Well, it happened again. the stock market was going up and then it went straight down as soon as there was some pessimism over the debt ceiling. So why is there so much pessimism over the debt ceiling? Well, one of the reasons is some say the stock market could tank as much as a 40 percent if we fail to lift the debt ceiling and actually pay Our obligation if we default. We could also potentially see according to Moody's the unemployment rate rise as high as 1.6 percent.

That is, we could lose around one and a half million jobs within the first week of a default. Within just two months of a default, we could end up losing four to six times that amount of jobs and see the unemployment rate Skyrocket from the current 3.4 percent to 7.8 percent now. Joe Biden did come back from his G7 meeting to meet with house Speaker Kevin McCarthy in an attempt to break the deadlock. However, and unfortunately we yet have no results and that's been pretty typical for Congress.

In fact, things always seem to run up so close to the deadline that as soon as we get close to the deadline, people start asking: is that really actually the deadline And that's in fact what started happening today today. Kevin McCarthy In a message to members of the House of Representatives says quote, we are nowhere near a deal, which is a problem because we are certainly near the deadline. The X date, which is when the treasury Department is expected to run out of cash is expected to be June 1st this is what the Treasury Department is telling us now. Goldman Sachs thinks that date could actually be more like this sixth to the eighth.

This has started to create some skepticism from Republicans and much like I just alluded to, anytime Congress seems to get close to a deadline, the first thing they do rather than get their job done is start question the deadline. And since this deadline is being sent by Janet Yellen who's the Secretary of the Treasury Department which is a leading role in the Biden Administration making Janet Yellen a part of the Biden Administration Republicans are now questioning really need to get this done by June 1st and that sort of dialogue is sending the stock market straight down. Now there is some argument to be made by at least some on Wall Street that perhaps we could actually get to June 15th. and if we make it to June 15th by figuring out how to pay our bills between June 1st and June 15th, then perhaps we'll get a new inflow of tax revenues so we'll get revenues coming in so we'll write that as tax ours.

and that could potentially help give us an extra 30 days in negotiations because we'll have an extra 30 days to be able to pay our bills. and so a lot of folks are hoping this deal obviously gets done by the first. There does seem to be some wiggle room on the date of the first, that is the exact X date. Unfortunately, the stock market is getting very nervous about that, even though the market has been doing very well.

It's recently getting quite nervous because we are knocking on the door of the first now, even though today at a time of this recording is actually only the 23rd. There are a lot of folks in Congress that say we actually need 10 days to be able to come to an agreement, write a bill, pass it, sign it, and enact it well. Unfortunately, if you had 10 days to this, even with the 31st considered, you're already past June 1st Now We've seen last minute deals get done all of the time and I imagine Janet Yellen has some flexibility built into her June 1st deadline. But and unfortunately, the Treasury Department has already issued a memo requesting United States departments to start well, counting their pennies and letting the treasury Department know if the Treasury could potentially delay sending payments to those agencies and that's sending more fears again for the stock market.

Doesn't help that about 50 Senators have so far accepted Sat phones as a sort of an anti-cyber attack measure in case there happen to ever be an issue. It just happens to be odd timing that just about a week and a half before a potential United States default we would see talk about 50 Senators receiving satellite phones so they can communicate with each other in the event that cell phone service is no longer available. Technically, the House of Representatives did pass a plan. Now those folks are not the ones getting satellite phones though.

and maybe that's routine for senators. Still a little weird. but anyway, under the McCarthy plan passed in the house, most are looking at the McCarthy plan as simply a well showpiece. So that way Republicans can go on mainstream media and argue.

hey, we already did our job. We already passed a debt ceiling increase. This is actually kind of exactly what the House of Representatives did when Democrats were in power under Nancy Pelosi During Covid remember the Heroes Act, we already passed another stimulus package. It's Mitch McConnell and Republicans holding it up.

It's the same thing in Reverse Now they all do We to each other. there's nothing unique here. it's just now Republicans Like Ted Cruz and other speakers are able to go on to Fox News or CNN and argue. We already passed a plan.

It's Democrats holding it up. It's Joe Biden holding it up. Is he even capable of making sure the debt ceiling can get past her or their woke 20 and 30 year old leftists running the White House who actually want to default because they don't understand how sacred the U.S dollar is? Who knows. But we do know that Moody's is estimating that a GDP would decline from 2.25 to about 1.6 percent in 2024 under the McCarthy plan.

and we could actually see job losses of around 780 000 job losses as a result of some of the cuts that would be instituted via the McCarthy plan. This is according to Moody's but then again, we expect this to be a showpiece. This is sort of the initial offer, right? It's like when you make an offer on an uncompetitive listing for Real Estate I'm going to start a little lower and it's on the the Democrats to counteroffer. And of course, Joe Biden has met with McConnell and McCarthy in person to work on these negotiations, but unfortunately, we just haven't been making much ground in those negotiations yet.

We'll talk about what that middle ground might look like, but it's worth noting that 55 percent of Republicans in America right now actually think America should just default let it happen. This is actually very similar to what I recall is the 2016 election where people sort of thought you know what I kind of want Donald Trump to get in there and throw the furniture around. Let's just see what happens. Maybe then we can finally get things organized and I think that's how a lot of Republicans feel now about the debt, that we're spending on an unsustainable path and that if we don't address the debt issues in our spending problem now, then when will we Now of course we can all share frustrations over why it is that we pass bills and then have to negotiate a debt limit increase afterwards when those bills authorize the spending.

It's kind of like voting for bills twice, but then again, this is how it's been for over a hundred years actually 106 years to be exact and we've extended the debt limit 78 times. We've never not extended the debt ceiling limit, so we'll probably extend it again. Now there is this idea of maybe using the discharge position, a petition which would and require five Republicans to hop on over and support of Democrats and shove something through the House of Representatives in well, opposition to Kevin McCarthy and most Republicans And then of course the Senate which is democratically controlled would pass it and Joe Biden would sign it. This is relatively unlikely, as you'd probably be looking at career suicide for these five Republicans.

However, maybe they'd be throwing themselves on the line to save America from default, but then again, that would upset a lot of Republicans who are like let's just evil. Like if if that's what it takes to actually get our act together on spending, then maybe that's what we need to do. A lot of folks talking about the 14th Amendment which is sort of this interesting constitutional back and forth where you've got Republicans saying we got the Second Amendment and then you've got Democrats saying? Well, we got the 14 18th which says we shall not default on our obligations Though this is going to be quite legally questionable and up for a lot of debate and probably the last thing we want to do is use the 14th and then have a Court rule it unconstitutional. The Supreme Court leans Republican and then we end up defaulting and now we're already in default mode.

Much like the Second Amendment gets caught up in court regularly about. Okay, well how far does the Second Amendment go? It's you know we are told the Second Amendment shall not be infringed, but then again, courts regularly declare that while we are allowed to have background checks or requirements or limitations, rather on the type of guns or ammunition that can be used or carried in various different states, that's really a topic for a different video. Then you've got this idea that the Federal Reserve will be able to break some kind of emergency glass window and Save Market I'm. sure the Federal Reserve will have some tools, but I wouldn't rely on the Federal Reserve.

The FED probably doesn't want to get to this level either. But you do have a lot of Republicans questioning hey, maybe uh, maybe the FED can do something and maybe this June 1 deadline isn't really a June 1 deadline. Democrats Of course, are looking for potentially raising revenues, which is just a fancy way of saying tax more which doesn't really. Right now leave the best taste in American lives and households, mostly because we're already dealing with economic challenges as well as this threat of 80 000 new IRS agents coming to audit you.

Uh, then of course we have this idea of spending more. which again frustrates many who are frustrated over this irresponsible spending of the government. especially after Covid. We know we overspent during Covid.

that led to the inflation we have. now. people were still dealing with the inflation, the high prices we have now, and they're frustrated. they don't want these high prices anymore.

Of course, Democrats widely argue. Well, now is not the time for cuts. Let's get through the economic catastrophe that we're in and when the economy is doing better, then we'll focus on paying down the debt. But then again, will we? The middle ground will probably be passing the debt ceiling here in some form of last minute negotiation along with some form of date manipulation by the treasury.

Department And who knows, maybe Parts in the TSA parks and TSA or congressmen and women won't get paid for a few days and their paychecks will get delayed. Ultimately, I Expect this to end up passing within the next two weeks. Some kind of Middle Ground will probably be actually raising the debt ceiling. won't be a clean bill like Democrats would want, which would mean no restrictions I Expect there would be some restrictions or new requirements like work requirements for certain entitlement programs, no military cuts, no social security or Medicare cuts, and of course some cuts, to discretionary spending.

Though a lot of Democrats get frustrated here because they say Hey you want us to secure the board or more but border funding is actually one of the discretionary fundings so there's always this constant back and forth with politics. Of course, a lot of commenters online will say things like hey, who cares if we default only people who would care were those or would be those receiving payments from entitlement programs and if you're not entitled then maybe you don't care Of course, the counter argument to that is hey, if you lost your job and you're on unemployment or you're down on your luck and you're on Medicaid why should you not get paid when you've been paying into these systems and all of a sudden the government failed to uphold their end of the bargain when they're supposed to provide a social safety net for you. Who knows, we'll see, but hopefully this gets passed soon. and I expect once this Catalyst of pain is removed from markets, markets will actually perform quite well.

So fingers crossed, the debt limit gets extended. If you want more updates, make sure to subscribe and stay tuned and we'll see in the next one. Goodbye.