Ahhh more talk about the debt ceiling yet again!!!

Discussion in 'Economics' started by S2007S, Jan 15, 2013.

  1. S2007S


    From now until February I will be posting article after article after article on the debt ceiling and the worries it will have on the economy if nothing is done, dont worry though as each article will make you think what if, there should be zero worries because the debt ceiling is going higher and the US is going even deeper into debt, but no worries, as long as you can buy that garden style burger, grab that latest tablet, drink the newest IPA and go zip lining there are zero worries about what the US plans to do to pay off its debt...because there are no fucking plans :)

    Really, the debt ceiling is far scarier than the fiscal cliff, who believes this pathetic nonsense....this has to be the millionth time I have heard about the debt ceiling being a problem in how many years, how many more times is the US going to bump up against the debt ceiling? and what does it matter anyway, every single time we get to the point, They raise it, so what is the big deal here, like I said a few times before raise it to $982 Trillion dollars..and the talk about the US defaulting is just too fucking funny, do you REALLY think, I mean realllllly think they are going to let the US default, the answer is NO, did we go over the "fiscal cliff" no we didnt...so why even write pointless articles on this topic.

    Alan Blinder says,
    "this is downward spiral toward depression."

    HAHA really, keep hyping up whats not going to happen....just like I said the fiscal cliff would be solved last minute, they will now raise the debt ceiling once again so the US can continue to pay their bills..

    Why Debt Ceiling Is Far Scarier Than the 'Fiscal Cliff'
    CNBC.com | January 15, 2013 | 01:55 PM EST
    As far as menacing metaphors go, there's almost no contest between the fiscal cliff and the debt ceiling. The cliff summons up images of plunging to our doom. The ceiling is just something that keeps the rain off our heads.

    This is unfortunate because the reality is exactly the opposite. Impact with the debt ceiling would be far worse than stumbling off the cliff. Both remind us that our government has become so divided—both on principles of taxes and spending and along partisan lines—that is very nearly dysfunctional. But the economic impact of the debt ceiling is far more severe than the cliff.

    Yesterday the Obama administration appeared to indicate that it could prioritize interest payments on Treasury bonds, which probably takes the worst case scenario of a default by the government of the United States off the table. Our full faith and credit will remain full of faithfulness.

    At least for now. One of the things that the discussion of a possible default by the United States has revealed is that a default is possible. The president took default off the table only elliptically yesterday, by leaving non-payment of debt off the list of things that wouldn't get paid if we go off the debt ceiling. We still have no direct statement of policy from the White House that it will definitely make all debt payments regardless of ceiling constraints.

    What's more, the very fact that this appears to be a matter of policy choice may make some investors nervous. Many people had assumed that the United States government is under some kind of legal or constitutional obligation to make debt payments. Or, at least, to pay debt before paying any other obligation. We now know that the question of debt payment is—like so many other questions about what the Constitution requires—murky at best. The importance of the 14th Amendment's line about not questioning the validity of the debt is very much in the eye of the beholder (and not necessarily the eye of the bond holder).

    Some even raise the possibility of an accidental default. Like a household that has set up automatic payments of bills through credit cards, the payment systems of the United States are set up to pay all bills as they come due. Turning off some payments while leaving the others on is a technical challenge. Some doubt it can be done with 100 percent certainty that there will be no errors. So there is at least a chance that some of the bills we plan to pay will go unpaid—and if one of those is an interest payment on a bond, we'll have accidentally defaulted.

    In today's Wall Street Journal, Alan Blinder points out that running into the debt ceiling would provoke a severe fiscal contraction.

    "At current rates of spending and taxation, federal receipts cover less than 74% of federal outlays. So if the government hits the debt ceiling at full speed, total outlays—which includes everything from Social Security benefits to soldiers' pay to interest on the national debt—will have to be trimmed by more than 26% immediately. That amounts to more than 6% of GDP, far more than the fiscal cliff we just avoided," Blinder writes.

    The fiscal cliff, by contrast, would have erased 4.5 percent of GDP.

    Any sustained captivity below the debt ceiling, in other words, means that the economy will enter a severe recession. This recession will be made far worse because the so-called automatic stabilizers that kick in when the economy slumps—think unemployment insurance—will not be able to function because of the budget constraint. So unemployment will grow while unemployment insurance contracts. This will not only pose a hardship on the people out of work, it will mean that the spending power of the American consumer will shrink rapidly.

    Where the fiscal cliff might have led to a recession, this is downward spiral toward depression. The shrinking economy will shrink the government's tax revenues. And since the budget deficit cannot increase, the spiral will go unchecked. Falling taxes will trigger falling spending. "Downward spiral" may be too mild. Economic black hole better fits the bill.

    "In short, the consequences of hitting the debt ceiling are too awful to contemplate—worse even than going over the fiscal cliff. A sane Congress wouldn't even think about it," Blinder writes. He's absolutely correct.

    Blinder goes on to propose a plan to avoid a crises based on the assumption that Congress is sane. Let's hope that assumption is correct.
  2. "The president has acknowledged that his previous vote against the debt limit was “a political vote.” On Monday, at a news conference, he urged lawmakers to boost the debt limit without conditions: “We’re going to have to make sure that people are looking at this in a responsible way, rather than just through the lens of politics.” (In other words, don’t do what I did back when I was a lawmaker.)"

  3. TGregg


    Hyperbole. I have a ton of plans. I'm going to party my brains out while demanding an ever increasing level of handouts from Uncle Sucker. Then I am going to my grave, LMAOing all the way, glad to have @$$ raped the next few generations. Sucks to be them, but I know for a fact they would have done absolutely the same thing in my shoes, except for starting out on the handout path sooner.
  4. TGregg


    LOL. Last time it was Politics as Usual, but this time it's Do The Right Thing. "I voted for it before I voted against it."
  5. we need a War on Debt
  6. TGregg


    According to the left, we need a crapload more debt, seeing as how (fiscally speaking) we are in the best shape ever. I am not making this up, this is what they think:

  7. Bob111


    +1 FT(for once)
  8. BSAM


    Your best post, ever, brother Trad3r.
  9. piezoe


    I respectfully disagree. I'm not concerned with the debt acquired because of the financial collapse, the recession, and the need to apply stimulus to keep us out of depression and deflation. I think exactly the right thing was done and is being done, although it might have been done a little better-- but it's been done well enough to save this country from a disastrous depression. We are the model for the rest of the World with regard to how best to deal with a major financial collapse and a threatened depression.

    The debt ceiling is moot. We are constitutionally bound by the 14th amendment. We must pay our bills. The executive branch can ignore the debt ceiling if they are forced to. Constitutional law trumps statutory law.

    The focus right now should be on jobs even if that requires still more debt, and it will.

    The discussion in Congress should be focused on jobs, bringing the cost of medical care down, and scaling back, in small steps, the defense department so as not to make the employment situation much worse. It is a matter of moving dollars from where they are being inefficiently and unproductively spent on wasting assets to where they can be efficiently and productively used. The result of mismanaging our assets has been a growing poor class, a shrinking middle class, and an increasing concentration of wealth among a tiny fraction of the population. Concentration of wealth among a few percent of the population is a normal condition for the country going back to colonial days-- but the concentration has now attained a level where it has become dangerous to the economy and stability of the country. Economic conditions must be established that will result in a rebirth of opportunity and the spontaneous growth of a strong middle class.

    Once we bring our unemployment rate down to 5-6%, and bring our medical and defense costs in line with other developed nations, revenues will increase dramatically relative to expenditures, the debt problem will resolve itself, and there will be plenty of money, provided we avoid getting entangled in further unproductive, expensive, and endless wars.

    We could start by cutting our order for 2500 unneeded F-35's in half. (We'd still acquire 1250 unneeded F-35's. That should be enough!)

    There is plenty of money, it is distributed ineffectively among poorly ordered priorities.

    Drastic fiscal cuts will be disastrous. We need to rearrange how we are spending the revenue we do have, and continue borrowing and deficits at a declining level while we concentrate on graduated, controlled reductions in medical and defense spending.

    A major overhaul of how we pay for medical care, in conjunction with the staged introduction of Obamney care is unavoidable. We might as well get on with it.
    #10     Jan 16, 2013