Debt Ceiling - Open Discussion, Please

I understand that people these days like to say their piece completely oblivious to everyone else around them, and not listen to each other, and not engage in conversation, and not contribute, and not research, and not think, etc.

It's just the way things are. The debt crisis, though - I have no idea what is going on with it. And I need help.

Recently, I discovered that I learned better through conversation than being told one point of view and being forced to memorize it. Especially when it turns out there are multiple people with different points of view hellbent on being right. To me, that's not just suspicious, that's insanity.

So a discussion - involves asking questions, that involves critical thinking, yeah - I understand that those might be a bit hard to accept. Less so on ATS, though, thank you

So we can at least start with people bringing facts to the table (apparently this is also taboo in mainstream culture, as "Google It" is a phrase often used to discourage conversation -


Anyway, this seems like a really complicated subject to me.

reply to post by darkbake


Anyway, the debt ceiling:

Washington Post: The Debt Ceiling

In return for a one-year suspension of the debt ceiling, House Republicans are demanding a yearlong delay of Obamacare, Rep. Paul Ryan’s tax reform plan, the Keystone XL pipeline, more offshore oil drilling, more drilling on federally protected lands, rewriting of ash coal regulations, a suspension of the Environmental Protection Agency’s efforts to regulate carbon emissions, more power over the regulatory process in general, reform of the federal employee retirement program, an overhaul of the Dodd-Frank financial regulations, more power over the Consumer Financial Protection Bureau’s budget, repeal of the Social Services Block Grant, more means-testing in Medicare, repeal of the Public Health trust fund, and more.

Wikipedia: The U.S. Debt Ceiling

The United States debt ceiling or debt limit is a legislative restriction on the amount of national debt that can be issued by the Treasury. Because expenditures are authorized by separate legislation, the debt ceiling does not actually restrict deficits. In effect, it can only restrain the Treasury from paying for expenditures that have already been incurred. The United States has had some sort of legislative restriction on debt since 1917. Periodically, a political dispute arises over legislation to raise the debt ceiling. When the debt ceiling is reached, the Treasury has undertaken "extraordinary measures" which buy more time for the ceiling to be raised. The United States has never reached the point of default where the Treasury is unable to pay its obligations. If this situation were to occur, it is unclear whether the Treasury would be able to prioritize payments on debt to avoid a default on its debt obligations, but it would at least have to default on some of its non-debt obligations. A default could trigger a variety of economic problems including a financial crisis and a decline in output that would put the country into a recession.

We keep on hitting this... okay, so the first article mentioned that if there was a government shutdown, the government would have to choose between paying education or military personnel.

These next quotes are from the Washington Post article

...And that's a bit quicker than we had thought. "[T]he Congressional Budget Office predicted these funds would be used up between Oct. 22 and Oct. 31 if legislation isn't enacted to raise the ceiling on government borrowing. That little cash could make it difficult, if not impossible, for the government to pay the roughly $55 billion in Social Security, Medicare and military payments due Nov. 1." Damian Paletta and Kristina Peterson in The Wall Street Journal.

Here’s what happens next, after Oct. 17. "From that point on, the federal government will only bring in enough tax revenue to pay about 68 percent of its bills for the rest of the month, according to a recent analysis by the Bipartisan Policy Center — and Treasury won’t be able to borrow or scrounge up more money to make up the difference...The Bipartisan Policy Center report, written by Shai Akabas and Brian Collins, argued that prioritization is infeasible. "It would involve sorting and choosing from nearly 100 million monthly payments," they write. There's no good way to stop paying the Education Department while making sure soldiers get paid. It's not clear that the Treasury Department even has the technical capacity to do this, let alone the legal authority." Brad Plumer in The Washington Post.

Why such little cash? Apparently, the government would have $33 billion dollars for the rest of October, when it requires up to $60 billion a day to function.

October 17: Mark your calendars, and hope we never have to go to that appointment. "The U.S. Treasury Department on Wednesday said it would exhaust emergency measures to avoid falling behind on government obligations no later than Oct. 17 and would be left with $30 billion in cash to run the government, a warning that could hasten fiscal discussions on Capitol Hill. Treasury Secretary Jacob Lew, in a letter to Congress, said the $30 billion in cash would "be far short of net expenditures on certain days, which can be as high as $60 billion." He called on Congress to raise the nation's borrowing limit immediately to prevent the country from falling behind on its bills." Damian Paletta in The Wall Street Journal.

So... what I don't understand, is how often are we going to be hitting this debt ceiling? Once every other month? Once a year? Or once we hit it, are we in government shutdown mode until the end of time? Check this out:

Congress down to one-week CR. "Gridlocked over a months-long spending bill, the widely unpopular 113th Congress is trying to see if it is capable of passing a stopgap measure for just one week. Washington often kicks the can down the road on tough issues; but this time, down the road means not a year or even a few months, as it usually does, but just a handful of working days." Alexander Bolton in The Hill.

So my question is, what happens in November? Do we get a new budget? If we do, will that one last until October? Or only until September?

reply to post by darkbake


So here is the deal - Democrats just want to keep on raising the debt ceiling, but that is ridiculous! Yes, I agree with social programs, but it is an entirely stupid idea to get the whole country reliant on them when there is no income to back them up!

Don't Democrats understand that the income that is taxed in this country comes from Republicans? How can there be social programs without taxing Republicans or allowing Republicans to find income sources!?

...And they just want to hike the debt ceiling clean of any spending cuts. "House Democrats have a message: They want to see a clean debt ceiling bill come up for a vote. Still weeks away from hitting the ceiling but possibly days away from a House vote, the Democratic leadership had harsh words for Republicans, who are considering attaching a one-year delay of the individual mandate to the hike." Ginger Gibson in Politico.

I am personally a progressive - I want to see social programs and safety nets, but it is simply not possible without realistic budgeting! The problem is, the Republicans feel so threatened that they are stonewalling.

House Republicans explore strategy to avoid federal government shutdown. "With federal agencies set to close their doors in five days, House Republicans began exploring a potential detour on the path to a shutdown: shifting the fight over President Obama’s health-care law onto a separate bill that would raise the nation's debt limit. If it works, the strategy could clear the way for the House to approve a simple measure to keep the government open into the new fiscal year, which will begin Tuesday...However, it would set the stage for an even more nerve-wracking deadline on Oct. 17, with conservatives using the threat of the nation’s first default on its debt to force the president to accept a one-year delay of the health-care law’s mandates, taxes and benefits." Lori Montgomery and Juliet Eilperin in The Washington Post.

And that brings up ObamaCare - something else I want to have an open discussion on, because it also seems entirely complicated. Does anyone have any other thoughts on this?

Are we going to be experiencing yearly government shut-downs? Is the month of October just going to be one of those months where no one gets paid? Why not make it a holiday?

You have so many questions I don't know where to start!

The government isn't funded through taxes alone. Many people and foreign countries and corporations purchase government bonds, this is one of the major ways in which the US government gets money to spend. Taxes are another part of it. The federal government likes deficits, there have been only three presidents who have ever run a surplus. One of them ended up with a recession, one of them left office with it and the third one cut taxes and increased spending at the same time.

Debt isn't necessarily a bad thing. Much like your personal debt, it allows you to borrow more money at a cheaper rate...so long as you're smart about it. The US government borrows money from the federal reserve and from other nations through their respective bonds.

The debt ceiling is a self-imposed limit on what we're allowed to borrow. Mainly because we have to eventually pay it back. We usually have some time to pay it back though. China isn't going to suddenly cash in all their bonds at once because they would incur a penalty, their $1 trillion bond would suddenly only be worth $600 billion. Still significant but fiscally stupid.

Personally, I believe we should be more responsible with the money we spend. The DoD's budget has more than doubled in the last ten years. Soldiers don't skin their own potatoes anymore, they pay food service workers $15/hour to do it for them. We have an ever increasing CIA and NSA budget that is completely classified. The DoD has been having the CIA perform para-military operations all over the world at a rapidly expanding rate.

Our country lets major corporations steal tens of trillions of dollars every year and fines them a few hundred thousand when they get caught. Our financial cops are usually former corporate board members themselves, so we only very rarely go after these guys.

On top of it all, the nation just went through a horrible recession. Millions of people are out of work and millions more are underpaid for the work they do. This forces them onto government programs. No one should work three jobs and still be eligible for SNAP assistance. That's not an argument against SNAP, that's an argument against capitalism.

My answer? Raise taxes on the wealthy (pre-Reagan rates), pull people out of poverty (pump more money into the economy through individual spending power) and cut government spending where it doesn't benefit the American people directly (increase spending on infrastructure and decrease spending on planes that no one wants).

On the immediate issue of the debt ceiling, they have to raise it. There is no choice. Full Stop. End of Story.

We've been living the alternative most of the year now, and it's called sequestration. The automatic process where the spending reverses itself from debt accumulated in higher numbers to literally spending DOWN into the existing money for coverage of obligations that won't take No. The mandatory spending (What is required, by law no matter what revenue or political situations look like) WILL go on. Whether the limit is raised or not...the law leaves no option. So, the only place that spending has to find money, if not upward....is INTO discretionary spending categories of all other kinds. Some military ... Some education.

Both of those areas also have mandatory and required spending of different types, so it's a misnomer to say they were both or either be up for wholesale cutting. They won't be...at least not in full. Just some areas are.

Raising the limit is NO solution...but with the time remaining? There is NO other solution. Not even a hint of one. Just raising the limit ...or watch sequestration eat every last thing we have not mandated by law to spend on within a year or two. After all, entitlements and other mandatory items keep rising...keep taking more..whether more is there to be had or not.

We keep having to raise it because they still haven't passed a budget since 2009. What they keep passing are spending resolutions, onmibus stop gap measures and the like. Not a formal budget to cover the whole Government for the entire fiscal year. The nation hasn't seen one of those since Spring of '09 and that one was written under Bush in '08.

Budgets are important, not just for setting what can be spent and on what things ...but what LIMITS there are to spending too. That is why, I believe, no one is in ANY hurry to have another one...since the public seems okay with their daily violation of black letter law in the Constitution.

You know the worst part? Obama's budget proposals, as required by law, ARE submitted largely on-time. This is Obama's issue for not doing more to force Congress ...but budgets aren't his duty. The House has to be willing to write one ...and the Senate has to be willing to vote on one the House writes. Neither has been the case to success in 5 years.

....so diddling with debt ceilings because the alternative is total financial implosion is the best these greedy little toads can offer us. (BTW.... Congresses total failure to pass a budget has come under both colors of party control...It's not a partisan thing. It's a 'spending like drunken sailors' thing by everyone up there.

This is an indication; again, of the destructiveness of the Republican Party and their disregard for human beings...this is their anti-human agenda.

They don’t give a dam about the deficit because as much as they decry the democratic “spending”
IT IS AND WAS THE REAGAN AND BUSH REPUBLICAN ADMINIISTRATIONS THAT RAISED THE DEFICIT MORE THAN ANYONE!

The republicans don’t like the fact that some of their tax money goes to help poor and minorities in the country. That’s their only real concern.

When a republican administration is in power you don’t hear a peep out of these sanctimonious hypocrites in the republican anti-human party about spending. Its only when a democrat gets in office do we see this garbage out of their mouths.

reply to post by Willtell


So you figure the budget matter is a 100% partisan problem and only one side has issues?

Will the nation ever move beyond the right/left fantasy put forth by the ruling elite? I keep saying it's real enough...Democrat and Republican ..among average citizens. It has to be or they couldn't keep using it to insure we're fighting too hard among each other to ever give them attention.

They don't follow a fraction of the party fighting lines they babble in public though. The same ones at each other for the cameras are off writing bills together or having cocktails on the D.C. circuit that evening.

Blaming one side to the exclusion of the other ...Either side... as a Political party? That will insure we never...ever...get out of the mess we've sunken into. TPTB in Washington are counting on it too, I fear.

reply to post by Wrabbit2000

On the immediate issue of the debt ceiling, they have to raise it. There is no choice. Full Stop. End of Story.

I disagree with this.

It doesn't stop. the debt ceiling is a limit of how much they are 'allowed' to spend.

Doesn't means spending stops, just up to a certain amount.

Between taxes,printing,borrowing money that all fall short. Because we are spending too much money, and money we obviously we do not have.

Doesn't make any sense to me to continually raise the amount of money your allowed to spend when we already can't pay our bills.

Bottom line it is political theatre at it's worst. To create heros, and villians. To keep the people fighting between themselves.

So those idiots on capitol hill can continue with their stupidity of writing checks they know they can't cash.

But hell it makes great tv and threads on ATS.

reply to post by neo96


Short term? As in...on the eve of the new fiscal year? They have two choices. Take serious damage to the US financial ratings and cause chaos across the country for no good reason (Because not one of those up there right now, frankly, has the balls to play this to the endgame it would have to run to for it to mean anything) or they can raise the debt ceiling.

Now they should have been working since December on this. They said they would be. The House IS who originates budgets too, by the way ...So Boehner IS the larger of the three problems until he has a REAL honest to goodness budget made, passed the House, and then rejected. He hasn't tried because Harry said it wouldn't stand a chance, so no point in it. Nice "go getter" leaders we have in the GOP, huh? All the backbone of a jellyfish.

At this late date though? There really is no choice. Even if spending stops now? Interest accumulation doesn't. Compounding the figure...doesn't...It just works backward as mentioned elsewhere. Discretionary spending? That's what goes instead of higher debt numbers until mandatory meets revenue and even that has no margin left. I mean we crash now or later. I'd kinda like to see Christmas though, personally.

Unless they are ready to go all the way with it. You think any of them are?

reply to post by Wrabbit2000

Short term? As in...on the eve of the new fiscal year? They have two choices. Take serious damage to the US financial ratings and cause chaos across the country for no good reason (Because not one of those up there right now, frankly, has the balls to play this to the endgame it would have to run to for it to mean anything) or they can raise the debt ceiling.

Serious damage was already done because of the credit downgrades because we were spending too much.

Which is what the entire purpose of the debt ceiling was to begin with : limit government spending.

Now they say that doesn't matter. Continue spending what we don't have.

At this late date though? There really is no choice. Even if spending stops now? Interest accumulation doesn't

I was under the impression the largest creditor was us. Since that money being printed, and borrowed isn't going to what it is collected for ?

We I don't see this as a bad thing.

Reference to intragovernment debt.

I honestly don't give a ratts arse if China and Japan, and other extra government debt holders make any money.

So they are raising the amount of money we can spend to fatten their bank accounts while draining ours.

IF someone had the balls to go all the way with it they would adhere to the debt ceiling limits instead of acting like it doesn't matter.

They need to stop spending.
They need to stop borrowing,
They need to stop printing.
They need to stop creating asinine programs that can't pay for themselves.

They don't care.

THEY CREATED THIS SCENARIO.

First of all, at April 30, the debt was 16.828.845.497.183,90.
That is well above the debt ceiling, currently it stands at 16.738.443.175.473,97.
Still above the limit but lower that in April, so there is some room and since the debt ceiling has already been breached without problems, what is all the fuss about ?

www.treasurydirect.gov...

reply to post by neo96

THEY CREATED THIS SCENARIO.

Actually they didn't the Fed Reserve did. The Fed controls the economy in this country and it isn't a government agency.

Moreover, if they were really worried, than why were they so eager to attack Syria? doesn't that cost money?
If there is little left because of a political struggle, one would think that Americans are more important than an attack on a country which is not even a threat to America.

Strange politics..

buster2010
reply to post by neo96

 

THEY CREATED THIS SCENARIO.

Actually they didn't the Fed Reserve did. The Fed controls the economy in this country and it isn't a government agency.

Oh really ?

Sitting there saying the Federal reserve is responsible for current government spending ?

The federal reserve is responsible for the creation of Social security,medicare,medicaid, and other government subsidies ?

No.

That was dam right hysterical.

The same people who created asinine government spending that created debt are the same people who created the federal reserve who prints money out of thin air, and 'treasuries' out of thin air that pays for everything.

That is nothing more than the GOVERNMENTS word 'PROMISE to PAY'.

Money for nothing, but money is nothing, but alot of people sure just do love to fight over nothing.

reply to post by buster2010

Actually they didn't the Fed Reserve did. The Fed controls the economy in this country and it isn't a government agency.

Uhhh...

The Federal Reserve *BUYS* debt instruments. They don't create them.

The U.S. Treasury issues the securities to get money.

Binge spenders in Congress are the spenders.


Socialist spending is FAIL.

They need to limit spending to 80% of revenues and limit security issues.

reply to post by links234


Raising taxes won't be enough to pay for the binge spending.

Unless they double all the rates.

Higher rates on the 'rich' and the 'corporations' won't generate enough extra revenue.

Unless of course, you can show us the actual genuine figures without any guessing ?

Willtell
This is an indication; again, of the destructiveness of the Republican Party and their disregard for human beings...this is their anti-human agenda.

They don’t give a dam about the deficit because as much as they decry the democratic “spending”
IT IS AND WAS THE REAGAN AND BUSH REPUBLICAN ADMINIISTRATIONS THAT RAISED THE DEFICIT MORE THAN ANYONE!

The republicans don’t like the fact that some of their tax money goes to help poor and minorities in the country. That’s their only real concern.

When a republican administration is in power you don’t hear a peep out of these sanctimonious hypocrites in the republican anti-human party about spending. Its only when a democrat gets in office do we see this garbage out of their mouths.

edit on 27-9-2013 by Willtell because: (no reason given)

^^^^ The only people shouting THAT malarkey are the ultra Left Wing dingers ^^^^

Here's the real figures and who dunnit.....
any questions ?

and LOOK !!!

How can we have an open discussion when there is a ceiling?

reply to post by Wrabbit2000


I am blaming the current evildoers who are trying to wreck people’s lives NOW!

Beyond theory and who is right and wrong philosophically.

There tactics will bring immense suffering TO REAL HUMAN BEINGS!

I have denounced numerous Democrats on all kinds of issues when I believe they are wrong on any given issue. Such recently as the Syrian crises.

I wrote a scathing letter to my Democratic senator and told him I wouldn’t vote him in as county dog catcher again.

I deal with issues on a single basis.

I have op ed many anti Obama threads

Anti Clinton threads.

So it is you who is rapped up in politics not me. I deal in issues, not parties or labels.

reply to post by xuenchen


As big as your eyes are you are still blind. As well you distort facts.

It is a fact that under republican austerity people commit more suicides
www.alternet.org...

Clinton actually left a budget surplus. Bush wrecked it with his war on terror.

Reagan left and started the biggest deficit of all presidents combined.
He did this by cutting taxes on the rich and super rich and then after realizing this would bankrupt the country went and raised taxes on the middle class 11 times.