As of this writing, the president has pulled off a great political trick, with the help of some kamikaze Republicans. He has refused to offer a deficit-reduction plan, or submit a budget, or allow the Senate Democrats to do either"”and has the public persuaded that he is the man who is seeking a bipartisan solution to the deficit problem. He has also quite cunningly left the Republicans bargaining with themselves"”offering progressively greater compromises, but not with him, with their own last offer.
During the so-called negotiations"”can you hear the sound of one party negotiating?"”we have at least learned one thing: the battle of the deficit bulge in the government finances is both more and less scary than is commonly believed. Start with the less. The only significance of the August 2 date on which the president and Treasury Secretary Tim Geithner say America will be unable to pay its bills is that Congress would like to adjourn next week. The sky-is-falling date has now been pushed ahead by some ten days to two weeks. Even then, the government can manage the flow of payments so that default on the debt is postponed for a considerable time. Geithner will have over $170 billion in revenues in August from which to draw the $29 billion he needs by mid-month to meet the nation's debt interest obligations. America is not Greece: we can pay our bills, roll over IOUs within the debt ceiling, and send out plenty of checks.
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