The day after....We hit the debt ceiling

[lazerelmo]

Mayhem, Crisis, Turmoil, and Mass starvation!!!!!

http://www.nypost.com/p/news/opinion/opedcolumnists/obama_debt_limit_truth_twisting_QgMC6YT1SDi6yIf1Tr HtaP


Treasury Secretary Tim Geithner, in particular, is playing the "dire warning" game. Back in April, he wrote Congress: "If the debt limit is not increased by May 16," Treasury will have to take "extraordinary measures . . . to temporarily postpone the date the United States would other wise default on its obligations."






Well, here we are on May 17, with no sign that the sky has fallen.



Now what am I going to do with all those canned goods and bottled water I stocked up on.

:wakeup

[Viva Las Espuelas]

No fear mongering at all. Nothing to see here. I wonder why August wasnt mentioned before.

[Drachen]

Mayhem, Crisis, Turmoil, and Mass starvation!!!!!

http://www.nypost.com/p/news/opinion/opedcolumnists/obama_debt_limit_truth_twisting_QgMC6YT1SDi6yIf1Tr HtaP



Now what am I going to do with all those canned goods and bottled water I stocked up on.

:wakeup



Um, they are using money from the retirement funds of federal employees to keep things going for a while. I think (and I am sure that most if not all federal employees would agree) that these are "extraordinary measures" that has the effect of temporarily postponing default.

Is that not clear to the two of you?

[CosmicCowboy]

Um, they are using money from the retirement funds of federal employees to keep things going for a while. I think (and I am sure that most if not all federal employees would agree) that these are "extraordinary measures" that has the effect of temporarily postponing default.

Is that not clear to the two of you?

*yawn*

They have done it before and they will do it again. Soon as the debt ceiling gets raised they pay the funds back. No big deal.

[Drachen]

*yawn*

They have done it before and they will do it again. Soon as the debt ceiling gets raised they pay the funds back. No big deal.

Be that as it may, everything in the OP is true, but since the sky hasn't fallen, I guess we can go back to just ignoring the problem until about 3 days before the funds run out.

[Wild Cobra]

Be that as it may, everything in the OP is true, but since the sky hasn't fallen, I guess we can go back to just ignoring the problem until about 3 days before the funds run out.
I like this pressure of fiscal responsibility i play right now. Hopefully, the conservatives do not cave on this. Even if we have a temporary government shutdown, we need to stop the ever increasing debt.

[CosmicCowboy]

Be that as it may, everything in the OP is true, but since the sky hasn't fallen, I guess we can go back to just ignoring the problem until about 3 days before the funds run out.

You expect politicians in Washington to sit down at the table and work out a reasonable, rational, bi-partisan solution to the debt crisis?

:lmao

Both political parties suck.

[CosmicCowboy]

I like this pressure of fiscal responsibility i play right now. Hopefully, the conservatives do not cave on this. Even if we have a temporary government shutdown, we need to stop the ever increasing debt.

WC, taking ANY tax increases off the table as a precondition to negotiation is irresponsible and reprehensible. We may have gotten into this mess because of irresponsible spending but it is going to take spending cuts AND increased revenue to reverse this clusterfuck.

[Drachen]

You expect politicians in Washington to sit down at the table and work out a reasonable, rational, bi-partisan solution to the debt crisis?

:lmao

Both political parties suck.

agreed...


Maybe I am missing the point of this thread since it seems that we don't have a whole hell of a big difference of opinion on this issue. The OP posted what seemed to be an attempt at an attack on the urgency displayed by geithner by posting a snippet of an article which had geithners quotes which are true. It's like if someone told me yesterday that today would be tuesday and I started attacking them today for saying it would be tuesday. Makes no sense, but then again maybe they weren't attacking him, perhaps the purpose of this thread was to let people know how correct he was.

[Drachen]

WC, taking ANY tax increases off the table as a precondition to negotiation is irresponsible and reprehensible. We may have gotten into this mess because of irresponsible spending but it is going to take spending cuts AND increased revenue to reverse this clusterfuck.

Wow.....
um..


Agreed again.

[MannyIsGod]

Has any qualified person chimed in and said that default is not a big deal?

[boutons_deux]

"irresponsible spending"

2 Repug botched wars financed with debt rather than tax, first time in US history.

Repug tax cuts.

runaway spending? A VRWC lie. Govt spending as percentage of GDP is now about 1977 level.

The debt limit is charade, pure politics, it's NEVER been NOT raised.

[CosmicCowboy]

"irresponsible spending"

2 Repug botched wars financed with debt rather than tax, first time in US history.

Repug tax cuts.

runaway spending? A VRWC lie. Govt spending as percentage of GDP is now about 1977 level.

The debt limit is charade, pure politics, it's NEVER been NOT raised.

broken record

it's all the republicans fault.

Damn, boutons, you are such a fucking tool.

[coyotes_geek]

I like this pressure of fiscal responsibility i play right now. Hopefully, the conservatives do not cave on this. Even if we have a temporary government shutdown, we need to stop the ever increasing debt.

If conservatives were truly interested in "fiscal responsibility" they would acknowledge that some level of tax increases are going to be required. A conservative truly interested in "fiscal responsibility" would refer back to Obama's recent speech where he specifically mentioned a 3:1 ratio of cuts to tax increases. In the interests of fiscal responsibility, that conservative would then propose $X worth of tax increases and then challenge Obama and the democrats to come up with $3X worth of cuts.

Sadly though, conservatives aren't really interested in "fiscal responsibility". They're just interested in using the term as a stick to poke their political foes with.

[fyatuk]

Has any qualified person chimed in and said that default is not a big deal?

Default could be a big deal. Problem is not raising the debt ceiling does not mean default.

Government would have to cut current period spending in order to pay it's debt service (probably meaning job cuts, salary freezes, etc, the typical cost cutting moves), but it's not likely that refusing to raise the debt ceiling would cause the government to default on it's debts.

Saying that the government needs to raise the debt ceiling to avoid default means the government is continually borrowing money to meet it's already accrued expenses. It's like taking out a signature loan every month to pay the mortgage. Yeah, you can do that short term, but over a long term it really jacks you up.

Honestly, I'd almost rather the debt ceiling not be raised at this point. At the very least, raising it should come with spending cuts and revenue enhancements attached.

[lazerelmo]

Um, they are using money from the retirement funds of federal employees to keep things going for a while. I think (and I am sure that most if not all federal employees would agree) that these are "extraordinary measures" that has the effect of temporarily postponing default.

Is that not clear to the two of you?

Crystal clear.

I can't believe your buying into this whole "They're raiding pensions funds" drama even after the "debt ceiling hype". I think you need to read Geitner's version of what he is doing and compare it to your news source. There's a big difference in not putting money we don't have into a fund and "raiding it". My hope is that when they do choose to raise the debt ceiling(unnecessary IMO) and if pension funds have truly been borrowed from they will make these funds whole via reformation not from other borrowed money.

[Drachen]

Default could be a big deal. Problem is not raising the debt ceiling does not mean default.

Government would have to cut current period spending in order to pay it's debt service (probably meaning job cuts, salary freezes, etc, the typical cost cutting moves), but it's not likely that refusing to raise the debt ceiling would cause the government to default on it's debts.

Saying that the government needs to raise the debt ceiling to avoid default means the government is continually borrowing money to meet it's already accrued expenses. It's like taking out a signature loan every month to pay the mortgage. Yeah, you can do that short term, but over a long term it really jacks you up.

Honestly, I'd almost rather the debt ceiling not be raised at this point. At the very least, raising it should come with spending cuts and revenue enhancements attached.

Agreed again.

I am sure that is exactly what will be discussed starting around the second week in August when there is only time for posturing and none for any action other than raising it.

[Drachen]

Crystal clear.

I can't believe your buying into this whole "They're raiding pensions funds" drama even after the "debt ceiling hype". I think you need to read Geitner's version of what he is doing and compare it to your news source. There's a big difference in not putting money we don't have into a fund and "raiding it". My hope is that when they do choose to raise the debt ceiling(unnecessary IMO) and if pension funds have truly been borrowed from they will make these funds whole via reformation not from other borrowed money.

My initial news source was NPR yesterday, but I know that generally doesn't fly so I am posting a link. However, since everytime someone posts a link for proof, others generally get all over them saying "of course THAT site would tell you that", I am just going to post search results.

link (http://www.google.com/search?q=pension+funds+raided+for+debt+limit+fox&hl=en&source=hp&aq=f&aqi=&aql=&oq=)

[lazerelmo]

My initial news source was NPR yesterday, but I know that generally doesn't fly so I am posting a link. However, since everytime someone posts a link for proof, others generally get all over them saying "of course THAT site would tell you that", I am just going to post search results.

link (http://www.google.com/search?q=pension+funds+raided+for+debt+limit+fox&hl=en&source=hp&aq=f&aqi=&aql=&oq=)


:lol

Considering my original article was from the New York Post. You won't get any flack from me about credible news sources.

[fyatuk]

I am sure that is exactly what will be discussed starting around the second week in August when there is only time for posturing and none for any action other than raising it.

Yep. Raising the debt ceiling used to be pretty procedural, but that was when the ceiling was half what it is now. It's getting to be a pretty dangerous level, so now when it comes up you get bickering over it, but it doesn't get any thought until it absolutely has to.

Then again, modern politics is bickering.

[MannyIsGod]

Default could be a big deal. Problem is not raising the debt ceiling does not mean default.

Government would have to cut current period spending in order to pay it's debt service (probably meaning job cuts, salary freezes, etc, the typical cost cutting moves), but it's not likely that refusing to raise the debt ceiling would cause the government to default on it's debts.


How would this differ from a default? What your basically saying is that the US government can go into the equivilant of bankruptcy in order to pay off its debts. Thats fine and all, but aside from the direct impact of the cuts you laid out (if implimenting such cuts is even feasible) the results are the exact same as a default.

[MannyIsGod]

http://www.fas.org/sgp/crs/misc/R41633.pdf

Get a handle on the scope of cuts that would be needed. If the public really knew what was being brandied about here they would realize how bad this would be. I promise you that Americans would want to default on the debt before this happend.

[Agloco]

"irresponsible spending"

2 Repug botched wars financed with debt rather than tax, first time in US history.

Repug tax cuts.

runaway spending? A VRWC lie. Govt spending as percentage of GDP is now about 1977 level.

The debt limit is charade, pure politics, it's NEVER been NOT raised.

I can't tell if boutons is a dem, rep or troll.

[MannyIsGod]

I do liken this a lot to the financial attitude before Lehman Brothers went under. It was no big deal and it would be a good thing that they went under. Yeah well, it nearly collapsed the financial system.

[Winehole23]

The financial system was supposed to collapse; it still might, under the right circumstances. I wish I had your confidence that disaster was averted, rather than just postponed.

[boutons_deux]

Lehman wasn't that big, but its leverage was deeply exposed/exposing

You want another Lehman-type candidate? Google criminal fugitive Marc Rich's Glencore offering shares than could bring in $11B. Leverage that 35 to 1, and if Glencore collapses, we got another Lehman tripwire and world-wide financial catastrophe. There's no way to prevent it.

[boutons_deux]

...

[Winehole23]

If it had collapsed, you can be goddammed sure that financial reform would have been geared toward making sure such a debacle never happened again, rather than pawning our future GDP to prop up the insolvent losers whose incompetence and fraud were the proximate cause of the Panic of 2008.

[fyatuk]

How would this differ from a default? What your basically saying is that the US government can go into the equivilant of bankruptcy in order to pay off its debts. Thats fine and all, but aside from the direct impact of the cuts you laid out (if implimenting such cuts is even feasible) the results are the exact same as a default.

No, I'm saying the US can cut current costs to avoid going into bankruptcy. The government could still pay its debts while cutting when and how it wants. Comparing to an individual's finances, it's like switching to a cheaper phone and buying generic groceries.

Defaulting would pretty much mean every cut possible would have to be made. Again with the comparison, this is like having the phone and electricity cut off.

Similar effects, but defaulting would be magnitude's more serious and much less controlled.

[MannyIsGod]

@WH think you're putting words in my mouth.

Just because I've been diagnosed with cancer doesn't mean I want to play russian roulette.

[CosmicCowboy]

No, I'm saying the US can cut current costs to avoid going into bankruptcy. The government could still pay its debts while cutting when and how it wants. Comparing to an individual's finances, it's like switching to a cheaper phone and buying generic groceries.

Defaulting would pretty much mean every cut possible would have to be made. Again with the comparison, this is like having the phone and electricity cut off.

Similar effects, but defaulting would be magnitude's more serious and much less controlled.

I assume you are talking about cutting discretionary spending as opposed to mandated expenses...they could cut discretionary spending 100% and it still wouldn't be enough to avoid eventually raising the debt ceiling.

[boutons_deux]

"the US can cut current costs to avoid going into bankruptcy"

no it can't. It has to raise the debt limit just to make interest payments on federal debt, which are MUCH BIGGER than the few $10Bs in the recent spending reduction deal.

[Winehole23]

Just because I've been diagnosed with cancer doesn't mean I want to play russian roulette.The Chicken Little routine. Never went out of style.

[MannyIsGod]

The Chicken Little routine. Never went out of style.

Eh, you can call me a fear monger all you want but I'm just going off of what those who know more on the subject have said.

We have a long term debt problem and thats obvious. That doesn't mean I want a financial collapse. I want to find a way to solve things as smoothly as possible.

[MannyIsGod]

No, I'm saying the US can cut current costs to avoid going into bankruptcy. The government could still pay its debts while cutting when and how it wants. Comparing to an individual's finances, it's like switching to a cheaper phone and buying generic groceries.

Defaulting would pretty much mean every cut possible would have to be made. Again with the comparison, this is like having the phone and electricity cut off.

Similar effects, but defaulting would be magnitude's more serious and much less controlled.

I don't think you realize the level of cuts they would need to undertake to avoid default with our low tax rates and down economy at the moment. And of course, government cuts would lead to lower taxes collected compounding the problem.

[MannyIsGod]

If it had collapsed, you can be goddammed sure that financial reform would have been geared toward making sure such a debacle never happened again, rather than pawning our future GDP to prop up the insolvent losers whose incompetence and fraud were the proximate cause of the Panic of 2008.

Yeah right. THe same people would have still maintained the highest level of influence. Making poor people poorer isn't giong to solve this.

[coyotes_geek]

I don't think you realize the level of cuts they would need to undertake to avoid default with our low tax rates and down economy at the moment. And of course, government cuts would lead to lower taxes collected compounding the problem.

Yep. Monthly interest expense on our debt is about $35 billion. No way the government can just shut down $35 billion worth of operations on a moment's notice to switch all that revenue to debt service.

[Winehole23]

Yeah right. THe same people would have still maintained the highest level of influence. Making poor people poorer isn't giong to solve this.Letting rich folks/firms fall on their face might have, though.

[fyatuk]

I assume you are talking about cutting discretionary spending as opposed to mandated expenses...they could cut discretionary spending 100% and it still wouldn't be enough to avoid eventually raising the debt ceiling.

They could revise the budget to reduce mandated expenses as well. And they would if they had to. Drop some medicare benefits, drastically reduce SS payments, gut the space program and military research. They could do it.


I don't think you realize the level of cuts they would need to undertake to avoid default with our low tax rates and down economy at the moment. And of course, government cuts would lead to lower taxes collected compounding the problem.

Nah, I'm aware. I think it's possible to avoid default without raising the debt ceiling. I don't think it's likely. And I wouldn't want to see the draconian, hard-line cuts across all spending necessary for it to happen (in so short a time-frame at least).

I've been saying since 2004 that the upper level Bush tax-cuts needed to go (and loophooles needed closing) to go with spending reductions.

The point was that not-raising-the-debt-ceiling does not equal default.

[LnGrrrR]

If it had collapsed, you can be goddammed sure that financial reform would have been geared toward making sure such a debacle never happened again, rather than pawning our future GDP to prop up the insolvent losers whose incompetence and fraud were the proximate cause of the Panic of 2008.

I'm not so sure of that. Most of the people in Congress are much more insulated from financial crisis than your average citizen.

[Wild Cobra]

WC, taking ANY tax increases off the table as a precondition to negotiation is irresponsible and reprehensible. We may have gotten into this mess because of irresponsible spending but it is going to take spending cuts AND increased revenue to reverse this clusterfuck.
The only tax increase I see as acceptable is one that hits everyone. No deductibles. Until the working poor also have a "dog in the fight" when it comes to the government raising revenue, we have too many wolves voting on what to have for dinner.

[Wild Cobra]

I can't tell if boutons is a dem, rep or troll.
He's a libtard.

[LnGrrrR]

The only tax increase I see as acceptable is one that hits everyone. No deductibles. Until the working poor also have a "dog in the fight" when it comes to the government raising revenue, we have too many wolves voting on what to have for dinner.

I think the "no deductibles" idea could have traction. After all, I would think the rich make use of deductibles/loopholes as much as the poor do.

[Wild Cobra]

I think the "no deductibles" idea could have traction. After all, I would think the rich make use of deductibles/loopholes as much as the poor do.
Yes, we need to get rid of preferential treatment in the tax codes.

[Winehole23]

I'm not so sure of that. Most of the people in Congress are much more insulated from financial crisis than your average citizen.They'd not have been insulated from the level of human misery and real scarcity that accompany a debt-deflation spiral.

[TDMVPDPOY]

why not start privatising govt assets? do you have any?

[LnGrrrR]

They'd not have been insulated from the level of human misery and real scarcity that accompany a debt-deflation spiral.

I wonder sometimes... at a certain level of income, how much interaction does one really need with the "common man"? How much scarcity would they have experienced?

Oh sure, the number in their bank account might have dipped considerably, but would it have been enough to prevent them from doing anything other than taking one less vacation per year? *shrug* I don't know.