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It’s debt limit season again. Treasury will soon exhaust all the “extraordinary” (if familiar) measures it’s using to stay within the limit. By mid-October, Treasury will have just $50 billion on hand. Once that’s gone–maybe at Halloween, maybe a bit later–Uncle Sam won’t be able to pay all his bills or will be forced into doing something desperate like breaching the debt limit or minting platinum coins (kidding, mostly).

We seen this movie before. Sometimes it ends with major policy changes, such as the 2011 deal that spawned the sequester. Other times it leads to minor tweaks, such as the January 2013 deal that linked congressional pay to passing separate budgets through the House and Senate.

These showdowns feel like a modern phenomenon. But over at Tax Analysts, tax historian Joe Thorndike reminds us that a similar showdown happened in 1953 under President Eisenhower:

Soon after President Dwight Eisenhower took office, his administration began signaling the need for additional borrowing authority. But conservatives were not convinced. “For the Administration, this would be the easy way out of hard decisions,” warned the Wall Street Journal. “[T]o lift the debt ceiling for this ‘emergency’ need will make the whole idea of a debt ceiling meaningless. To impose a limit on the government’s debt and then to change it the moment it begins to squeeze makes of the whole thing a trick for fooling people.”

In fact, the Journal suggested that a debt ceiling crisis might be useful. “The government would not be able to carry out all of its spending plans,” the editors predicted. “Some things would have to be cut back a little further. Up against the hard ceiling, government officials would be compelled to make hard decisions, to choose between this dollar and that one.” Staying under the existing cap would be difficult, but that was the point. “Under such a compulsion,” the paper suggested, “many needed economies would be made that would otherwise be thought impossible.”

Eisenhower didn’t believe that spending cuts would be sufficient to keep federal debt under the cap. “Despite our joint vigorous efforts to reduce expenditures,” he told Congress, “it is inevitable that the public debt will undergo some further increase.” On July 30, Eisenhower asked Congress for an increase in the debt ceiling from $275 billion to $290 billion.

Treasury Secretary George M. Humphrey stressed the urgency of the situation. “We will just run out of money and we can’t pay our bills,” he told lawmakers. “It’s just that simple.” Failing to raise the borrowing limit, he warned ominously, might produce “a near panic.”

The House of Representatives swallowed hard and approved Eisenhower’s request. But the Senate had other ideas.

History, as they say, sometimes repeats. Swap the House and Senate and boost the dollar amounts and you’ve got rhetoric that could almost be plucked from today.

Read Joe’s piece to find out how it all turned out. One tidbit (which I don’t think we should repeat): Treasury was forced to sell gold bullion to cover $500 million in debt.

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Best Zombie Movie?

I haven’t had time for blogging lately, so here’s something different: “Cargo,” a short film from Australia’s Tropfest 2013.

Best zombie movie ever? You be the judge:

ht: Wonkbook

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My Urban Institute colleague Gene Steuerle says yes: politicians have gone too far trying to control future policies and spending.

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New York Times Profile

Annie Lowery penned a nice profile of the Tax Policy Center in today’s New York Times: here.

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Our buddy Merle Hazard — of  “Inflation or Deflation?” and “Bailout” fame — is back  with a new, animated version of his surf-music take on the Fiscal Cliff.

P.S. I should get back to real blogging soon.

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If you are a Godel, Escher, Bach kind of person, this short film is for you. Cristobal Vila presents Inspirations:

ht: Open Culture via @brainpicker

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Via Kottke, an especially fun video of starlings flocking:

More here.

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I am walking around my hometown of NYC today, so this video seems particularly apt.

ht: kottke

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The Centers for Disease Control offers emergency preparedness tips with a sense of humor:

So what do you need to do before zombies…or hurricanes or pandemics for example, actually happen? First of all, you should have an emergency kit in your house. This includes things like water, food, and other supplies to get you through the first couple of days before you can locate a zombie-free refugee camp (or in the event of a natural disaster, it will buy you some time until you are able to make your way to an evacuation shelter or utility lines are restored). Below are a few items you should include in your kit, for a full list visit the CDC Emergency page.

     

  • Water (1 gallon per person per day)
  • Food (stock up on non-perishable items that you eat regularly)
  • Medications (this includes prescription and non-prescription meds)
  • Tools and Supplies (utility knife, duct tape, battery powered radio, etc.)
  • Sanitation and Hygiene (household bleach, soap, towels, etc.)
  • Clothing and Bedding (a change of clothes for each family member and blankets)
  • Important documents (copies of your driver’s license, passport, and birth certificate to name a few)
  • First Aid supplies (although you’re a goner if a zombie bites you, you can use these supplies to treat basic cuts and lacerations that you might get during a tornado or hurricane)

Once you’ve made your emergency kit, you should sit down with your family and come up with an emergency plan. This includes where you would go and who you would call if zombies started appearing outside your door step. You can also implement this plan if there is a flood, earthquake, or other emergency.

ht: Alex Tabarrok

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On Friday I will be speaking at an event sponsored by Hamilton Place Strategies. It came together on short notice, so let me give it a plug:

Developing the Competitiveness Agenda

This week’s first meeting of the President’s Council on Jobs and Competitiveness kicked off a national debate on the economic policies encouraging greater job creation and economic growth in the United States. The Council’s mission is to focus on finding new ways to promote growth by investing in American business to encourage hiring, to educate and train our workers to compete globally, and to attract the best jobs and businesses to the United States.

To contribute to the ongoing debate, we are bringing together noted policy experts and economists to discuss the key policies that will be most effective in achieving America’s economic goals.

Featuring

Byron Auguste, Director, McKinsey & Company
Donald Marron, Director of the Urban-Brookings Tax Policy Center
Michael E. Porter, Professor, Harvard Business School

Moderated by Matt McDonald, Partner, Hamilton Place Strategies

WHEN: 10:00 am – 11:00 am, Friday, February 25th, 2011

WHERE:
The National Press Club: Holeman Lounge
529 14th Street, NW
Washington, DC 20045

RSVP here

My basic approach will be to emphasize the three key drivers of economic activity: a skilled workforce, capital, and ideas. I generally align myself with Paul Krugman on the idea of “competitiveness“, so if you hear me use the term, I probably mean it as shorthand for productivity. (Well, not shorthand exactly — “competitiveness” has more letters than “productivity” – but you know what I mean.)

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