On The Debt Ceiling

[JohnnySavage]

The debt ceiling is a meaningless and artificial construct that just provides good political theater - because Congress authorizes spending without respect to a debt limit.

Then every six months or a year, the Treasury says, "We don't have any money to pay for the authorized spending."

Then the party in power says, "We have to raise the limit to pay for things already bought!"

Then the debt ceiling is raised, and new spending is authorized.

It's circular.

Congress's spending should be tied to paying the bill.

 

[jeninflorida]

If you remeber, cuckold obama was against raising the debt limit when Bush was in office....

 

[Busybody]

The debt ceiling is a meaningless and artificial construct that just provides good political theater - because Congress authorizes spending without respect to a debt limit.

Then every six months or a year, the Treasury says, "We don't have any money to pay for the authorized spending."

Then the party in power says, "We have to raise the limit to pay for things already bought!"

Then the debt ceiling is raised, and new spending is authorized.

It's circular.

Congress's spending should be tied to paying the bill.

STFU!

 

[Sean Renaud]

You can't tie spending to paying the bills. Well you could but things would just get worse and worse until the country eventually collapsed.

 

[trysail]

You can't tie spending to paying the bills. Well you could but things would just get worse and worse until the country eventually collapsed.

Dear god. The man is a bloody prophet and seer.


Try it yourself at home and see what happens.

 

[jeninflorida]

Dear god. The man is a bloody prophet and seer.


Try it yourself at home and see what happens.

And hes the best the left has to offer


Its like watching titanic in 3d hoping they make it

 

[Sean Renaud]

Dear god. The man is a bloody prophet and seer.


Try it yourself at home and see what happens.

As a business owner I've not only tried it myself but I'm thriving because of it. Perhaps you should come back when you understand that it takes money to make money and you have to take risks to get rewards.

By contrast if you make less money in any given cycle and you give up something you'll make even less the following cycle because whatever that was brought in customers. See how well your company runs after you shut off the phones.

 

[dan_c00000]

And hes the best the left has to offer


Its like watching titanic in 3d hoping they make it

He's still better than Herman Cain.

 

[IrezumiKiss]

As a business owner I've not only tried it myself but I'm thriving because of it. Perhaps you should come back when you understand that it takes money to make money and you have to take risks to get rewards.

By contrast if you make less money in any given cycle and you give up something you'll make even less the following cycle because whatever that was brought in customers. See how well your company runs after you shut off the phones.

"Scared money don't make none."

—*Questlove, using a A Tribe Called Quest lyric from "Midnight" when asked about the high hipster prices on his fried chicken shop venture Hybird.

 

[Colonel Hogan]

The debt ceiling is a meaningless and artificial construct that just provides good political theater - because Congress authorizes spending without respect to a debt limit.

Then every six months or a year, the Treasury says, "We don't have any money to pay for the authorized spending."

Then the party in power says, "We have to raise the limit to pay for things already bought!"

Then the debt ceiling is raised, and new spending is authorized.

It's circular.

Congress's spending should be tied to paying the bill.

It's circular, all right, but not in the way that you're thinking. Every year, roughly 60% of ALL federal spending is on Medicare, Social Security, and unemployment benefits. Toss in interest on the debt (7% in 2013) and veterans benefits (4%), and you start to get a true picture of what "government spending" really means.

That's the circular part. But the next part is why your simplistic solution falls flat on its face.

The reason these expenditures are recurring is that the legislation which established the programs "mandates" who shall receive the benefits. Those beneficiaries are "entitled" by LAW! The only way to cut government spending on these programs is to repeal or amend the existing legislative mandate. No one in the Congress has the balls or stupidity (and it is hard to say which characteristic is most applicable) to substantially reduce the supplemental income to seniors, the majority of whom cannot work, or their supplemental healthcare costs, the majority of whom would be uninsurable in the open market.

I think it is safe to say that if you or I were members of Congress there is a very good chance that we wouldn't have the balls or stupidity to solve the problem either.

So, until someone manages to actually grow a pair AND manages to get elected along with a majority of similarly equipped colleagues, we should just STFU and authorize the debt ceiling increase.

Because simply arguing about it couldn't possibly be fooling anybody about the true nature of our future intentions.

 

[Colonel Hogan]

As a business owner I've not only tried it myself but I'm thriving because of it. Perhaps you should come back when you understand that it takes money to make money and you have to take risks to get rewards.

By contrast if you make less money in any given cycle and you give up something you'll make even less the following cycle because whatever that was brought in customers. See how well your company runs after you shut off the phones.

In what sense is the government analogous to a for-profit business entity, and what is the product or service it can improve upon in order to increase revenue and profitability?

 

[JohnnySavage]

It's circular, all right, but not in the way that you're thinking. Every year, roughly 60% of ALL federal spending is on Medicare, Social Security, and unemployment benefits. Toss in interest on the debt (7% in 2013) and veterans benefits (4%), and you start to get a true picture of what "government spending" really means.

That's the circular part. But the next part is why your simplistic solution falls flat on its face.

The reason these expenditures are recurring is that the legislation which established the programs "mandates" who shall receive the benefits. Those beneficiaries are "entitled" by LAW! The only way to cut government spending on these programs is to repeal or amend the existing legislative mandate. No one in the Congress has the balls or stupidity (and it is hard to say which characteristic is most applicable) to substantially reduce the supplemental income to seniors, the majority of whom cannot work, or their supplemental healthcare costs, the majority of whom would be uninsurable in the open market.

I think it is safe to say that if you or I were members of Congress there is a very good chance that we wouldn't have the balls or stupidity to solve the problem either.

So, until someone manages to actually grow a pair AND manages to get elected along with a majority of similarly equipped colleagues, we should just STFU and authorize the debt ceiling increase.

Because simply arguing about it couldn't possibly be fooling anybody about the true nature of our future intentions.

Well then, you agree that the debt limit is a meaningless construct.

Congress buys stuff, the Treasury pays for it, Congress buys more stuff, the Treasury says they need money to pay for what was bought, so Congress increases the limit on the credit card, then buys more stuff.

What's the point of having a limit?

 

[dan_c00000]

Here's an easy way to cut spending

See that massive spending on the military? Cut it.

 

[richard_daily]

Here's an easy way to cut spending

See that massive spending on the military? Cut it.

We could cut military spending by 75%, and still have more than enough to defend our own borders, and more yearly spending than any other nation on the earth.

 

[Colonel Hogan]

Well then, you agree that the debt limit is a meaningless construct.

Congress buys stuff, the Treasury pays for it, Congress buys more stuff, the Treasury says they need money to pay for what was bought, so Congress increases the limit on the credit card, then buys more stuff.

What's the point of having a limit?

No, I do not agree that the debt limit is meaningless. Congress doesn't borrow money like individuals borrow money. The United States does not go to some other country (i.e. China) with hat and a loan application in hand and supplicate itself like Obama bowing to King Abdullah. We borrow money the way banks, insurance companies and other financial institutions do. We issue debt instruments (primarily bonds and notes) that pay interest to the purchaser. These interest bearing products are available from the Treasury Department to individual investors on up to sovereign nations.

Raising the debt limit signals our commitment not to go into default on the debt instruments we've sold, as well as setting a theoretical limit for the issuance of new debt.

The point I was trying to make with my last post was that of all the "stuff" the federal government spends money on, approximately 60% of our total expenses go to three program items: Social Security and disability benefits, unemployment/labor, and Medicare. These programs and their beneficiaries as stipulated in the law essentially REQUIRE us to run deficit budgets either as a single annual document or in the form of "continuing resolutions."

Let me repeat this for emphasis: Entitlement programs are the primary expenditures that force us to borrow money in ever increasingly dangerous amounts.

Of the remaining 40% of the budget popularly referred to as "discretionary," no item would have a greater impact if it went unpaid than that 7% item known as "Interest on the Debt." Thumb your nose at that in order to fund the Department of Transportation, or the Justice Department or even the Department of Defense, and you've basically committed financial suicide and international financial homicide all at once. The number of countries we would pull into the abyss with us is unthinkable.

Any expense item that represents such a small amount of the budget and yet has such potential catastrophic impact if left unpaid is hardly "meaningless."

 

[Colonel Hogan]

We could cut military spending by 75%, and still have more than enough to defend our own borders, and more yearly spending than any other nation on the earth.

Assuming that was true, you would have "saved" $546 billion of a $2.4 trillion problem, and that assumes you apply every penny of that military savings to ease the financial pressure resulting from the "mandatory" programs. All you have done is slow the rate at which your ship is sinking.

That may be significant if help is on the way or you are able to initiate a plan for your rescue. But if all you are going to do is drown anyway, the depth of water in which you take your final breath is of no consequence whatsoever.

 

[eyer]

What's the point of having a limit?

"having a limit" and sticking to it means that no new debt can be incurred.

Let's imagine the "shutdown" continues for an entire fiscal year and the debt ceiling is not raised...

...the feds estimate that during that time - October 1, 2013 to September 30, 2014 - revenue will reach around $3 trillion.

If we do not raise the debt ceiling and do hold federal government expenditures to $3 trillion over the next year...

...we will have achieved a balanced budget for that time, meaning we will rack-up no additional debt to what we already have.

$3 trillion is a whole bunch to spend in a year's time - plenty to pay the interest on the humongous debt we already have, plenty for Defense, plenty to guarantee SS checks keep flowing, plenty to keep funding the two Ms, plenty to cover Vet benefits, plenty to fund general federal government functions, plenty to pay the State Dept, plenty to back existing retirement programs for fed employees, etc, etc, etc...

...cuts will still have to be made, though, because of the fiscally irresponsible habit we've gotten into of spending much, much more than we make every year (thus the friggin' $17 trillion overt debt we have). I'm sure we can survive a while without giving foreign aid, we can totally eliminate farm subsidies, we can trim welfare programs back to where food stamps, WIC, the school lunch program, and housing assistance are where our focus lies.

Point is that America can survive AOK by just living off the $3 trillion it's going to take in in the next year...

...and, if we can survive well with a balanced budget for one year, then we can do it for two, and if we discipline ourselves to do it for three we will well be on our way to fiscal responsibility that will benefit future generations.

NO to Obamacare...

...and NO to raising the debt ceiling.

 

[Sean Renaud]

In what sense is the government analogous to a for-profit business entity, and what is the product or service it can improve upon in order to increase revenue and profitability?

Honestly its not but I was responding to a particular poster and a general sentiment that a government should live within its means because we do and that if the government was run like a business it would have gone out of business decades ago.

 

[SeaDaddy1]

The debt ceiling is a meaningless and artificial construct that just provides good political theater - because Congress authorizes spending without respect to a debt limit.

Then every six months or a year, the Treasury says, "We don't have any money to pay for the authorized spending."

Then the party in power says, "We have to raise the limit to pay for things already bought!"

Then the debt ceiling is raised, and new spending is authorized.

It's circular.

Congress's spending should be tied to paying the bill.

Yes sir indeed! I agree wholeheartedly Johnny. Particularly that last sentence.
But it's a glass ceiling that's only foreseeable through our Congress, the President, and I suspect the failing Federal Reserve (also subject to Congressional oversight). I find it ironic the Dept of Treasury creates the currency used.

As a business owner I've not only tried it myself but I'm thriving because of it. Perhaps you should come back when you understand that it takes money to make money and you have to take risks to get rewards.

By contrast if you make less money in any given cycle and you give up something you'll make even less the following cycle because whatever that was brought in customers. See how well your company runs after you shut off the phones.

You're a business owner? In the words of a good friend,"Oh, sweet baby Jesus! Heaven help us all!"

It's circular, all right, but not in the way that you're thinking. Every year, roughly 60% of ALL federal spending is on Medicare, Social Security, and unemployment benefits. Toss in interest on the debt (7% in 2013) and veterans benefits (4%), and you start to get a true picture of what "government spending" really means.

That's the circular part. But the next part is why your simplistic solution falls flat on its face.

The reason these expenditures are recurring is that the legislation which established the programs "mandates" who shall receive the benefits. Those beneficiaries are "entitled" by LAW! The only way to cut government spending on these programs is to repeal or amend the existing legislative mandate. No one in the Congress has the balls or stupidity (and it is hard to say which characteristic is most applicable) to substantially reduce the supplemental income to seniors, the majority of whom cannot work, or their supplemental healthcare costs, the majority of whom would be uninsurable in the open market.

I think it is safe to say that if you or I were members of Congress there is a very good chance that we wouldn't have the balls or stupidity to solve the problem either.

So, until someone manages to actually grow a pair AND manages to get elected along with a majority of similarly equipped colleagues, we should just STFU and authorize the debt ceiling increase.

Because simply arguing about it couldn't possibly be fooling anybody about the true nature of our future intentions.

No, I do not agree that the debt limit is meaningless. Congress doesn't borrow money like individuals borrow money. The United States does not go to some other country (i.e. China) with hat and a loan application in hand and supplicate itself like Obama bowing to King Abdullah. We borrow money the way banks, insurance companies and other financial institutions do. We issue debt instruments (primarily bonds and notes) that pay interest to the purchaser. These interest bearing products are available from the Treasury Department to individual investors on up to sovereign nations.

Raising the debt limit signals our commitment not to go into default on the debt instruments we've sold, as well as setting a theoretical limit for the issuance of new debt.

The point I was trying to make with my last post was that of all the "stuff" the federal government spends money on, approximately 60% of our total expenses go to three program items: Social Security and disability benefits, unemployment/labor, and Medicare. These programs and their beneficiaries as stipulated in the law essentially REQUIRE us to run deficit budgets either as a single annual document or in the form of "continuing resolutions."

Let me repeat this for emphasis: Entitlement programs are the primary expenditures that force us to borrow money in ever increasingly dangerous amounts.

Of the remaining 40% of the budget popularly referred to as "discretionary," no item would have a greater impact if it went unpaid than that 7% item known as "Interest on the Debt." Thumb your nose at that in order to fund the Department of Transportation, or the Justice Department or even the Department of Defense, and you've basically committed financial suicide and international financial homicide all at once. The number of countries we would pull into the abyss with us is unthinkable.

Any expense item that represents such a small amount of the budget and yet has such potential catastrophic impact if left unpaid is hardly "meaningless."

I see your point w/all that, but why should the US have to go to anyone for a loan? Are there countries that have paid us back for any loans?

 

[Colonel Hogan]

I see your point w/all that, but why should the US have to go to anyone for a loan? Are there countries that have paid us back for any loans?

IMHO, these are absolutely the WRONG questions to be asking.

Let's try this another way. Have you ever seen a copy of your credit report? Do you know what information is on it? If you have, you know that it shows the dollar amounts of individual credit accounts you have outstanding and any lateness in your payments to those accounts. It shows if you have ever been turned down for credit, had your wages garnished and other relevant information that provides a reasonably accurate picture of your financial condition.

Do you understand the importance of making timely payments and protecting your overall credit worthiness, or do you assume a defensive attitude that implies that because other people default on their loans and file bankruptcies every five or six years, you can afford to just make payment whenever you feel like it and you'll still look okay by comparison to a host of deadbeats?

How do you think such a lackadaisical attitude would benefit you if you wanted to borrow more money?

These same principles work in reverse if you are out shopping for an investment grade bond. If you purchase a AAA-rated bond from a company, you will probably get a lower interest rate on an investment that is virtually guaranteed to pay that interest on time and in full.

If you purchase a so-called "junk bond" from a corporation, it will most likely offer a higher than average rate of return, but it is understood from the outset that its "junk" rating suggests that you may never see that return on investment at all.

As you travel through life, which kind of "company" do you want to be like and what kind of responsibility and integrity would you like the United States to reflect as well?

 

[SeaDaddy1]

IMHO, these are absolutely the WRONG questions to be asking.

Let's try this another way. Have you ever seen a copy of your credit report? Do you know what information is on it? If you have, you know that it shows the dollar amounts of individual credit accounts you have outstanding and any lateness in your payments to those accounts. It shows if you have ever been turned down for credit, had your wages garnished and other relevant information that provides a reasonably accurate picture of your financial condition.

Do you understand the importance of making timely payments and protecting your overall credit worthiness, or do you assume a defensive attitude that implies that because other people default on their loans and file bankruptcies every five or six years, you can afford to just make payment whenever you feel like it and you'll still look okay by comparison to a host of deadbeats?

How do you think such a lackadaisical attitude would benefit you if you wanted to borrow more money?

These same principles work in reverse if you are out shopping for an investment grade bond. If you purchase a AAA-rated bond from a company, you will probably get a lower interest rate on an investment that is virtually guaranteed to pay that interest on time and in full.

If you purchase a so-called "junk bond" from a corporation, it will most likely offer a higher than average rate of return, but it is understood from the outset that its "junk" rating suggests that you may never see that return on investment at all.

As you travel through life, which kind of "company" do you want to be like and what kind of responsibility and integrity would you like the United States to reflect as well?

Yeah, I seen my credit report. My 1st wife fucked it up royally, but I managed to recover. That's why I don't do credit anymore or share it with any other person.

And if you're saying outside/foreign countries heavily influenced the US credit rating due to "junk" ratings, I understand that too. Which is why we should stop borrowing money to help foreign nationals, then turn to US citizens to pay it off to countries we borrow from. We may be the singular reason many countries aren't falling apart due to our 'credit rating' to more stable countries, but we know we'll never get payment back from those that ride on our back.

Basically, I'm wondering why the US keeps up w/this insanity when we know it's not working.

 

[JAMESBJOHNSON]

Assuming that was true, you would have "saved" $546 billion of a $2.4 trillion problem, and that assumes you apply every penny of that military savings to ease the financial pressure resulting from the "mandatory" programs. All you have done is slow the rate at which your ship is sinking.

That may be significant if help is on the way or you are able to initiate a plan for your rescue. But if all you are going to do is drown anyway, the depth of water in which you take your final breath is of no consequence whatsoever.

I agree with all you say, and add that the interest rate we pay on our debt is lower than what we usually pay. If the interest rate rises to its usual rate we're toast.

 

[4est_4est_Gump]

I agree with all you say, and add that the interest rate we pay on our debt is lower than what we usually pay. If the interest rate rises to its usual rate we're toast.

Bernake's dilemma, the one we have been talking about for a long time now.

The "recovery" is so fragile that rates cannot be allowed to rise and the government, Wall Street and the Big Banking firms have gone crazy and created a cheap money bubble. Eventually this bubble will lead to truly cheap money for all of us.

ANd, if we just pay the interest from incoming revenues, we cannot default, but Obama wants a default because in crises there is opportunity and he has campaign bundlers who still need to be rewarded for his last great victory over common sense.

 

[JAMESBJOHNSON]

Bernake's dilemma, the one we have been talking about for a long time now.

The "recovery" is so fragile that rates cannot be allowed to rise and the government, Wall Street and the Big Banking firms have gone crazy and created a cheap money bubble. Eventually this bubble will lead to truly cheap money for all of us.

ANd, if we just pay the interest from incoming revenues, we cannot default, but Obama wants a default because in crises there is opportunity and he has campaign bundlers who still need to be rewarded for his last great victory over common sense.

For a long time I've warned that the elites and their government expect a collapse, and are liquidating the commonwealth to buy stuff like real estate, stocks, gold, and commodities. While the rest of us are stuck with trillions of Weimar Republic paper.

Look for the Chinese to grab Hawaii and the West Coast/Alaska.

 

[4est_4est_Gump]

I do not think they see outside of the faculty lounge.

They actually believe that they finally have just the right balance between Capitalism and Socialism.



Well, close, they still need to bring Capitalism down to size, but they're getting there!