The Debt Ceiling

[hortysir]

It's not about "wanting to see the country fail"

You can't be "fiscally responsible" by raising the debt limit.




My credit cards are maxed out.
Does it make sense to go and borrow money to pay them down so I can go out and buy more stuff?






WE ARE FUCKING BROKE.

Turn off the lights, shut the door, and flip the sign

If the debt ceiling is not raised, the government will default on its financial obligations. If you run out of money, can’t increase your income, and can’t borrow, what do you do? Your creditors lineup and you pay what you can and the rest have to wait. The same thing would happen with the government but it’s quite a bit more serious. For example, the government pays the troops fighting overseas, but doesn’t pay contractors. Then just about everyone who has US Savings bond turns them in for redemption. About 12 trillion dollars in treasury bills and notes would be dumped on the open market. In the US and abroad, US dollars would be exchanged for just about any currency driving the value of the dollar down to pennies bringing on hyperinflation. I don’t think I need to go any further with this doomsday scenario, as it will never happen because no political party would be foolish enough to pursue this course. But what could happen in this high stakes game of chicken, interest rates on treasuries followed by other interest rates could sky rocket, pushing the economy into another recession.

It is responsible to spend more than you earn, but it is far more irresponsible to refuse to pay your creditors.

That's when ya go out and get a second job (raise revenue) and eat Ramon noodles (cut spending).
You DO NOT take out ANOTHER loan.

 

[kyzr]

In the near future the debt of the United States will reach its approved limit. The raising of the debt ceiling requires a vote by Congress. The current spending of the government will cause this to be reached very soon.

President Obama has stated to Congress that he wasnts a clean bill delivered to him regarding the raising of the debt ceiling. This means that there are no other attachments to the bill such as tax raises or spending cuts.

Although it is important that America's credit standing is upheld, it is equally important that real and responsible action is taken regarding our nation's budget. Simply raising the debt ceiling allows the White House and Demorcratic Senate to spend more. There should be action which acts as proof that the government is moving in the direction of reducing spending and the budget deficit.

What specific actions should be attached to the bill which would ultimately lead to responsible solutions to our current budget deficit problem?

Didnt the right already try this lame threat? its a joke. Its like you guys have no idea what the hell you are talking about and the ones on the right who do, uses you dolts.

That post is a joke. You offer no proof of anything that makes sense, just very biased opinion.

How do you propose to stop the runaway spending before the US goes bankrupt? Eventually we won't be able to pay for all the money we borrowed. We won't ne able to borrow more. Then what?

 

[Flopper]

It's not about "wanting to see the country fail"

You can't be "fiscally responsible" by raising the debt limit.




My credit cards are maxed out.
Does it make sense to go and borrow money to pay them down so I can go out and buy more stuff?






WE ARE FUCKING BROKE.

Turn off the lights, shut the door, and flip the sign

If the debt ceiling is not raised, the government will default on its financial obligations. If you run out of money, can’t increase your income, and can’t borrow, what do you do? Your creditors lineup and you pay what you can and the rest have to wait. The same thing would happen with the government but it’s quite a bit more serious. For example, the government pays the troops fighting overseas, but doesn’t pay contractors. Then just about everyone who has US Savings bond turns them in for redemption. About 12 trillion dollars in treasury bills and notes would be dumped on the open market. In the US and abroad, US dollars would be exchanged for just about any currency driving the value of the dollar down to pennies bringing on hyperinflation. I don’t think I need to go any further with this doomsday scenario, as it will never happen because no political party would be foolish enough to pursue this course. But what could happen in this high stakes game of chicken, interest rates on treasuries followed by other interest rates could sky rocket, pushing the economy into another recession.

It is responsible to spend more than you earn, but it is far more irresponsible to refuse to pay your creditors.

That's when ya go out and get a second job (raise revenue) and eat Ramon noodles (cut spending).
You DO NOT take out ANOTHER loan.

Unfortunately it’s not that simple for the US government. It can’t raise revenue without raising taxes, which can take a year or more. It can cut spending by not taking on more obligations, but that doesn't help much with paying for the current obligations. The answer is not to refuse to make good on your obligations but rather not to assume obligations you can’t pay.

Not raising the debt limit is like a family saying, since we can't control our spending, we will stop paying our creditors. It makes no sense.

 

[hortysir]

If the debt ceiling is not raised, the government will default on its financial obligations. If you run out of money, can’t increase your income, and can’t borrow, what do you do? Your creditors lineup and you pay what you can and the rest have to wait. The same thing would happen with the government but it’s quite a bit more serious. For example, the government pays the troops fighting overseas, but doesn’t pay contractors. Then just about everyone who has US Savings bond turns them in for redemption. About 12 trillion dollars in treasury bills and notes would be dumped on the open market. In the US and abroad, US dollars would be exchanged for just about any currency driving the value of the dollar down to pennies bringing on hyperinflation. I don’t think I need to go any further with this doomsday scenario, as it will never happen because no political party would be foolish enough to pursue this course. But what could happen in this high stakes game of chicken, interest rates on treasuries followed by other interest rates could sky rocket, pushing the economy into another recession.

It is responsible to spend more than you earn, but it is far more irresponsible to refuse to pay your creditors.

That's when ya go out and get a second job (raise revenue) and eat Ramon noodles (cut spending).
You DO NOT take out ANOTHER loan.

Unfortunately it’s not that simple for the US government. It can’t raise revenue without raising taxes, which can take a year or more. It can cut spending by not taking on more obligations, but that doesn't help much with paying for the current obligations. The answer is not to refuse to make good on your obligations but rather not to assume obligations you can’t pay.

Not raising the debt limit is like a family saying, since we can't control our spending, we will stop paying our creditors. It makes no sense.

If we raise the debt ceiling by 4 trillion, like what is being proposed, do ou honestly think that the Fed isn't going to run right out and borrow more money?
Wouldn't that be the definition of assuming obligations we can't pay?
So what if we default.
We already have defaulted in the eyes of the world, anyway.
You don't think China knows how fucked we are?
If they decide to give us a 3-day eviction notice we may as well trade or forks in on chopsticks.

Pardon me if anyone thinks I'm over-simplifying, but it IS exactly that simple.

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Whether we raise the DC or not, it's "heads they win, tails we lose"

 

[smchugh]

Pardon me if anyone thinks I'm over-simplifying, but it IS exactly that simple.

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Whether we raise the DC or not, it's "heads they win, tails we lose"

I like your statement in the sense that it is true, though definitely over simplified. And it has to be qualified by saying that it is the case only if things continue to function the way they have for the past decade.

Obama talked today about tax reform being an essential part to reducing the deficit. There are two problems with tax reform; the first being that it takes at least a year to see any results. The other is that when taxes are increased, especially on those entrepreneurs and innovators fueling economic growth, they try to find ways to avoid the increased taxation. It's human nature to not work as hard if more is going to be taken away from you if you do. I do agree that some sort of tax reform should be enacted soon, but it is not a short term solution and has not worked well throughout history.

The biggest impact that can be taken right now is to cut spending. The biggest drain on our budget is entitlement spending, such as welfare, food stamps, Medicare, Medicade, and Social Security. All of these need serious reform or cuts. The problem with reforming these now is that serious change won't be seen for a few years. It is not fair to those who paid for certain services their whole lives to now not get what they deserve.

Some possible cuts that can be made now can be found in defense, infrastructure, and some areas of education. First of all I am all for the defense of our country and have worked for a defense contractor. A lot of non-defense applications have come out of weapons development. That being said there is definitely room to try to make things run more efficiently and with less waste. Project deadlines could be accelerated and companies could be asked to contribute some of their own capital to development more often. There are countless areas of waste when it comes to infrastructure projects all over the country. These projects could be given to private contractors creating more jobs. The private contractors will most likely do a better job and have more pride in their work than the government employees. Finally I believe that education is vital to the development of our youth and country. We need our citizens to be more educated. Having family members who are teachers, it is obvious to me that there need to be serious reforms and increased accountability in our schools. Money can at least be more wisely used to get better results than it is currently doing.

Overall changes must be made to the major source of the problem now so that there is a light at the end of the tunnel. If we continue to say that entitlements will only affect us in the future, they will. If we hit the brakes on the runaway train now, by the time it comes to the end of the track it may have stopped. We need some of these changes now. Everyone needs to be more accountable for their decisions, politicans, economists, business leaders, and average citizens. It is time for America to become great again and that starts at the top. Make the tough decisions already.

 

[hortysir]

Pardon me if anyone thinks I'm over-simplifying, but it IS exactly that simple.

W
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F
U
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K
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D
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Whether we raise the DC or not, it's "heads they win, tails we lose"

I like your statement in the sense that it is true, though definitely over simplified. And it has to be qualified by saying that it is the case only if things continue to function the way they have for the past decade.

Obama talked today about tax reform being an essential part to reducing the deficit. There are two problems with tax reform; the first being that it takes at least a year to see any results. The other is that when taxes are increased, especially on those entrepreneurs and innovators fueling economic growth, they try to find ways to avoid the increased taxation. It's human nature to not work as hard if more is going to be taken away from you if you do. I do agree that some sort of tax reform should be enacted soon, but it is not a short term solution and has not worked well throughout history.

The biggest impact that can be taken right now is to cut spending. The biggest drain on our budget is entitlement spending, such as welfare, food stamps, Medicare, Medicade, and Social Security. All of these need serious reform or cuts. The problem with reforming these now is that serious change won't be seen for a few years. It is not fair to those who paid for certain services their whole lives to now not get what they deserve.

Some possible cuts that can be made now can be found in defense, infrastructure, and some areas of education. First of all I am all for the defense of our country and have worked for a defense contractor. A lot of non-defense applications have come out of weapons development. That being said there is definitely room to try to make things run more efficiently and with less waste. Project deadlines could be accelerated and companies could be asked to contribute some of their own capital to development more often. There are countless areas of waste when it comes to infrastructure projects all over the country. These projects could be given to private contractors creating more jobs. The private contractors will most likely do a better job and have more pride in their work than the government employees. Finally I believe that education is vital to the development of our youth and country. We need our citizens to be more educated. Having family members who are teachers, it is obvious to me that there need to be serious reforms and increased accountability in our schools. Money can at least be more wisely used to get better results than it is currently doing.

Overall changes must be made to the major source of the problem now so that there is a light at the end of the tunnel. If we continue to say that entitlements will only affect us in the future, they will. If we hit the brakes on the runaway train now, by the time it comes to the end of the track it may have stopped. We need some of these changes now. Everyone needs to be more accountable for their decisions, politicans, economists, business leaders, and average citizens. It is time for America to become great again and that starts at the top. Make the tough decisions already.

I like all your ideas. Truly.
In all of these cases we'd need, at least, a temporary ratcheting up of the ceiling. If only to be a cushion for our interest adding up.
We need to eliminate dozens and dozens of useless bureaucracies.
Think about it. Hell, the biggest gainer in jobs, the last 2 years, has been government positions.
What's scary, though, is are they union jobs?? Will we still have to pay them? If we have to pay them UEC at least we're saving money compared to what we *were* paying them.
The UE rate might spike when we cut 'em from the tit, buy hey...we "all" need to make sacrifices right??!!!

 

[Flopper]

That's when ya go out and get a second job (raise revenue) and eat Ramon noodles (cut spending).
You DO NOT take out ANOTHER loan.

Unfortunately it’s not that simple for the US government. It can’t raise revenue without raising taxes, which can take a year or more. It can cut spending by not taking on more obligations, but that doesn't help much with paying for the current obligations. The answer is not to refuse to make good on your obligations but rather not to assume obligations you can’t pay.

Not raising the debt limit is like a family saying, since we can't control our spending, we will stop paying our creditors. It makes no sense.

If we raise the debt ceiling by 4 trillion, like what is being proposed, do ou honestly think that the Fed isn't going to run right out and borrow more money?
Wouldn't that be the definition of assuming obligations we can't pay?
So what if we default.
We already have defaulted in the eyes of the world, anyway.
You don't think China knows how fucked we are?
If they decide to give us a 3-day eviction notice we may as well trade or forks in on chopsticks.

Pardon me if anyone thinks I'm over-simplifying, but it IS exactly that simple.

W
e

A
r
e

F
U
C
K
E
D
!

Whether we raise the DC or not, it's "heads they win, tails we lose"

First of all the Fed, Federal Reserve doesn't borrow the money. The Treasury borrows the money. The Federal Reserve is independent within government in that "its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government."

The Treasury borrows money because either Congress or the administration has obligated the US government in accordance with the approval and direction of Congress, to make expenditures greater than revenues.

If we had defaulted in the eyes of the world, would the banks and nations of the world be loaning the government billions of dollars for 10 years at 2.25% interest today? I think not. Would all the bond-rating services be rating US treasury bonds as AAA, the highest rating for safety of principal and interest? I think not.

When Congress approves the budget or passes any spending bills, the obligations have been made. The administration cannot legally refuse to issue Social Security checks, pay Medicare bills, pay defense contracts, or any number program expenditures that have been enacted into law. If there aren’t sufficient funds available, the treasury must borrow money to fulfill the government’s obligation provided they do not exceed the debt limit.

It should be obvious that Congress must be the one to curb spending. You do not curb spending by defaulting on your obligations. If your family spending were out of control, would you refuse to pay your mortgage as a solution? Only if you are out of your frigging mind.

 

[JWBooth]

[ame=http://www.youtube.com/watch?v=xNnAvTTaJjM]YouTube - Talking Heads "Burning Down the House"[/ame]

 

[waynefromaitkin]

All this talk about balancing the budget seem like a re-play
from the President Bush-President Clinton era. A big national debt clock, like the one I see today.
President Clinton made hard choices and the national debt was almost depleted. Now we have a re-run, President Bush-President Obama era national debt clock is in the Trillions again. So if the middle class and working poor suffer the pain of again of bringing down the debt. . What are our Representatives going to do to ensure that we dont get he USA in the same JAM again?

 

[signelect]

Lets see what do we do.

1. Don't spend what we don't have.
2. Bring the military home from everywhere
3. Stop paying back lobbyist back for the favors they have done for you, vacation etch, cars for your children and silly stuff like that.
4. When tax dollars are collected for a specific future project like say SS, leave it the hell along.
5. Stop cost plus contracts for military spending
6. Let the states fund their own needs
7. Flat tax
8. eliminate tax loop holes
9. don't bailing out loosing businesses and paying bonuses to the ones who got them there.

that is a start

 

[JWBooth]

All this talk about balancing the budget seem like a re-play
from the President Bush-President Clinton era. A big national debt clock, like the one I see today.
President Clinton made hard choices and the national debt was almost depleted. Now we have a re-run, President Bush-President Obama era national debt clock is in the Trillions again. So if the middle class and working poor suffer the pain of again of bringing down the debt. . What are our Representatives going to do to ensure that we dont get he USA in the same JAM again?

Largely the GOPers didn't give a damn about fiscal responsibility until the Dims occupied the White House. There were individual exceptions to be sure just as there were a few individual exceptions to the Dims objections to GOPer spending when it was a GOPer in the big chair. The Dims were only pissed because more money was being spent on bombs and bullets instead of their laundry list of unnecessary bullshit.

With rare exception they are all a bunch of hypocrites. Paul Ryan, suddenly he is hotter than Tom Cruise at a sorority party in 1985. The S.O.B. spent the last eight years voting for every spending bill from No Child Left Behind and Medicare D to the damnable TARP.

They make a bunch of noise about cutting, when they aren't actually going to cut anything more than the rate of growth and hope the economy catches up, like they did in the 90's.

 

[editec]

In the near future the debt of the United States will reach its approved limit. The raising of the debt ceiling requires a vote by Congress. The current spending of the government will cause this to be reached very soon.

President Obama has stated to Congress that he wasnts a clean bill delivered to him regarding the raising of the debt ceiling. This means that there are no other attachments to the bill such as tax raises or spending cuts.

Although it is important that America's credit standing is upheld, it is equally important that real and responsible action is taken regarding our nation's budget. Simply raising the debt ceiling allows the White House and Demorcratic Senate to spend more. There should be action which acts as proof that the government is moving in the direction of reducing spending and the budget deficit.

What specific actions should be attached to the bill which would ultimately lead to responsible solutions to our current budget deficit problem?

How about a 50% decrease in military spending?

That would save us about $400 Billion a year.

 

[JWBooth]

How about a 50% decrease in military spending?
That would save us about $400 Billion a year.

Its a start...
and the rest can come from a 50% across the board cut everywhere else.

 

[smchugh]

Its a start...
and the rest can come from a 50% across the board cut everywhere else.

Since the largest chunks of our budget each year come from automatic entitlement spending, even your proposed 50% across the board cut would not make the numbers work for the FY 2012. This shows how dire our situation is with the entitlement spending and stresses the importance for getting effective reform passed now. The longer we wait and bicker, the more of a hole the entitlement spending creates.

I am all for spending cuts, but most importantly I am for intelligent spending cuts. I agree that every area of the government has fat that can be trimmed. Spending cuts that eliminate redundant programs or positions, ineffective bureauacracies, unnecessary pet projects, and handouts to friends should be the first to go. Making every sector of the government smaller, more efficient, and more accountable will greatly reduce spending and produce a better run government. Also privatizing areas such as infrastructure construction and some defense spending will greatly reduce spending and create private sector jobs. With these projects under private supervision they will most likely be completed faster, with more pride, and to a better degree than if undertaken by the government.

In summery, it makes more sense to take each section of the government as a separate case and determine what is the best course of action. The cuts need to be made now, but they need to be deliberate and effective.

 

[Gunny]

In the near future the debt of the United States will reach its approved limit. The raising of the debt ceiling requires a vote by Congress. The current spending of the government will cause this to be reached very soon.

President Obama has stated to Congress that he wasnts a clean bill delivered to him regarding the raising of the debt ceiling. This means that there are no other attachments to the bill such as tax raises or spending cuts.

Although it is important that America's credit standing is upheld, it is equally important that real and responsible action is taken regarding our nation's budget. Simply raising the debt ceiling allows the White House and Demorcratic Senate to spend more. There should be action which acts as proof that the government is moving in the direction of reducing spending and the budget deficit.

What specific actions should be attached to the bill which would ultimately lead to responsible solutions to our current budget deficit problem?

It's the closest proof to the "expanding universe" theory there is.

 

[Flopper]

All this talk about balancing the budget seem like a re-play
from the President Bush-President Clinton era. A big national debt clock, like the one I see today.
President Clinton made hard choices and the national debt was almost depleted. Now we have a re-run, President Bush-President Obama era national debt clock is in the Trillions again. So if the middle class and working poor suffer the pain of again of bringing down the debt. . What are our Representatives going to do to ensure that we dont get he USA in the same JAM again?

Of course it is. Until we have a balanced budget amendment, we will repeat the fight over deficit over and over. If we can't do a balance budget amendment, we should at least keep the growth of debt, the deficit less than the growth rate of the GDP.

 

[Flopper]

In the near future the debt of the United States will reach its approved limit. The raising of the debt ceiling requires a vote by Congress. The current spending of the government will cause this to be reached very soon.

President Obama has stated to Congress that he wasnts a clean bill delivered to him regarding the raising of the debt ceiling. This means that there are no other attachments to the bill such as tax raises or spending cuts.

Although it is important that America's credit standing is upheld, it is equally important that real and responsible action is taken regarding our nation's budget. Simply raising the debt ceiling allows the White House and Demorcratic Senate to spend more. There should be action which acts as proof that the government is moving in the direction of reducing spending and the budget deficit.

What specific actions should be attached to the bill which would ultimately lead to responsible solutions to our current budget deficit problem?

It's the closest proof to the "expanding universe" theory there is.

The problem with attaching cuts to the bill to raise the debt limit is you have to be prepared to go all the way. I don't think there are very many Congressmen prepared to force the government to default. As the government runs out of money, the possibility of default will become a real possibility in the minds of those that hold government bonds long before default occurs. If even a small percent began dumping US debt, there could be serious consequences in the credit markets.

 

[l33t.n1nja]

<quote>What specific actions should be attached to the bill which would ultimately lead to responsible solutions to our current budget deficit problem?</quote>

The best attachment to this bill would be a flame. Borrowing money to pay off loans as far as I know isn't good financial planning and borders on illegal.

 

[Toronado3800]

Flopper shows an understanding few do.

I once again will say the budget was the chance to well, budget. This is an opportunity to grandstand and score a couple talking points but I hope the boys dont fool around too much.

 

[kyzr]

Flopper shows an understanding few do.

I once again will say the budget was the chance to well, budget. This is an opportunity to grandstand and score a couple talking points but I hope the boys don't fool around too much.

Exactly. If Ryan and the dems can meet in the middle (Debt Commission) everyone wins. If they both fail to save the day, they will all most likely get replaced in 2012. We want fiscal sanity, not litmus-tests on ideology.