Today's Coming Crisis Movie

Friday, July 29, 2011

Now it's REALLY serious! No debt deal, economy takes another tumble... and even Christmas could be cancelled - 29th July 2011

The Tea Party is making its voice heard on the Republicans’ debt bill plans - and it’s not pretty.

House Speaker John Boehner’s plans to ensure the U.S. government avoids a first-ever debt default have been dealt a fresh blow after his budget deficit bill was blocked by the Tea Party last night.

It comes as the economy expanded at meagre annual rate of 1.3 per cent in the spring - with the combined growth for the first six months of the year being the weakest since the recession ended.

Fiscally-hardline supporters blocked Mr Boehner's plan as they do not think it goes far enough, days before next Tuesday’s deadline comes up to lift the government's $14.3trillion borrowing limit. Read More

SO WHAT HAPPENS NEXT?

  • A Downgrade of the U.S. credit rating is likely even if a deal is reached in time, unless a big dent is made in the deficit.
  • Once the house acts, action will move to the Democratic- Controlled Senate, where Mr Boehner's plan is Doomed anyway.
  • Democratic Leader Harry Reid is pushing his own deficit reduction plan as both parties seek to beat next week's Deadline.
  • If the Deadline is not met, U.S. servicemen Abroad and the 80 million people who get Social Security might not get any more Money.