Shall I compare thee to a summer's DOOM?

The debt-ceiling bill passed the house, and is now on the way to the Senate, where it is expected to pass. We're trying to empty the ocean at thimble-full at a time, but I guess you have to start somewhere. Let's hope the cuts actually materialize, and that our good Solons on Capitol Hill stay true to their no-tax pledges.

The extended and bitter partisan wrangling over the bill has given Wall Street the fidgets; there are few things investors hate worse than uncertainty. The article posits a kind of karmic payback for Wall Street's excesses during the subprime meltdown of 2008, but to me, this is pretty much politics as usual. (As Insty often says, we have the worst governing class in a long, long time.)

The victory of the Hobbits has enraged Gollum. Gollum hates the Tea Party, My Precious, yes he does. He hates it forever! Savor the flavor, but stand back lest you be hit by flying spit:

These last few months, much of the country has watched in horror as the Tea Party Republicans have waged jihad on the American people. Their intransigent demands for deep spending cuts, coupled with their almost gleeful willingness to destroy one of America’s most invaluable assets, its full faith and credit, were incredibly irresponsible. But they didn’t care. Their goal, they believed, was worth blowing up the country for, if that’s what it took.

Yet another story about the imminent death of the Socialist Left. I'm skeptical because Socialists are like cockroaches -- stomp them out in one place and they just crop up in another. The weeds of envy, the will to power, and the urge to get something for nothing are evergreen in the human heart.

Central Falls, RI has declared bankruptcy and voided all contracts with the public-sector employee unions. This after the unions and retirees refused to accept cuts to their benefits to save the city money. One aspect of the debt-ceiling deal is that states and cities are going to be receiving substantially less money from the Feds, which in turn is going to put even more pressure on state and municipal budgets in the years to come. Expect a lot more stories like this.

Italy is now really feeling the sovereign-debt hurt that the rest of the PI(I)GS have been in for the past two years or so. Europe is careening from crisis to crisis while we've been focused on our debt-debate over here; we may be seeing the slow-motion collapse of the eurozone before our very eyes.

This Financial Times piece says something I've often said myself: By all rights, the Unites States does not deserve a triple-A bond rating. We ought to get a downgrade, and we would have long since if the ratings agencies were doing their jobs properly.

Over at Forbes, an interesting article on monetary reform. The market may force a move back to the Gold Standard (or some other commodity-backed standard). I personally consider it inevitable -- the era of sovereign fiat money is drawing to a close, and will be seen by historians as a colossal mistake that was partly responsible for the ocean of debt we have now, I think.

California's teacher's pension system, CalSTRS, is on a dangerous path to insolvency. As are most public-sector pension systems in that state.

Ninny Matt Yglesias finds the prospect of raising the Social Security retirement age "quite horrifying". Well, I have a feeling poor old Matt is going to find a lot of things horrifying as the welfare state runs out of money.

The value of public-sector job security.

Our baseline result was that job security for federal government employees was equivalent to a 1.5 percent to 3 percent increase in pay. (There is some recent academic work cited in our paper showing that this may be an underestimate—a German survey found that individuals stated they would accept a more than 10 percent pay cut to receive public sector levels of job security.) Importantly, though, our baseline result assumes that federal employees who lost their jobs would, after a period of job-searching, find new employment at similar pay. However, our working paper also showed that federal workers receive a significant salary and benefits premium over similar private sector employees. This is where job security becomes particularly valuable, because it protects not only against lost income during unemployment but also against being forced into a lower paying job afterward. When this factor is accounted for, the value of job security rises to around 17 percent of pay.

Slublog sends this piece: Consumer incomes up, spending down. This is called "deleveraging", and it's been going on for a long while now in fits and starts. (The income-increase is pretty tiny, and can probably be explained by more people working overtime hours or working other jobs.)

UPDATE 1: All together now! I wanna hear you in the cheap seats! Unexpectedly!

UPDATE 2: Pooty-poot thinks we're parasites. Maybe we can send Cankles McClusky back over there to give him a new Reset button. I don't think he's feeling the love any more.

posted by Monty at 09:09 AM

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