Debt Ceiling Limericks on the Radio

David Lefkovits, the creator of Dr. Goose, sat down with Tess Vigeland of public radio's Marketplace Money to swap limericks on the debt ceiling crisis, including those sent in by her listeners.

Here is the interview, courtesy of American Public Media:



You can read the full text on the Marketplace website; the listeners' limericks can be found here.

Plan Beta for Beijing?

To the US said China: "We trust you will
Pay your bills, as you've often discussed you will,
But on Treasury debt
We may lower our bet,
And diverge to the Dow Jones Industrial."

Economists such as Shanghai-based Andy Xie have suggested that, with the political cloud of uncertainty hanging over US Treasury bonds, China - the largest foreign holder of US sovereign debt - would do well to diversify into US stocks. In doing so, it would have the benefits of strong US corporate earnings backed by rising exports to emerging market countries such as itself; proof that what goes around, comes around.



Weekend Radio Recommendation

For financially sound information
Find your town's public radio station,
Where the Marketplace crew
And Dr. Goose, too,
Will firm your financial foundation.

Tune into public radio's Marketplace Money with Tess Vigeland this weekend, as she talks debt ceiling limericks with David Lefkovits, alter ego of Dr. Goose. Find your local station and time or subscribe to the podcast.

Capitol Thrill-Seeker

A fellow who loved a good thrill
Made a bet on the debt ceiling bill,
Going 7 to 3
On a "yes" from the G.-
O.P. Caucus on Capitol Hill.

As the debt ceiling crisis heads toward the Default Date of August 2 with no resolution in sight, many are aware that this impasse has been manufactured by the Republican House majority to force spending cuts on the President and Congressional Democrats.  However, some extreme GOP representatives appear to want to force concessions on their Speaker as well.  The Wall Street Journal reports that Senators Rand Paul (R-KY) and Jim DeMint (R-SC) wrote to House colleagues that Speaker John Boehner's plan to cut $1.2 trillion in expenses doesn't go far enough.  The GOP may yet vote "yea" on a budget compromise, but don't bet your life on it.

The Too-Quiet Markets

The US is counting the days away
From default, which we surely hope stays away,
But the markets' reaction
Shows great satisfaction
Catastrophe's still quite a ways away.

Confounding the expectations of financial journalists, the international financial markets remained calm with less than a week to go before August 2, understood by all as the date on which the US Treasury could no longer pay its bills without an increase in the federal debt ceiling. Like Sherlock Holmes investigating the case of the dog that didn't bark, the Wall Street Journal contacted fixed income portfolio managers to explain this odd silence. The general answer seems to be an expectation that the immediate problem of the debt ceiling can and will be solved quickly, even if the larger problem of deficits may be thornier.

* * *

Is there a limerick writer in you waiting to get out? Dr. Goose will appear on Marketplace Money with Tess Vigeland this weekend, and they would like your debt ceiling limericks to add to the fun! You can post them on the Marketplace Money Facebook page, or tweet them to @radiotess.

Whence Came the Deficit?

Uncle Sam, once quite in the black,
Financially fell off the track
Through tax cuts galore,
Recession, and war
In Afghanistan and in Iraq.

The New York Times editorial page gave a lesson in US federal deficit history over the weekend. Countering the notion put forth by Grover Norquist and his Republican pledgees in Congress that the deficit results from "runaway spending" under Obama, the Times demonstrated that a combination of military spending, as well as reduced revenues from lower tax rates and a weak economy, had squandered the surplus left behind by the Clinton administration. The stimulus measures implemented by Obama, though adding to the deficit in the short term, are only temporary.

More Dollars to Gold(en Arches)

Said McDonald's competitors recently:
"While the rest of us lag, they do decently;
We must capture, like they,
An original way
Of promoting the spread of obesity."

In times of dollar distress, investors take to gold. The same holds true for the golden arches of McDonald's (NYSE: MCD) which, practically alone in the fast food industry, continues to grow same-store sales at a healthy (if that's the word for it) pace. Perhaps, as Kelly Evans writes in the Wall Street Journal's Ahead of the Tape column, it's due to the traffic drawn to those fruity smoothies and sweet iced coffee drinks. Or maybe those golden fries really are a store of (caloric) value.

Greco-Franco-German Wrestling

EC President José Barroso
Says: "The scope of the Greek crisis grows so!
Will combined intervention
Of Germans and French in
This crisis suffice? I suppose so."

Like a pair of grappling Olympians, the leaders of Germany and France are trying to pin down the Greek credit crisis before it injures the Spaniards and Italians. Details of the new accord reached between German Chancellor Angela Merkel and French President Nicolas Sarkozy Wednesday night in Berlin have not yet been revealed, but are expected to include fresh emergency loans to Athens from euro zone governments and the IMF. European Commission president José Manuel Barroso warned all of his member states of the dire global economic consequences of failing to act decisively: "None of these Tea Party shenanigans," he admonished. #notreally

What Happens if We Default?

On a US default, we deduct,
If the GOP reps can obstruct,
Our economy's fatally,
Foolishly, finally,
Fittingly, fecklessly f***ed.

Simon Johnson writes in Project Syndicate that some Tea Party Republicans hope that a US default will radically reduce government's role in the economy,

But the consequences of any default would, ironically, actually increase the size of government relative to the US economy – the very outcome that Republican intransigents claim to be trying to avoid.
The reason is simple: a government default would destroy the credit system as we know it.

The entire dollar-based credit system is founded on the assumption that US government debt is riskless; the entire economy is founded on credit; without the one, the other will contract fitfully, fiscally and ferociously.

Hat tip to Tess Vigeland of Marketplace Money.

Borders Closing

The consensus in literate quarters
On the shuttered locations of Borders
Is now that the name
Of this publishing game
Is e-book and internet orders.

Only months after filing for bankruptcy, Borders book stores announced that they would close for good. Attempts to find a private equity savior proved unsuccessful, against a backdrop of a changing industry, increasing prevalence of e-readers such as the Kindle and Nook, and a fitful US economy. As a "bookseller selling just books," Borders has found it impossible to compete in this new era.