David Fleer
Bristlecone Value Partners, LLC
12301 Wilshire Blvd., Suite 320
Los Angeles, CA 90025 USA
Work 1-877-806-4141

Brinksmanship Revisited

October 17th, 2013

Entering the fourth quarter of 2013, political gridlock once again took center stage.  The Republican majority in the House and the Democratic majority in the Senate failed to agree on a federal budget for the fiscal year beginning October 1st, resulting in the first government shutdown since 1995.  The dispute is a retread of past fiscal showdowns, which are rooted in sharp philosophical differences over the best way to reduce (or eliminate) the federal budget deficit.

Complicating matters this time, however, was the pending implementation of the Affordable Care Act (ACA, aka “Obamacare”), which added new urgency for certain Republicans committed to seeing that legislation overturned or, barring that, “de-funded.”  These politicians initially made amendment or postponement of ACA a precondition for passing a budget, which Senate Democrats and President Obama insisted was a non-starter.  Further compounding the impasse was that the U.S. Treasury was projected to hit the upper limit of its debt issuance authorization by October 17th.    In the end, Congress once again granted a reprieve to a crisis of its own making, passing legislation mere hours before the debt ceiling expiration that will fund the government through January 15th, and suspend the debt ceiling limit until February 7th. Read the rest of this entry »

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