Deep heat in Texas....and the White House!

The American Southwest remains plagued with drought and searing temps. "Pray for Rain' posters are seen in front yards and on pasture posts. In desperation, farmers and ranchers are hoping for a hurricane, or at least a strong tropical depression. There are none in sight and I check at least three times a day. My online weather map covers the entire North Atlantic from Africa to Mexico. Nothing.

Hotter still is political life in Washington. Democrats and Republicans are miles apart in negotiations for a compromise settlement for raising the national debt ceiling. Although done many times in the past, reputedly 17 times during the Reagan years, the Republicans in Congress are shouting a resolute no. Why, because they do not want to concede tax increases espoused by Obama to help finance recurrent obligations and spending. A deeper, and more sinister reason may well be that they want to embarrass O and thereby weaken his reelection chances.

And embarrass O they will if the deadline for national accounts payable of 2 August comes and goes without definitive fiscal action such as increasing our debt limit. Moodys is already reviewing the status of the dollar with a view toward reducing its triple A status should no solution be found before the deadline. It is likely that this is a maneuver to put pressure on Washington to come up with a solution PDQ.

People and pundits vary on the danger we are in. Some argue that we have enough national income, just over 200 billion a month, to finance our debt of just over 90 billion a month. Others say no, because other spending commitments will erode monies coming into the treasury and the government will indeed default on some debts. Others argue that debt is a moving target. Treasury bonds, for example, will come due in August, but most of them will be rolled over.

Reportedly, O walked, stormed or strode out of a negotiations meeting yesterday. As I said, the heat is on. We live in interesting times.