Actually, the United States Has Defaulted Before
Earlier, trading in Asia was muted, with markets in Tokyo and Hong Kong closed for holidays. At issue are two normally routine pieces of legislation that have become entangled in disputes over Obama’s health care overhaul and overall government spending. Congress’ failure to pass a bill temporarily funding the government led to the partial shutdown, the first in 17 years. And if Congress doesn’t approve a separate measure increasing the debt ceiling – the amount of money the government is allowed to borrow – the Obama administration says it will not be able to pay its bills, risking default. On Sunday, Democratic Majority Leader Harry Reid and Republican Minority Leader Mitch McConnell spoke by phone but failed to agree on a deal to raise the $16.7 trillion debt limit. They also could not agree on a plan to reopen a government that shut down on Oct. 1 after conservative Republicans aligned with the tea party movement demanded that Obama defund his 3-year-old health care overhaul law. Reid and McConnell – five-term senators hardened by several budget disputes and years of negotiations – remain at an impasse over yet another source of fiscal fighting: the automatic, across-the-board spending cuts known as sequestration that took effect earlier this year, as part of a previous high-stakes budget deal. Republicans want to keep spending at the reduced levels while Democrats are pressing for a higher amount. The shutdown has furloughed 350,000 federal workers, impeded various government services, put continued operations of the federal courts in doubt and stopped the federal tax agency from processing tax refunds. Several parks and monuments remain closed, drawing a protest at the National World War II Memorial on Sunday that included conservative tea party-backed lawmakers. “I’m optimistic about the prospects for a positive conclusion to the issues before this country today,” Reid said as the Senate wrapped up a rare Sunday session. McConnell insisted a solution was readily available as he embraced the proposal from a bipartisan group of 12 senators, led by Republican Sen. Susan Collins and Democratic Sen.
A simple way to see that is to look at daily changes in T-bill yields: T-bill rates spiked upwards four times in the months around the default. In November 1978, Henry Dr. Doom Kaufman predicted that interest rates would rise. They did. Turn-of-the-year cash management disrupted rates as 1978 became 1979. And rates spiked and fell in October 1979 when Paul Volcker announced that the Fed would target monetary aggregates rather than interest rates (the Saturday night special). The fourth big move was the day of the first default, when T-bill rates rose almost 0.6 percentage points (i.e., 60 basis points).Theres no indication this increase reversed in the days that followed (the vertical line on the chart is just a marker for the day of default). Indeed, using more sophisticated means, including comparing T-bill rates to interest on commercial paper, the authors conclude that default led to a persistent increase in T-bill rates and, therefore, higher borrowing costs for the federal government. The financial world has changed dramatically in the intervening decades. T-bill rates hover near zero compared to the 9-10 percent range of the late 1970s; that means a temporary delay in payments would be less costly for creditors. Treasurys IT systems are, one hopes, more reliable that 1970s vintage word processors. And one should take care not to make too much of a single data point.
The United States is still getting rid of its chemical weapons
Julio Dely Valdes’ charges trail fourth-place Mexico by three points, meaning they have to beat the USA and hope Mexico lose away to Costa Rica. That scenario appears unlikely, with Mexico still harbouring hopes of an automatic qualification berth from the CONCACAF section. But with the United States already confirming their place in Brazil next year, Panama will be confident of an upset against Jurgen Klinsmann’s outfit. If Panama are to secure an improbable intercontinental play-off with New Zealand they will have to arrest a run of four games without victory. That included a 1-0 defeat to the United States in the CONCACAF Gold Cup final in July, but they will be well backed by the Estadio Rommel Fernandez Gutierrez support. Panama’s hopes of a play-off spot were dealt a blow after they lost 2-1 to Mexico on Saturday. Luis Tejada had cancelled out Oribe Peralta’s opener, but with just five minutes remaining Raul Jimenez notched a crucial winner. The United States are already assured of their place as group winners, as they hold an unassailable lead over second-place Costa Rica. Klinsmann’s team have lost just twice in nine outings in the CONCACAF group, and their latest success came with a 2-0 home success over Jamaica on Friday. It took until the 77th minute to find the breakthrough as Graham Zusi netted before Jozy Altidore confirmed the win. Panama’s task is made even more daunting by the USA’s recent form. The United States have tasted defeat just once in 15 matches and head into the fixture in buoyant mood following Friday’s success.
Eventually, the United States signed the international chemical treaty in the 1990s and got serious about getting rid of the chemicals in a way that would not harm the environment or the people working at the plant or living in the area. While the process was slow and expensive, Trujillo said there was not a single casualty despite the volatility of some of the chemicals. “You know the whole task is nothing short of miraculous in my mind,” Trujillo said. “And I was part of it.” Today there are no weapons at the Tooele facility. The process of safely getting rid of these chemicals and munitions took 16 years, and was finally completed last year. Workers there will soon begin the process of dismantling the plants needed to do the job. Yet, there are still more than 3,000 tons of chemical weapons left in the United States, stored at two remaining facilities at Pueblo, Colorado, and Bluegrass, Kentucky. The majority is in Pueblo, where officials plan to start in 2015 destroying 2,600 tons of mustard blister chemicals stored in projectiles in liquid form. The process is expected to take four years. At the Bluegrass plant outside Lexington, Kentucky, there are 523 tons of mustard agent, VX and sarin nerve agents. Officials predict the job of destroying that arsenal, which is slated to start in 2020, will be completed in 2023. Where is Assad hiding chemical weapons? A convoy of inspectors from the Organisation for the Prohibition of Chemical Weapons prepares to cross into Syria at the Lebanese border crossing point of Masnaa on Tuesday, October 1. Inspectors from the Netherlands-based watchdog arrived in Syria to begin their complex mission of finding, dismantling and ultimately destroying Syria’s chemical weapons arsenal.