Talk about Distortion

[Narcotized]

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[Mman]

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Not raising the debt ceiling is equivalent to balancing the budget. Calm the hysteria. It doesn't mean you default. It just means you can only spend the 2+ trillion in revenue taken in and no more.

That is incorrect. The country technically would default on payments to creditors, domestic and foreign. Longterm you are correct, but in the shortterm we wouldn't be making payments that the government is due to make. The money that will be taken in by the govt this year has already been spent. It's gone. By your calculation, the fed govt should close up shop for the rest of 2011.


Gotta cut the spending big time, but you can't just instantly turn it down to zero.

 

[lord_jeebus]

Sure, but failure to secure at least a short-term solution to the debt limit issue will only weaken demand for US debt, raise interest rates, and thus worsen the situation.

It doesn't mean you default, but default is one possibility (which Obama may unwisely calculate to be less politically damaging than diverting SS checks or military paychecks to pay creditors), the market is aware of that, and as you pointed out at the end of the last thread, much of US debt turns out to be short-term bonds that will be quickly affected by the increase in interest rates caused by lack of market confidence.

Raising the debt limit is not the solution, but is part of the best solution - a balanced budget attained via significant cuts in military spending, increased revenue from the top 0.5% (ie. not the six-figure professional crowd but the seven-to-eight-figure-earning financial parasites), perhaps adjustments to SS and Medicare/Medicaid, and resolution of this manufactured debt limit crisis (there is a problem but, as you point out, it's not a new problem) to demonstrate to the world that we are still a country run by mature adults.

 

[Narcotized]

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[Narcotized]

The money that will be taken in by the govt this year has already been spent. It's gone. By your calculation, the fed govt should close up shop for the rest of 2011.

No, that would be incorrect. The government continuously takes in money. Look at your weekly/monthly paycheck. They don't get paid a lump sum every January 1. The years revenues are not gone. They haven't even been collected yet.

 

[Narcotized]

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[Mman]

It will NEVER be cut big time without an ammendmant or forced by a debt ceiling. Every plan out there is a joke. They cut virtually nothing. They confuse you with "deficit" cuts when all it means is the debt keeps piling up at a fast rate, but just at a tiny bit slower rate. And the "deficit savings" are mostly imaginary.

Nobody has either the balls nor the brains to say "America, we spent your future. Our best days are long behind us for a long while. A massive amount of pain will be required over the next multiple decades. Everybody is getting slashed: rich, old, you name it." That's the truth. You'll never hear it.

I believe we should be only spending what we take in over the long haul. Perhaps spending just a *teeny* bit more than we take in. And we need to be paying down the debt and get it to a much more manageable level. You don't need to totally be balanced, just keep it within the realm of what tolerable inflation is. Because with inflation over time, your debt lessens a little.


If I had a dollar for every time I hear a single teenage mom talk about how she wanted to get pregnant so she could qualify for medicaid and not have to work, I'd be really rich. So I know we waste a lot of money on people that don't deserve it.

We need to increase the workforce in the country and decrease the number of people needing public assistance.

 

[lord_jeebus]

Actually, there already is no demand for US debt. 70-80 percent of it gets printed by the FED. Do you think ashortterm solution helps the solvency of paying back this debt? Raising the ceilingt or not, rating AAA or not, bottom line is our debt is a bottomless pit and one incredibly dumb place to put your money. Ratings and ceilings don't change that. Longterm we are much better off crashing now than another 10-20 trillion in debt later.

All changes in demand from outside organizations, which do continue to purchase some US debt, will influence interest rates, and thus that which we pay.

I never endorsed a short-term solution. Interest on existing debt is a significant component of federal expenditure, and low interest rates are the only way to reduce this expenditure short of paying off the federal debt overnight.