Lower the Debt Ceiling

[Kevin_Kennedy]

Currently, the big show in Washington, DC, centers around raising the debt ceiling. Congress began setting this ceiling in 1917 so that the Treasury could independently issue debt. The debt ceiling is like the limit on your credit card, except the federal government sets the limit on itself. When President Nixon took us off the gold standard in 1971, the national debt was $400 billion. The increase in the national debt last year alone was four times the entire debt in 1971.

Both Democrats and Republicans tell us that not raising the debt ceiling would have a negative — even catastrophic — effect on the American and world economies. They are in agreement on this. The only matter of debate is what concessions are necessary in order to establish a bipartisan majority to pass a bill raising the ceiling. Democrats seem to want larger cuts and tax increases, while Republicans want smaller cuts with no tax increases. The multitrillion-dollar cuts that they are discussing only occur over a ten-year time frame and do not balance the budget, so no one except Ron Paul is really discussing the kinds of budget cutting that would actually help the economy.

Lower the Debt Ceiling - Mark Thornton - Mises Daily

 

[waltky]

Haven't they talked this thing into the ground enough already??...

Vote on US debt deal delayed to allow more talks
30 July 2011 - A test vote in the US Senate on a Democrat plan to increase the US debt limit has been delayed.

The Leader of the Democrats in the Senate, Harry Reid, said it would give negotiators more time to work out a deal.

Politicians in Washington remain divided on how to tackle America's debt crisis with Tuesday's deadline to raise the country's debt ceiling above $14.3 trillion looming.

Speaking to the Senate, Mr Reid said that negotiations between congressional leaders and the Obama administration were still going on, but that there was "still a distance to go" before a deal might be reached.

BBC News - Vote on US debt deal delayed to allow more talks

 

[logical4u]

Currently, the big show in Washington, DC, centers around raising the debt ceiling. Congress began setting this ceiling in 1917 so that the Treasury could independently issue debt. The debt ceiling is like the limit on your credit card, except the federal government sets the limit on itself. When President Nixon took us off the gold standard in 1971, the national debt was $400 billion. The increase in the national debt last year alone was four times the entire debt in 1971.

Both Democrats and Republicans tell us that not raising the debt ceiling would have a negative — even catastrophic — effect on the American and world economies. They are in agreement on this. The only matter of debate is what concessions are necessary in order to establish a bipartisan majority to pass a bill raising the ceiling. Democrats seem to want larger cuts and tax increases, while Republicans want smaller cuts with no tax increases. The multitrillion-dollar cuts that they are discussing only occur over a ten-year time frame and do not balance the budget, so no one except Ron Paul is really discussing the kinds of budget cutting that would actually help the economy.

Lower the Debt Ceiling - Mark Thornton - Mises Daily

This seems to be the new "theme" for suckering Americans into allowing congress to ruin the country.

We can take a small bitter pill now or we can wait til later and eat shit for years.

 

[waltky]

Now dat dat's settled, Granny so glad she gonna get her social security so she can buy more Halliburton stock...

It's a deal: Obama, Congress will avert default
Jul 31,`11 WASHINGTON (AP) -- Ending a perilous stalemate, President Barack Obama and congressional leaders announced agreement Sunday night on an emergency deal to avoid to avert the nation's first-ever financial default. The arrangement would cut more than $2 trillion from federal spending over a decade.

The dramatic agreement, with scant time remaining before Tuesday's deadline, "will allow us to avoid default and end the crisis that Washington imposed on the rest of America," Obama said. Default "would have had a devastating effect on our economy," the president said at the White House, relaying the news to the nation and to financial markets around the world. He thanked the leaders of both parties. House Speaker John Boehner telephoned Obama at mid-evening to say the agreement had been struck, officials said.

No votes were expected in either house of Congress until Monday at the earliest, to give rank-and-file lawmakers time to review the package. But leaders in both parties were already beginning the work of rounding up votes. In a conference call with his rank and file, Boehner said the agreement "isn't the greatest deal in the world, but it shows how much we've changed the terms of the debate in this town."

Obama underscored that point. He said that, if enacted, the agreement would mean "the lowest level of domestic spending since Dwight Eisenhower was president" more than a half century ago. Senate Democratic leader Harry Reid provided the first word of the agreement. "Sometimes it seems our two sides disagree on almost everything," he said. "But in the end, reasonable people were able to agree on this: The United States could not take the chance of defaulting on our debt, risking a United States financial collapse and a world-wide depression."

In his remarks, Obama said there will be no initial cuts to entitlement programs like Social Security and Medicare. But he said both could be on the table along with changes in tax law as part of future cuts. That was a reference to a special joint committee of lawmakers that will be established to recommend a second round of deficit reductions, to be voted on by Congress before year's end as part of an arrangement to raise the debt ceiling yet again. That is expected to be necessary early next year.

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[ShackledNation]

Excellent article. I actually read it a while ago.

 

[waltky]

Granny says somebody gonna take it to the Supreme Court an' dem activist judges gonna muck it all up...

Under the U.S. Supreme Court: Can Obama raise the debt limit by himself?
July 31, 2011 WASHINGTON, July 31 (UPI) -- The dance of raising the U.S. debt limit has gone on for weeks, with President Obama and Republicans circling each other like Sharks and Jets. But can the president use the Constitution to raise the debt limit by himself to avoid economic disaster?

Maybe, maybe not. It all depends on to whom you listen. More on that later. Another debate developing rather late in the game is whether failing to raise the debt limit by Aug. 2 would really be the catastrophe U.S. Treasury Secretary Timothy Geithner says it would be. Actually, in 1979, Congress briefly failed to raise the debt limit and the government briefly defaulted on a small portion of its bills.

Professor Peter Morici of the Robert H. Smith School of Business at the University of Maryland was on SiriusXM radio last Monday and said failing to lift the debt ceiling only would be comparable to a government shutdown. "There is absolutely no possibility that we have to default on our debt," he insisted. "We will only default if Secretary Geithner chooses to default to give the president political advantage."

Morici said the U.S. government takes in $180 billion a month, while interest payments on the national debt are less than $30 billion a month. "The U.S. would not be insolvent but rather in a political crisis." Besides debt interest, he did not say how the government would pay other bills, including those generated by entitlement programs. Another hard-shell conservative, Sen. Jim DeMint, R-S.C., said earlier this month on "Fox News Sunday" Geithner was irresponsibly exaggerating. "There certainly will be disruption, but this is not a deadline we should rush and make a bad deal," DeMint said.

In contrast, the administration points to international companies that threaten to lower the country's gold-plated triple-A bond rating if the debt limit isn't raised, or even if it isn't raised for a long period of time. Lowering the bond rating means higher interest rates for borrowing -- not just for the government but for personal credit cards and loans -- and gutting the value of the dollar, making the national debt that much harder to reduce. One independent voice, George Pennacchi, a University of Illinois finance professor who studies financial institutions and the bond markets, says the effect of a default could be serious.

Read more: Under the U.S. Supreme Court: Can Obama raise the debt limit by himself? - UPI.com

 

[The_GiantNoodle]

Excellent article. I actually read it a while ago.

What do you find "excellent" regarding the editorial?

 

[ShackledNation]

Excellent article. I actually read it a while ago.

What do you find "excellent" regarding the editorial?

The idea of lowering the debt ceiling. Lol.