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Old Dec 26, 2012, 08:24 PM   #1
malman89
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U.S. Debt Ceiling, Part 79

http://www.nytimes.com/interactive/u...sha=055678dce?

I guess we should have skipped the December 21 Mayan hysteria for December 31. Who needs automatically enabled austerity measures (or "fiscal cliff" for main stream media) when we'll have to resort to tricky accounting tactics to delay defaulting on our debt?

As much as I want the austerity measures to go into effect as a bitter pill to entice reigning in the national debt, I would hope that Congress is able to lift the debt ceiling once more in time - and hopefully at an amount that won't dry up in 3-6 months. Something that gives us a bit more time to work things out (ideally 1 year minimum). Little lasting change can be done to the budget (furloughs and layoffs are the shortest of short term solutions) in such a short time.
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Old Dec 26, 2012, 10:08 PM   #2
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As much as I want the austerity measures to go into effect as a bitter pill to entice reigning in the national debt, I would hope that Congress is able to lift the debt ceiling once more in time - and hopefully at an amount that won't dry up in 3-6 months.
I think you conflate two unrelated items here.

The "fiscal cliff" are imposed cuts in federal spending along with tax hikes that will increase revenue.

Raising the "debt ceiling" is simply an acknowledgement of debt incurred and the renewed commitment to pay what we as a nation are responsible for.

So long as we have a debt and the ability to meet our responsibilities, the debt ceiling should always be raised regardless of how we choose to deal with our federal budget.

If we owe it, we should pay it. The debt ceiling should not become a constant political pawn in this destructive game Republicans insist on playing.
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Old Dec 26, 2012, 10:34 PM   #3
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I think you conflate two unrelated items here.

The "fiscal cliff" are imposed cuts in federal spending along with tax hikes that will increase revenue.

Raising the "debt ceiling" is simply an acknowledgement of debt incurred and the renewed commitment to pay what we as a nation are responsible for.

So long as we have a debt and the ability to meet our responsibilities, the debt ceiling should always be raised regardless of how we choose to deal with our federal budget.
I'm not confused about the two (and I refuse to use the stupid cliff term), but they're undeniably tied together (especially considering the timing of Dec 31 - Jan 1), so I threw in that side comment.
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Old Dec 26, 2012, 11:05 PM   #4
citizenzen
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I'm not confused about the two (and I refuse to use the stupid cliff term), but they're undeniably tied together (especially considering the timing of Dec 31 - Jan 1), so I threw in that side comment.
They are tied together as current news stories.

But not as a consequence of each other.


[home analogy]

You still need to pay your credit card bill.

Regardless of how much you slash your budget next month.

[/home analogy]
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Old Dec 27, 2012, 01:18 AM   #5
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Who did not see this coming. I think having the debt ceiling is stupid and the GOP has been using it incorrectly for years. I say the ceiling should be rolled in with the budget. Do not give the idiots know as the GOP 2 chances to hold the country hostage for their petty gains. Force them to do it only once.
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Old Dec 27, 2012, 09:21 AM   #6
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Raising the "debt ceiling" is simply an acknowledgement of debt incurred and the renewed commitment to pay what we as a nation are responsible for.
If the debt ceiling were not passed, we'd be forced to stop incurring NEW debt, and start paying existing debt. Your suggestion that it's 'NOTHING MORE than an acknowledgement of debt incurred' is a popular big-government talking point designed to make debt hawks and fiscal conservatives look bad for doing what they can to stop the continued growth of government and debt/deficit spending. Now, don't get me wrong... simply not passing a debt ceiling increase is not a solution in and of itself... but it's one of the many steps we'll have to take to reign in this monster and stop the bleeding. If it can be stopped.
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Old Dec 27, 2012, 09:27 AM   #7
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If the debt ceiling were not passed, we'd be forced to stop incurring NEW debt, and start paying existing debt. Your suggestion that it's 'NOTHING MORE than an acknowledgement of debt incurred' is a popular big-government talking point designed to make debt hawks and fiscal conservatives look bad for doing what they can to stop the continued growth of government and debt/deficit spending. Now, don't get me wrong... simply not passing a debt ceiling increase is not a solution in and of itself... but it's one of the many steps we'll have to take to reign in this monster and stop the bleeding. If it can be stopped.
minus the fact if they do not raise it if the government will default on agreements it already made.

I am going to point to the fact the debt ceiling should not be were this pissing match from the GOP takes place. The budget is the correct place to do it and when the budget is pass require a debt ceiling increase to be part of it to pay for it. Do not get the GOP 2 chances to hold the entire country hostage to get the petty things they want.
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Old Dec 27, 2012, 11:37 AM   #8
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minus the fact if they do not raise it if the government will default on agreements it already made.

I am going to point to the fact the debt ceiling should not be were this pissing match from the GOP takes place. The budget is the correct place to do it and when the budget is pass require a debt ceiling increase to be part of it to pay for it. Do not get the GOP 2 chances to hold the entire country hostage to get the petty things they want.
I'm sorry, but this is not remotely correct. These are simply big-goverment talking points... as I stated earlier.

For your suggestion to be correct, tax revenues would have to be insufficient to cover annualized debt payments (currently only around 10% of our budget).

What would occur would be that government would actually have to make some decisions about what needs to be cut. Debt would be paid first... then we'd have to decide which programs to slash. Defense? Medicare? Something would have to give... we'd have to start living within our means.

***
Here's a real world example for those who don't understand:

Tommy (U.S. Government) has a lot of debt, and a lot of bills (SS, Medicare, Defense). Tommy makes his payments every month, on his bills and on his loans, but to do so he has to get a new loan every year from the bank.(citizens and foreign countries)

This year though, Tommy's wife Sarah (congress) decided that there was no way they could go on living this unsustainable lifestyle, and so she refused to sign on to any more debt (refusal to increase debt ceiling). Tommy could no longer get new debt, to pay off his bills and existing debt, so something had to change.

Tommy knew it was stupid to stop paying debt payments including mortgage and credit card bills (existing debt), so he knew that the cuts had to some from somewhere else. Debt payments are first priority, not last... and so they would be paid first. So, Tommy intelligently cut his entertainment budget, sold his car, and stopped buying new stuff for his house (entitlement programs, defense, etc.) until his budget was back into alignment.

***

Of course not raising the debt ceiling doesn't mean we have to default on agreements and debt we've already incurred. It's all how you prioritize your spending.

Last edited by classicaliberal; Dec 27, 2012 at 11:47 AM.
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Old Dec 27, 2012, 11:44 AM   #9
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So you'd have austerity. That works really well at a government level .
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Old Dec 27, 2012, 11:48 AM   #10
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So you'd have austerity. That works really well at a government level .
Living within your financial means works great at every level. I'm sorry you think our defense and Medicare budgets can't be lowered... I happen to think they can. And must.
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Old Dec 27, 2012, 11:55 AM   #11
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Living within your financial means works great at every level.
In the long term sure, but not as a short sharp shock.

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I'm sorry you think our defense and Medicare budgets can't be lowered... I happen to think they can. And must.
I think the US could essentially eliminate its defence budget, and the world would be a safer place because of it. Even so it can't happen overnight.

I don't think you'll be able to make large cuts to medicare and social security without widespread protests.
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Old Dec 27, 2012, 12:20 PM   #12
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If the debt ceiling were not passed, we'd be forced to stop incurring NEW debt, and start paying existing debt.
OMG. Who knew it was so easy?



And in this thread, some dude invented cold fusion.



It's another Festivus miracle!!!

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Old Dec 27, 2012, 12:32 PM   #13
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Living within your financial means works great at every level. I'm sorry you think our defense and Medicare budgets can't be lowered... I happen to think they can. And must.
But like a many others your entire thought process has so many flaws in it that it is insane.

You do not seem to get slamming on the breaks and yanking out all that money at 1 time is a sure fired way throw the economy into a depression. The Great depression would look like child's play.
But GOP are idiots and explaining that BASIC logic to them is beyond what they can understand.

The debt ceiling is not the right place for this debt. The budget is the correct time.
We need to reduce spending and raise taxes but it has to be phased in to not cause everything to crash and burn. Let the economy adjust to it.

But this might be over your head in understanding.
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Old Dec 27, 2012, 12:32 PM   #14
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I'm sorry, but this is not remotely correct. These are simply big-goverment talking points... as I stated earlier.

For your suggestion to be correct, tax revenues would have to be insufficient to cover annualized debt payments (currently only around 10% of our budget).

What would occur would be that government would actually have to make some decisions about what needs to be cut. Debt would be paid first... then we'd have to decide which programs to slash. Defense? Medicare? Something would have to give... we'd have to start living within our means.
The problem with this idea is that it assumes the government has no positive effect on the rest of the economy. If you cut all that spending overnight the economy would tank, and because of that there wouldn't be enough taxes coming in to pay off the debt. Yes we need to reduce spending, but it has to be done gradually so it doesn't have a huge negative effect. Also it needs to be combined with increased revenue so we don't have to cut as much.
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Old Dec 27, 2012, 12:35 PM   #15
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Living within your financial means works great at every level. I'm sorry you think our defense and Medicare budgets can't be lowered... I happen to think they can. And must.
but you seem to think this can be done over night with out causing massive problems.

And as pointed out a lot of bills would not be pay able.
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Old Dec 27, 2012, 01:26 PM   #16
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but you seem to think this can be done over night with out causing massive problems.

And as pointed out a lot of bills would not be pay able.
The problem isn't that our esteemed elected officials don't want to tackle it on a gradual basis. The problem is that they don't want to tackle it at all. They are all beholden to special interest and that keeps them from legitimately tackling any issue that really matters.
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Old Dec 27, 2012, 01:29 PM   #17
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The problem isn't that our esteemed elected officials don't want to tackle it on a gradual basis. The problem is that they don't want to tackle it at all.
I simply don't believe that.
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Old Dec 27, 2012, 01:32 PM   #18
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I simply don't believe that.
Well you can believe what you like. But the fact is that both sides seem unwilling to budge on taxes and folks on the left don't want to see any changes of note to core entitlement programs. Running the country has more to do now with the willingness to play the political game rather than actually getting anything done.
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Old Dec 27, 2012, 02:00 PM   #19
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The problem isn't that our esteemed elected officials don't want to tackle it on a gradual basis. The problem is that they don't want to tackle it at all. They are all beholden to special interest and that keeps them from legitimately tackling any issue that really matters.
Very true. Sadly they are lock into there own petty gains than what needs to be done.
The GOP has proven time and time again to be willing to hold the entire country hostage for getting everything they want and then some.
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Old Dec 27, 2012, 02:14 PM   #20
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In the long term sure, but not as a short sharp shock.

I think the US could essentially eliminate its defence budget, and the world would be a safer place because of it. Even so it can't happen overnight.

I don't think you'll be able to make large cuts to medicare and social security without widespread protests.
I think the world would be safer with drastic defense cuts, I also think the American society would be stronger and more prosperous by dealing with reality on Medicare and Social Security.


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OMG. Who knew it was so easy?



And in this thread, some dude invented cold fusion.



It's another Festivus miracle!!!

Who said it would be easy? In fact, today, in another thread, I repeatedly pointed out that it would be incredibly hard and would require significant sacrifice from society.


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But like a many others your entire thought process has so many flaws in it that it is insane.

You do not seem to get slamming on the breaks and yanking out all that money at 1 time is a sure fired way throw the economy into a depression. The Great depression would look like child's play.
But GOP are idiots and explaining that BASIC logic to them is beyond what they can understand.

The debt ceiling is not the right place for this debt. The budget is the correct time.
We need to reduce spending and raise taxes but it has to be phased in to not cause everything to crash and burn. Let the economy adjust to it.

But this might be over your head in understanding.
Insane?

Depression? A depression is simply the natural result of over investment and malinvestment in certain economic sectors. It's the economy trying to heal itself. Prices plunge so that debt and malinvestments can be liquidated, curing the illness so the economy can get back to normal growth.

What we have to do is stop inflating the bubble - stop prohibiting the depression from taking place... because if you don't, all you're going to get is a massive decade long recession which will do far more damage than it otherwise would have.

Rip off the band aid quick and move on.

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The problem with this idea is that it assumes the government has no positive effect on the rest of the economy. If you cut all that spending overnight the economy would tank, and because of that there wouldn't be enough taxes coming in to pay off the debt. Yes we need to reduce spending, but it has to be done gradually so it doesn't have a huge negative effect. Also it needs to be combined with increased revenue so we don't have to cut as much.
Hey, gradually is better than not at all... unfortunately 'not at all' is all our politicians ever cut. Even their proposed 'cuts' aren't really cuts... just reductions in growth. We have a massive spending problem in this country, and almost no one has yet come to grips with this reality.


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but you seem to think this can be done over night with out causing massive problems.

And as pointed out a lot of bills would not be pay able.
Existing debt bills are completely 100% payable; new expenditures in defense, entitlements, etc. wouldn't be.



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The problem isn't that our esteemed elected officials don't want to tackle it on a gradual basis. The problem is that they don't want to tackle it at all. They are all beholden to special interest and that keeps them from legitimately tackling any issue that really matters.
Yep.

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Very true. Sadly they are lock into there own petty gains than what needs to be done.
The GOP has proven time and time again to be willing to hold the entire country hostage for getting everything they want and then some.
It's exactly this kind of mentality that has gotten us to where we are. It's the other guy! I didn't do anything wrong! My spending is ok! Amazing how you can simultaneously agree with ugahairydawgs, then immediately go into reapeating the same rhetoric he's speaking out against.
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Old Dec 27, 2012, 02:22 PM   #21
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Very true. Sadly they are lock into there own petty gains than what needs to be done.
The GOP has proven time and time again to be willing to hold the entire country hostage for getting everything they want and then some.
Neither side is innocent here. The Dems and GOP both control a chamber of Congress and neither seem to do much to try and get anything through. Most of the time when they do propose something it is so far out on a fringe that they know they other side is going to say no and they do so for no other reason than to be able to run to the press and blame the other.
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Old Dec 27, 2012, 02:30 PM   #22
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Neither side is innocent here. The Dems and GOP both control a chamber of Congress and neither seem to do much to try and get anything through. Most of the time when they do propose something it is so far out on a fringe that they know they other side is going to say no and they do so for no other reason than to be able to run to the press and blame the other.
Points to the record filbusters by GOP and record number of pointless votes by GOP.

Both sides do it I am not going to argue that point but there is no getting around the fact that the GOP has taken it to an entirely new level and will not compromise at all.
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