and skipping the daily commute.

Mark Zandi, chief economist at Moody’s Analytics, expects employers are likely to be scrambling for workers for a long time.

For one thing, many Americans are taking their time returning to work -- some because they’re still worried about COVID-19 health risks and childcare problems, others because of generous federal unemployment benefits, set to expire nationwide Sept. 6.

In addition, large numbers of Baby Boom workers are retiring. “The labor market is going to be very, very tight for the foreseeable future,” Zandi says.

For now, the short-term benefits of the economic snapback are overwhelming any job losses from automation, whose effects tend to show up gradually over a period of years. That may not last. Last year, researchers at the University of Zurich and University of British Columbia found that the so-called jobless recoveries of the past 35 years, in which economic output rebounded from recessions faster than employment, could be explained by the loss of jobs vulnerable to automation.

Despite strong hiring since the middle of last year, the U.S. economy is still 5.3 million jobs short of what it had in February 2020. And Lydia Boussour, lead U.S. economist at Oxford Economics, calculated last month that 40% of the missing jobs are vulnerable to automation, especially those in food preparation, retail sales and manufacturing.

Some economists worry that automation pushes workers into lower-paid positions. Daron Acemoglu, an economist at the Massachusetts Institute of Technology, and Pascual Restrepo of Boston University estimated in June that up to 70% of the stagnation in U.S. wages between 1980 and 2016 could be explained by machines replacing humans doing routine tasks.

“Many of the jobs that get automated were at the middle of the skill distribution,” Acemoglu says. “They don’t exist anymore, and the workers that used to perform them are now doing lower-skill jobs.”

 

[hanimmal]

https://www.rawstory.com/joe-manchin-obstruction/

Appearing on MSNBC's "The Sunday Show" with host Jonathan Capehart, the co-chair of WV Can't Wait dropped the hammer on Sen. Joe Manchin (D-WV) for blocking a desperately needed stimulus bill that would provide welcome relief to his constituents.

With host Capehart quoting the senator from an op-ed in the Wall Street Journal where he wrote, "I have always said if I can't explain it, I can't vote for it and I can't explain why my Democratic colleagues are rushing to spend $3.5 trillion.," Stephen Smith opened fire on his senator.

"Look, here's the secret that every West Virginian knows: Joe Manchin, the rest our congressional delegation, they do not represent the working people of West Virginia," he accused. "They never have, they never will. That's because, up until now, you don't win high office in West Virginia because you serve the people; you win high office in West Virginia because you serve Exxon, because you serve out-of-state landowners, bankers and corporate lawyers."

"That's who he's checking in with," he continued. "The only language they understand is power, and so the only hope we have on the ground of persuading these establishment politicians is to threaten to replace them. And so that's what we're doing. The threat must be credible, permanent, fearless, and most important, homegrown."

 

[hanimmal]

https://apnews.com/article/joe-biden-business-bills-nancy-pelosi-joe-manchin-9f948c2604fbcf9af5f0be6868424ef6

WASHINGTON (AP) — House Democrats unveiled a sweeping proposal Monday for tax hikes on big corporations and the wealthy to fund President Joe Biden’s $3.5 trillion rebuilding plan, as Congress speeds ahead to shape the far-reaching package that touches almost all aspects of domestic life.

The proposed top tax rate would revert to 39.6% on couples earning more than $450,000, and there would be a 3% tax on wealthier Americans making beyond $5 million a year. For big businesses, the proposal would lift the 21% corporate tax rate to 26.5% on incomes beyond $5 million.

In all, the tax hikes are in line with Biden’s own proposals and would bring about the most substantive changes in the tax code since Republicans with then-President Donald Trump slashed taxes in 2017. Business and anti-tax groups are sure to object. But Democrats are pressing forward.

Rep. Richard Neal, D-Mass., the chairman of the tax-writing Ways & Means Committee, said taken together, the proposals would “expand opportunity for the American people and support our efforts to build a healthier, more prosperous future.”

It’s a daunting moment for Biden and his allies in Congress as they assemble the massive package that is destined to become one of the largest singles measures considered in some time, if ever. The president’s “build back” agenda includes spending on child care, health care, education and strategies to confront climate change. It is a sweeping undertaking, on part with the Great Society or New Deal.

One Democratic senator vital to the bill’s fate says the cost will need to be slashed to $1 trillion to $1.5 trillion to win his support.

Sen. Joe Manchin, D-W.Va., also cautioned there was “no way” Congress will meet the late September goal from House Speaker Nancy Pelosi, D-Calif., for passage given his current wide differences with liberal Democrats on how much to spend and how to pay for it.

“I cannot support $3.5 trillion,” Manchin said Sunday, citing in particular his opposition to a proposed increase in the corporate tax rate from 21% to 28% and vast new social spending. “We don’t have the need to rush into this.”

Democrats have no votes to spare if they want to enact Biden’s massive “Build Back Better” agenda, with the Senate split 50-50 and Vice President Kamala Harris the tiebreaker if there is no Republican support. Democratic congressional leaders have set a target of Wednesday for committees to have the bill drafted.

The White House welcomed the preliminary tax plan, which “makes significant progress towards ensuring our economy rewards work and not just wealth,” said deputy press secretary Andrew Bates.

“This meets two core goals the President laid out at the beginning of this process -- it does not raise taxes on Americans earning under $400,000 and it repeals the core elements of the Trump tax giveaways for the wealthy and corporations,” he said in a statement.

The proposal was pitched as potentially raising some $2.9 trillion — but that’s a preliminary estimate. That would go a long way toward paying for the $3.5 trillion legislation. The White House is counting on long-term economic growth to be sparked by the legislation to generate an additional $600 billion to make up the difference.

Much of the revenue raised would come from the higher taxes on corporations and the highest earners — more than $450,000 for married couples filing jointly, to 39.6% from the current 37%.

Pressed repeatedly about a price tag he could support, Manchin said, “It’s going to be $1, $1.5 (trillion).” He suggested the range was based on a modest rise in the corporate tax rate to 25%, a figure he believes will keep the U.S. globally competitive.

But Sen. Bernie Sanders, the Vermont independent who chairs the Senate Budget Committee and is helping craft the measure, noted that he and other members of the liberal flank in Congress had initially urged an even more robust package of $6 trillion.

“I don’t think it’s acceptable to the president, to the American people or to the overwhelming majority of the people in the Democratic caucus,” Sanders said. He added: “I believe we’re going to all sit down and work together and come up with a $3.5 trillion reconciliation bill which deals with the enormously unmet needs of working families.”

The current blueprint proposes billions for rebuilding infrastructure, tackling climate change and expanding or introducing a range of services, from free prekindergarten to dental, vision and hearing aid care for older people.

Manchin voted last month to approve a budget resolution that set the figure, though he and Sen. Kyrsten Sinema, D-Ariz., have expressed reservations about the topline amount. All of it would be paid for with taxes on corporations and the wealthy.

Congressional committees have been working hard this month on slices of the 10-year proposal in a bid to meet this week’s timeline from Pelosi and Senate Majority Leader Chuck Schumer, D-N.Y., to have the bill drafted. Pelosi is seeking a House vote by Oct. 1, near the Sept. 27 timeline for voting on a slimmer infrastructure plan favored by moderate lawmakers.

Manchin, who in an op-ed earlier this month urged a “strategic pause” on the legislation to reconsider the cost, described the timing as unrealistic. He has urged Congress to act first on the $1 trillion bipartisan infrastructure bill already passed by the Senate. But liberal Democrats have threatened to withhold their support until the $3.5 trillion spending bill is passed alongside it.

Manchin spoke on CNN’s “State of the Union,” NBC’s “Meet the Press” and ABC’s “This Week.” Sanders was on CNN and ABC.

 

[hanimmal]

https://apnews.com/article/business-prices-inflation-consumer-prices-2479b000e3cb1b2fbc73651dbf8c45fc

WASHINGTON (AP) — U.S. consumer prices rose a lower-than-expected 0.3% last month, the smallest increase in seven months and a hopeful sign that a recent jump in inflation may be cooling.

The August gain was weaker than the 0.5% increase in July and a 0.9% surge in June, the Labor Department reported Tuesday. It was the smallest increase since prices rose 0.3% in January.

While the upward march of prices appears to have eased last month, economists caution that the same underlying causes remain. Supply chains are still snarled especially for critical components like computer chips. Consumer demand is easily outpacing supply, which will push prices higher.

Over the past 12 months, prices are up 5.3%, down slightly from two consecutive months averaging 5.4%, the strongest 12-month price gains since 2008.

Core prices, which exclude volatile food and energy costs, rose a tiny 0.1% in August and are up 4% over the past year, an improvement from 12-month gains of 4.3% in July and 4.5% in June.

Republicans have attacked the Biden administration for this year’s surge in prices but administration officials have insisted that the price jump will be temporary and price gains will begin to return to more normal levels supply chains catch up to recovering economies.

For August, food prices rose 0.4%, a slight moderation after gains of 0.8% and 0.7% in the previous two months.

Energy prices rose 2% in August and are up 41.9% over the past year, a surge that has been driven by rising gasoline prices, which were up 2.8% in August and have jumped 42.7% over the past year as the availability of vaccines has allowed Americans to resume traveling.

There is some evidence in Tuesday’s report suggesting that the surge in COVID-19 cases caused by the delta variant may have contributed to slowing price gains, particularly in areas such as travel. Airline fares fell 9.1% in August while hotel room rates were down 2.9% and rental car prices dropped 8.5%.

Last week, the nation’s largest airlines warned that the spread of the delta variant would delay a return to normal operations. Air travel during the pandemic fell to levels not seen in the jet era.

Used car prices, which had been surging because of low supplies, fell 1.5% n August but new car prices increased 1.2%, reflecting the supply-chain problems still confronting automakers trying to get semiconductor deliveries.

The 0.3% overall increase was below the consensus view that prices would rise 0.4% in August. Analysts said the lower-than-expected reading should ensure that the Federal Reserve leaves its ultralow interest rate policies unchanged at next week’s meeting. But the analysts said the report doesn’t alter the view that the Fed will announce plans to trim its monthly bond purchases later this year, probably at the Fed’s November meeting.

“Inflation readings remain high enough for the Fed to move away from emergency support, perhaps later this year, even with some moderation in the recovery in the labor market,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.

 

[hanimmal]

https://apnews.com/article/business-mitch-mcconnell-janet-yellen-eb14f403fb747f6ec0e05ad4f382bc91

WASHINGTON (AP) — The Biden administration has been enlisting one emissary after another to convince Senate Republican leader Mitch McConnell to help raise the federal debt limit.

It’s not working.

Despite the high-level conversations, including a call from Treasury Secretary Janet Yellen, the GOP leader is digging in and playing political hardball. He’s telling all who will listen that it’s up to the Democrats, who have narrow control of Congress, to take the unpopular vote over federal borrowing on their own.

McConnell’s stance is deepening a political standoff and risking turbulence in the financial markets that could ripple into the broader economy. His refusal to rally Republican votes leaves Democrats with only tough choices as they rush to ensure the nation does not default on any of its accumulated debt, which now stands at $28.4 trillion.

President Joe Biden and the Democratic leaders, House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer, spoke late Thursday. The White House said after the call that keeping the government running and ensuring the full faith and credit of the United States are bipartisan responsibilities.

“Any suggestion by Republicans that they will shirk their responsibility is indefensible,” the White House said.

While there is little doubt the Democrats will be able to avert a crisis and vote to allow additional borrowing, the path ahead is uncertain and potentially treacherous.

“We are working, there are a number of different options,” Schumer told reporters earlier this week at the Capitol. “We will do it because its imperative to do it. And Leader McConnell, as I said, is playing dangerous political games by not stepping up to the plate.”

The showdown is sparking a fiscal battle that is reminiscent, but different, from those that have set Washington and Wall Street on edge at times over the past decade. Unlike the brinksmanship of past battles, this one is unique in that there is no deal to be brokered — McConnell simply will not participate.

Late Wednesday, McConnell warned Yellen he is not changing his mind. “The leader repeated to Secretary Yellen what he has said publicly since July,” said McConnell spokesman Doug Andres. “They will have to raise the debt ceiling on their own and they have the tools to do it.”

It was a similar situation Tuesday when Hank Paulson, who was Treasury secretary in the Bush administration, paid McConnell a visit at the Capitol.

Lawmakers appear to have only a few weeks to devise a plan for approving the federal government’s debt limit before the U.S. Treasury is forced to delay or miss payments.

Stocks and bonds have been relatively calm recently, indicating investors expect Washington will ultimately reach a deal on the debt ceiling. The S&P 500 remains within 2% of its record set two weeks ago, and prices in the bond market are moving more on reports about the economy and inflation. But the ride could get bumpier in coming weeks.

Because they’re seen as the world’s safest possible investments, U.S. Treasury bills and bonds form the bedrock for financial markets. So a default on the U.S. debt would quickly cascade through markets around the world.

Treasury spokeswoman Lily Adams said in statement Thursday, “Secretary Yellen will continue to talk to Republicans and Democrats about the critical need to swiftly address the debt ceiling in a bipartisan manner, to avoid the catastrophic economic consequences of default.”

The debt limit caps the amount of money Treasury can borrow to keep the government running and pay its debts.

Once a routine task in Congress that brought grumbling from lawmakers but not high-stakes opposition, votes to increase or suspend the debt ceiling are now often contentious.

The debt ceiling vote became a political weapon in 2011, wielded by a new class of tea party Republicans eager to confront the Obama administration as the debt load ballooned during the Great Recession. Prolonged and heated discussions during that crisis risked a federal default, a first in the modern era, but eventually a deal was brokered to begin to curtail spending levels.

Democrats note that on three occasions during President Donald Trump’s presidency, they worked with a Republican-controlled Senate and White House to suspend the borrowing limit. They are insisting that Republicans reciprocate and share in what can be a politically unpopular vote that allows the government to not only promptly pay its bills but also to take on more debt.

But in McConnell’s view, if Democrats are going to go it alone to push Biden’s $3.5 trillion budget plan through Congress, they can use their majority to shoulder the debt limit vote.

According to Andres, McConnell told Yellen, “This is a unified Democrat government, engaging in a partisan reckless tax and spending spree.”

An Associated Press analysis of data from the U.S. Treasury shows that nearly 98% of the nation’s $28.4 trillion debt predates Biden’s inauguration in January. That includes about $7.8 trillion heaped onto the pile during Trump’s four-year presidency.

One option would be for Democrats to force the issue by holding a debt ceiling vote either on its own as part of a must-pass bill to keep the government funded past Oct. 1 — and try to make McConnell and the Republicans blink.

It would take 60 votes in the evenly divided Senate, 50-50, to overcome a Republican filibuster, but it’s not at all clear McConnell or any other GOP senators would break ranks to join Democrats.

Sen. John Kennedy, R-La., predicted McConnell will hold firm. “I think he is like that Missouri mule that just sat down in the mud and is not going to budge.”

If Republicans refuse to help, Democrats may need to take the more cumbersome route of amending their $3.5 billion budget resolution to include the debt ceiling. That vote would need just 51 votes for approval, with Vice President Kamala Harris able to cast the tie-breaking vote.

Yellen has been using “extraordinary measures” to conserve cash. But once those measures and cash on hand are fully exhausted, the U.S. will have to rely on incoming receipts to pay its obligations, forcing the Treasury to delay or miss payments. Yellen has projected that moment will arrive sometime in October.

 

[hanimmal]

https://www.washingtonpost.com/opinions/2021/09/15/joe-manchin-dangerous-myth-government-benefits-work/

Sen. Joe Manchin III (D-W.Va.) keeps straining to find reasonable-sounding justifications for why he wants to cut back on the Democrats’ $3.5 trillion budget reconciliation bill. He has said it’s too large. He has said it could increase inflation. He has said fixing our nation’s broken-down physical infrastructure should take precedence.

But Manchin’s greatest howler came on Sunday, when Dana Bash of CNN specifically asked whether he supported making the expanded child tax credit permanent. “Let’s make sure,” he said, “we’re getting it to the right people. …

There’s no work requirements whatsoever. There’s no education requirements. … Don’t you think if we’re going to help the children, that the people should make some effort?”

It’s a dangerous myth, this idea that government help causes some people to just loaf off. It’s also untrue. Reminder: Before the pandemic, most working-age people receiving benefits like food stamps worked. They just didn’t earn enough money.

The belief that people receiving aid from the government do not — but should — work both plays to and encourages stereotypes that people living in poverty are lazy, irresponsible and looking to get something for nothing.

It serves to rationalize letting those in need go without, their economic failures viewed as a failure of morals.

Yet the temporary child tax credit signed into law this year by President Biden demonstrates the opposite. It is an extraordinary success. Almost 90 percent of families with children under age 18 are eligible to receive a monthly check from the federal government through the end of the year.
Census Bureau data reveals that within a month of the first checks going out in July, the number of families with children reporting they’d gone hungry within the past month fell significantly. Households also appeared to spend the extra money on things most of us would consider rather important, not to mention virtuous, like buying school supplies and paying down debt.

Nonetheless, there is forever a seductiveness — at least to Americans — to adopt Manchin’s way of thinking. It certainly sounds like common sense.
A majority of us want to believe anyone can get ahead in our society if they work hard enough. A poll conducted two decades ago found that a majority of Americans actually believed the phrase “God helps those who help themselves” was in the Bible. It’s not. It is, however, in Benjamin Franklin’s aphorism-heavy, "Poor Richard’s Almanac." Self-help, as I’ve been known to observe, is the American state religion.

We almost all worship at its altar, at least some of the time.

Republican pols love to promote the canard that government aid discourages paid employment. Former president Donald Trump — who, let’s remember, inherited his real estate fortune — was also a fan of work requirements. His administration attempted to impose them on non-elderly, non-disabled recipients of Medicaid. Seema Verma, who served as head of the Centers for Medicare and Medicaid Services in Trump’s administration, claimed the move would help the people set to lose benefits. Work requirements for non-disabled adults, she said, would improve self-esteem, well-being, health and self-sufficiency.

So it was no surprise that when Sens. Mike Lee (R-Utah) and Marco Rubio (R-Fla.) issued a joint statement in opposition to the initial Biden child tax credits, they also couched it as a way to help families. “This kind of universal basic income makes more Americans dependent on government and severs the vital elements — work, marriage, community, and beyond — required to raise healthy families.”

This kind of thinking is garbage in, garbage out.

Many other developed nations offer almost all residents a child allowance of some sort. And the evidence, here and abroad, shows that such an allowance can increase paid work by recipients. An expansion of the child allowance in Canada raised the employment rate of single mothers. An unpublished paper by the economist Wei Zheng, highlighted late last year by the Niskanen Center, found the same was true for the more limited earned income tax credit in the United States. In fact, most people receiving the current child tax credit are employed; the Treasury Department estimates that over 97 percent of recipients are working families.

If anything, an argument can be made that the children of the irresponsible deserve more support from us, not less. Children can’t push their parents to get with the work-and-education program. As a result, you’re not “helping” children if you insist on financially punishing their parents for not making an “effort.” You are, instead, punishing children for the sins of their caretakers.

Money makes a difference. Studies of the earned income tax credit reveal it results in improvements in infant health. Schoolwork and grades improve. Children in households receiving the benefit are more likely to attend college. All of this, in turn, helps make the United States a wealthier, more prosperous country.

The next time Manchin is tempted to repeat stale and discredited talking points, he might want to remember that human infrastructure matters too.

 

[hanimmal]

Republicans trying like hell to get the American economy to collapse under a Democratic presidency so that they can have a hope at keeping their political power by distracting from their allowing the economy to melt down under Republican rule.

https://www.washingtonpost.com/powerpost/mcconnell-debt-limit-default/2021/09/17/01fe4caa-1704-11ec-9589-31ac3173c2e5_story.html

Early last year, one of Senate Minority Leader Mitch McConnell’s longest rivals offered a lesson about why the Kentucky Republican is unfazed by his critics whenever he digs in on a political strategy.

“The people in Kentucky who know him understand that he can’t be shamed into changing,” Rep. John Yarmuth (D-Ky.), who has worked with and clashed with McConnell for more than 50 years, said in an interview.

That was January 2020, and the context focused on House Speaker Nancy Pelosi’s (D-Calif.) decision to hold articles of impeachment against President Donald Trump over his actions toward Ukraine to try to pressure McConnell into agreeing to hold an expansive Senate trial that would include witnesses.

Now, almost two years later, Democrats have set up a similar type of strategy that, if successful, will force Republicans to accept their fair share of the national debt that now tops $28 trillion. If this strategy fails, the federal government could run out of funding authority and enter another congressionally forced shutdown — the fourth in less than a decade — and create a debt crisis that could rattle global financial markets.



Why does the debt ceiling exist?

McConnell has declared that Senate Republicans will not vote to increase the Treasury’s authority to continue borrowing, which is the same as voting to allow a default. As he has done before, McConnell has essentially created a new rule out of whole cloth to justify his actions.

“Let me make it perfectly clear. The country must never default. The debt ceiling will need to be raised. But who does that depends on who the American people elect,” McConnell told Punchbowl News on Tuesday, acknowledging he will vote for a policy outcome he says he doesn’t want to occur.

Because Democrats control the White House and both branches of Congress, his argument goes, they alone are responsible for safeguarding the government’s creditworthiness and preventing a potential economic calamity.

No such rule exists, nor has it ever.

In fact, almost every time the debt ceiling has been lifted, it has been done in bipartisan fashion under the regular Senate order that requires at least 60 votes to end debate on the legislation.

In today’s 50-50 Senate, that means at least 10 Republicans have to join Democrats to approve a new debt limit or, as has been done in recent years, suspend that law for a few years.

Instead, McConnell says he is vehemently opposed to the more than $6 trillion proposed agenda President Biden has pushed on Capitol Hill and is now urging Democrats to use a parliamentary budget move to deal with the debt issue on their own.

The goal is purely political.

How Mitch McConnell and Senate Republicans learned to stop worrying about a Biden victory and love the infrastructure bill

McConnell says he doesn’t want to breach the debt limit. He just wants to keep GOP hands clean of all this new spending in advance of the 2022 midterm elections.

Senate Republicans are almost completely united behind McConnell, with 46 Republicans signing a letter saying they will oppose the Democratic plan to pass a new suspension of the debt limit tagged on to a bill to keep federal agencies functioning past the Sept. 30 deadline. Even the four Republicans who did not sign the letter have not indicated whether they will back the plan.

“The Democrats have added enormous amounts of debt, including the $1.9 trillion package, now $3.5 trillion on top of that, so they bear the responsibility for increasing the debt limit,” Sen. Susan Collins (R-Maine) told reporters this week.

Collins’s remark mischaracterizes the debt limit and ignores her own votes for policies that did or would increase the debt during both the Trump and Biden administrations. The debt limit only applies to paying for the expenses of policies already enacted, not to legislative proposals that have not been signed into law.

The last time the debt crisis hit such an impasse, in late July 2011, the financial markets went into a tailspin until a pair of seasoned Washington hands stepped in and negotiated a settlement: McConnell and then-Vice President Biden.

Before that date, the hypocrisy over the debt limit had been the purview of both parties. When Democrats were out of power, they would vote against raising the debt limit and blame the Republican president for not doing more to keep the debt in check. Republicans did the same when in a similar position.

But this political game became more dangerous with the rise of tea party movement early last decade because of the willingness of many House Republicans to actually force a default, not just play games with their votes.

Democrats are determined to break the Republican blockade by exposing how their threats could lead to both a government shutdown and a potential default.

“Nobody gets to hold the American economy hostage. Right now, we’re in the middle of it, Mitch McConnell trying to establish a double standard,” Sen. Ron Wyden (D-Ore.), chairman of the Senate Finance Committee, said in an interview Tuesday.

What’s up with Republicans’ brinkmanship on the debt ceiling?

White House officials noted that McConnell, as majority leader in 2019, shepherded a massive budget deal to the finish line that included a two-year suspension of the debt limit.

“If you look to just two years ago, he argued that the failing to vote to raise the debt limit would quote, be a disaster and, quote, put our full faith and credit at risk. We agree with that. And now he’s against a vote,” White House press secretary Jen Psaki said Thursday.

McConnell has done this before and withstood plenty of pressure from Democrats.

In 2019, as Yarmuth predicted, McConnell never gave in on demands for witnesses and quickly ushered Trump through to an acquittal in the impeachment trial.

In 2016, after Antonin Scalia died and left a Supreme Court vacancy, McConnell declared there was a tradition that in a presidential election year, no such vacancies should be filled, even though Barack Obama had another 10 months left in his presidency.

He briefly added a proviso that this custom would shift if the same party held the Senate and presidency — an assertion with no real foundation, but one he latched onto a year ago when Ruth Bader Ginsburg died and left vacant a Supreme Court seat. McConnell filled that seat, with Justice Amy Coney Barrett, just days ahead of the 2020 election.

These McConnell machinations drive Democrats crazy and often lead to weeks or months of battling over the hypocrisy in his decisions, but that’s an area where he is quite comfortable.

As they argue about Senate rules and procedure, McConnell happily points out other areas where Democrats have been hypocritical and the larger public tends to tune out the arcane parliamentary debate.

“I think it’s important, before everybody rushes off to this frenzy of congressional procedure, to understand what’s at stake,” Wyden said. “And what’s at stake is whether or not Mitch McConnell can impose a double standard: Take the economy hostage, and reverse something that just in the last few years the Congress had really said, ‘Look we are in it together.’ ”

At an economic inflection point, Biden leans into expansive, populist agenda

No one is certain of the exact timing of all this. The latest estimates, from Treasury Secretary Janet Yellen and private market analysts, suggested the government would run out of maneuvers to juggle the books by late October.

“We will pass a debt limit [increase]. We don’t know when,” Sen. Richard C. Shelby (R-Ala.) told reporters. “We don’t think that the Treasury is up against a wall yet.”

But the Democrats plan to attach the debt-ceiling issue to the legislation to keep the government funded, a deadline that hits Sept. 30. If Republicans block that measure, over the debt issue, the government would shut down the next day.

Shelby, the top Republican on the Senate Appropriations Committee, acknowledged that McConnell and Senate Majority Leader Charles E. Schumer (D-N.Y.) have had no real discussions and, given his committee, no direction about how to avoid a shutdown.

Democrats acknowledge, for now, that they have no real fallback plan if McConnell and Senate Republicans hold the line and drive the nation into a shutdown or a debt crisis — other than trying to shame McConnell into upholding his previous positions.

As Yarmuth noted in January 2020, that’s a very difficult hand to play regardless of the stakes.

“Mitch is just not going to be pressured,” he said then.

 

[smokinrav]

Ha, that's awesome. The "fucking sink hole" is the Glory Hole at Lake Berryessa.

We would go boating on Lake Berryessa every summer weekend during my childhood. Such fond memories...

 

[hanimmal]

https://www.marketwatch.com/story/dow-futures-drop-300-points-as-china-property-fears-grow-11632121264

Looks like the market is tanking today because of this:

https://apnews.com/article/business-china-beijing-financial-markets-9b77908b0333b601bffa016a6f7c2892

BEIJING (AP) — One of China’s biggest real estate developers is struggling to avoid defaulting on billions of dollars of debt, prompting concern about a broader economic fallout and protests by buyers of unfinished apartments.

Evergrande Group appears likely to be unable to repay all of the 572 billion yuan ($89 billion) it owes banks and other bondholders, financial rating agencies say. That might jolt financial markets, but analysts say Beijing is likely to step in to prevent wider damage if Evergrande can’t manage an orderly resolution of its debts.

“In the unlikely event that a default unsettles the broader property market, significantly disrupting sales and investment, this could have farther-reaching macroeconomic effects,” said Fitch Ratings analysts in a report Wednesday.

Evergrande ran into a cash crunch after its borrowing to build apartments, office towers and shopping malls collided with pressure from the ruling Communist Party to reduce corporate debt loads that are seen as a threat to the economy.

Beijing has made reducing financial risk a priority since 2018. In 2014, authorities allowed the first corporate bond default since the 1949 communist revolution. Defaults have gradually been allowed to increase in hopes of forcing borrowers and investors to be more disciplined.

Despite that, total corporate, government and household debt rose from the equivalent of 270% of annual economic output in 2018 to nearly 300% last year, unusually high for a middle-income country. Economists say a financial crisis is unlikely but debt could drag on economic growth by diverting money from consumption and investment.

Evergrande’s struggle has prompted warnings abroad that a broader financial squeeze on real estate — an industry that propelled China’s explosive 1998-2008 boom — could lead to trouble for banks and an abrupt and politically dangerous collapse in economic growth.

The government has yet to say what it might do about Evergrande, one of China’s biggest private sector conglomerates, but financial analysts say Beijing is likely to intervene, especially to protect households that bought unfinished apartments.

An outright default might dent consumer confidence if homebuyers suffer losses, “but we assume the government would act to protect households’ interests, making this outcome unlikely,” Fitch analysts said.

President Xi Jinping is promoting a “common prosperity” initiative to spread China’s wealth more broadly and narrow its politically volatile gap between a wealthy elite and the poor majority. So regulators may favor homebuyers at the expense of banks and other investors in Evergrande debt.

Headquartered in the southern city of Shenzhen, near Hong Kong, Evergrande has sold assets to pay down debt since regulators in August 2020 tightened controls on financing for China’s 12 biggest developers.

The companies were told to limit debt relative to “three red lines” — cash on hand, the value of their assets and equity in their businesses. Banks are required to limit real estate lending to 40% of their total under rules that took effect in January.

In addition to bondholders, the company owes 667 billion yuan ($103 billion) to construction companies and other business creditors.

Its share price in Hong Kong plunged 34% to an all-time low on Wednesday. It has fallen 50% over the past month.

Evergrande reported a $1.6 billion profit for the first half of 2021. In a statement Tuesday, it said it has hired outside experts in debt restructuring. On Monday, the company denied it would apply for a corporate restructuring under China’s bankruptcy law.

A financial information service, REDD, reported last week, citing unidentified sources, that Evergrande would suspend interest payments on loans to two banks. The company has yet to confirm that.

As of June 30, Evergrande had 240 billion yuan ($37.3 billion) of debt due within a year, down 28.5% from the end of 2020 but nearly triple its cash holdings of 86.8 billion yuan ($13.5 billion), according to a company financial report.

On Sunday, about 100 people who invested in Evergrande debt through “wealth management products” sold by banks crowded into its Shenzhen headquarters to demand repayment.

The company said those investors can choose to be repaid in property, cash in installments or a claim to payments on residential units, according to the business magazine Caixin.

“It is difficult for Evergrande to make 40 billion yuan ($6.2 billion) of repayments at once for the wealth management products,” the head of Evergrande’s wealth management unit, Du Liang, was quoted as saying.

On Friday, apartment buyers who complain Evergrande suspended construction protested at its headquarters, according to Hong Kong news reports. The company also faces lawsuits by construction contractors that say it has delayed paying them.

Evergrande also sank money into launching its own electric vehicle brand, a priority in the ruling party’s technology plans. It said this week it was making no progress in selling stakes to outside investors.

Other major Chinese developers do not appear to be facing the same cash crunch. But other companies are struggling with debt.

Huarong Asset Management Co., Ltd., the biggest of a group of state-owned companies created to help resolve bad loans held by state banks, reported in August that it lost 102.9 billion yuan ($15.9 billion) last year.

Huarong’s debts stood at $162.3 billion in mid-2020, according to financial information company Capital IQ. However, Huarong said it had no plans to restructure after receiving a capital injection in August from state-owned companies.

 

[hanimmal]

 

[mooray]

That's what I'm talkin about! Bring people up, don't bring the world around you down.

 

[Fogdog]

https://www.marketwatch.com/story/dow-futures-drop-300-points-as-china-property-fears-grow-11632121264View attachment 4991291

Looks like the market is tanking today because of this:

https://apnews.com/article/business-china-beijing-financial-markets-9b77908b0333b601bffa016a6f7c2892
View attachment 4991292

Chinese markets have an odor about them. This story is particularly revolting.

The company's business model relies on up front purchase of the property. It has 1.5 million buyers who have a down payment with them. Some have been waiting years. Due to nonpayment issues with their suppliers, in May, the company began suspending construction. Unsurprisingly, sales took a precipitous drop last month. Concurrent with that, the company this summer, demanded loans from its employees, threatening their yearly bonus if they did not make the loans. It would be difficult to say no to a boss if I needed the job. What a creepy situation.

Evergrande Gave Workers a Choice: Lend Us Cash or Lose Your Bonus (Published 2021)

The Chinese property giant owes $300 billion and is on the hook for as many as 1.6 million apartments. It may owe tens of thousands of its employees money, too.

www.nytimes.com

They have $300 B in debt. Probably just the first of many to go into some form of default due to debt triggered by recession or maybe triggering recession. Not sure which is first.

1.6% drop in S&P today. Maybe going to get worse, my guess is probably not. Chinese government will step in.

 

[hanimmal]

Chinese markets have an odor about them. This story is particularly revolting.

The company's business model relies on up front purchase of the property. It has 1.5 million buyers who have a down payment with them. Some have been waiting years. Due to nonpayment issues with their suppliers, in May, the company began suspending construction. Unsurprisingly, sales took a precipitous drop last month. Concurrent with that, the company this summer, demanded loans from its employees, threatening their yearly bonus if they did not make the loans. It would be difficult to say no to a boss if I needed the job. What a creepy situation.

Evergrande Gave Workers a Choice: Lend Us Cash or Lose Your Bonus (Published 2021)

The Chinese property giant owes $300 billion and is on the hook for as many as 1.6 million apartments. It may owe tens of thousands of its employees money, too.

www.nytimes.com

They have $300 B in debt. Probably just the first of many to go into some form of default due to debt triggered by recession or maybe triggering recession. Not sure which is first.

1.6% drop in S&P today. Maybe going to get worse, my guess is probably not. Chinese government will step in.

That has scam written all over it. You are right I don't see the Chinese government not stepping in to clean that mess up.

 

[hanimmal]

https://www.rawstory.com/marjorie-taylor-greene-budget/

Rep. Marjorie Taylor Greene (R-GA) claimed on Tuesday that President Joe Biden's proposed budget would make all Americans slaves to China.

During an appearance on Real America's Voice, Greene argued that the government should not be funded.

"Stopping them from continuing on with the massive debt that they're piling on you, the American taxpayer, is so critical," she told host Steve Bannon. "We have to stop the debt ceiling from being raised because Nancy Pelosi and [Chuck] Schumer, they want to continue it for another 15 months so they can ram through the infrastructure bill and the budget."

"In reality, they're setting up the passage for the Green New Deal, which is in raw form in the budget, the $3.5 trillion budget that is going to enslave all of you to China," she said.

Bannon noted that Democrats "need the deplorables' permission" to raise the debt ceiling and pass a budget.

"Yeah, but let's keep them shut down," Greene insisted. "Because what did they do to the American people? How many small businesses closed over Covid? Over 100,000."

Greene's remarks triggered a rant from Bannon about the danger of China enslaving Americans.

"You're not going to enslave our children!" Bannon shouted. "Right now, they're Russian serfs because of what you've done. Now they're going to be debt slaves! We're not going to do it. You're not going to be a debt slave. Your children are not going to be debt slaves. Your grandchildren are not going to be debt slaves because in September-October of 2021 we called their bluff!"

 

[hanimmal]

https://www.washingtonpost.com/outlook/debt-limit-ceiling-reconciliation-gop-biden/2021/09/24/e0dd1ce8-1c87-11ec-a99a-5fea2b2da34b_story.html

On the Senate floor Monday, Minority Leader Mitch McConnell (R-Ky.) proclaimed that if the Democratic majority decides, in his rendering, to “go it alone” on a suite of pending budgetary matters, “they will not get Senate Republicans’ help with raising the debt limit,” a ceiling that Treasury Secretary Janet Yellen has warned we’ll hit sometime in October. Since 19 Senate Republicans, including McConnell, already voted for a compromise version of President Biden’s infrastructure bill, and since debate on Biden’s larger budget package is an intramural negotiation among Democrats — with Republicans choosing to be on the sidelines by threatening a filibuster — McConnell is signaling that his caucus is content to kneecap a Democratic president with the threat of letting the United States default on its credit.

It’s a move from the same playbook McConnell used to try to hamstring President Barack Obama in budget talks.
But it’s a riskier one now, in the post-Trump era, when some congressional Republicans, with no serious agenda of their own and motivated by residual fake 2020 outrage, might be tempted to let a default happen for what they hope is a political win.

No matter how far they take their threat this time, McConnell and Republicans are counting on Americans not understanding what the debt ceiling is — that’s the only way this scam can work.

The debt limit is a legal formality. It isn’t an economic constraint on the federal government’s ability to borrow. A vote to raise it isn’t a vote for more debt; it’s a vote to fund the debts the government already owes. The debt limit exists because some policymakers would like to turn the public’s general opposition to debts and deficits into legislation that would reduce them or at least control their growth.

Indeed, Americans regularly express concern about the deficit, which is the annual increment to the debt. In practice, however, it has proved difficult to transform this concern into specific policy actions or even electoral consequences: The debt rises under both Republican and Democratic administrations. When Republicans hold the White House, some Democrats are less inclined to vote for a debt-limit increase. And as the Manhattan Institute’s Brian Riedl recently noted, Democrats could have taken care of the debt limit earlier this year.

But only one party brands its members as fiscal hawks. Republicans still try to claim that mantle, but they engage in orgies of tax-cutting (without corresponding “pay-fors”) whenever they get the opportunity. GOP notables such as former House speaker Paul Ryan, with his largely undeserved reputation as a green-eyeshade-wearing budget-cutter, have vanished from view. Despite professing outrage about deficits and debt, many tea partyers embraced Donald Trump, on whose watch the national debt rose by close to $8 trillion.

I helped create the GOP tax myth. Trump is wrong: Tax cuts don’t equal growth.

On either side of the aisle, legislators can reasonably debate what they consider the right amount of borrowing and spending, but they can’t reasonably argue that it’s anything other than derelict to play chicken with the nation’s creditworthiness.

The debt limit, which has existed since 1917, hasn’t been an effective brake on the growth of debt. It mainly allows members of Congress to pontificate on the evils of debt without requiring them to stand behind any politically painful act that would actually reduce it, such as raising taxes or cutting popular spending programs.

Nearly a half-century ago, policymakers genuinely concerned about deficits tried to create an improved budgetary system, culminating in the Budget Act of 1974. It requires Congress, at intervals, to set a limit on the federal debt. When the limit needs to be increased, specific congressional action is required — raising it can’t be just an automatic part of the appropriations process. The law created a mechanism called “reconciliation” that would facilitate deficit reduction by preventing a Senate filibuster for legislation that would affect the debt.

Unfortunately, in recent years, the budget process has become something of a joke insofar as deficit limitation is concerned: Congress simply ignores it except when it wants to use reconciliation to increase deficits with tax cuts or spending hikes.

This has left the debt limit as a merely theoretical restraint on the national debt’s climb. Everyone in Congress knows that it’s about as useful as a too-ambitious New Year’s resolution. But it still serves a demagogic purpose for the political party not in control of the White House. (Fewer Americans would blame their own member of Congress if the country defaulted on its obligations; most would blame the president.)

The right wants a hands-off approach to business. Until it hates the results.

As McConnell put it during the 2011 debt limit crisis: “It’s a hostage that’s worth ransoming. And it focuses the Congress on something that must be done.” This time around, McConnell hasn’t specified his ransom, but it will undoubtedly be something unpalatable to Democrats. Democrats are playing their own game of chicken, with moderates and progressives not trusting the other faction to provide enough votes for final passage of both Biden’s infrastructure legislation and his overall budget proposal.

The danger, as with Cold War “brinkmanship,” is that you never know if things will go too far and someone will decide to test the nuclear option. The equivalent result in today’s budget fight would be a default, with an ensuing meltdown in financial markets if U.S. government bonds become questionable assets. Markets have always believed that a default on the federal debt would never happen. Up to now, that thinking has been right — but there’s a first time for everything: On Jan. 5, few envisioned the Jan. 6 insurrection. These days, McConnell’s caginess is offset by a lot of Republican craziness.

Whether Republicans are still only bluffing, or if they’re really ready to gamble with America’s creditworthiness just to stick it to Biden, it would matter a whole lot less if they couldn’t rely on the public’s confusion about the debt limit. If raising it were properly understood for what it is — authorization for the country to pay what it owes — then it wouldn’t be a hostage worth taking. McConnell and Republicans would look like deadbeats.

But so long as Republicans can convince voters that a debt-limit raise is runaway spending, not responsible bill-paying, they’ll have a potent way to disrupt the budget process, divert Democrats from passing popular spending programs and mask their own lack of fiscal discipline.