Debt ceiling

oldsaw wrote: History shows that the US was literally the only country whose industrial base hadn't been devastated during WWII. That gave the country a huge advantage in expanding the economy. History is a beotch regardless of what one chooses to cherry-pick.

My main point was that it is that it takes a lot to pull an economy out of a recession.

I do think a balanced budget is a good thing. I also think it is not feasible in this economic climate.

Our national budget has a lot of inertia. Rather than always maintaining a balanced budget, I think it makes more sense to find a healthy budget balance that builds up reserves while the economy is stronger and uses those to bolster the economy when it is weaker. I doubt that's realistically going to happen, but it's nice to think it might.

racerdave600 wrote: Also, why is that the dems never submitted a budget last year when they ran the house? It is their primary job and they didn't even attempt it. The president has yet to submit a plan of any kind for anything as far as I can tell. If they can't even submit a budget, how can they fix the budget?

We keep drudging up the same tired, old misdirections. Why? As has been reported many times, as was said at the time and as continues to be the answer to this non question, they wanted to wait for the findings of the bi-partisan deficit reduction commission. If they had passed a budget the tired, misdirected non question would be "why did the President bother to have a debt reduction commission if they didn't even wait for the findings to pass a budget!?" It's fine, but it's more of the problem. Looking to position anything that is done as a political issue. There are some good ideas in that report and a very few of them actually had some impact when the budget debate did take place. It was a responsible thing to do. Not that they waited for responsible reasons- they just thought your non question was a better option than the alternate non question.

In reply to fast_eddie_72:

The Debt Reduction Commission published its' conclusions in December, 2010 - over seven months ago. We have yet to see a budget following the proposed guidelines.

You wanna try spinning that again?

Salanis wrote:

oldsaw wrote: History shows that the US was literally the only country whose industrial base hadn't been devastated during WWII. That gave the country a huge advantage in expanding the economy. History is a beotch regardless of what one chooses to cherry-pick.

My main point was that it is that it takes a lot to pull an economy out of a recession. I do think a balanced budget is a good thing. I also think it is not feasible in this economic climate. Our national budget has a lot of inertia. Rather than always maintaining a balanced budget, I think it makes more sense to find a healthy budget balance that builds up reserves while the economy is stronger and uses those to bolster the economy when it is weaker. I doubt that's realistically going to happen, but it's nice to think it might.

On those points we completely agree. A balanced-budget amendment forces restraints on an entity that has acted irresponsibility.

Too bad that you chose not to address the part you deleted, though.

“In the history of human thought, science has often come out of superstition. Astronomy came out of astrology. Chemistry came out of alchemy. What will come out of economics?” -- Bernard Lewis

oldsaw wrote: In reply to fast_eddie_72: The Debt Reduction Commission published its' conclusions in December, 2010 - over seven months ago. We have yet to see a budget following the proposed guidelines. You wanna try spinning that again?

Well, you can see it how you like. I'm trying to be pretty reasonable in my posts. I haven't tried to "spin" anything. You can pretend like the Republicans didn't take over the House of Representitives and take many seats in the Senate if you like. I recall seeing coverage on television of the budget compromise that was reached and have a pretty good udnerstanding how we ended up where we are. December 2010 was after the November elections, as you know. What you're asking is why didn't the Democrats ram a budget through before they lost all those seats. And I think you can answer that for yourself. It would be a worse position for them to be in. The waited because they wanted to force the Republicans to have a hand in the budget so if things went poorly they couldn't lay it all at the Democrats feet. In other words, they gave the Republican an opportunity to be part of the process. The Republicans are just pissed that they have to bear some of the weight of the mess now.

Here's a non question to answer your non question- what is it you are suggesting? What is the feidish plot that the Democrats are executing?

You can come up with a never ending string of these questions. Health care- the Republicans said 'we all agree something needs to be done', then why didn't they do something when they had both houses of Congress and the White House? Budget- why didn't the Republican ballance the budget when they ran Washington? Taxes- why did Republicans pass the Bush tax cuts with an expiration date? (edit - I left out an appropriate one- Why did Republicans vote seven times to raise the debt ceiling with no fuss during the Bush administration?)

What a waste of time. This is exactly what they're counting on. Dig in and identify with your side then find a load of diversionary non issues to debate to keep from asking the uncomfortable questions about why your side isn't getting anythig done either. "Well, the other side is worse!" Great answer.

I've given an example- I would be in favor of pretty big changes to Social Security. I'd like the Democrats to put together a proposal that saves a load in pay-roll taxes and offers fewer benefits to some people, including myself. As part of the proposal I'd like them to ask the upper income earners to pay more income tax. That seems like a reasonable way to cut a load of entitlement spending and raise revenue- it has a tax cut to offset the increase so Republicans should be able to agree to it without pissing off the Godfather. But it won't ever happen if all we do is bitch about the same crap that has nothing to do with anything.

(edit) And this is exactly why I hate these debates. No matter how hard you try to have a reasonable discussion there's so much static being slund around that you spend most of the time talking about idotic non issues like this instead of what the hell are they doing RIGHT NOW.

Good day gentlemen. I'll leave you to spew each parties talking points in peace and shake my head at yet another confirmation of exactly why things are so bad and exactly how hopeless it is to think that some number of voters will be less easily swayed by over simplification and rhetoric.

oldsaw wrote: On those points we completely agree. A balanced-budget amendment forces restraints on an entity that has acted irresponsibility. Too bad that you chose not to address the part you deleted, though.

I just don't believe that the sky is falling. We're in a recession. It sucks. That's the vast majority of our current problems right there. Given enough time, the economy will recover. There is too much propensity to attribute blame and success to politicians for things they have no control over.

If we really wanted to cut spending, the government could say, "Man these wars in the middle east are berkeleying expensive! We need that money to handle problems at home." They're not going to do that, and I'm not even saying they should. But if we really needed to save a lot of money, that is an actually viable option that no one is willing to put on the table.

I think this is a damn if you do damned if you don't situation. We can't just keep going deeper in debt forever but major cuts or major tax raises will hurt the economy. I know in Huntsville (which is a very government contract dependent town) very few people are finding jobs because most the companies aren't hiring because they don't know what is going to happen with the government. The cuts or taxes will hurt a lot in the short term but help in the long term which means that that won't happen. I think people need to realize that at some point cuts will have to be made and taxes will have to be raised.

fast_eddie_72 wrote: Good day gentlemen. I'll leave you to spew each parties talking points in peace and shake my head at yet another confirmation of exactly why things are so bad and exactly how hopeless it is to think that some number of voters will be less easily swayed by over simplification and rhetoric.

Now you're copping-out just like a politician. It's not about talking points, it's about reality.

Revenue should come from tax reform and (even) tax increases. You want high income earners to pay more, I want everyone to have skin in the game.

Taxing those who earn the most is far more palatable when the beneficiaries of tax-free living have to start contributing, too. And that "shared sacrifice" definitely includes a serious re-vamping on how we spend and fund on entitlement programs beyond Social Security.

oldsaw wrote: Revenue should come from tax reform and (even) tax increases. You want high income earners to pay more, I want everyone to have skin in the game. Taxing those who earn the most is far more palatable when the beneficiaries of tax-free living have to start contributing, too. And that "shared sacrifice" definitely includes a serious re-vamping on how we spend and fund on entitlement programs beyond Social Security.

I'm not copping out. Look at what you just posted. What does it have to do with raising the debt ceiling? When we don't have an answer for why the people we voted for are acting like asses, we change the subject.

Here's the thing, plain and simple. This isn't the time, place or issue for a showdown. The budget showdown was productive if over dramatic. Some things got done and some compromise was reached. This is playing with fire. Moody's is already evaluating our credit rating and no matter what Ron Paul thinks, that would instantly make it more expensive for us to borrow money. This could happen just as a result of the threat to refuse to raise the debt ceiling.

We ARE in debt and we WILL BE in debt if they raise the debt ceiling or not. Making it more expensive to borrow money will dig us deeper in the hole. Republicans know that. The debt ceiling needs to be raised. Period. The fall out from not doing it is devistating. They are holding our prosperity hostage for their political agenda. It's wreckless and inrresponsible. Debtate the budget when you do the budget. Don't debate weather or not you'll pay for the things you already voted to do. We get it. You don't like the health care law. Fine. Get more people elected and repeal it. But in the mean time, do you damn job. You lost. Quit crying about it.

Your suggestion that we address the tax code in a way that requires everyone to pay taxes is great, but will not happen as long as the Republicans are kissing the ring on Grover Norquist's hand and respond "how high?" when told to jump by the Koch brothers.

oldsaw wrote: You want high income earners to pay more, I want everyone to have skin in the game.

www.fairtax.org

That's what I want. Mainly because the top, even though they pay a lion's share of the taxes, end up paying lower EFFECTIVE rates than the rest of us.

fast_eddie_72, I agree with nearly everything you've said, and we usually share viewpoints from different sides of the aisle. Great comments.

I know this is a bit simplistic, but I think the real solution is simply this:
The government needs to stop spending more than it makes. Period.

Until it pays off its debt, it needs to be paying the interest-only + at least 1billion/year as part of that spending.

The main issue is that none of the politicians have the guts to actually cut the spending and/or revise taxes to do all that. I'm tired of it. Actually, as I get older, I feel like my politics are more in line with the early Americans that wanted to drastically limit the power of the national government. That states should have the majority of regulatory/aid power, and the federal government is primarily concerned with infrastructure and defense.

93EXCivic wrote: I think this is a damn if you do damned if you don't situation. We can't just keep going deeper in debt forever but major cuts or major tax raises will hurt the economy.

This is true. Unfortunately, when things are good is the right time to fix it, but they are too irresponsible for that. They are too busy partying like drunken sailors during good years. That means that the only time we can make progress is during the bad times.

fast_eddie_72 wrote: Here's the thing, plain and simple. This isn't the time, place or issue for a showdown. The budget showdown was productive if over dramatic.

See, I thought the budget showdown was a waste of time. We went in with a promise of $100B in cuts. Then it was $60B in cuts. Then it was finally $25B in cuts. Except that it wasn't. Because they are all lying douchebags, it actually ended up being $.3B in cuts.

So, when they can't make cuts during the budget, the only option left is to take away the credit card.

scardeal wrote: I know this is a bit simplistic, but I think the real solution is simply this: The government needs to stop spending more than it makes. Period. Until it pays off its debt, it needs to be paying the interest-only + at least 1billion/year as part of that spending. The main issue is that none of the politicians have the guts to actually cut the spending and/or revise taxes to do all that. I'm tired of it. Actually, as I get older, I feel like my politics are more in line with the early Americans that wanted to drastically limit the power of the national government. That states should have the majority of regulatory/aid power, and the federal government is primarily concerned with infrastructure and defense.

I agree, except they can't get there immediately. They spend 40% more than they take in. You can't just cut that all at once.
I'm with you on limiting the gov's control also. It was never intended for us to have career politicians. It was conieved as more of a duty, kind of like jury duty, but obviously longer and people would volunteer for it. And as you stated, the fed gov was also not intended to have the kind of power they do. Most of the control was supposed to be with the states.
In any case, they've proven themselves incapable of running this country responsibly, so the less of them the better, IMO.

In reply to DILYSI Dave:

Here's the issue, I think. They paint things to be one way, and people believe that, but they aren't really that way at all. I post this a lot, so I'll do it quickly. Something like 75% of the budget is Social Security, Medicaid, Medicare and the military. Social Security is a mess, but as we discussed earlier, while flawed, it is more or less self funded. We could make changes to Medicaid and Medicare, but people have voted time and again to retain those programs. I think there are reasonable measures that could save some money there, but we're not talking about tens of trillions. People want the programs.

People also want lower taxes. Hey, keeping more money is great. So when we have these debates, what do they talk about. NPR. Planned Parenthood. Crap that doesn't add up to anything. Trouble is, if you're not whacking big chunks off the big programs, you're pretty much wasting time. You could eleminate the ENTIRE BUDGET save the programs I mentioned and we would still be WAY underwatter. If you're not talking about those four, you're not talking about anything that can get us to a balanced budget. Plain and simple.

So, what can you do? Raise more revenue. There are two ways to do that. Raise taxes or grow the economy. In the past, the growth of the economy was enough to cover a lot of it. Yeah, not enough, but it kept growing, so they could put it off for a while. That let them lower taxes AND provide all the services! Politicians wet dream. Everyone wins. But it left us with a lot of exposure if the economy didn't grow. And it didn't. And we got hit hard.

To a large degree, Clinton got us to a balanced budget by cutting military spending. It's the only "easy" place to cut because the other programs are mandated by law. You have to pass a bill to cut them, and people have little appitite for that. So they stay. But if we want it all, we have to pay for it. It's fine to say "we should cut entitlements" but if thats your position, you have to get them cut. "Take away the credit card" is exactly what Reagan and every Republican since has said they are doing. We still have all those entitlements. Shoot, if anything, we have even more. It didn't work. We have been sold a line. We've been told we can have all the programs and lower taxes. We can not. And now there's no accounting voodoo to make it look like we can.

But, again, and I know I'm repeating myself, but this is important. This has nothing to do with the debate about the debt ceiling. It's one thing to take away the credit card. But it's another to refuse to make the minimum payment. That never ended well for anyone and cost a lot more in the long run. If it were an individual, it would lead to bankruptcy. If you want to see how that looks on a national scale, look at Greece and Ireland. But we're talking about the United States. There's no one to bail us out. We're talking bout a global economic disaster. It's no joke and it's nothing to play with. They need to just go do their jobs and have this debate when they debate the budget.

fast_eddie_72 wrote: The debt ceiling needs to be raised. Period. The fall out from not doing it is devastating. They are holding our prosperity hostage for their political agenda. It's reckless and irresponsible.

I do not agree with this, Eddie, although most of the other stuff you said, however angry and defensive, sounded pretty close. Prove this. I have read equal numbers saying this as saying nothing will happen.

fast_eddie_72 wrote: To a large degree, Clinton got us to a balanced budget by cutting military spending.

And borrowing from SS!!!

fast_eddie_72 wrote: But it's another to refuse to make the minimum payment.

Nobody is telling them that they cannot spend the money they have borrowed thusfar and get from revenue to pay the debt payments. That's fabricated.

DILYSI Dave wrote: So, when they can't make cuts during the budget, the only option left is to take away the credit card.

This.

They (all of them) have proven time and time again that being responsible is beyond their capabilities. It's time to make them.

In reply to tuna55:

Well, there's no way to say "nothing will happen". How do you figgure? SOMETHING will happen. We owe more than we have. We all know that. So if we don't borrow the money, something doesn't get paid.

As I said, Moody's is, right now, evaluating our credit rating just as a result of the threat not to raise the debt ceiling. If that happens, it will cost us more to borrow the money.

I read an article, and I'll look for it, but you can google and see if you can find something similar. This is what I laid out above. They were talking about Michelle Bachman's bill to legislate that we will pay military bills, debt payments and Social Security payments if the debt ceiling doesn't get raised. She's running for president and I get that. She knows this won't happen but I understand why she wants the political cover. No problem there.

But since she put it out there, someone did the math. If we did what she is suggesting, there is NOTHING left. Remember, we are opperating at a tremendous deficit. We aren't even almost covering all we spend. And those few programs would take all of it.

Now, here's the thing- if we don't raise the debt ceiling, we will NOT pay for all of those programs. As I said before, unimaginable things would happen. EVERYTHING else would shut down. I'm not sure what happens to things like the FBI, CIA, ATF and Boarder Patrol, but it stands to reason they won't all volunteer to work for free. But more to the point, all the programs that provide aid to poor folks would immediately go away. That isn't going to happen. Even the people who don't like those programs won't allow that. American Families would be devistated. None of those politicians will allow that made for TV movie to be laid at their feet. "Debt Debate Costs 5 Year Old Memphis Boy His Leg". "Family Homeless, Living Under Golden Gate Due To Debt Battle". Not going to happen.

We simply do not have enough money coming in to cover enough of what we're spending. We're in a fragile, global economic recovery. To think that the US could endure a fiscal crisis like that without having any effect on the global economy is crazy. The market would tank hard, and that would drag down the rest of the world. As I laid out above, a lot of governmetns use growth as an easy way out. Companies would immediately stop hiring (in fact, I'm pretty sure many already are) and people would stop spending again. It would be pretty ugly.

I mean, that's pretty much it, in a nut shell. There's nothing to prove, really. It would be very similar to what we lived through. No way those kind of huge things happen without effecting consumer confidance and the global markets that are run as much on voodoo as common sense. 50 years from now might we all be better off for it? Could be. But it would be a really rough 50 years.

tuna55 wrote: Nobody is telling them that they cannot spend the money they have borrowed thusfar and get from revenue to pay the debt payments. That's fabricated.

I don't think you understand just how much of a defict we're running. There's no bank account full of borrowed money waiting to be spent. They spent it. We're talking about borrowing money to meet next month's expenses. And not just a little, either. It's something like 40% of what we spend. And yes, that's a problem. And yes, that needs to be solved. And no, refusal to raise the debt ceiling won't eleminate one penny of it.

tuna55 wrote:

fast_eddie_72 wrote: To a large degree, Clinton got us to a balanced budget by cutting military spending.

And borrowing from SS!!!

Yes, and that sucks. It was a political trick to raise taxes without raising taxes. Would have been much better to just raise taxes, but politics wouldn't allow them to be raised any more than they were. But however it got done, it did work. As I said 'to a large degree'. I didn't explore, nor could I name off the top of my head everything that was done under Clinton. But the big points were higher taxes and smaller military. More revenue, less spending. Balanced budget.

fast_eddie_72 wrote: 50 years from now might we all be better off for it? Could be. But it would be a really rough 50 years.

If the choice is between a rough 50 years followed by a viable USA, or continuing to party like drun k sailors for 10 years, followed by a collapsed USA, I'll take the former.

tuna55 wrote:

fast_eddie_72 wrote: The debt ceiling needs to be raised. Period. The fall out from not doing it is devastating. They are holding our prosperity hostage for their political agenda. It's reckless and irresponsible.

I do not agree with this, Eddie, although most of the other stuff you said, however angry and defensive, sounded pretty close. Prove this. I have read equal numbers saying this as saying nothing will happen.

Got a link to the story? I'd be interested in reading it.

In reply to DILYSI Dave:

I said maybe. That's not the choice. It's not even close to that clear cut. Absolutely uncharted territory. And the 50 years thing I just kind of made up. Again, just no idea what it would lead to.

Who knows what would happen? Maybe we'd find some way to patch it together and have everything work out, plus be on guard against excessive debt in the future. But in the short term we would undoubetly no longer be the learders of the financial world. Could we get back to the top? Maybe. Just as likely, if not more, that China would capitalize on our crisis and we'd be relegated to a shadow of our former self. At best it would be a gamble, and a poor one at that. Certainly not one I want to take. Much better to increase the debt ceiling and look for a way froward from a position of power than to intentionally destroy ourselves in the hope that we'll come back stronger than ever.