6.3.13

NO BETTER WAY AVAILABLE.

A current CNN Money article suggests that the current sequester might become the current continuing resolution, for lack of a mutually beneficial compromise, at least until the current debt ceiling matters.
At that point, the fiscal year, which ends Sept. 30, will be almost over, and the overriding priority will be to avoid default.

So it may be that only political pressure would force a compromise on replacing the sequester, said budget expert Charles Konigsberg.

The public pitching a fit might work. So, too, might terrible economic numbers.
Meanwhile, the Washington Monument remains closed, Vice President Biden is back on the Acela Express, and Wall Street is bubbling up.  Today's CNN Money article doesn't suggest a connection between a temporary end to government expansion and animal spirits, relying on more conventional formulae.  The disciples of Leon Trotsky also rely on convention.
The latest surge in the stock market—which has soared almost without a hitch since the start of the year—is bound up with the fact that those in the know had been assured the White House and Congress would push through the sequester cuts. As a leading Bank of America executive told the New York Times this week, “The market wants more austerity.”

More broadly, since day one of the crisis the government has provided the banks with unlimited funds.
What happens if the private economy continues to recover, despite the slowed rate of increase in federal spending?

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