James Hamilton quotes several economists (Republican and Democrat): Debt-ceiling economics and politics. Hamilton concludes:
The real purpose of the debt ceiling is political– it gives the minority party an opportunity to grandstand as if they’re somehow holding the line on the deficits that are the necessary mathematical result of previous spending and tax legislation. The political game is to force the majority party to push through the debt-ceiling increase and then try to embarrass them for their votes, relying on the stupidity of voters not to see the posturing for what it really is. But when different parties control the two houses of Congress, the only chumps in this game are the legislators who still try to play the same hand.
Thursday would be a good day to vote to pay the bills! Sooner is better than later …
Thursday economic releases:
• At 8:30 AM ET, the initial weekly unemployment claims report will be released. The consensus is for claims to decrease to 368 thousand from 371 thousand last week.
• Also at 8:30 AM, Housing Starts for December will be released. The consensus is for total housing starts to increase to 887 thousand (SAAR) in December, up from 861 thousand in November.
• At 10:00 AM, the Philly Fed Manufacturing Survey for January. The consensus is for a reading of 6.0, down from 8.1 last month (above zero indicates expansion).