Monday, May 30, 2011

Debt Ceiling Questions

I was unable to attend Congresswoman's Noem's Yankton appearance.  This David Bell post at the Frum Forum makes me wish I had been there.

According to the Yankton Press & Dakotan coverage, "Noem . . . fielded audience questions on a number of subjects."  One of her responses was described thusly.
An audience member asked how the federal government could hit its debt limit of $14 trillion yet continue operating until August. Noem explained that U.S. Treasury Secretary Timothy Geithner used what he termed “extraordinary measures” such as delaying payments to keep the federal government afloat.
The answer may be fine as far as it goes, but  Bell has a whole list of questions that he wants politicians to answer.
*ask the next Senator you see about the Credit Default Swap situation;

*ask the next Congressman you run across at a fund-raiser about the size of the global derivatives market;

*ask the next Washington, D.C. politician you meet how many swaps and derivatives contracts he or she has personally arranged.
I have to admit that I generally use "derivative" as an adjective meaning "lacking originality."  Were I to use the word in a sentence, I would say "Congresswoman Noem's statements were derivative of John Boehner's talking points."  I'm glad, therefore, that Bell concludes with this less technical question.
And, the coup de grace, just ask anyone if they think it is wise to test a theory about marketplace behavior when failure of that test could severely undermine the confidence of markets all over the world about the reliability and judgment of United States policymakers.
I would have loved to hear Noem's answer to that one.

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