Wednesday, July 13, 2011

Obama Walks, Moody's Warns

The debt crisis show continued today, President Obama walked out of debt talks. Politico reports:

President Barack Obama abruptly walked out of a stormy debt-limit meeting with congressional leaders Wednesday, a dramatic setback to the already shaky negotiations, according to GOP sources.

“He shoved back and said ‘I’ll see you tomorrow’ and walked out,” House Majority Leader Eric Cantor (R-Va.) told reporters in the Capitol after the meeting...

When Cantor said the two sides were too far apart to get a deal that could pass the House by the Treasury Department’s Aug. 2 deadline — and that he would consider moving a short-term debt-limit increase alongside smaller spending cuts — Obama began to lecture him.

“Eric, don’t call my bluff,” the president said, warning Cantor that he would take his case “to the American people.”...

“Cantor’s account of tonight’s meeting is completely overblown. For someone who knows how to walk out of a meeting, you’d think he’d know it when he saw it,” a Democratic aide said. “Cantor rudely interrupted the president three times to advocate for short-term debt ceiling increases while the president was wrapping the meeting. This is just more juvenile behavior from him and Boehner needs to rein him in, and let the grown-ups get to work. “
Meanwhile, Moody's put U.S. debt on under review for a credit rating downgrade.

What really needs to be put on downgrade is the U.S. dollar, since the debt ceiling will eventually be raised and the Federal Reserve will have to pump out dollars to absorb the huge amount of new Treasury debt that will hit the markets.

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