. . . all that sincere negotiating over lifting the debt ceiling . . .

[charles brough]

. . or is it? Or is it now a game of "chicken"? Each side holds back until we get closer to default hoping the other side will give in first in order to prevent default! The extremists, the Tea Party bunch are pressing to cut welfare expenses a few trillion dollars in order to avoid rising the debt ceiling at all.

They would rather have the insane, retarded, aged, homeless and unemployed wandering the streets without food or shelter in order to avoid paying the same taxes they paid during the Clinton Administration. They don't want to cut out the some 35 billion dollars in agricultural subsidies either, nor the tax breaks for the oil companies or close a mass of unneeded military bases in the US.

Perhaps I should stock up on gold and oil stocks!

 

[Baruch Menachem]

This whole game would have been impossible if folks had been more responsible.

It is not just the conservatives who are playing fowl here.

 

[Sheldon]

This whole game would have been impossible if folks had been more responsible.

It is not just the conservatives who are playing fowl here.

I think someone needs to wash that fowl mouth of yours out with some soap.

 

[william the wie]

Biden is just playing a role, there is no D negotiating.

 

[FiscalSanity]

Why does everyone buy into all the doom and gloom stories about grandma not getting her social security check? The federal government has a ton of things it can stop paying for a while without touching social security payments or servicing our debt. Little things like parks and recreation, UN dues, etc. If Grandma doesn't get her social security check it's because some politician deliberately include the social security fund in the cuts to score political points.

In the long run social security and medicare are going to have to be reformed or they will bankrupt the county, but screaming that they are going to have to stop paying them this year is just a way for the politicians to panic us into tolerating another spending increase on their part.

 

[waltky]

The debt ceiling fight is not the last chance to broker an agreement on debt reduction. At least it shouldn't be...

Debt ceiling: Just do it
Money June 27, 2011: Warnings from all three credit ratings agencies didn't do it. Seven weeks of talks among lawmakers didn't do it. Maybe President Obama's talks with Capitol Hill brass will do it.

But as of now, there's still no debt-reduction deal. And many lawmakers are still demanding one in exchange for their vote to increase the debt ceiling. Here's an idea: Even if they can't come up with a deal by Aug. 2, lawmakers should raise the debt ceiling anyway. Then they should make a pot of coffee and go back to hammering out a debt-reduction plan. Fiscal responsibility isn't a one-off proposition; it's an ongoing process. If Congress fails to raise the debt ceiling by Aug. 2 -- the day when the Treasury Department estimates it will no longer be able to pay all the country's bills -- any number of damaging and utterly preventable scenarios could occur.

Deadbeat nation: For starters, the United States would look ridiculous. The debt ceiling needs to be raised because of obligations that Congresses past and present chose to incur. Not raising the ceiling would signal to the world that Americans are willfully choosing not to pay their bills. The message won't be "We can't pay." It will be "We could pay, but we've decided not to. Sorry."

Market mayhem: To date, investors have been trading on the assumption -- the rock-solid belief, actually -- that there is just no way Congress would fail to raise the debt ceiling in time. If Congress dashes those expectations, no one can know exactly how the markets will react. But most think markets will react, and not well. Some bond experts expect that contrary to popular belief, Treasury rates won't rise but stocks may tank. In other words, there will be a move out of risk-based assets and a flight to safety in bonds. So interest rates may stay low, but Americans' investments get whacked. Or, Treasury yields could become volatile and start to climb as investors smell political instability in Washington. That would push the cost of U.S. debt higher.

Hopping mad republic:

 

[waltky]

Granny says the only thing dey defaultin' on is sendin' her dat 2nd stimulus check...

Default? Under Obama, Tax Revenues Have Exceeded Combined Costs of Interest, Entitlements and Federal Wages
Friday, July 08, 2011 - Federal tax revenues have exceeded federal interest payments on the national debt by more than 10-fold during the presidency of Barack Obama, according to the daily accounting statements published by the U.S. Treasury Department.

There is no way the U.S. government would need to default on its interest payments on the federal debt if the debt limit were not increased and the government allowed to borrow more money than it already has. Also, with the current revenue stream, the federal government can afford to pay entitlement and veterans benefits and wages and insurance payments for federal workers--without having to borrow new money. Specifically, during the Obama presidency, total interest on the federal debt has equaled $426.988 billion while total federal tax revenues have equaled $5.009005 trillion—or 10.8 times what was needed to simply pay the interest that the federal government owes on the money it has already borrowed.

Additionally, the $5.009005 trillion in tax revenue that the federal government has taken in since Obama was inaugurated on Jan. 20, 2009 has been more than ample to pay the combined $4.517179 trillion the federal government has spent on interest, plus Medicare, Medicaid, Social Security, Veterans Affairs, federal workers salaries and insurance payments for federal workers. In fact, since Obama has been president, after the government paid the interest on the debt, plus Medicare, Medicaid, Social Security, Veterans Affairs, and federal workers’ salaries and insurance, it still had $491.826 billion in tax revenue left to spend on discretionary items. In fact, the government has increased the total national debt by $3.716145 trillion since Obama has been president (from $10.626877 trillion on Jan. 20, 2009 to $14.343022 trillion on July 6, 2011) because all federal spending--above and beyond interest payments, entitlement payments and federal workers' wages--has outstripped federal revenue by that much while Obama has been president.

This pattern of federal tax revenues bringing in more than the federal government has to pay out for interest, plus Medicare, Medicaid, Social Security, Veterans Affairs, and federal workers’ salaries and insurance has persisted through the current fiscal year, which began on Oct. 1, 2010 and will end on Sept. 30, 2011. Thus far in fiscal 2011, according to the Daily Treasury Statement for July 6, federal tax revenues have been $1.622312 trillion while the combined expenditures for interest, plus Medicare, Medicaid, Social Security, Veterans Affairs and federal workers’ salaries and insurance have been 1.467127 trillion. That has left $155.185 billion in additional tax revenue to spend on other things.

Payments to defense vendors—as opposed to salaries for military personnel—are the single biggest non-entitlement expenditure on the Daily Treasury Statement. Thus far this fiscal year, these payments have equaled $298.221 billion. So, maintaining the current level of payments to defense venders on top of paying the interest on the debt and Medicare, Medicaid, Social Security, Veterans Affairs, and federal workers’ salaries and insurance, would in fact put the government in the red for the year—and force new borrowing. But it also a fact that the government could pay for the interest on the debt, plus Medicare, Medicaid, Social Security, Veterans Affairs and federal workers salaries and insurance out of the current level of federal tax revenues without having to borrow new money.

MORE

 

[Flopper]

. . or is it? Or is it now a game of "chicken"? Each side holds back until we get closer to default hoping the other side will give in first in order to prevent default! The extremists, the Tea Party bunch are pressing to cut welfare expenses a few trillion dollars in order to avoid rising the debt ceiling at all.

They would rather have the insane, retarded, aged, homeless and unemployed wandering the streets without food or shelter in order to avoid paying the same taxes they paid during the Clinton Administration. They don't want to cut out the some 35 billion dollars in agricultural subsidies either, nor the tax breaks for the oil companies or close a mass of unneeded military bases in the US.

Perhaps I should stock up on gold and oil stocks!

That's not a bad idea. I'm a Democrat and own some.

 

[waltky]

Granny says Obama needs to put a boot up Congress' butt an' tell `em to quit holdin' Social Security hostage for rich folks tax breaks an' pork barrel spending...

Obama: Social Security checks 'not guaranteed'
July 12, 2011: President Obama issued a broadside Tuesday in the debt ceiling debate, saying in a high-profile interview that he cannot ensure government benefits -- including Social Security -- will be paid if Congress fails to act.

"I cannot guarantee that those checks go out on August 3rd if we haven't resolved this issue. Because there may simply not be the money in the coffers to do it," Obama told CBS News. This is not the first time the administration has warned that Social Security benefits are on the line. But it is the first time Obama has addressed the issue so pointedly. Treasury Secretary Tim Geithner warned Congress as early as Jan. 6 that benefit checks might not be paid in full and on time.

In another letter in May, Geithner reiterated the point: "A broad range of government payments would have to be stopped, limited or delayed, including military salaries, Social Security and Medicare payments, interest on debt, unemployment benefits and tax refunds." Geithner has said that by Aug. 2 he will no longer have enough money on hand every day to pay all the government's bills. The government reached the legal borrowing limit on May 16 and has been taking "extraordinary measures" since to keep the country out of default.

On Aug. 3, the federal government will be forced to start prioritizing payments. And that just happens to be a day when a big set of Social Security checks are scheduled to be mailed out. Some 60 million Americans receive Social Security benefits each month. The Treasury also has to ensure it has enough cash on hand to make a $29 billion interest payment to investors on Aug. 15. Consequently, the government would have to defer 44% of federal spending, a significant portion of the 80 million payments it makes every month, according to a study conducted by the Bipartisan Policy Center, a think tank in Washington founded by four former Democratic and Republican Senate majority leaders.

Because the government will still receive some tax revenue, some bills can be paid. But not everything. And the longer Congress delays, the more Treasury will be stretched. "Handling all payments for important and popular programs (e.g., Social Security, Medicare, Medicaid, defense, active duty pay) will quickly become impossible," the report's authors noted. It's impossible to say just how the government would prioritize payments. It's fair to assume, however, that picking who gets paid and who gets put off will be a mess technically and socially because it's never been done before.

Source

See also:

GOP leader says give Obama new debt limit powers
WASHINGTON – With compromise talks at a vituperative standstill, Senate Republicans unexpectedly offered Tuesday to hand President Barack Obama new powers to avert a first-ever government default threatened for Aug. 2.

Under a proposal outlined by Sen. Mitch McConnell of Kentucky, Obama could request — and likely secure — increases of up to $2.5 trillion in the government's borrowing authority in three separate installments over the next year, as long as he simultaneously proposed spending cuts of greater size. The debt limit increases would take effect unless blocked by Congress under special rules that would require speedy action — and even then Obama could exercise his authority to veto such legislation. Significantly, the president's spending cuts would be debated under normal procedures, with no guarantee they ever come to a final vote.

McConnell made his proposal public a few hours before Obama presided over his third meeting in as many days with congressional leaders searching for a way to avoid a default and possible financial crisis. Democratic officials who participated in the session said Obama did not reject the Senate Republican leader's suggestion, but stressed it was not his preferred approach. A statement issued later in press secretary Jay Carney's name said the president "continues to believe that our focus must remain on seizing this unique opportunity to come to agreement on significant, balanced deficit reduction."

Other officials said participants at the meeting spent part of the time reviewing proposed spending cuts that were made by both sides during several weeks of negotiations led by Vice President Joe Biden, suggesting that negotiators had not given up on a deal to cut deficits. There was little or no dispute among senior officials about the importance of avoiding default.

MORE

 

[Quantum Windbag]

. . or is it? Or is it now a game of "chicken"? Each side holds back until we get closer to default hoping the other side will give in first in order to prevent default! The extremists, the Tea Party bunch are pressing to cut welfare expenses a few trillion dollars in order to avoid rising the debt ceiling at all.

They would rather have the insane, retarded, aged, homeless and unemployed wandering the streets without food or shelter in order to avoid paying the same taxes they paid during the Clinton Administration. They don't want to cut out the some 35 billion dollars in agricultural subsidies either, nor the tax breaks for the oil companies or close a mass of unneeded military bases in the US.

Perhaps I should stock up on gold and oil stocks!

Not raising the debt ceiling does not mean that the US will go into default on anything.