Vote on Debt Limit increase?

[Riot]

Originally Posted by joeydb

How does that make any sense? If we don't raise the ceiling, we can't borrow any more money, right?

Yes, but we can stop spending 100% right now - a complete freeze (which is impossible due to Social Security and Medicare anyway, which increases with the population over time) - and we would still have to raise the debt ceiling to be able to borrow money to pay the debt we've already incurred.

The debt ceiling is mostly just cash flow capability.

So spending will HAVE to go down to a level where tax revenue alone will support.

Our tax revenue needs to be raised back up to where it should be. Obama never should have let the Bush tax cuts renew.

As for interest rates going up, is that worse than speeding toward a debt level in both principal and interest that we cannot afford?

Yes, because it permanently affects our credit rating in the world. Why should we add two percentage points of interest to those that want to borrow money for a house in 2060?

Yes, we have to pay down the debt. But not raising the debt ceiling has little to nothing to directly do with achieving that. The first thing we do is let the Bush tax cuts expire - our debt is cut in half in 10 years, doing nothing else.

[dellinger63]

Originally Posted by Riot

Yes, we have to pay down the debt. But not raising the debt ceiling has little to nothing to directly do with achieving that. The first thing we do is let the Bush tax cuts expire - our debt is cut in half in 10 years, doing nothing else.

Before we raise the credit limit or let any tax cuts expire, we need to show good faith paying down the debt, period. This will actually improve our credit rating. We need to be spending less and paying more interest, something Obama has failed to do on both accounts. And before we do that we'll obviously need to elect a new President who believes something other than we need to spend to prevent going bankrupt.

Obama needs more credit just like a alchoholic needs more booze. What he really needs is an intervention. With medicare and SS expenses increasing every year the last thing we need is Obamacare!

[somerfrost]

Originally Posted by dellinger63

Before we raise the credit limit or let any tax cuts expire, we need to show good faith paying down the debt, period. This will actually improve our credit rating. We need to be spending less and paying more interest, something Obama has failed to do on both accounts. And before we do that we'll obviously need to elect a new President who believes something other than we need to spend to prevent going bankrupt.

Obama needs more credit just like a alchoholic needs more booze. What he really needs is an intervention. With medicare and SS expenses increasing every year the last thing we need is Obamacare!

Man, you guys keep relating increasing the debt ceiling to increased spending, we are all in agreement that spending must be cut and money taken in increased but the debt ceiling (as has been clearly shown over and over) is a separate issue. Holding the debt ceiling hostage to draconian spending cuts (effecting only the poor and middle class) is right wing bs...why is that so hard to see??

[timmgirvan]

THEY shoulda had this **** figured out long time ago....blame the bankers with pols in their pockets! It's a national shame...across any and all aisles!

[somerfrost]

Originally Posted by timmgirvan

THEY shoulda had this **** figured out long time ago....blame the bankers with pols in their pockets! It's a national shame...across any and all aisles!

Timm, I agree...but the debt ceiling is not the issue here, greed across the board is!

[dellinger63]

Originally Posted by somerfrost

Man, you guys keep relating increasing the debt ceiling to increased spending, we are all in agreement that spending must be cut and money taken in increased but the debt ceiling (as has been clearly shown over and over) is a separate issue. Holding the debt ceiling hostage to draconian spending cuts (effecting only the poor and middle class) is right wing bs...why is that so hard to see??

If we are all in agreement that spending must be cut why are we spending so much more and where is the outrage? As I've documented, the increased budget certainly hasn't been spent on interest and to the contrary, while Obama has raised the budget, he has lowered what is allocated towards interest or paying down the debt.

With his demonstrated track record he surely wouldn't put any new tax money towards the debt unless forced into it by some sort of agreement. He'd come up with more do-nothing projects and giveaways to even more foreign countries. This is not right wing BS but rather the right trying to save the country.

[timmgirvan]

Originally Posted by somerfrost

Timm, I agree...but the debt ceiling is not the issue here, greed across the board is!

Somer: then we need to have a collective gut-check for the people in charge of our futures.

[somerfrost]

Originally Posted by timmgirvan

Somer: then we need to have a collective gut-check for the people in charge of our futures.

I agree...but failing to reduce the debt ceiling is cutting off our nose to spite our face. It's political posturing while avoiding the hard work of debt reduction.

[Riot]

Originally Posted by timmgirvan

THEY shoulda had this **** figured out long time ago....blame the bankers with pols in their pockets! It's a national shame...across any and all aisles!

I agree with that, even the "across all aisles" part.

But look back at the last time Newt and government shutdown loomed. And at a budget that was within our means, and paying our debt down in leaps and bounds. That wasn't very long ago.

[Riot]

Originally Posted by dellinger63

If we are all in agreement that spending must be cut why are we spending so much more and where is the outrage? As I've documented, the increased budget certainly hasn't been spent on interest and to the contrary, while Obama has raised the budget, he has lowered what is allocated towards interest or paying down the debt.

With his demonstrated track record he surely wouldn't put any new tax money towards the debt unless forced into it by some sort of agreement. He'd come up with more do-nothing projects and giveaways to even more foreign countries. This is not right wing BS but rather the right trying to save the country.

You mean like how Obama cut 5 billion out of Medicare, and "obamacare" not only has put 18 million more Americans on purchasing their own private health insurance (getting them off you and I paying for them) but how it extended Medicare's life 12 years?

[timmgirvan]

Originally Posted by Riot

You mean like how Obama cut 5 billion out of Medicare, and "obamacare" not only has put 18 million more Americans on purchasing their own private health insurance (getting them off you and I paying for them) but how it extended Medicare's life 12 years?

Well....like I said "show me demonstrable...not Stated...results

[somerfrost]

Originally Posted by timmgirvan

Well....like I said "show me demonstrable...not Stated...results

again, we are getting away from the debt ceiling and focusing on political ideology, distrust of one ideology by another has nothing to do with the need to raise the debt ceiling...just an attempt to throw the nation into debt default by loonies on the far right while blaming the Democrats (and many Republicans) for the resulting mess.

[Riot]

Originally Posted by timmgirvan

Well....like I said "show me demonstrable...not Stated...results

Is the Congressional Budget Office good enough for you?

See whitehouse.gov

Look, I know some of you guys may only watch Fox News or read Breitbach or Drudge, but this stuff has been in the general news - AP, CBS, NBC, ABC? It pretty much should be common knowledge. This isn't obscure stuff only available if you watch C-Span2 all day long.

That it is not common knowledge - like the list of things I posted that Obama did for veterans and the military - I think shows how the claim of the "rabid left wing slant" to the news doesn't particularly drive the general media discussion <g>

Most of this stuff was rather well-publicized policy decisions that came down the first year in office.

Expect to see alot more lists of "what Obama has done", especially as Romney decided to kick of his campaign today by claiming the President of the United States has done "nothing".

[Riot]

April 26, 2011, 6:30 pm
What Happens if the Debt Ceiling Isn’t Raised
By CATHERINE RAMPELL New York Times

Still don’t understand what happens if Congress doesn’t raise the debt ceiling?

Below is a letter from Matthew E. Zames, a managing director at JPMorgan Chase and the chairman of the Treasury Borrowing Advisory Committee, which meets quarterly with the Treasury Department. The letter gives a step-by-step account of what analysts think might happen to the economy if the debt limit is not raised, and why they fear this might lead to another financial crisis:

April 25, 2011

The Honorable Timothy Geithner
Secretary
Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220

Dear Mr. Secretary:

As Chairman of the Treasury Borrowing Advisory Committee, I am writing to express my concerns regarding the urgent need to increase the statutory debt limit. A considerable degree of uncertainty already exists among market participants given the severe and long-lasting impact that even a technical default would have on the U.S. economy.

Any delay in making an interest or principal payment by Treasury even for a very short period of time would put the U.S. Treasury and overall financial markets in uncharted territory, and could trigger another catastrophic financial crisis. It is impossible to know the full impact of such a crisis on overall economic growth and on Treasury’s financing costs. However, the lessons from the recent crisis suggest that several damaging consequences will likely result, ultimately raising Treasury’s long-term funding costs and increasing the burden on the American taxpayer. These consequences stem from five developments that could likely occur if Treasury were to default on its obligations as a result of a failure to raise the debt limit in a timely manner.

First, foreign investors, who hold nearly half of outstanding Treasury debt, could reduce their purchases of Treasuries on a permanent basis, and potentially even sell some of their existing holdings. A worrisome precedent is the sharp decline in foreign sponsorship of [government-sponsored enterprise, or G.S.E.] debt since Fannie Mae and Freddie Mac were placed under conservatorship. Despite assurances from Treasury officials regarding the U.S. commitment to these institutions, foreign sponsorship has yet to return to pre-conservatorship levels. If foreigners began curtailing their investment in Treasuries as a result of a default, Treasury rates, and thus Treasury’s borrowing costs, would undoubtedly rise. A sustained 50 basis point increase in Treasury rates would eventually cost U.S. taxpayers an additional $75 billion each year.

Second, a default by the U.S. Treasury, or even an extended delay in raising the debt ceiling, could lead to a downgrade of the U.S. sovereign credit rating. Indeed, Standard and Poor’s decision to change the U.S. ratings outlook from stable to negative this week indicates a one-in-three chance that Standard and Poor’s will downgrade the U.S. rating within the next two years. One reason cited for the change in the outlook is a material risk that U.S. policymakers might not reach an agreement on how to address medium- and long-term budgetary challenges. It is possible that a default, or even a delay in acting on the debt ceiling, will be perceived as an increased indication of the political inability to forge a compromise on essential long-term fiscal reforms. The consequences of a ratings downgrade would be significant, with the potential for Treasury rates to rise by a full percentage point for each one-notch downgrade.

Third, the financial crisis you warned of in your April 4th Letter to Congress could trigger a run on money market funds, as was the case in September 2008 after the Lehman failure. In the event of a Treasury default, I think it is likely that at least one fund would be forced to halt redemptions or conceivably “break the buck.” Since money fund investors are primarily focused on overnight liquidity, even a single fund halting redemptions would likely cause a broader run on money funds. Such a run would spark a severe crisis, disrupting markets and ultimately necessitating the same kind of backstops that Treasury and the Federal Reserve initiated in the aftermath of the 2008 crisis. Such further increases in Treasury’s off-balance-sheet commitments are likely to be viewed negatively by investors and ratings agencies, which will potentially put further downgrade pressure on U.S. sovereign ratings.

Fourth, a Treasury default could severely disrupt the $4 trillion Treasury financing market, which could sharply raise borrowing rates for some market participants and possibly lead to another acute deleveraging event. Because Treasuries have historically been viewed as the world’s safest asset, they are the most widely-used collateral in the world and underpin large parts of the financing markets. A default could trigger a wave of margin calls and a widening of haircuts on collateral, which in turn could lead to deleveraging and a sharp drop in lending.

Fifth, the rise in borrowing costs and contraction of credit that would occur as a result of this deleveraging event would have damaging consequences for the still-fragile recovery of our economy. In 2008, placing the GSEs in conservatorship combined with a tightening of credit standards caused mortgage spreads to widen by 1.5 percent, ultimately raising mortgage rates for consumers. A similar rise in mortgage and Treasury rates would adversely impact economic growth, potentially pushing the U.S. economy back into recession.

Finally, I would emphasize that because the long-term risks from a default are so large, a prolonged delay in raising the debt ceiling may negatively impact markets well before a default actually occurs. This is because investors will likely undertake risk-management actions in preparation for a potential default. For example, borrowers who rely on short-term funding markets, including the GSEs, may attempt to pre-fund themselves or hold excess liquidity through July, distorting money market rates. Additional effects could include large auction concessions, especially if Treasury were forced to delay auctions for cash management purposes. I would also expect to see weaker demand for Treasury securities as uncertainty increases on whether the debt limit will be raised. Both of these effects would negatively impact Treasury’s borrowing costs.

Given the magnitude of the adverse consequences a default would have on Treasury borrowing costs and the health of the broader economy, action is urgently needed to increase the statutory debt limit. Swift action would also help ease the existing uncertainty in financial markets that could begin translating into real market impacts well before Treasury exhausts extraordinary actions at its disposal to postpone a default. Notwithstanding your significant efforts to date, your continued attention to this important issue is greatly appreciated.

Sincerely,

Matthew E. Zames
Chairman
Treasury Borrowing Advisory Committee

[timmgirvan]

Originally Posted by Riot

Is the Congressional Budget Office good enough for you?

See whitehouse.gov

Look, I know some of you guys may only watch Fox News or read Breitbach or Drudge, but this stuff has been in the general news - AP, CBS, NBC, ABC? It pretty much should be common knowledge. This isn't obscure stuff only available if you watch C-Span2 all day long.

That it is not common knowledge - like the list of things I posted that Obama did for veterans and the military - I think shows how the claim of the "rabid left wing slant" to the news doesn't particularly drive the general media discussion <g>

Most of this stuff was rather well-publicized policy decisions that came down the first year in office.

Expect to see alot more lists of "what Obama has done", especially as Romney decided to kick of his campaign today by claiming the President of the United States has done "nothing".

Saw today somewhere that Obama cut 400Bil from Defense or military...I'll leave it to you to find it.

[Riot]

Originally Posted by timmgirvan

Saw today somewhere that Obama cut 400Bil from Defense or military...I'll leave it to you to find it.

I'll believe you

[timmgirvan]

Originally Posted by Riot

I'll believe you

...bout time!

[dellinger63]

Originally Posted by Riot

You mean like how Obama cut 5 billion out of Medicare, and "obamacare" not only has put 18 million more Americans on purchasing their own private health insurance (getting them off you and I paying for them) but how it extended Medicare's life 12 years?

I'm willing to give it a try. But we need safe-guards (insurance) as it is a big gamble (to at least to 50% of us plus). It's supposed to save money and that's all good. However we need a stop/loss put in at $5 Billion. That's plenty and we can't afford more. If it works? God Bless Obama....

[joeydb]

Originally Posted by dellinger63

I'm willing to give it a try. But we need safe-guards (insurance) as it is a big gamble (to at least to 50% of us plus). It's supposed to save money and that's all good. However we need a stop/loss put in at $5 Billion. That's plenty and we can't afford more. If it works? God Bless Obama....

Unfortunately, there is no "try" with ObamaCare or any other liberal program. They seize power from the individual in the form of freedom and it never comes back.

Sorry if my first sentence sounds Yoda-like.

[joeydb]

Recent poll: only 22% of people want the debt ceiling raised.