Debt ceiling delay: GOP proposes three-month window

Speaker of the House John Boehner swears in members of the 113th U.S. House of Representatives during the opening session at the U.S. Capitol in Washington, D.C., on Jan. 3, 2013.

In a proposal floated today that comes from their weekend policy retreat in Virginia, Republicans in the U.S. House of Representatives proposed raising the debt ceiling for three months. In essence, 'kicking the can down the road' one more time.

"It's really important that one lesson of the past two years, not the last four, is that maybe we're not willing to pitch the government into crisis for no good reason,"  The Guardian's Heidi Moore says. "If we're at that point, then we can have some hope and change."

Investors seemed buoyed by the news and the Dow Jones Industrial Average closed at close to a five-year high. Even though it doesn't provide a long-term solution, many see it as a cause for optimism that we won't be facing another manufactured crisis on top of the the tough budget cuts Congress packaged into a delayed 'sequester' bill the last time we battled over the debt ceiling. 

"At least we didn't wait until the 11th hour to kick the can down the road for the next three months," says Chicago Tribune's business reporter Ameet Sachdev. "I think the House Republicans realize that they cannot do that -- what they did on New Year's Eve -- and risk the economy for the next six months."

For more analysis on the Federal Reserve and on whether one can still make it in this economy, listen to the audio above.

About the author

Kai Ryssdal is the host and senior editor of Marketplace, public radio’s program on business and the economy.
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"It's really important that one lesson of the past two years, not the last four, is that maybe we're not willing to pitch the government into crisis for no good reason," The Guardian's Heidi Moore says.

So apparently Heidi thinks that trying to stop the government from spending the country into oblivion isn't a good enough reason. Comeon guys, this stuff is serious, the danger isn't the inconvenience of the fight, its the overwelming debt iteslf.

Why is everybody so surprised that the Federal Reserve didn't see that we had a housing bubble? These economists come from the same school of thought that forecasted that the economy of the Soviet Union would eventually surpass the USA. They don't really understand economics, and they never will. There are economists that did foresee the events of the housing collapse, but it would mean admitting to major mistakes, and it doesn't serve the interests of our central planning authorities to listen to them.
Kai _almost_ spoke the correct words: "They torpedoed the economy the past 4 years". Perhaps a Freudian slip?
The problem is the false belief that those at the Federal Reserve are our best and brightest. They are not.

Why are Heidi and Ameet so seemingly clueless to think that the Fed was blindsided by the housing collapse? Think about it. The Fed is a corporation. Its owners are the member banks, which were making money hand over fist from mortgage derivatives. For them, the market was working great and if it failed Treasury would eat their losses. Heidi, Ammet and your story producer should have realized and articulated that the Fed would act in the interests of its owners first, their business partners second, equity holders third, pensioners and workers a distant fourth, and maybe taxpayers some time after that, if ever.

It's the financial pecking order, stupid. Why doesn't Marketplace ever tell us that? Maybe the producers believe it explains too much, and listeners just couldn't take the truth. If that's your motivation, please stop patronizing us.

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