The Facts About the Debt Ceiling

[Contumacious]

The Facts About the Debt Ceiling

Separating economic myths from economic truths

Myth 1: If a deal is not reached by August 2, the U.S. will default on its debt.

Fact 1: The Treasury Department can prioritize payments in order to avoid a default

 

[waltky]

Granny says ever'thin' goin' to hell inna handbasket...

It looks like 1914 again
July 18, 2011 -- This is how it must have felt in late July 1914 as Europe careened blindly into a war that would shatter its wealth and its culture and nobody knew how to stop it.

The world we have known since the end World War II, of ever-broadening economic prosperity, is poised for implosion. The global economy has proved over the past three years to be a resilient beast but even it cannot survive the simultaneous collapse of Europe and the United States, its two dominant components. We are two weeks away from an American default on the world's greatest, most liquid and essentially most stable source of the debt and credit that fuel the economy of the whole planet. And yet the prospect of default has gone from unthinkable to unlikely to possible and is now teetering on the brink of the probable.

We may be a week away from a collapse of the eurozone and the chaos then unleashed would leave the European Union in shreds. The world's two largest economies would crumple together, like Sherlock Holmes and Dr. Moriarty plunging together in a death grip over the Reichenbach Falls. At least Arthur Conan Doyle had the good sense to bring Sherlock Holmes back to life. The world of the euro and dollar wouldn't find reincarnation to be so easy. As in 1914, there is nothing inevitable about this gruesome double stagger to disaster. Economic conditions have not brought us to this pass. This is a political crisis, brought on by obstinacy, ignorance and dogma.

The ignorance defies belief. We all saw what happened when Lehman Brothers collapsed in September 2008. A U.S. default would be like that, only a hundred times worse, triggering cascades of defaults and bankruptcies as the credit default markets unwound. Interest rates would soar worldwide. A new Great Depression would follow. And recall that in this world of tight supply chains for our supermarkets, modern societies are perhaps six meals away from blood on the streets.

The dogma is extraordinary. Those Republican congressmen and their Tea Party chorus who say that a U.S. default is needed to tame the beast of Big Government are terrifyingly sure of themselves, even though their leaders know the risks. "I don't think anybody in the world really believes that the United States is going to default on our debt," Speaker of the House John Boehner, R-Ohio, said on Fox News last week. "But given what is going up in Europe, something could spook the market, missing Aug. 2 could spook the market and you could have a real catastrophe."

Read more: Walker's World: It looks like 1914 again - UPI.com

 

[Richard-H]

The Facts About the Debt Ceiling

Separating economic myths from economic truths

Myth 1: If a deal is not reached by August 2, the U.S. will default on its debt.

Fact 1: The Treasury Department can prioritize payments in order to avoid a default

The article relies on the idea of the treasury issuing new securities to balance everything out.

Apparently, you and the author do not know what it means when the debt ceiling is not raised:

IT MEANS THAT THE TREASURY IS NOT ALLOWED TO ISSUE NEW SECURITIES!

Dim wit!

 

[Political Junky]

"Congress consistently brings the government to the edge of default before facing its responsibility, " Reagan says. "This brinkmanship threatens the holders of government bonds and those who rely on Social Security and veterans benefits. Interest rates would skyrocket, instability would occur in financial markets, and the federal deficit would soar. The United States has a special responsibility to itself and the world to meet its obligations. It means we have a well-earned reputation for reliability and credibility – two things that set us apart from much of the world."
Near the end of the 54-second video, an image of President Reagan is shown on the screen with the caption "That was an adult moment."

House Democrats say they know what Ronald Reagan would do – CNN Political Ticker - CNN.com Blogs

 

[Contumacious]

The Facts About the Debt Ceiling

Separating economic myths from economic truths

Myth 1: If a deal is not reached by August 2, the U.S. will default on its debt.

Fact 1: The Treasury Department can prioritize payments in order to avoid a default

The article relies on the idea of the treasury issuing new securities to balance everything out.

Apparently, you and the author do not know what it means when the debt ceiling is not raised:

IT MEANS THAT THE TREASURY IS NOT ALLOWED TO ISSUE NEW SECURITIES!

Dim wit!

HUH?

I take it English comprehension is not your forte:



"Fact 1: The Treasury Department can prioritize payments in order to avoid a default.

The Treasury Department is due to pay off $30 billion in maturing short-term debt. But we also know that the Treasury has the ability to prioritize its payments and pay that particular $30 billion out of the $172 billion it collects in tax revenue

.

 

[Contumacious]

]The dogma is extraordinary. Those Republican congressmen and their Tea Party chorus who say that a U.S. default is needed to tame the beast of Big Government[/B] ."

I see . So the only thing politicians can do about the behemoth welfare/warfare state is increase the debt ceiling to one quadrillion.

.

 

[waltky]

Hippity-hoppity, flippity-floppity...

Obama's Position Keeps Changing in Debt Talks
Saturday, July 23, 2011 - White House shifts in unpredictable debt debate

The roller-coaster debate over raising the nation's debt limit has forced the White House to explain away, brush aside or even ignore declarations by President Barack Obama and aides that no longer served much purpose in the unpredictable negotiations. First, the White House wanted a congressional vote separated from spending cuts. Now the administration likes them linked. Obama said he would reject any short-term deal to raise the borrowing limit. Now the White House says he could make an exception.

He pledged to meet with congressional leaders every day until a deal was reached. But the daily meetings stopped or at least disappeared from his schedule. He did summon lawmakers to the White House for talks Saturday after the top House Republican walked out Friday night. The White House shifts have been less a matter of flip-flops and more a case of unforeseen twists forcing the administration to reposition as the Aug. 2 deadline to prevent the U.S. from defaulting on its financial obligations draws closer. Anticipation of a deal had built all week, then came crashing down Friday evening when House Speaker John Boehner, R-Ohio, abruptly broke off the talks.

The White House's willingness to change course underscores efforts to cast Obama as a reasonable and flexible compromiser in the face of Republican intransigence. Perhaps the most notable shift has been on whether an increase should be linked to spending cuts. The president's opening position: a resounding no. "We do not need to play chicken with our economy by linking the raising of the debt ceiling to anything," White House spokesman Jay Carney said April 11.

But a few days later, Obama told The Associated Press in an interview that raising the debt ceiling wasn't going to happen without some cuts. Three months later, the White House has bowed to that political reality, acknowledging Republicans would block an increase without the cuts and promoting the benefits of linking the two. "The dynamic that's created here, for better or for worse -- and we think now for better -- that has linked these two has focused attention and focused people's minds on the need to do something significant around deficit reduction," Carney said Wednesday.

More Obama's Position Keeps Changing in Debt Talks | CNSnews.com

See also:

Boehner: Obama Kept Moving Goalposts in Debt Talks
Saturday, July 23, 2011 – House Speaker John Boehner, in a Friday evening news conference at the Capitol, said there are two reasons his debt-limit discussions with President Obama broke down.

“First, they insisted on raising taxes,” Boehner (R-Ohio) said. The Speaker said he and Obama “had an agreement on a revenue number,” which could be reached, not by tax hikes, but by a more “efficient” collection of the taxes that are due to the federal government. “Let me just say that the White House moved the goalposts,” Boehner said. “There was an agreement, until the President demanded $400 billion more, which was going to be nothing more than a tax increase on the American people. I can tell you Leader Cantor and I were very disappointed in this call for higher revenue.”

House Republicans have remained adamant that there will be no tax hikes as part of a deficit reduction deal. “In the end, we couldn’t connect. Not because of different personalities, but because of different visions for our country,” Boehner said. “The president is emphatic that taxes have to be raised. As a former small businessman, I know tax increases destroy jobs,” he wrote in a letter to his Republican colleagues.

Second point: Boehner said the Obama White House “refused to get serious about cutting spending, and making the tough choices that are facing our country on entitlement reform. Listen, that’s the bottom line,” Boehner said. In a letter to his Republican colleagues, Boehner said Obama refused to make “fundamental changes” to Social Security and other entitlement programs. “As the father of two daughters, I know these programs won’t be there for their generation unless significant action is taken now.”

Among the changes reportedly being considered was a hike in the retirement age for younger workers to 67 from 65. As for what comes next, Boehner said he will now work with congressional leaders of both parties to pursue legislation that “avoids default, reflects the will of the American people, and is consistent with the principles of the Cut, Cap, and Balance Act,” which passed the House earlier this week.

More Boehner: Obama Kept Moving Goalposts in Debt Talks | CNSnews.com

 

[Google]

The Facts About the Debt Ceiling

Separating economic myths from economic truths

Myth 1: If a deal is not reached by August 2, the U.S. will default on its debt.

Fact 1: The Treasury Department can prioritize payments in order to avoid a default

The article relies on the idea of the treasury issuing new securities to balance everything out.

Apparently, you and the author do not know what it means when the debt ceiling is not raised:

IT MEANS THAT THE TREASURY IS NOT ALLOWED TO ISSUE NEW SECURITIES!

Dim wit!

How is it you always appear whenever the debt ceiling is mentioned. Again, and I have gone over this with you over and over, you seem to be under the assumption that United States federal government takes in zero revenue. That all of its revenue is derived from debt.

Answer this is simple basic question, and if you can't everyone will know you are full of shit, how much does the United States take in revenue annually, and how much of that revenue goes to servicing the debt????????

Put down the marijuana and focus.

 

[Quantum Windbag]

Fact 0.

August 2nd is now August 10th.

Why the change? The note explains that previous projections showed the Treasury running out of money on the morning of Wednesday, August 3. On that day, it was predicted, the Treasury would need to spend $32 billion, including $22 billion in Social Security payments -- and it was only projected to have $30 billion at its disposal.
That projection was made on July 13. But since then, the researchers say, the Treasury has taken in about $14 billion more than expected, and paid out about $1 billion less than expected. Hence, the deadline date might actually be August 10, a week later than previously believed.

Debt Ceiling Deadline Might Be August 10, Not August 2: Report

 

[Richard-H]

The Facts About the Debt Ceiling

Separating economic myths from economic truths

Myth 1: If a deal is not reached by August 2, the U.S. will default on its debt.

Fact 1: The Treasury Department can prioritize payments in order to avoid a default

The article relies on the idea of the treasury issuing new securities to balance everything out.

Apparently, you and the author do not know what it means when the debt ceiling is not raised:

IT MEANS THAT THE TREASURY IS NOT ALLOWED TO ISSUE NEW SECURITIES!

Dim wit!

How is it you always appear whenever the debt ceiling is mentioned. Again, and I have gone over this with you over and over, you seem to be under the assumption that United States federal government takes in zero revenue. That all of its revenue is derived from debt.

Answer this is simple basic question, and if you can't everyone will know you are full of shit, how much does the United States take in revenue annually, and how much of that revenue goes to servicing the debt????????

Put down the marijuana and focus.

First, if the government fails to make any payments, it goes into default. Just paying the interest or part of the payments will not change that.

Secondly, the article from the OP says:

"Treasury Secretary Timothy Geithner could convert that interagency debt into publicly-held debt"

That would mean selling securities - which without congress having raised the debt ceiling, would not be authorized. Besides, the intra-govermental debt is money that the treasury owes other departments - the plan per the OP article makes no sense whatsoever.

Finally,

Holy geez! You think that just because I play guitar means that I do drugs?

You truly are a brain dead drone!

 

[Richard-H]

The Facts About the Debt Ceiling

Separating economic myths from economic truths

Myth 1: If a deal is not reached by August 2, the U.S. will default on its debt.

Fact 1: The Treasury Department can prioritize payments in order to avoid a default

The article relies on the idea of the treasury issuing new securities to balance everything out.

Apparently, you and the author do not know what it means when the debt ceiling is not raised:

IT MEANS THAT THE TREASURY IS NOT ALLOWED TO ISSUE NEW SECURITIES!

Dim wit!

How is it you always appear whenever the debt ceiling is mentioned. Again, and I have gone over this with you over and over, you seem to be under the assumption that United States federal government takes in zero revenue. That all of its revenue is derived from debt.

Answer this is simple basic question, and if you can't everyone will know you are full of shit, how much does the United States take in revenue annually, and how much of that revenue goes to servicing the debt????????

Put down the marijuana and focus.

Uh Yeah, one more thing...

I've never said that the governement doesn't take in tax revenue.

Apparently you hallucinate.

 

[Contumacious]

The article relies on the idea of the treasury issuing new securities to balance everything out.

Apparently, you and the author do not know what it means when the debt ceiling is not raised:

IT MEANS THAT THE TREASURY IS NOT ALLOWED TO ISSUE NEW SECURITIES!

Dim wit!

How is it you always appear whenever the debt ceiling is mentioned. Again, and I have gone over this with you over and over, you seem to be under the assumption that United States federal government takes in zero revenue. That all of its revenue is derived from debt.

Answer this is simple basic question, and if you can't everyone will know you are full of shit, how much does the United States take in revenue annually, and how much of that revenue goes to servicing the debt????????

Put down the marijuana and focus.

First, if the government fails to make any payments, it goes into default. Just paying the interest or part of the payments will not change that.

Secondly, the article from the OP says:

"Treasury Secretary Timothy Geithner could convert that interagency debt into publicly-held debt"

That would mean selling securities - which without congress having raised the debt ceiling, would not be authorized. Besides, the intra-govermental debt is money that the treasury owes other departments - the plan per the OP article makes no sense whatsoever.

Finally,

Holy geez! You think that just because I play guitar means that I do drugs?

You truly are a brain dead drone!

The question is how much of the national debt is valid or constitutionally authorized?

.

 

[NYcarbineer]

Keep in mind that this is not a one time deal. August 2nd is not the end of it. If the debt ceiling is not raised, you face the same situation month after month after month.

 

[Quantum Windbag]

Keep in mind that this is not a one time deal. August 2nd is not the end of it. If the debt ceiling is not raised, you face the same situation month after month after month.

Apparently you cannot read. August 2nd is not the deadline anymore.

 

[Contumacious]

The question is how much of the national debt is valid or constitutionally authorized?

.

Up until August 2, 2011, ALL of it! DUH!

A Welfare State = Government Buy The People

.

 

[Mr. Shaman]

The Facts About the Debt Ceiling

Separating economic myths from economic truths

Myth 1: If a deal is not reached by August 2, the U.S. will default on its debt.

Fact 1: The Treasury Department can prioritize payments in order to avoid a default

"McConnell-Reid Better Than Default"​

.

.