A hypothetical question about the Debt Ceiling Outcome

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A hypothetical question about the Debt Ceiling Outcome

Post by ampersand » Thu Jul 28, 2011 1:25 am

So, I'm listening about all of the emotional carnage between the two parties over how to raise the debt ceiling, or even if they should or not. The biggest thing I have heard is if the debt ceiling is not raised, we could face a downgrade of the Federal Government's loans from AAA to AA.

So here's my question. Suppose at some point they do agree to a short-term deal to raise the debt ceiling, to kick the can as they do in Europe. (And see how that has turned out.) If you were among the MorningStar, Forbes, etc. who would rate the American Government's debt rating, and realize that this is a short-term deal and not a long-term deal. Would you lower the debt rating anyway?

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Re: A hypothetical question about the Debt Ceiling Outcome

Post by collegestudent22 » Thu Jul 28, 2011 3:00 am

From what I heard, the debt rating drop is not due to the debt ceiling in particular, but the amount of the debt compared to the size of the economy. Even were we to have partial government shutdown in August, there are still some taxes coming in each month, enough to pay for the debt, as well as major government functions (about $250B comes in each month). The debt must be resolved first, due to Section 4 of the Fourteenth Amendment.

However, the vast amount of the debt is going to cause problems, especially if no plan can be agreed upon to actually limit it. Thus, what is really needed to fix the issue of the potential downgraded rating, we need a budget to be passed that has a plan to be balanced. Whether it is Paul Ryan's plan, or some modified version with cuts placed differently and different, but still viable, reforms to entitlements, it needs to be passed. Unfortunately, Obama has become reprogrammed to only say "corporate jet owners" over and over, so I don't think it will happen.

The debt ceiling is a farce, anyway. It has never actually limited the debt taken on by Congress, having been raised every time it comes up. It basically is really only there to provide cover for massive spending - when one party is kicked out of Congress for spending too much, the other party has to deal with the debt ceiling problem. Raising it moves the blame of high spending to the newcomers, while not raising it means partial government shutdown, so everyone that doesn't get a check now votes for the other side again. Lose-lose. It allows politicians to buy votes, and if anything stops that, blame the other party for it, which amounts to the same thing as buying a vote (but without all the messy legal bribery).
Frédéric Bastiat wrote:And now that the legislators and do-gooders have so futilely inflicted so many systems upon society, may they finally end where they should have begun: May they reject all systems, and try liberty; for liberty is an acknowledgment of faith in God and His works.
Count Axel Oxenstierna wrote:Dost thou not know, my son, with how little wisdom the world is governed?

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A hypothetical question about the Debt Ceiling Outcome

Post by Deacon » Fri Jul 29, 2011 3:32 pm

It's democracy come to a head.

I would be grateful if people would just stop saying "increase revenues" when they really mean "raise taxes". And if one more rich "artist" makes the argument that they'd be perfectly happy to pay more taxes--without ever having tried to give a bunch of extra money to the treasury--I'm going to pop them in the mouth.
The follies which a man regrets the most in his life are those which he didn't commit when he had the opportunity. - Helen Rowland, A Guide to Men, 1922

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Re: A hypothetical question about the Debt Ceiling Outcome

Post by collegestudent22 » Tue Aug 02, 2011 5:17 pm

Lucksi wrote:And yet, the US still has the best credit rating. After all, they did implement stuff so that spending will be reigned in, right?
The credit ratings agencies said we needed to cut twice as much as we actually did (an additional $2T in cuts) to secure that AAA rating. My guess, they will wait until the budget debate comes to a head as the fiscal year ends at the end of September, and if it isn't fixed then... (Yeah, we have to go through this bullshit again.)
Boy oh boy, is this going to end in flames. Hopefully about two generations down the road when it doesn't affect me anymore. Fuck the kids.
If we don't learn the lessons of Greece, I would bet that this would come to the absolute crisis point right around the middle of the century. :?

The budget needs to be balanced, and actually run a surplus for a while to pay off the debt. If that means the government cannot pay for unconstitutional and nonsensical nanny-state bureaucracy and entitlements, then so be it. The purpose of government is the protection of so-called "negative" liberty - the right to life, liberty, and property - by providing military defense from invasion, a system of justice and law enforcement. The rest subverts individual liberty and actually makes things worse.
Frédéric Bastiat wrote:And now that the legislators and do-gooders have so futilely inflicted so many systems upon society, may they finally end where they should have begun: May they reject all systems, and try liberty; for liberty is an acknowledgment of faith in God and His works.
Count Axel Oxenstierna wrote:Dost thou not know, my son, with how little wisdom the world is governed?

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Re: A hypothetical question about the Debt Ceiling Outcome

Post by Deacon » Tue Aug 02, 2011 8:21 pm

We could follow the lessons of the Nordic states who are insulated from defense and UN spending by the US and NATO and just go full-on 80% tax rates, inclusive of income tax plus all other taxes. That way EVERYONE will be equal! And we can really afford to start borrowing for real then...
The follies which a man regrets the most in his life are those which he didn't commit when he had the opportunity. - Helen Rowland, A Guide to Men, 1922

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Re: A hypothetical question about the Debt Ceiling Outcome

Post by collegestudent22 » Tue Aug 02, 2011 8:31 pm

We would also have another Great Depression for sure, but hey, who needs employment or anything when The Great and Powerful Federal Government is here to save us? :lol:
Frédéric Bastiat wrote:And now that the legislators and do-gooders have so futilely inflicted so many systems upon society, may they finally end where they should have begun: May they reject all systems, and try liberty; for liberty is an acknowledgment of faith in God and His works.
Count Axel Oxenstierna wrote:Dost thou not know, my son, with how little wisdom the world is governed?

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Re: A hypothetical question about the Debt Ceiling Outcome

Post by Deacon » Tue Aug 02, 2011 8:39 pm

It'll be fine. The New New Deal will save us.
The follies which a man regrets the most in his life are those which he didn't commit when he had the opportunity. - Helen Rowland, A Guide to Men, 1922

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Re: A hypothetical question about the Debt Ceiling Outcome

Post by spikegirl7 » Tue Aug 02, 2011 8:55 pm

*vomits at the thought*

I have a question, and please forgive my ignorance in this matter.

So apparently this issue came up because the government spent more money than they were allowed to. They wrote out checks for MORE than they could take in through taxes AND borrowing.

Um, how did they do this? And how did they not see this coming?

I know this is ignorance speaking, but do they just have a large block of money for the year and they just spent it all at once without thinking about what would happen later? Or did they lose track of how much they were spending? What happened?
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Re: A hypothetical question about the Debt Ceiling Outcome

Post by Deacon » Tue Aug 02, 2011 9:46 pm

The US Government is like daddy's little girl gone off to college with a credit card and a checkbook that she thinks as long as she's got checks left she's still got money, and if there's a problem she'll just tell the credit card company to increase the limit.

Except that daddy's little girl is now a run-down 55-year-old drug addict with incredibly expensive tastes and the same old credit cards. And to make herself feel better about it, she is also ferociously generous to anyone who asks, she supports both friends and charities deserving and not, and all with those same credit cards that she has never paid off but that keep having their limits increased to keep pace her increasingly wanton spending.

The only reason she hasn't been thrown out in the street yes is that even though daddy only gives her a certain amount of allowance that's nowhere ever even nearly enough to pay for her recklessly lavish and shortsighted lifestyle, they leave her with the highest credit score because daddy is so productive, and they're just gritting their teeth and hoping beyond hope that daddy will eventually pay her bills for her...
The follies which a man regrets the most in his life are those which he didn't commit when he had the opportunity. - Helen Rowland, A Guide to Men, 1922

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Re: A hypothetical question about the Debt Ceiling Outcome

Post by collegestudent22 » Tue Aug 02, 2011 10:32 pm

spikegirl7 wrote: So apparently this issue came up because the government spent more money than they were allowed to. They wrote out checks for MORE than they could take in through taxes AND borrowing.

Um, how did they do this? And how did they not see this coming?

I know this is ignorance speaking, but do they just have a large block of money for the year and they just spent it all at once without thinking about what would happen later? Or did they lose track of how much they were spending? What happened?
Lucksi's right. The debt ceiling is a mummer's farce. In the past, Congress has upped the ceiling whenever they bumped up against it, because no one bothered to hold their feet to the fire and demand responsibility with OUR money. The Tea Party does it now, and in return the Democrats - and their little idiot economist lapdog Krugman, who demands even MORE spending as the solution to all our problems - refer to "the people" in "We The People" as economic terrorists holding America hostage. Why don't they understand that nice-sounding rhetoric and government "assistance" make things worse. Or do they really judge policy by intention instead of results?

You know, I used to merely disagree with the Democrats - now, I'm wondering if the Dems in power WANT America to fail, thus giving them an excuse to set up a totalitarian socialistic state à la 1930s Germany. Antisemitism and all.

And here Rand Paul explains why this debt deal is ALSO a mummer's farce. Pelosi has already said that the Democrats on the new Deficit Commission will oppose any cuts to the main drivers of the deficit - Medicare, Medicaid and Social Security. The whole thing is ridiculous, and unless something actually changes, we're doomed to go the way of Europe, as it follows Greece and Ireland into the abyss. Meanwhile, Jon Stewart rants about how the Tea Party is a bunch of anarchists that want to get rid of traffic lights, and how he wants the government to be "better, not gone". :(

And this is the day that Congresswoman Giffords returns, after having been shot by that nutjob in Arizona. The party that called for "civility" is now, only seven months later, referring to citizens as "terrorists" and suicide bombers, waging jihad on America. Not that they know what an actual terrorist acts like. Those are just "man-made disasters", remember? God, it's like 1984 leapt off the page. Well, I'm pretty sure my response to the Democratic politicians and the Lamestream Media that let's this shit slide is pretty much in line with this one.
Jonah Goldberg wrote:The Today Show even had Debbie Wasserman Schultz on this morning for five minutes talking about Giffords. No one thought to ask her what she thought of Biden’s comments? It’s not like she’s the Democratic Party’s national spokesperson or anything. Oh, wait. She is! ...And yet you know the next time there’s the slightest, remotely exploitable tragedy or hint of violence, the same reporters, editors, producers and politicians are going to insist that blood was spilled because of the right wing’s rhetoric. Well, go to Hell. All of you.
Frédéric Bastiat wrote:And now that the legislators and do-gooders have so futilely inflicted so many systems upon society, may they finally end where they should have begun: May they reject all systems, and try liberty; for liberty is an acknowledgment of faith in God and His works.
Count Axel Oxenstierna wrote:Dost thou not know, my son, with how little wisdom the world is governed?

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A hypothetical question about the Debt Ceiling Outcome

Post by ampersand » Wed Aug 03, 2011 4:16 am

Well then. I suppose I should start looking for jobs overseas.

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Re: A hypothetical question about the Debt Ceiling Outcome

Post by spikegirl7 » Wed Aug 03, 2011 5:29 am

I'm still lost. Didn't they KNOW how much they would bring in via taxes and spending? Why couldn't they stay within that? Wasn't that several Trillion dollars? Isn't the US GDP 14.2 Trillion dollars? But then again the US debt is over 14.5 Trillion dollars.

Wait a sec...... 14.2T is the GDP, 14.5T in debt.......

*sigh*

I hate our government so much....

I was hoping for some cuts to entitlement programs. I was seriously hoping that the politicians would come out and say the tough words: "We messed up, we wrote checks we can't cash. We need to take serious looks at these programs for their sustainability and for our own fiscal future." But no, they chickened out.

Also, let's stop calling it "revenue increases." It's tax hikes they're talking about, let's not forget that.

You know, I thought that the last election where the Dems got spanked by the Tea Party who campaigned on controlling spending would have sent a message that people were getting tired of the out-of-control Federal spending. But who am I kidding, this is the government that holds 102% of the country's GDP in debt. WHY DO THEY THINK THIS IS ACCEPTABLE?!? And the sad thing about it is that I have lost faith that it will ever improve.
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A hypothetical question about the Debt Ceiling Outcome

Post by Deacon » Wed Aug 03, 2011 11:02 am

spikegirl7 wrote:I'm still lost. Didn't they KNOW how much they would bring in via taxes and spending? Why couldn't they stay within that? Wasn't that several Trillion dollars?
Stop thinking like a normal person.
Also, let's stop calling it "revenue increases." It's tax hikes they're talking about, let's not forget that.
It's clear why this talking point has been spun so consistently. It sounds better than raising taxes, and perpetuates the lie that in a teetering economy smothering it under a blanket of taxes is the best way to let the economy burn bright.

And yes it will eventually improve. It may take utter disaster to bring it around, but it will improve. At some point the bullshit will either cave in or become so rank people can't stand it anymore. I have a feeling some people, though, will continue charging these windmills until they die, literally in some cases.
The follies which a man regrets the most in his life are those which he didn't commit when he had the opportunity. - Helen Rowland, A Guide to Men, 1922

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Re: A hypothetical question about the Debt Ceiling Outcome

Post by collegestudent22 » Wed Aug 03, 2011 1:33 pm

spikegirl7 wrote: I was hoping for some cuts to entitlement programs. I was seriously hoping that the politicians would come out and say the tough words: "We messed up, we wrote checks we can't cash. We need to take serious looks at these programs for their sustainability and for our own fiscal future." But no, they chickened out.
Well, Paul Ryan said that. And he was called a radical tea-bagger for it, by both the Democrats and the establishment Republicans.
You know, I thought that the last election where the Dems got spanked by the Tea Party who campaigned on controlling spending would have sent a message that people were getting tired of the out-of-control Federal spending.
Not when they can write off the people as radicals and "economic terrorists".
WHY DO THEY THINK THIS IS ACCEPTABLE?!?
I'm going to go with the same reason King George thought his treatment of the colonies was acceptable. They are the elites, and they know better than you, dammit.
Deacon wrote: And yes it will eventually improve. It may take utter disaster to bring it around, but it will improve. At some point the bullshit will either cave in or become so rank people can't stand it anymore.
I'm thinking it is far more likely to cave in. Sadly, as long as you have idiot "experts" like Paul Krugman telling people that economic theory says the more debt the better, and politicians using that as an excuse to buy votes, it's never going to end. When protests against austerity measures are taking in Wisconsin, and compared not to the rioting in Greece, but the protests in Cairo for liberty, people have a fundamental misunderstanding of what liberty actually is. And then the question becomes, when it does fail, do people recognize it for the failure of socialism that it was, or ascribe the blame to liberty and freedom, like they keep doing with market issues?

Or maybe they will inflate the issue of "poverty", and make the elderly out to be stupid old people that didn't know how to save for retirement. Or how we absolutely need bullet trains and "green jobs". Or how teachers don't get paid well enough, with $53K (plus large union-earned benefits) for 9 months of work. Or all the rest of the stupid shit they waste our money on.

The unions are the worst - they fail to see that ever-increasing salaries and benefits only drive companies and government under. (I would separate private sector unions, but I don't think that the UAW or SEIU is truly in the "private sector" after all the bailouts and subsidies needed to keep their businesses afloat.) Frankly, if someone could just win their First Amendment right to not HAVE to join a union (freedom of association implies a choice, especially with political organizations like unions) in one of these non-"right to work" states, that would help a lot towards weakening the stranglehold the unions have over our government.
It’s not the terrorists who drive this change. It’s the evidence. It’s the economic suffering that “spreading it around” policy has created. It’s institutionalization of a recession. For a while, at least, those who claim that bankruptcy spending and bullet trains create jobs — no matter how regularly the media offer these myths as fact — can’t be taken seriously.

Fleeting as this shift may be, we were brought a sliver of good news this week. During one glorious day, the United States passed legislation with the sole intention of cutting government rather than “creating” so-called jobs or “investing” in some cockamamie energy boondoggle or “helping” “working families” — which is, of course, the biggest help Washington can offer us. For that, we can thank the “terrorists.”
Frédéric Bastiat wrote:And now that the legislators and do-gooders have so futilely inflicted so many systems upon society, may they finally end where they should have begun: May they reject all systems, and try liberty; for liberty is an acknowledgment of faith in God and His works.
Count Axel Oxenstierna wrote:Dost thou not know, my son, with how little wisdom the world is governed?

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Re: A hypothetical question about the Debt Ceiling Outcome

Post by spikegirl7 » Thu Aug 04, 2011 12:58 am

Sooooo...... essentially our government is run by a bunch of chimpanzees who would rather fling excrement around than sit down and discuss the problems facing our long-term prosperity like adults?
collegestudent22 wrote:
Deacon wrote: And yes it will eventually improve. It may take utter disaster to bring it around, but it will improve. At some point the bullshit will either cave in or become so rank people can't stand it anymore.
I'm thinking it is far more likely to cave in. Sadly, as long as you have idiot "experts" like Paul Krugman telling people that economic theory says the more debt the better, and politicians using that as an excuse to buy votes, it's never going to end. When protests against austerity measures are taking in Wisconsin, and compared not to the rioting in Greece, but the protests in Cairo for liberty, people have a fundamental misunderstanding of what liberty actually is. And then the question becomes, when it does fail, do people recognize it for the failure of socialism that it was, or ascribe the blame to liberty and freedom, like they keep doing with market issues?
Sadly, I agree with you CS22. I think it's more likely we'll crash and burn before any sort of real progress comes about. They're finding more reasons to expand government oversight, more reasons to spend recklessly, all in the name of "creating jobs." From what I understand there is little to nothing the government can do to actually create jobs short of putting more money into the pockets of consumers by (wait for it....) cutting taxes. If I recall correctly, cutting taxes almost always lead to increases in consumer spending, causing employers to hire more people, lowering the unemployment rate, decreasing government spending on unemployment benefits.....

But there I go, talking about things like responsible spending by our government. The same government that is losing hundreds of millions of dollars in tax income because they can't agree on 16 million in spending cuts to the FAA. This is the government that seems to think that the American people will just shoulder any debt burden, and that throwing government spending at anything and everything that moves will lead to long term economic prosperity. And if they're leaving crippling debt for the next generation to deal with: who cares, not their problem.

/rant.
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