This is Not an Abstraction

Posted by: Sommer Saadi on June 29, 2011

That would be the nation’s debt-ceiling debate. Truth be told, it isn’t a
debate because most of us have been trained to ignore all things debt ceiling.
July Memo: this time is different and to a person, the smart people I respect
make clear this debt-ceiling time is different. Chris Krueger of MFGlobal
suggests a “critical juncture.”

I would suggest a press-conferenced President Obama captured the right
political urgency (whatever your views) and advanced the discussion by saying a
discussion is needed…now. Now can mean different things in politics,
economics and fiscal finance. I would suggest that the immediate distinction is
your given time-line upset by exogenous shocks and realities.

The outside “shock” to watch is the glide path of unemployment to 8%. That
regression suggests an arrival of 12/31/12…. which is eight Tuesdays too late for
President Obama. This is not an abstraction. Discuss.