Another no vote on the debt ceiling

[NYcarbineer]

The Paul Ryan budget requires a raising of the debt ceiling.

 

[NYcarbineer]

So, then...
You agree that labelling the GOP congressional minority as "obstructionist" and "the party of no" was just a bunch of partisan hooey.
Right?

I said the obstructionists were Republicans and Democrats who act like Republicans.

Happy now?

So representing your constituents' interests is now considered "obstructionist"? Interesting.

If you have an obstructionist constituency, sure.

 

[The Rabbi]

I said the obstructionists were Republicans and Democrats who act like Republicans.

Happy now?

So representing your constituents' interests is now considered "obstructionist"? Interesting.

If you have an obstructionist constituency, sure.

So some Americans are more equal than other Americans, comrade?

 

[NYcarbineer]

So representing your constituents' interests is now considered "obstructionist"? Interesting.

If you have an obstructionist constituency, sure.

So some Americans are more equal than other Americans, comrade?

That makes no sense in the context of this conversation.

 

[editec]

So when they don't raise the debt limit do we bring the boys home from our wars of Empire? And the DEA won't be funded, either? Neither will the AFT, FBI, CIA and all those other armed FEDERAL police?

Given that possiblity, it might almost be worth watching this nation go bankrupt.

Let's see.. what else happens?

Well about half the people here, those getting social security or military retirement checks, won't get paid. I'm sure none of you guys will mind that, right?

TSA will probably stop molesting children getting on planes. (assuming the airports don't shut down, of course). Now there's a real plus.

Border guards will abandon their posts. Hell that's okay, they didn't so such a good job anyway, right?

There will probably be a run on banks as people seek to cover their bills.

Food will begin to disappear off the shelves, I expect, as people panic with the collapse in the USD.

Federal prisons will have to release their prisoners, VA hospitals will close.

Yeah, this government shutdown is gonna be a lot of fun.

We'll just have to look to the STATE governments will fill in the void, I guess.

Oh wait...they're ALSO depending on FED checks to keep going too, aren't they?

Wow! Some of you people are finally going to see your anti-government dreams realized.

You'll finally get to see how well libertarian anarchy works as a system of non governance on that perfect market you think exists.

This could be a very educational event.

If ut wasn't that I think that when Humpty Dumpty falls, it wouldn't be put back together again, I'd be right there with you libertarians pushing like hell.

 

[The Rabbi]

If you have an obstructionist constituency, sure.

So some Americans are more equal than other Americans, comrade?

That makes no sense in the context of this conversation.

That's because you're dense.
Reps get elected to represent their constituents. That often means opposition to others. You call it "obstructionism". But those people represented have every right to representation as anyone else.

 

[NYcarbineer]

So some Americans are more equal than other Americans, comrade?

That makes no sense in the context of this conversation.

That's because you're dense.
Reps get elected to represent their constituents. That often means opposition to others. You call it "obstructionism". But those people represented have every right to representation as anyone else.

I said absolutely nothing about their rights.

I call it 'obstructionism' because it fits the definition of 'obstructionism'. that's all.

 

[The Rabbi]

That makes no sense in the context of this conversation.

That's because you're dense.
Reps get elected to represent their constituents. That often means opposition to others. You call it "obstructionism". But those people represented have every right to representation as anyone else.

I said absolutely nothing about their rights.

I call it 'obstructionism' because it fits the definition of 'obstructionism'. that's all.

Now you're backtracking.
You obviously think that the GOP should have rolled over for Obama and the Democrats' agenda and just voted alongside with them. The fact that they didnt is what you label obstructionist.
But I point out that the GOP had good reasons for opposing the Dems' agenda. And now you want to pretend that your comment was innocent.

 

[Toro]

No it doesn't. It just means that, instead of borrowing money to pay for everything in sight, the government has to survive with the money it actually has on hand. Geithner has statuary authority to decide which bills to pay and which ones to defer. If it was going to happen the way you describe the deadline for raising the ceiling would be May 20, not the middle of June.

The US budget for 2011, approximate

Social security $800 billion.
Medicare and medicaid $800 billion
Defense $800 billion
Interest $200 billion
Everything else $1.2 trillion
Total spending $3.8 trillion

Total revenues $2.2 trillion

Deficit $1.6 trillion.

So, to not borrow money, either spending must be cut or taxes raised dramatically. If we aren't going to raise taxes, then we are going to have start cutting social security, medicare and defense because those three account for $2.4 trillion in spending and we only have $2.2 trillion in revenues. Assuming that we don't default on our debt - a tenuous assumption - revenues are $2 trillion. That means we have to cut at least $400 billion from those three, and that is assuming that we don't spend a dime on everything else. "Living within our means" means slashing these items, no way, no how.

The debt ceiling gets hit in the first week in May. Treasury has enough gimmicks to get us through to the beginning of July. And cash flows and expenditures for the government are seasonal, so the exact date when those big items are cut are variable. But they will be cut if the debt ceiling is not raised. It is not debatable.

 

[Toro]

But hopefully not before the GOP has wrung maximum concessions from Obama, like rolling back Obamacare. This has already started, with Obama actually signing legislation to revoke some parts of it.

Obamacare isn't going to get rolled back.

However, this isn't all on the Republicans. If raising the debt ceiling means the Democrats have to accept some cuts, they should accept. If the ceiling isn't raised, this is a failure of politics, not just one party.

 

[NYcarbineer]

That's because you're dense.
Reps get elected to represent their constituents. That often means opposition to others. You call it "obstructionism". But those people represented have every right to representation as anyone else.

I said absolutely nothing about their rights.

I call it 'obstructionism' because it fits the definition of 'obstructionism'. that's all.

Now you're backtracking.
You obviously think that the GOP should have rolled over for Obama and the Democrats' agenda and just voted alongside with them. The fact that they didnt is what you label obstructionist.
But I point out that the GOP had good reasons for opposing the Dems' agenda. And now you want to pretend that your comment was innocent.

I didn't say anything even remotely resembling that.

 

[Flopper]

The FLAW in your arguement is that you CITE GE...a private entity...that doesn't PAY taxes as of late...

But as to others or any household?

Imaging them running their budgets like gubmint?

Thing is? The Gubmint's bluff has been called. S&P called them...

Something HAS TO BE DONE...this has been going on too long. That can they kick down the road can't be kicked any longer.

The Debt ceiling should remain where it is. The world will NOT come to an end. it would signal the rest of the world that WE are serious of this debt.

Critics of the government contend it is inefficient, inept, and wasteful. Yet faced with a debt ceiling, those same people believe government could pull the rabbit out of the hat and not default on contracts, interest payments, and bond redemptions. Interest rates on treasury bills would easily double. There would be no savings and the government would be permanently saddled with high interest rates.

People are inherently wasteful as long as they are allowed to be. But when budget crunch reality sets in you would be amazed how much more efficient the whole thing can be.
You would also be amazed at the dexterity of Treasury. I recall the last shut down they managed a few tricks. This wont be any different. It certainly wont be the Armageddon the administraiton predicts.

The among the first to be effected by the failure to raise the debt ceiling would be money market funds which millions of individuals and corporations use as a checking account since they are widely regarded as cash. A stock market crash and a credit crisis would be inevitable.

If the government were running on a cash flow basis, who makes the decision as to which of over 3 million payments per day are to be made? Are troops in Afghanistan to be paid or interest payments on the national debt? Remember payments can only be made with cash on hand. Do you think the holders of 15 trillion dollars in US debt would sit on the sidelines hoping the government had enough cash on hand to meet interest payments and redemption? Of course not, they would drop US debt like a hot potatoes. The government would be flooded with redemptions and it would have to offer high interest rates to attract investors. If you think our inept, inefficient, wasteful government could manage this; you have a much higher option of them than I do.

At the end of day, how much money would really be saved after we paid hundred of billion in additional interest on the national debt, loss of tax revenues, cancellation fees and late fees on government contracts, and billions in law suits against the government?

 

[The Rabbi]

Critics of the government contend it is inefficient, inept, and wasteful. Yet faced with a debt ceiling, those same people believe government could pull the rabbit out of the hat and not default on contracts, interest payments, and bond redemptions. Interest rates on treasury bills would easily double. There would be no savings and the government would be permanently saddled with high interest rates.

People are inherently wasteful as long as they are allowed to be. But when budget crunch reality sets in you would be amazed how much more efficient the whole thing can be.
You would also be amazed at the dexterity of Treasury. I recall the last shut down they managed a few tricks. This wont be any different. It certainly wont be the Armageddon the administraiton predicts.

The among the first to be effected by the failure to raise the debt ceiling would be money market funds which millions of individuals and corporations use as a checking account since they are widely regarded as cash. A stock market crash and a credit crisis would be inevitable.

But money market funds are the assets of the wealthy, the very people we want to screw.
This could be the greatest redistribution of wealth in history. The US repudiates its debt and uses the savings to fund medicare, Social Security, etc etc.
Damn, I'll bet this is the Dem plan all along.

 

[Quantum Windbag]

No it doesn't. It just means that, instead of borrowing money to pay for everything in sight, the government has to survive with the money it actually has on hand. Geithner has statuary authority to decide which bills to pay and which ones to defer. If it was going to happen the way you describe the deadline for raising the ceiling would be May 20, not the middle of June.

The US budget for 2011, approximate

Social security $800 billion.
Medicare and medicaid $800 billion
Defense $800 billion
Interest $200 billion
Everything else $1.2 trillion
Total spending $3.8 trillion

Total revenues $2.2 trillion

Deficit $1.6 trillion.

So, to not borrow money, either spending must be cut or taxes raised dramatically. If we aren't going to raise taxes, then we are going to have start cutting social security, medicare and defense because those three account for $2.4 trillion in spending and we only have $2.2 trillion in revenues. Assuming that we don't default on our debt - a tenuous assumption - revenues are $2 trillion. That means we have to cut at least $400 billion from those three, and that is assuming that we don't spend a dime on everything else. "Living within our means" means slashing these items, no way, no how.

The debt ceiling gets hit in the first week in May. Treasury has enough gimmicks to get us through to the beginning of July. And cash flows and expenditures for the government are seasonal, so the exact date when those big items are cut are variable. But they will be cut if the debt ceiling is not raised. It is not debatable.

What do you think those numbers prove?

Social Security takes in money every year. Despite the fact that it will actually take in less than it pays out this year and the fact that we have used the SS trust fund to pay for everything else it is not part of the budget, which is why SS checks have never been affected by a government shut down, they won't be affected by not raising the debt ceiling.

Medicare is more problematic, but the government can order participating hospitals and doctors to take vouchers. Again, no disruption.

For the rest, Geithner can spend on the bills he decides are more important. In theory he is totally independent in this, but I doubt anyone really believes that. Forcing the US to operate on a cash basis just means that his job gets more interesting, it does not automatically necessitate a complete shutdown, or even default. That will only happen if he does it deliberately or is completely incompetent.

 

[Flopper]

No it doesn't. It just means that, instead of borrowing money to pay for everything in sight, the government has to survive with the money it actually has on hand. Geithner has statuary authority to decide which bills to pay and which ones to defer. If it was going to happen the way you describe the deadline for raising the ceiling would be May 20, not the middle of June.

The US budget for 2011, approximate

Social security $800 billion.
Medicare and medicaid $800 billion
Defense $800 billion
Interest $200 billion
Everything else $1.2 trillion
Total spending $3.8 trillion

Total revenues $2.2 trillion

Deficit $1.6 trillion.

So, to not borrow money, either spending must be cut or taxes raised dramatically. If we aren't going to raise taxes, then we are going to have start cutting social security, medicare and defense because those three account for $2.4 trillion in spending and we only have $2.2 trillion in revenues. Assuming that we don't default on our debt - a tenuous assumption - revenues are $2 trillion. That means we have to cut at least $400 billion from those three, and that is assuming that we don't spend a dime on everything else. "Living within our means" means slashing these items, no way, no how.

The debt ceiling gets hit in the first week in May. Treasury has enough gimmicks to get us through to the beginning of July. And cash flows and expenditures for the government are seasonal, so the exact date when those big items are cut are variable. But they will be cut if the debt ceiling is not raised. It is not debatable.

What do you think those numbers prove?

Social Security takes in money every year. Despite the fact that it will actually take in less than it pays out this year and the fact that we have used the SS trust fund to pay for everything else it is not part of the budget, which is why SS checks have never been affected by a government shut down, they won't be affected by not raising the debt ceiling.

Medicare is more problematic, but the government can order participating hospitals and doctors to take vouchers. Again, no disruption.

For the rest, Geithner can spend on the bills he decides are more important. In theory he is totally independent in this, but I doubt anyone really believes that. Forcing the US to operate on a cash basis just means that his job gets more interesting, it does not automatically necessitate a complete shutdown, or even default. That will only happen if he does it deliberately or is completely incompetent.

All Society Security payroll taxes are invested in treasury bonds when received, so to make benefit payments each month Society Security must redeem treasury bonds. To avoid default on bonds and contracts, the government could suspend payment of S.S. benefits and Medicaid funds. Clinton threatened to do this in the government shutdown in the 90’s. Medicaid is jointly funded by the states so it could continue functioning by suspending some services. Just as in a government shutdown, nonessential government employees could be furloughed. This should guarantee that all government debt and contractual obligations would be met. Pressure from the voters, would force Congress to resolve the issue in a matter of days. Once Congress raises the debt limit, all suspended payments and back salaries could be paid.

There are a number of things government could do to keep things going until the debt ceiling is lifted. I doubt very seriously that any scenario that government might chose would lead to cost savings but could lead to a lot of additional cost.

 

[Quantum Windbag]

The US budget for 2011, approximate

Social security $800 billion.
Medicare and medicaid $800 billion
Defense $800 billion
Interest $200 billion
Everything else $1.2 trillion
Total spending $3.8 trillion

Total revenues $2.2 trillion

Deficit $1.6 trillion.

So, to not borrow money, either spending must be cut or taxes raised dramatically. If we aren't going to raise taxes, then we are going to have start cutting social security, medicare and defense because those three account for $2.4 trillion in spending and we only have $2.2 trillion in revenues. Assuming that we don't default on our debt - a tenuous assumption - revenues are $2 trillion. That means we have to cut at least $400 billion from those three, and that is assuming that we don't spend a dime on everything else. "Living within our means" means slashing these items, no way, no how.

The debt ceiling gets hit in the first week in May. Treasury has enough gimmicks to get us through to the beginning of July. And cash flows and expenditures for the government are seasonal, so the exact date when those big items are cut are variable. But they will be cut if the debt ceiling is not raised. It is not debatable.

What do you think those numbers prove?

Social Security takes in money every year. Despite the fact that it will actually take in less than it pays out this year and the fact that we have used the SS trust fund to pay for everything else it is not part of the budget, which is why SS checks have never been affected by a government shut down, they won't be affected by not raising the debt ceiling.

Medicare is more problematic, but the government can order participating hospitals and doctors to take vouchers. Again, no disruption.

For the rest, Geithner can spend on the bills he decides are more important. In theory he is totally independent in this, but I doubt anyone really believes that. Forcing the US to operate on a cash basis just means that his job gets more interesting, it does not automatically necessitate a complete shutdown, or even default. That will only happen if he does it deliberately or is completely incompetent.

All Society Security payroll taxes are invested in treasury bonds when received, so to make benefit payments each month Society Security must redeem treasury bonds. To avoid default on bonds and contracts, the government could suspend payment of S.S. benefits and Medicaid funds. Clinton threatened to do this in the government shutdown in the 90’s. Medicaid is jointly funded by the states so it could continue functioning by suspending some services. Just as in a government shutdown, nonessential government employees could be furloughed. This should guarantee that all government debt and contractual obligations would be met. Pressure from the voters, would force Congress to resolve the issue in a matter of days. Once Congress raises the debt limit, all suspended payments and back salaries could be paid.

There are a number of things government could do to keep things going until the debt ceiling is lifted. I doubt very seriously that any scenario that government might chose would lead to cost savings but could lead to a lot of additional cost.

Or they could stop buying bonds.

If we don't raise the ceiling they will eventually have to cut spending.

 

[Big Fitz]

Damn those partisan Republicans that want to destroy the country.

Wait, isn't Pryor a Democrat?

Sen. Mark Pryor said Wednesday he won't vote to raise the federal government's borrowing limit unless there's a commitment to address the nation's debt by cutting spending and overhauling the tax code. The Democrat from Arkansas told members of the Political Animals Club that he was hopeful a bipartisan group of senators could come up with a plan within the next two weeks to reduce the debt based on recommendations issued by a presidential commission last year. The debt will hit its ceiling of $14.3 trillion by mid-May, and administration officials say the cap must be raised by no later than early July.

Democratic Senator warns he might vote NO to raising debt ceiling… « Gretawire

This just in. Blind Squirrel Finds a Nut!

 

[Toro]

I'm not sure if you understand what the numbers mean. SS cash flows are included in the consolidated budget of the US government. I can't remember exactly how much of the $2.2 trillion comes from payroll taxes - I will check later - but SS was in deficit within the last year or two. Let's be generous and assume that SS taxes are $900 billion, you still can't get over the math. If we assume that all SS checks will be sent out, the US budget now looks like this.

Medicare and Medicaid $800 billion
Defense $800 billion
Interest $200 billion
Everything else $1.2 trillion
Total spending ex-SS $3 trillion

Total revenues ex-SS taxes $1.4 trillion
Add back SS surplus $100 billion
Total revenues $1.5 trillion

Deficit ex-SS $1.5 trillion

However, since we aren't going to default, total revenues ex-interest payments are $1.3 trillion for remaining spending of $2.8 trillion.

It's doubtful that we can issue vouchers since vouchers are non-interest bearing liability instruments, ie debt. So that means we are going to slash defense and Medicare.

That's the math.

What do you think those numbers prove?

Social Security takes in money every year. Despite the fact that it will actually take in less than it pays out this year and the fact that we have used the SS trust fund to pay for everything else it is not part of the budget, which is why SS checks have never been affected by a government shut down, they won't be affected by not raising the debt ceiling.

Medicare is more problematic, but the government can order participating hospitals and doctors to take vouchers. Again, no disruption.

For the rest, Geithner can spend on the bills he decides are more important. In theory he is totally independent in this, but I doubt anyone really believes that. Forcing the US to operate on a cash basis just means that his job gets more interesting, it does not automatically necessitate a complete shutdown, or even default. That will only happen if he does it deliberately or is completely incompetent.

 

[Flopper]

What do you think those numbers prove?

Social Security takes in money every year. Despite the fact that it will actually take in less than it pays out this year and the fact that we have used the SS trust fund to pay for everything else it is not part of the budget, which is why SS checks have never been affected by a government shut down, they won't be affected by not raising the debt ceiling.

Medicare is more problematic, but the government can order participating hospitals and doctors to take vouchers. Again, no disruption.

For the rest, Geithner can spend on the bills he decides are more important. In theory he is totally independent in this, but I doubt anyone really believes that. Forcing the US to operate on a cash basis just means that his job gets more interesting, it does not automatically necessitate a complete shutdown, or even default. That will only happen if he does it deliberately or is completely incompetent.

All Society Security payroll taxes are invested in treasury bonds when received, so to make benefit payments each month Society Security must redeem treasury bonds. To avoid default on bonds and contracts, the government could suspend payment of S.S. benefits and Medicaid funds. Clinton threatened to do this in the government shutdown in the 90’s. Medicaid is jointly funded by the states so it could continue functioning by suspending some services. Just as in a government shutdown, nonessential government employees could be furloughed. This should guarantee that all government debt and contractual obligations would be met. Pressure from the voters, would force Congress to resolve the issue in a matter of days. Once Congress raises the debt limit, all suspended payments and back salaries could be paid.

There are a number of things government could do to keep things going until the debt ceiling is lifted. I doubt very seriously that any scenario that government might chose would lead to cost savings but could lead to a lot of additional cost.

Or they could stop buying bonds.

If we don't raise the ceiling they will eventually have to cut spending.

Well,yes and no.

The Fed is buying bonds with created money so it's not really effecting the cash held by treasury. However, the fed must have collateral for the money it creates, so it sells treasury bonds. This is all Fed smoke and mirror.

 

[Quantum Windbag]

I'm not sure if you understand what the numbers mean. SS cash flows are included in the consolidated budget of the US government. I can't remember exactly how much of the $2.2 trillion comes from payroll taxes - I will check later - but SS was in deficit within the last year or two. Let's be generous and assume that SS taxes are $900 billion, you still can't get over the math. If we assume that all SS checks will be sent out, the US budget now looks like this.

Medicare and Medicaid $800 billion
Defense $800 billion
Interest $200 billion
Everything else $1.2 trillion
Total spending ex-SS $3 trillion

Total revenues ex-SS taxes $1.4 trillion
Add back SS surplus $100 billion
Total revenues $1.5 trillion

Deficit ex-SS $1.5 trillion

However, since we aren't going to default, total revenues ex-interest payments are $1.3 trillion for remaining spending of $2.8 trillion.

It's doubtful that we can issue vouchers since vouchers are non-interest bearing liability instruments, ie debt. So that means we are going to slash defense and Medicare.

That's the math.

What do you think those numbers prove?

Social Security takes in money every year. Despite the fact that it will actually take in less than it pays out this year and the fact that we have used the SS trust fund to pay for everything else it is not part of the budget, which is why SS checks have never been affected by a government shut down, they won't be affected by not raising the debt ceiling.

Medicare is more problematic, but the government can order participating hospitals and doctors to take vouchers. Again, no disruption.

For the rest, Geithner can spend on the bills he decides are more important. In theory he is totally independent in this, but I doubt anyone really believes that. Forcing the US to operate on a cash basis just means that his job gets more interesting, it does not automatically necessitate a complete shutdown, or even default. That will only happen if he does it deliberately or is completely incompetent.

You are actually talking about 2 separate things. We tend to lump everything together when we are talking about them, but Social Security is not part of the budget. It is projected that it will pay out a bit more than it is projected to take in, but that does not even add to budget deficit this year because, on paper, Social Security has a surplus that will last for years.

The interesting thing to me is that you are still not addressing my point. Treasury has broad authority to restructure payments to meet obligations. The only way we will go into default is if they are totally incompetent, or they make a deliberate choice to drive us into it. Despite the doom saying from both sides of the aisle no one is worried about the government not paying its bills. We will actually run out of credit before the deadline Obama has laid down for raising the limit, and even he is not worried about that happening. Even the markets are not currently worried, and they would be if total collapse was in the near future.

If it takes going up to, and past, the arbitrary deadline Obama imposed to get real concessions then we need to do it. The deficit is not going away unless we make a commitment at some point, and all the government is interested in doing is kicking the can down the road. That needs to stop at some point. Better here and now than wait until the fix really hurts.