Debt Ceiling: Worst-Case Scenario

[Big Fitz]

Just on the news, Moody's has put the US triple A bond rating under review.

I'm sick of this argument that not raising the debt limit is doing something to threaten the country's credit rating.

Think about it: Greece's debt, spread evenly to ever family, would be a burden of $40,000. Here in America it would be $45,000, and the left and Obama want us to believe that not increasing that number to $50,000 would hurt the country's credit yeah right. 63% of Americans, over 50% on all polls, the plurality of America is against this president.

The country gets this mythical, magical money from T-bill holders and there aren't that many out there anymore.

The yield on the Greek 2 year bond is 31%.

and the hyper inflation is going at...?

If/when (and it's looking more like when) the US defaults on a loan, you can look to history to see what will happen in the space of 1 year:

Wiemar Republic.

In less than a year, the Mark went from 4 to 1 against the dollar to 1,000,000 to 1 against the dollar. The only solution they could find was to do a 'currency reset' by creating a NEW Mark that was valued by the time it went into use at a TRILLION to 1 versus the old Mark... which put it back to parity with the dollar to pre-default 4 to 1 value.

THIS is the worst case scenario. Are you ready to have a loaf of bread or can of soup cost a quarter million dollars???

Oh, and don't forget what that time of instability ushered in, in Germany? The nation united behind the National Socialist Worker's Party.

Yeah, not good.

 

[Google]

Just on the news, Moody's has put the US triple A bond rating under review.

I'm sick of this argument that not raising the debt limit is doing something to threaten the country's credit rating.

Think about it: Greece's debt, spread evenly to ever family, would be a burden of $40,000. Here in America it would be $45,000, and the left and Obama want us to believe that not increasing that number to $50,000 would hurt the country's credit yeah right. 63% of Americans, over 50% on all polls, the plurality of America is against this president.

The country gets this mythical, magical money from T-bill holders and there aren't that many out there anymore.

The yield on the Greek 2 year bond is 31%.

Are you really going to argue that America should pursue the fate of Greece?

 

[cutter]

First, your link isn't the link to the article you posted. That article in the link was to me by email. I know Malpass. He came to my office when he was at Bear.

The problem with that analysis is that it is based on forecasted growth of, if I recall correctly, 3.5%. Maybe that will happen, maybe it won't. That forecast expects a surge in economic growth. Are you expecting that? Fiscal year 2011 is expected to have revenues of approximately $2.2 trillion, so tax revenues are forecasted to grow 15%-20%. Really? You think so? Total spending this year is expected to be $3.8 trillion. The forecast is for it to drop. That may happen if we get strong economic growth. But what if we get 2.5%? I doubt tax revenues will grow that much. This fiscal year, we are expected to pay out approximately $800 billion each in defense, Medicare and Medicaid and SS. Interest costs are expected to be $200 billion. That's $2.6 trillion in spending right there. Assuming growth is low, we are going to have lop off $400 billion from one of those three from somewhere, assuming we pay all our interest payments.

But you didn't answer my question. I'm not talking annual numbers. I'm talking right here, right now. We have a $23 billion SS payment due on August 3. Total tax revenues on August 3 are expected to be $12 billion. Where will the money come from? Also, given that we expect $170 billion to come in during August and expect to spend $300 billion, we are going to be getting $80-$90 billion in tax revenues in the first half of the month. We know that on August 15, we have to pay $56 billion in interest and principle payments. We also have four Treasury refundings scheduled between Aug 3 and Aug 15. The last two fundings on August 11 were for $33 billion. What are the funding amounts for the four fundings, and what are our cash inflows for those dates?

See, I have no idea. If we have $56 billion due on August 15 and have to pay out $23 billion in SS on Aug 3, that's $79 billion. Our tax revenues may be $80 billion in total, that is assuming the economy doesn't fall off a cliff in the first half of Aug. How do you know that we won't default during that time? I don't know. A default is when you don't pay your interest payments on time. It could be that there is a mistiming of inflows and outflows which causes a default.

IOW how can you be so sure we won't default? Maybe we will be fine, I don't know. But the point is, I don't know. How do you know?

I met with a 20-year veteran Wall Street bond investor this morning. He told me that we won't default. He didn't tell me why, other than that the Treasury has ways of moving around money to meet payments. Maybe he's right. I hope so, because a default might be catastrophic. And no, that's not scare-mongering.

The Social Security Trust Fund has 2.4trillion in IOUs from the federal government that the gov. borrowed over the last 30 or so years when Social Security had a surplus. How about we just cash in those IOUs( they are in the form of treasury bonds I believe) and SS is fine. How long will 2.4trillion fund SS? A while I think.

And just where does the money to pay back those bonds come from? Guess?

Answer: The federal budget.

What Federal budget? The dems never got around to passing a Federal budget. I guess it's easier to just spend and then raise the debt limit when you run out of money.

 

[NYcarbineer]

I'm sick of this argument that not raising the debt limit is doing something to threaten the country's credit rating.

Think about it: Greece's debt, spread evenly to ever family, would be a burden of $40,000. Here in America it would be $45,000, and the left and Obama want us to believe that not increasing that number to $50,000 would hurt the country's credit yeah right. 63% of Americans, over 50% on all polls, the plurality of America is against this president.

The country gets this mythical, magical money from T-bill holders and there aren't that many out there anymore.

The yield on the Greek 2 year bond is 31%.

and the hyper inflation is going at...?

If/when (and it's looking more like when) the US defaults on a loan, you can look to history to see what will happen in the space of 1 year:

Wiemar Republic.

In less than a year, the Mark went from 4 to 1 against the dollar to 1,000,000 to 1 against the dollar. The only solution they could find was to do a 'currency reset' by creating a NEW Mark that was valued by the time it went into use at a TRILLION to 1 versus the old Mark... which put it back to parity with the dollar to pre-default 4 to 1 value.

THIS is the worst case scenario. Are you ready to have a loaf of bread or can of soup cost a quarter million dollars???

Oh, and don't forget what that time of instability ushered in, in Germany? The nation united behind the National Socialist Worker's Party.

Yeah, not good.

Going to default to try to get the US to get its fiscal situation in order is like inducing lung cancer in someone to get them to quit smoking.

 

[Big Fitz]

The yield on the Greek 2 year bond is 31%.

and the hyper inflation is going at...?

If/when (and it's looking more like when) the US defaults on a loan, you can look to history to see what will happen in the space of 1 year:

Wiemar Republic.

In less than a year, the Mark went from 4 to 1 against the dollar to 1,000,000 to 1 against the dollar. The only solution they could find was to do a 'currency reset' by creating a NEW Mark that was valued by the time it went into use at a TRILLION to 1 versus the old Mark... which put it back to parity with the dollar to pre-default 4 to 1 value.

THIS is the worst case scenario. Are you ready to have a loaf of bread or can of soup cost a quarter million dollars???

Oh, and don't forget what that time of instability ushered in, in Germany? The nation united behind the National Socialist Worker's Party.

Yeah, not good.

Going to default to try to get the US to get its fiscal situation in order is like inducing lung cancer in someone to get them to quit smoking.

Then I guess Obama better get the stick out of his ass and play ball instead of running away like he has been for a few weeks now.

Great leader my fat hairy ass.

 

[Mr.Nick]

Guess they don't really have a SS trust fund anymore according to Obama.

Do you folks pay attention at all to what your reading or writing:

"the investments held by the trust funds are backed by the full faith and credit of the U. S. Government."

Do you know what that statement means?

No?

If the debt ceiling is not raised, THE U.S. GOVERMENT HAS NO CREDIT.

Sooo...in accordance with that statement, the SS fund goes KAPUT!

Pay attention here. If the debt ceiling is not raised, THE U.S. GOVERNMENT HAS NO MORE CREDIT. Social Security and the debt can both be funded.

You haven't shown any evidence of your claim that a default would be unavoidable if the debt limit isn't increased. 15% of annual revenue, that is all to service the debt. $200 billion a month over budget, and you believe that $200 billion is all social security and such.

CUT IT OR SHUT IT!!!!! That is what 63% of Americans believe about the debt limit debate, you are in the 11% minority of die-hard patrician leftists who will die by what this administration tells them to think.

And a person 250k in debt making 60k a year can beg for more credit and they will have more money, given the extended limit... In the end they still wont be able to pay it back, when they die their kids will be stuck paying it back.

It seems leftists don't give a fuck who has to pay for their socialist services just as long as its not them...

Then they have the fucking audacity to call others "greedy" when they're the ones expecting everyone else to cover their ass.

 

[KissMy]

I hope they don't raise the debt limit.

Every time I see a lazy blood-sucking government employee lose their job it bring a little smile to my face.

Every time I see a lazy blood-sucking government employee lose their "Taxpayer Funded Defined Benefit Pension" I JUMP FOR JOY!!!!!!



It is about time these assholes get a taste of the unemployment & misery they have caused the private sector.

 

[cutter]

The only one who has the power to stop social security checks from going out is Obama. He can either send the old their checks or leave them hanging and give the money to finance the expanding federal bureaucracy.

President Obama said yesterday, "I cannot guarantee that [Social Security] checks go out on August 3rd, if we haven't resolved this [debt ceiling] issue. Because there may simply not be the money in the coffers to do it."

We've been told by Democrats and liberal economists that the Social Security Trust Fund exists.

The official Social Security Administration website claims, "By law, income to the trust funds must be invested, on a daily basis, in securities guaranteed as to both principal and interest by the Federal government," and, "Far from being 'worthless IOUs,' the investments held by the trust funds are backed by the full faith and credit of the U. S. Government."

Let's ignore, for the moment, the president's many options, such as cutting payments to his cronies and government bureaucrats. Instead of starving grandma, why doesn't President Obama just tap into the Social Security Trust Fund like he recently tapped into the oil reserves?

You mean to tell me, the Social Security Trust Fund doesn't really exist? I'm shocked!
Blog: Tap into the Social Security Trust Fund as if it were the federal oil reserve

Guess they don't really have a SS trust fund anymore according to Obama.

Do you folks pay attention at all to what your reading or writing:

"the investments held by the trust funds are backed by the full faith and credit of the U. S. Government."

Do you know what that statement means?

No?

If the debt ceiling is not raised, THE U.S. GOVERMENT HAS NO CREDIT.

Sooo...in accordance with that statement, the SS fund goes KAPUT!

The Federal gov has plenty of income coming in each month to pay not only SS but medicare and interest on the debt. What they need to do is get their act together and quit spending so much fu**ing money. We are not a nation that can afford to support the world any longer. We don't NEED half the departments our gov has now and all the politicians can think about is new programs. They are all a bunch of FU**ING IDIOTS( except Ron Paul).

 

[KissMy]

Guess they don't really have a SS trust fund anymore according to Obama.

Do you folks pay attention at all to what your reading or writing:

"the investments held by the trust funds are backed by the full faith and credit of the U. S. Government."

Do you know what that statement means?

No?

If the debt ceiling is not raised, THE U.S. GOVERMENT HAS NO CREDIT.

Sooo...in accordance with that statement, the SS fund goes KAPUT!

The Federal gov has plenty of income coming in each month to pay not only SS but medicare and interest on the debt. What they need to do is get their act together and quit spending so much fu**ing money. We are not a nation that can afford to support the world any longer. We don't NEED half the departments our gov has now and all the politicians can think about is new programs. They are all a bunch of FU**ING IDIOTS( except Ron Paul).

Thats right. The Social Security Trust Fund is one of the US Government Creditors. As long as the USG pays it's Creditors, the SS Trust Fund will be able to take those payments along with the SS payroll deductions to keep on making its Social Security payments to Seniors. This will not harm the USG Credit Rating.

 

[Mr.Nick]

Do you folks pay attention at all to what your reading or writing:

"the investments held by the trust funds are backed by the full faith and credit of the U. S. Government."

Do you know what that statement means?

No?

If the debt ceiling is not raised, THE U.S. GOVERMENT HAS NO CREDIT.

Sooo...in accordance with that statement, the SS fund goes KAPUT!

The Federal gov has plenty of income coming in each month to pay not only SS but medicare and interest on the debt. What they need to do is get their act together and quit spending so much fu**ing money. We are not a nation that can afford to support the world any longer. We don't NEED half the departments our gov has now and all the politicians can think about is new programs. They are all a bunch of FU**ING IDIOTS( except Ron Paul).

Thats right. The Social Security Trust Fund is one of the US Government Creditors. As long as the USG pays it's Creditors, the SS Trust Fund will be able to take those payments along with the SS payroll deductions to keep on making its Social Security payments to Seniors. This will not harm the USG Credit Rating.

In theory for now....It does noting for my kids who will have to fund a program in which 10% paid nothing into it but are receiving benefits, then you got fraud on top of that...

I don't want my kids paying into an insolvent program.

 

[martybegan]

The Social Security Trust Fund has 2.4trillion in IOUs from the federal government that the gov. borrowed over the last 30 or so years when Social Security had a surplus. How about we just cash in those IOUs( they are in the form of treasury bonds I believe) and SS is fine. How long will 2.4trillion fund SS? A while I think.

And just where does the money to pay back those bonds come from? Guess?

Answer: The federal budget.

What Federal budget? The dems never got around to passing a Federal budget. I guess it's easier to just spend and then raise the debt limit when you run out of money.

I explained this in another thread, but will go again.

SS works by paying out money from what it takes in, so your FICA goes to pay people getting SS. In the past it got more than it paid. This extra was then invested in treasuries. What this did is move the surplus from FICA into the overal federal budget.

Treasuries expire over time, and the principal is paid back. Lets use a value of 300 billion per year. Every year 300 billion of treasuires matures and the feds have to pay the investor. Only every year Social security just rebought another 300 billion in treasures, plus lets say 30 billion more using the surplus.

Now however, FICA taxes do not cover what SS pays out. Lets say its 30 billion in the hole. Now when those 300 billion in treasuries expire for the year, SS only can buy 270 billion back, it needs the extra 30 to pay for benefits.

Negative SS is a reality now. So each year it will be cashing in more and more maturing treasuries, using principal on the "trust fund" to pay for benefits.

Thus technically the federal budget has to make up that $30 billion dollar principal payback, either by other lending, or cutting.

 

[Toro]

Is that certain? On one hand you believe the deficit needs to get under control and on the other hand you believe we need to increase the deficit by another $2 trillion dollars on the promise that the government will address the problem.

Well you can't have it both ways. Which is more detrimental to the future of my child: the ruinous effects of inflation and public sector growth or not letting the government increase the debt to $16,000,000,000,000?

Oh, and you say that we won't default!! You are the first of the 'sky will fall' crowd to admit that the math proves the government won't default. So when Obama is saying this it is a lie.

And how about we just forget the "they" and "I" stuff and let our points stand for themselves.

If you eliminate the budget deficit immediately - which is what you are proposing - you will start contracting the economy at a rate of 7%-10% per year. That is a mathematical fact. It would be a greater contraction than the depth of the Financial Crisis. It would probably be more, given the multiplier affect. Do I think its a good idea to have massive contractionary policy in the midst of one of the worst economies in decades? Hell, no. Do you? Or have you thought this through?

As for the "they" and "I", who are you getting your information from? Fox News? Rush Limbaugh? What do you know to be so certain about what will happen in the future? Do you bring anything to the table? Answer me this; what is the affect on the money market funds if the Treasury can't roll over its debt? Why does that matter? See, those are the questions "they" can answer.

As I said, I don't think we are going to default. But the reason why is because the risks are potentially catastrophic. I think there is a pretty good chance that this is a nonevent, even if we drag it out over the deadline by a few weeks. But the risks are higher now than they have ever been.

News flash - we didn't make interest payments for two months in 1979. The world didn't end. But given the level of interconnectedness, and how much of debt is owned outside this country, nobody knows what will happen. Nobody had any idea what would happen when they let Lehman go bust, and it almost took everything down.

This week, we started talking about how to hedge our book in case there is a default, something we have never discussed before. Buy deep out of the money calls on yen? On Swiss francs? Buy Canadian bonds? Gold? Buy calls on interest rate volatility? These are things we began thinking about for the first time ever, because the bozos in DC can't get their shit together. I do NOT blame this all on the Republicans, but I see the Republicans - particularly the Tea Party folks - being the most intransigent, and the ones most willing to play with fire.

 

[hortysir]

Now however, FICA taxes do not cover what SS pays out. Lets say its 30 billion in the hole. Now when those 300 billion in treasuries expire for the year, SS only can buy 270 billion back, it needs the extra 30 to pay for benefits.

Negative SS is a reality now. So each year it will be cashing in more and more maturing treasuries, using principal on the "trust fund" to pay for benefits.

Thus technically the federal budget has to make up that $30 billion dollar principal payback, either by other lending, or cutting.

Anything to support this? I know the taxpayer/recipient ratio is getting worse, but this is the first I heard that SS is in the red

 

[martybegan]

Now however, FICA taxes do not cover what SS pays out. Lets say its 30 billion in the hole. Now when those 300 billion in treasuries expire for the year, SS only can buy 270 billion back, it needs the extra 30 to pay for benefits.

Negative SS is a reality now. So each year it will be cashing in more and more maturing treasuries, using principal on the "trust fund" to pay for benefits.

Thus technically the federal budget has to make up that $30 billion dollar principal payback, either by other lending, or cutting.

Anything to support this? I know the taxpayer/recipient ratio is getting worse, but this is the first I heard that SS is in the red

Social Security in the red this year - Washington Times

Article from May 2010.

Please note that I made the exact numbers up just as an example, they do not reflect either the current value of yearly matured treasuries, or the amount SS is in the red on a yearly basis.

 

[Big Fitz]

I hope they don't raise the debt limit.

Every time I see a lazy blood-sucking government employee lose their job it bring a little smile to my face.

Every time I see a lazy blood-sucking government employee lose their "Taxpayer Funded Defined Benefit Pension" I JUMP FOR JOY!!!!!!



It is about time these assholes get a taste of the unemployment & misery they have caused the private sector.

You do realize default will cause your avatar to become reality just like it did in the Wiemar Republic, right? Default is an incredibly bad thing. Hell, devaluing our bond rating to AA instead of it's normal AAA is going to be bad enough.

I don't want a default... but I don't want that debt ceiling raised without trillions of dollars in cuts made. We can save over a trillion by ending Obamacare. Let's start with the easy one right there. Then NCLB, Medicare Part D, the battle fronts in Libya, Syria, Afghanistan and Iraq and let them figure it out themselves, Foreign Military bases, Ag subsidies, NAFTA, CAFTA, Tax refunds greater than taxes paid in... Reinstitute Glass Stegal, gradual shutdown of Freddie and Fannie Mae... Yeah.

There are DOZENS of bid ticket items that we can't afford anymore that need to go. And then we start digging our hooks into the ponzi scheme of Social Security and the elimination of government paid healthcare, and get some real reform in there by relegating the government to oversight regulation of private industry only.

 

[hortysir]

Now however, FICA taxes do not cover what SS pays out. Lets say its 30 billion in the hole. Now when those 300 billion in treasuries expire for the year, SS only can buy 270 billion back, it needs the extra 30 to pay for benefits.

Negative SS is a reality now. So each year it will be cashing in more and more maturing treasuries, using principal on the "trust fund" to pay for benefits.

Thus technically the federal budget has to make up that $30 billion dollar principal payback, either by other lending, or cutting.

Anything to support this? I know the taxpayer/recipient ratio is getting worse, but this is the first I heard that SS is in the red

Social Security in the red this year - Washington Times

Article from May 2010.

Please note that I made the exact numbers up just as an example, they do not reflect either the current value of yearly matured treasuries, or the amount SS is in the red on a yearly basis.

So, since government is incapable of creating jobs, how about we make our a country into a favorable enviroment for job growth.
More jobs = more FICA payments

 

[Google]

Is that certain? On one hand you believe the deficit needs to get under control and on the other hand you believe we need to increase the deficit by another $2 trillion dollars on the promise that the government will address the problem.

Well you can't have it both ways. Which is more detrimental to the future of my child: the ruinous effects of inflation and public sector growth or not letting the government increase the debt to $16,000,000,000,000?

Oh, and you say that we won't default!! You are the first of the 'sky will fall' crowd to admit that the math proves the government won't default. So when Obama is saying this it is a lie.

And how about we just forget the "they" and "I" stuff and let our points stand for themselves.

If you eliminate the budget deficit immediately - which is what you are proposing - you will start contracting the economy at a rate of 7%-10% per year. That is a mathematical fact. It would be a greater contraction than the depth of the Financial Crisis. It would probably be more, given the multiplier affect. Do I think its a good idea to have massive contractionary policy in the midst of one of the worst economies in decades? Hell, no. Do you? Or have you thought this through?

As for the "they" and "I", who are you getting your information from? Fox News? Rush Limbaugh? What do you know to be so certain about what will happen in the future? Do you bring anything to the table? Answer me this; what is the affect on the money market funds if the Treasury can't roll over its debt? Why does that matter? See, those are the questions "they" can answer.

As I said, I don't think we are going to default. But the reason why is because the risks are potentially catastrophic. I think there is a pretty good chance that this is a nonevent, even if we drag it out over the deadline by a few weeks. But the risks are higher now than they have ever been.

News flash - we didn't make interest payments for two months in 1979. The world didn't end. But given the level of interconnectedness, and how much of debt is owned outside this country, nobody knows what will happen. Nobody had any idea what would happen when they let Lehman go bust, and it almost took everything down.

This week, we started talking about how to hedge our book in case there is a default, something we have never discussed before. Buy deep out of the money calls on yen? On Swiss francs? Buy Canadian bonds? Gold? Buy calls on interest rate volatility? These are things we began thinking about for the first time ever, because the bozos in DC can't get their shit together. I do NOT blame this all on the Republicans, but I see the Republicans - particularly the Tea Party folks - being the most intransigent, and the ones most willing to play with fire.

First, this idea that deficit spending fuels the economy is flawed and dangerous. Again, and I'm not trying to repeat things purposely, but on average the US federal government spends $200 billion a month over the budget.

What is it that is so vital that those deficit funds are being used?

Also if I need to back something up I'm saying, or you do not believe a fact or statistic I'll give you my source, otherwise what the hell does it matter? I could do what you do and say things like "I know people, powerful people that don't agree with you, so obviously I'm right" but it's childish. So is your statement about Fox News and such.

The price of gold is a clear indication as to the serious nature of the current economic state of America. Inflation is up, food prices have increased nearly 10% since 2008.

There is no winning with you, because you will agree and then disagree. You agree the deficit is serious and needs corrected, but your solution is more deficit spending. You believe that the economy would collapse if the government isn't given the unfettered ability to spend ludicrous amounts of money, but you admit that spending that amount is going to have horrendous economic consequences, the same that is occurring right now through out Europe.

Like I said before, you can't have it both ways.

 

[M.D. Rawlings]

Sure, we have enough cash to pay the interest as long as the cash coming in is enough to pay what we owe when it is due. THAT'S the issue. If we are to generate $2.6 trillion next fiscal year, we don't get $7.1 billion flowing into the Treasury smoothly each and every day. Some days we will get $20 billion and some days we will get $5 billion. On August 3, we will generate about half what we need to pay just SS alone, let alone everything else.

The other thing no one is talking about is what this will do to the economy. Every Macroeconomics 101 student has seen this equation.

GDP=C+I+G+NX.

G is government spending, and includes deficit spending. No more deficits means the government has to contract immediately. The deficit is about 10% of GDP. That means the economy will start contracting at about a 10% annualized rate. During the worst of the Financial Crisis, we contracted at a rate of 6.8%, at least over the quarter. That means we have to have somewhere else to pick up the slack? Consumption (C) is 70% of GDP, is it going to grow 10%? No. Is investment (I) - which is 15% of GDP - going to double next quarter to make up the difference? Of course not. Hey, maybe the dollar will absolutely collapse and we can quadruple our exports (NX)! We haven't had a 10% GDP growth since the 70s, and generally, the times when we have had double digit growth was bouncing hard after coming out of a deep recession. There isn't an economist on earth who thinks we can do that this year.

Yeah screw it you're right. Lets raise the debt limit and believe that the government will address the budget before we hit the debt ceiling once again. The public sector can not grow faster than the private sector, and hell you don't even have to take a macroeconomics to understand that.

You are demonstrating why the Republicans are, despite being rather mute, winning on this issue. Tell me if I am wrong in saying servicing the debt would take 15% of the government's revenue?

Default isn't the crisis, the coming crisis is what is going to happen very soon and will be hastened by raising the debt limit.

What happens when no one buys American Treasury bonds? When government growth outpaces economic growth, where it derives its revenues, it undermines the value of the currency and our T-bills. China has already dumped large amounts. The Federal Reserve is the only one talking about buying significant amounts. What happens when the government goes to auction those T-bills and they can't raise the revenue to account for the deficit spending passing the debt ceiling.

debt

–noun
1.
something that is owed or that one is bound to pay to or perform for another: a debt of $50.
2.
a liability or obligation to pay or render something: My debt to her for advice is not to be discharged easily.
3.
the condition of being under such an obligation: His gambling losses put him deeply in debt.

ceil·ing

–noun
1.
the overhead interior surface of a room.
2.
the top limit imposed by law on the amount of money that can be charged or spent or the quantity of goods that can be produced or sold.

Those two words aren't a bad thing. What's the point in having a debt ceiling if the government isn't going to stop or even attempt to stop before it hits it?

I agree that we have to do something about the budget deficit. Doing something about it in this way is absolutely fucking insane. Its like playing Russian Roulette with five loaded chambers.

We ran surpluses in the 90s and we didn't go through this bullshit. Nor were we living through the aftermath of two massive asset bubble collapses. To say this is the only way to deal with the deficit is utterly crazy. And the people whom I know who buy Treasury bonds in size - the guys who lend to the US government - think its crazy too. I've had Republicans in the investment business tell me that if the debt ceiling doesn't get done, they won't vote Republican again.

Well, such Republicans would be idiots, wouldn’t they?

Why is it on Republicans? Why should it be seen that way? It makes sense to raise taxes in the midst of a recession such as this, which is what Obama is demanding for a deal, especially given the "two massive asset bubble collapses" and the staggering increase in taxation slated to kick in in 2013 against small business as a result of Obamacare? And what of Obama's trillion-plus increase of the debt on so-called stimulus spending which those of us with an IQ above that of a gnat knew from the jump would be squandered for nothing? The Democrats have made it abundantly clear that they are not willing to meaningful cut or reform entitlements. And what is Obama's plan? Where is it? The only grown ups around are the Republicans.