Our Salutary Debt-Ceiling Scare By CHARLES KRAUTHAMMER

As the sun rises in the east, the debt ceiling will be raised. Getting there, however, will be harrowing. Which is a good thing.

Treasury Secretary Tim Geithner warns that failure to raise the limit would be disastrous. In that he is correct. But he is disingenuous when he suggests that we must do so by Aug. 2 or the sky falls.

There is no drop-dead date. There is no overnight default. Debt service amounts to about 6% of the federal budget and only about 10% of federal revenues. This means that for every $1 of interest payments, there are roughly $9 of revenue the government spends elsewhere.

Move money around — and you’ve covered the debt service. Cover the debt service — and there is no default. What scares Geithner is not that we won’t be able to pay our creditors but that his Treasury won’t be able to continue spending the obscene amounts of money (about $120 billion a month) it doesn’t have and will (temporarily) be unable to borrow.

Good. The government will (temporarily) be forced to establish priorities. A salutary exercise.

Read more from IBD Editorials

Carter: Economic Stagnation Explained, at 30,000 Feet

The man in the aisle seat is trying to tell me why he refuses to hire anybody. His business is successful, he says, as the 737 cruises smoothly eastward. Demand for his product is up. But he still won’t hire.

“Why not?”

“Because I don’t know how much it will cost,” he explains. “How can I hire new workers today, when I don’t know how much they will cost me tomorrow?”

He’s referring not to wages, but to regulation: He has no way of telling what new rules will go into effect when. His business, although it covers several states, operates on low margins. He can’t afford to take the chance of losing what little profit there is to the next round of regulatory changes. And so he’s hiring nobody until he has some certainty about cost.

It’s a little odd to be having this conversation as the news media keep insisting that private employment is picking up. But as economists have pointed out to all who will listen, the only real change is that the rate of layoffs has slowed. Fewer than one of six small businesses added jobs last year, and not many more expect to do so this year. The private sector is creating no more new jobs than it was a year ago; the man in the aisle seat is trying to tell me why.

He is trim and white-haired and bursting with energy. He’s proud of the business he has built: not large by the way things are measured these days, but certainly successful. He shows me sales figures, award citations, stories from trade magazines. I congratulate him, then turn to the window and enjoy the view for a bit. We are flying over the Midwest, away from the setting sun and toward the darkness. America stretches beneath us in every direction, flat and broad and beautiful. My seat-mate has just discovered that I am a law professor: That is the reason for his discourse.

Read more from Bloomberg.com

SideBear: This article is worth a read because it gets to the nub of what’s wrong with the economy.

The Republican Who Can Win By DOROTHY RABINOWITZ

The candidate would know Americans are more worried about their jobs and their savings than abstractions like ‘big government.’ .

To win the presidency in 2012, the Republican candidate will require certain strengths. Among them, a credible passion for ideas other than cost-cutting and small government. He or she will have to speak in the voice of Americans who know in their bones the extraordinary character of their democracy, and that voice will have to ring out steadily. That Republican candidate will need, no less, the ability to talk about matters like Medicare and Social Security without terrorizing the electorate.

Americans already have plenty of cause for fear. They have on one side the Obama health-care plan now nearly universally acknowledged as a disaster. A plan that entails huge cuts in health care—$500 billion cut from Medicare—that will nevertheless cause no pain, according to its architects. As the polls on ObamaCare show, this grand scheme appears mostly to have alarmed Americans.

From the Republican side comes an incessant barrage of doomsday messages and proclamations that the nation is imperiled by the greatest crisis in a generation—not, as we might have supposed, by our ongoing, desperate unemployment levels, but by spending on social programs. No sane person will deny the necessity of finding ways to cut the costs of these programs. But it’s impossible not to hear in the clamor for boldness—for massive cuts in entitlements—a distinctly fevered tone, and one with an unmistakable ideological tinge. Not the sort of pragmatism that inspires voter confidence.

Thinking about all this, a physician friend recalls a lesson that experienced doctors learn: A patient comes in with symptoms—is it angina? Will it lead to a heart attack? Patients whose doctors show deliberation and care in the choice of their treatment, he observes, tend to have increased faith both in the treatment and the doctor. That is a point of some relevance to politicians.

Read more from Wall Street Journal

Can we say “UNEXPECTEDLY!” Bad Economic News

Calculated Risk (blog) – May Employment Report: 54,000 Jobs, 9.1% Unemployment Rate

Nonfarm payroll employment changed little (+54,000) in May, and the unemployment rate was essentially unchanged at 9.1 percent, the U.S. Bureau of Labor Statistics reported today. Job gains continued in professional and business services, health care, and mining. Employment levels in other major private-sector industries were little changed, and local government employment continued to decline. … The change in total nonfarm payroll employment for March was revised from +221,000 to +194,000, and the change for April was revised from +244,000 to +232,000.

Zero Hedge (blog) – Birth/Death Adjustment+ 206,000!

Take away the Birth/Death adjustment of 206,000 and the Real NFP is: -150,000. This is the biggest monthly B/D adjustment in over a year. And if as all the pundit claimed last month, demanding the McDonalds addition of 62,000 janitorial, part-time jobs be added to the May number, the economy really lost over 200,000 in May. Time to price in QE 666.

Only in America…