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Our Imaginary Debt Ceiling - Reason MagazineIt is reprehensible how politicians waste our time with whimsical notions about "debt ceilings" and "budgets." A federal debt limit is much like other government guidelines—e.g., "speed limits" and "filing taxes"—that exist only theoretically. In the past decade, Congress has raised the debt limit -- instituted in 1917 to restrain spending—10 times, and the U.S. has reached its ceiling 74 times since President Barack Obama's birth. So in other words, technically speaking, there is no ceiling. We might as well eliminate it.
It is likely that we will now witness another ridiculous debate on the topic, followed by another Republican surrender, because a measly $14.3 trillion cap won't do for a great nation. By now, you've also probably seen the quote from a once-chaste future president, arguing that even a debate about raising America's debt limit was a sign of failed leadership (Bush!). A signal, he claimed, that the U.S. government could not pay its own bills, that we were dependent on the assistance of foreigners to fund our "reckless" fiscal policies.
Obama was just kidding. Those were impetuous days in 2006 when Democrats railed against increasing the debt ceiling and Republicans—not yet having discovered The Road to Serfdom—were doing what they could to power it through. Today, via the magic of partisanship, the role reversal is complete.
But Americans, not yet properly tenderized by media and administration scaremongering, are still under the impression that a debt limit exists. And they like it. The majority of them, according to a CBS News/New York Times poll, oppose raising it. Just 27 percent of Americans think it should be increased, while 63 percent oppose doing so—a number encompassing 64 percent of independents and 48 percent of Democrats, all of whom, no doubt, are members of a nascent rightist militia movement.
I know, the apocalypse will be on July 8th, (excuse me, Aug 2nd,) but who cares? Other than whoever is in the White House.
It is reprehensible how politicians waste our time with whimsical notions about "debt ceilings" and "budgets." A federal debt limit is much like other government guidelines—e.g., "speed limits" and "filing taxes"—that exist only theoretically. In the past decade, Congress has raised the debt limit -- instituted in 1917 to restrain spending—10 times, and the U.S. has reached its ceiling 74 times since President Barack Obama's birth. So in other words, technically speaking, there is no ceiling. We might as well eliminate it.In-other-words.....deficits don't matter....like The Dick; Cheney said.
What timing!!!!!
April 30, 2011
How Bush/Cheney BLEW IT!!!
"The nation’s unnerving descent into debt began a decade ago with a choice, not a crisis.
In January 2001, with the budget balanced and clear sailing ahead, the Congressional Budget Office forecast ever-larger annual surpluses indefinitely. The outlook was so rosy, the CBO said, that Washington would have enough money by the end of the decade to pay off everything it owed.
Voices of caution were swept aside in the rush to take advantage of the apparent bounty. Political leaders chose to cut taxes, jack up spending and, for the first time in U.S. history, wage two wars solely with borrowed funds. “In the end, the floodgates opened,” said former senator Pete Domenici (R-N.M.), who chaired the Senate Budget Committee when the first tax-cut bill hit Capitol Hill in early 2001.
Now, instead of tending a nest egg of more than $2 trillion, the federal government expects to owe more than $10 trillion to outside investors by the end of this year. The national debt is larger, as a percentage of the economy, than at any time in U.S. history except for the period shortly after World War II.
Polls show that a large majority of Americans blame wasteful or unnecessary federal programs for the nation’s budget problems. But routine increases in defense and domestic spending account for only about 15 percent of the financial deterioration, according to a new analysis of CBO data.
The biggest culprit, by far, has been an erosion of tax revenue triggered largely by two recessions and multiple rounds of tax cuts. Together, the economy and the tax bills enacted under former president George W. Bush, and to a lesser extent by President Obama, wiped out $6.3 trillion in anticipated revenue. That’s nearly half of the $12.7 trillion swing from projected surpluses to real debt.
Federal tax collections now stand at their lowest level as a percentage of the economy in 60 years."
In the first two business days of May, Treasury increased the debt by $44.2 billion. The amount the Treasury borrows fluctuates from day to day and month to month, but in the first 215 days of fiscal year 2011—which began on Oct. 1, 2010—the Treasury has increased the national debt subject to the $14.294-trillion limit by a total of $769.3 billion. That equals an average of $3.58 billion in federal borrowing per day. At that pace, the Treasury would exhaust its remaining $13.86 billion in borrowing authority and exceed the legal debt limit in less than four days.
Over the course of April, the Treasury managed to sharply curtail its borrowing—increasing the national debt subject to the legal limit by only $18.076 billion during the month. In a letter sent to House Speaker John Boehner (R.-Ohio) on Monday, Treasury Secretary Timothy Geithner said that the Treasury Department would start taking “extraordinary measures” to evade the debt limit this week. On Friday, Geithner said, Treasury will stop selling State and Local Government Series Treasury securities, a special type of bond the federal government sells to state and local governments.
However, according to the latest Daily Treasury Statement, the Treasury has redeemed $68.949 billion worth of these bonds this year while selling only $52.896 billion in new ones--meaning that on net the Treasury has been able to reduce the debt by $16.053 billion this year thanks to reduced demand for these bonds from state and local governments.
Geithner also said in his letter to Boehner that the Treasury estimates it will hit the debt limit on May 16 and on that day he intends to declare a “debt issuance suspension period." That declaration will allow the Treasury to prematurely “redeem” intra-governmental bonds it has issued to the Civil Service Retirement and Disability Fund (a trust fund into which federal workers pay pension money) and use the room freed up under the debt limit by "redeeming" those intragovernmental bonds to sell debt in the public market in exchange for cash.
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He said Congress must attach fiscal reforms to legislation increasing the debt ceiling. Hatch also warned his fellow lawmakers what could happen if the fiscal reforms, once enacted, “fall prey to gimmicks, are waived or otherwise undermined.” “My sense is that the people will come to this Capitol with pitchforks and torches they will be so upset. And they'd be right to do so,” Hatch said.
History shows that fiscal reforms can leave people feeling betrayed and disappointed, when Congress inevitably goes back to its big-spending ways, Hatch said. For example, he mentioned the pay-go rule, which was supposed to curb deficit spending but ended up costing billions of dollars in additional deficit spending, as Congress found ways to get around the law. Hatch said that’s just one example of how Congress has responded to calls for spending restraint – and then done an end-run around those restraints.
“This time must be different,” Hatch told the committee in his opening remarks. “This time we must make meaningful and lasting reforms. We must make the fundamental changes to our spending programs that might be tough today, but that will make maintenance of budget discipline easier in the future. “The fact is, we can’t be having this debate again in another 5 years,” Hatch continued. “We are already nearing a point where it is too late to enact the changes that the markets demand. And failure to act now will have a lasting detrimental impact on families, businesses, and the economy.
“No matter what happens with the debt ceiling, we need to make sure that Congress and the President stick to the fiscal reforms attached to the (debt ceiling) legislation. Both parties must accept responsibility, buckle down, and make the tough decisions, even when it hurts,” Hatch said.
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Spending and Wars need to be cut, it's that simple. Obama seems to not have the sack to do these things so I yhope we get someone else that can.
May 4, 2011
"Senior Republicans conceded Wednesday that a deal is unlikely on a contentious plan to overhaul Medicare and offered to open budget talks with the White House by focusing on areas where both parties can agree, such as cutting farm subsidies.
On the eve of debt-reduction talks led by Vice President Biden, House Majority Leader Eric Cantor (Va.) said Republicans remain convinced that reining in federal retirement programs is the key to stabilizing the nations finances over the long term. But he said Republicans recognize they may need to look elsewhere to achieve consensus after President Obama excoriated us for a proposal to privatize Medicare.
my understanding is the debt. ceiling 'hard' dates have been foregone, forgoed whatever, a number of times in the past with no detriment to our fisc.
Americans May Come to the Capitol With Pitchforks and Torches, Senator Warns
Wednesday, May 04, 2011 As the Obama administration demands another increase in the U.S. debt limit, Americans taxpayers are demanding spending restraint, Sen. Orrin Hatch (R-Utah) told the Senate Finance Committee on Wednesday.
