Friday, July 22, 2011

The Sound of Distant Thunder*

I was watching Gwen Ifill's excellent public TV public affairs show "Washington Week" tonight when the cable signal began breaking up, then dropped completely. Outside, thunder rumbled in the distance from yet another tempest, none of which has yet been able to break this execrable heat wave.

Ifill & Co. were discussing the hubristic failure of the Obama-Boehner talks on a grand deal to reduce the deficit towards coming up with an increase in the debt ceiling. They made a mistake going for too big a deal, one that necessarily had cuts in Medicare and Social Security as well as tax increases on the rich. All well and good, I say (the increase in eligibility age for Medicare and indexation formula for S.S. are coming, sooner or later, as are the tax increases), but Obama's party rebelled against one, and even more forcefully, Boehner's rebelled against the other, and Boehner had to pull out So to speak.

Our political leaders now basically have one weekend to get a deal together, the necessary characteristics of which I outlined recently. Monday, if there is no deal (or a fig-leaf kind of deal with no significant budget cuts agreed), Armageddon will be visited upon us in the form of a massive selloff of both stocks and bonds. If you can get some gold on the weekend, Sunday night would be a good time.

*with honor due to Ray Bradbury for the title

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