What good is the Debt Ceiling?

[Dixie - In Memoriam]

I agree, the debt ceiling is pointless.

Well, if it's really not a 'ceiling' at all... then you are right, it is pointless. If we just raise it automatically whenever it is reached, it is technically not a 'ceiling' of any kind, by the very definition. The 'ceiling' is supposed to be the top... the limit... all you can do... can't go any further! If you are having trouble comprehending this, put a trampoline in your living room and start jumping... see what happens when you reach the ceiling!

Now we have been brainwashed to believe, this is perfectly normal and routine, to just raise our debt ceiling when we reach it... Republicans have done it... Democrats have done it... and in the realm of Washington politics, it has become somewhat of a routine exercise we just take for granted. But when you divorce yourself of the partisan political rhetoric, it doesn't make very much practical sense at all, what purpose does a debt ceiling serve, if we aren't going to observe it when reached? I mean, take this out of a political perspective and objectively analyze it philosophically for a change... does it make sense to continue to allow politicians to do something that is completely illogical, just because they always have?

SF got thanked above (just before he was groaned) for his comments about this being an issue of accountability. But there has been no accountability. And that goes for both sides of the aisle, most of this spending couldn't pass without bipartisan support, although Obamacare did. But the blame doesn't matter now, we can blame Bush, we can blame Democrats, we can blame both... it doesn't fix the problem. To fix this problem, we have to set aside partisan difference in ideology and focus on the fundamental principles. What is the purpose and supposed function of the debt ceiling. And is it being respected as a 'ceiling' or is it being exploited because we are too stupid to hold the politicians accountable?

 

[Cancel 2016.2]

Medicare/Medicaid - 20.8%
Social security - 19.6%
DoD - 18.74%
Unemployment - 16.13%
Interest on the Debt - 4.63%
Everything else - 20%

Which one is Cable TV, Internet, and Eating out? Medicare? Defense? Everything else?

1) $500 Billion in Waste in Medicare/Medicaid that Obama identified.... $50B per year
2) Social Security stays
3) DoD.... can be cut by at LEAST 20%
4) Shore up our fiscal situation and watch as the trillions in cash on corporate books gets put to work (which reduces the unemployment spending)
5) Interest on debt is mandatory
6) Everything else.... across the board cut of 10%

 

[Based Chad]

Well, if it's really not a 'ceiling' at all... then you are right, it is pointless. If we just raise it automatically whenever it is reached, it is technically not a 'ceiling' of any kind, by the very definition. The 'ceiling' is supposed to be the top... the limit... all you can do... can't go any further! If you are having trouble comprehending this, put a trampoline in your living room and start jumping... see what happens when you reach the ceiling!

Now we have been brainwashed to believe, this is perfectly normal and routine, to just raise our debt ceiling when we reach it... Republicans have done it... Democrats have done it... and in the realm of Washington politics, it has become somewhat of a routine exercise we just take for granted. But when you divorce yourself of the partisan political rhetoric, it doesn't make very much practical sense at all, what purpose does a debt ceiling serve, if we aren't going to observe it when reached? I mean, take this out of a political perspective and objectively analyze it philosophically for a change... does it make sense to continue to allow politicians to do something that is completely illogical, just because they always have?

SF got thanked above (just before he was groaned) for his comments about this being an issue of accountability. But there has been no accountability. And that goes for both sides of the aisle, most of this spending couldn't pass without bipartisan support, although Obamacare did. But the blame doesn't matter now, we can blame Bush, we can blame Democrats, we can blame both... it doesn't fix the problem. To fix this problem, we have to set aside partisan difference in ideology and focus on the fundamental principles. What is the purpose and supposed function of the debt ceiling. And is it being respected as a 'ceiling' or is it being exploited because we are too stupid to hold the politicians accountable?

Accountability somehow only applies to the low and middle class these days. The elites have exempted themselves with "too big to fail" ism. The entire concept of accountability has now become a tool in the ongoing class warfare against regular people.

 

[Cancel 2016.2]

Calm down, junior. No need to yell. Tough day at the track or something?

ah yes, the standard 'why you angry' line of crap.... you crack me up. When TYPING, using caps is a way to emphasize a word. I suppose I could use bold or underline it if that means your panties don't get bunched up to the point where you see imaginary 'anger'. Idiot.

I think we just disagree about what is a problem and what is not. We should all be able to agree that defaulting on our debt is a major problem. We should also be able to all agree that not paying Medicare, Medicaid and Social Security obligations in full beginning in August is also a major a problem. The only way to avoid those two things is to raise the debt ceiling. The fact of raising the debt ceiling does not in and of itself cause any problems whatsoever. It just allows the government to meet its current obligations. Even if you think that the government needs to cut spending, raising the debt ceiling doesn't require the government to spend more. Congress can always vote to cut whatever it wants even if the debt ceiling is eleventy billion dollars. if you want to cut spending, just cut spending. The debt ceiling has nothing to do with it.

Yes, defaulting is NOT an option. (note the NOT is capitalized for emphasis, it doesn't mean I am angry)

Yes, as I have stated on other threads, there is no way to cut excess spending fast enough to prevent a default. However, that does NOT mean we have to raise the ceiling without addressing the need for long term spending cuts. They can go hand in hand. Same piece of legislation. Otherwise we just end up right back here in a year or two or however long it takes for the idiots in DC to push the new ceiling.

you are wrong... raising it does cause a problem in and of itself.... it allows the idiots to keep outspending revenue until we hit the new ceiling. Then we play this game all over again.

You are correct, it doesn't REQUIRE the government to spend more.... but they will. 50 straight years of their doing so is evidence enough of that.

 

[Dixie - In Memoriam]

I cannot think of a single good reason why we have one.

It matters what we do with it because not raising it causes all sorts of problems. We should just get rid of it.

Ok turdface, let's examine your kid-like stupidity here..... Congress announces we have just eliminated any debt ceiling for the US Government! Yay! No more limits on our debt! We can spend and spend and go as far in debt as we like! We can run a QUADRILLION dollar deficit now! Sounds so great, doesn't it???? Less than an hour after this bill passes, the dollar begins to plummet on the world market, and within 36 hours, you will need a wheelbarrow full of $100 bills to buy a loaf of bread. Shortly thereafter, your new Chinese government would be trying to decide what to rename your city, state or region....I bet you'll get a really cool name.

 

[Cancel 2016.2]

But they've already voted on everything once already (i.e. they've ordered and eaten). Now they're voting on whether to pay for it. It's stupid.

wrong.... it is like going out to dinner knowing you have no money to paying for it and ordering the surf and turf for everyone anyway, then calling your credit card company after the fact to proclaim that they should raise your limit because otherwise it will hurt your ability to pay for what you want.

 

[Based Chad]

wrong.... it is like going out to dinner knowing you have no money to paying for it and ordering the surf and turf for everyone anyway, then calling your credit card company after the fact to proclaim that they should raise your limit because otherwise it will hurt your ability to pay for what you want.

But you believe accountability should only apply to old and poor people.

 

[FUCK THE POLICE]

Wrong again. The debt of the country is restricted by its ability to spend. The debt limit restricts that ability.

The congressional debt limit is, again, like me going around and declaring "I shall not borrow more than X". The debt limit set by a credit card company is the amount of money it has decided to risk lending to you before it believes you become a risk. That's more analogous to investors refusing to buy bonds than the congressional debt limit itself. The only similarity is that the "debt limit" is a definite number in those two situations.

how does that shore up the money supply water?

By putting additional money into circulation. It's not the same thing as printing money and sending it to the government. It's printing money and using it to buy assets, assets that are actually owned by secondary buyers.

Yes, to a degree that is true. The problem is that we have run actual deficits since 1960. Which is why the debt ceiling has had to continually be raised.

As for balancing the budget, we can take everything across the board back to 2006 spending levels. Revenues may be lower by 200-300 billion dollars, but they are not shy by $1.6 TRILLION.

Actually, taking historically regular revenue figures of 20% of GDP, and comparing them to current revenue figures of 15%, revenue is down about 800 billion from normal. That's about half the deficit. The other half is spending. One big figure here is unemployment, which of course is usually nowhere in the universe of 15% of the budget. Again, another consequence of the recession. Once the recession is over, that should leave us at around a 600 billion deficit. Which, I think, is the number we should be seeking to plug right now. I think cutting around 400 billion is practical. It would be ideal to fully balance it, but a 200 billion a year deficit is at least a number that won't leave us in long term trouble (although it will make getting the debt under control take a lot longer).

Our bonds ARE lacking buyers Water... which is WHY the Fed is playing the shell game with QE1 and QE2.

QE is just a measure the Fed is taking because it's not practical to set negative interest rates.

 

[Cancel 2016.2]

But you believe accountability should only apply to old and poor people.

no, I believe everyone should be accountable for their own actions. As for spending, the accountability lies with the idiots in DC. We must hold THEM accountable for continually outspending revenue.

 

[Dixie - In Memoriam]

But you believe accountability should only apply to old and poor people.

No, most politicians aren't poor.

 

[Bonestorm]

wrong.... it is like going out to dinner knowing you have no money to paying for it and ordering the surf and turf for everyone anyway, then calling your credit card company after the fact to proclaim that they should raise your limit because otherwise it will hurt your ability to pay for what you want.

But there is no credit card company.

 

[Bonestorm]

Ok turdface, let's examine your kid-like stupidity here..... Congress announces we have just eliminated any debt ceiling for the US Government! Yay! No more limits on our debt! We can spend and spend and go as far in debt as we like! We can run a QUADRILLION dollar deficit now! Sounds so great, doesn't it???? Less than an hour after this bill passes, the dollar begins to plummet on the world market, and within 36 hours, you will need a wheelbarrow full of $100 bills to buy a loaf of bread. Shortly thereafter, your new Chinese government would be trying to decide what to rename your city, state or region....I bet you'll get a really cool name.

Like I said previously, you are a fucking idiot.

 

[Cancel 2016.2]

The congressional debt limit is, again, like me going around and declaring "I shall not borrow more than X". The debt limit set by a credit card company is the amount of money it has decided to risk lending to you before it believes you become a risk. That's more analogous to investors refusing to buy bonds than the congressional debt limit itself. The only similarity is that the "debt limit" is a definite number in those two situations.

Again, the debt ceiling is in place because in order to raise it, the idiots in DC must VOTE to do so. That means we the people can see who voted yes and who voted no. It is then up to us to determine if we think either of the groups should be replaced with more fiscally responsible parties.

By putting additional money into circulation. It's not the same thing as printing money and sending it to the government. It's printing money and using it to buy assets, assets that are actually owned by secondary buyers.

QE2 does not shore up the money supply. QE2 has the FED buying US Treasury Bonds from the Dept of the Treasury. $600B worth. It is an attempt to keep long term interest rates from rising. They are doing this because they cannot lower interest rates any further and they need someone to buy the insane amounts of debt they are issuing.

Actually, taking historically regular revenue figures of 20% of GDP, and comparing them to current revenue figures of 15%, revenue is down about 800 billion from normal. That's about half the deficit. The other half is spending. One big figure here is unemployment, which of course is usually nowhere in the universe of 15% of the budget. Again, another consequence of the recession. Once the recession is over, that should leave us at around a 600 billion deficit. Which, I think, is the number we should be seeking to plug right now. I think cutting around 400 billion is practical. It would be ideal to fully balance it, but a 200 billion a year deficit is at least a number that won't leave us in long term trouble (although it will make getting the debt under control take a lot longer).

The above would be a reasonable start.

QE is just a measure the Fed is taking because it's not practical to set negative interest rates.

yes, I am aware of that. My point to you is that if they stop, there is not enough demand for our bonds at current rates. You said there was a limit and it was based on those willing to buy our bonds. That is what I was addressing. There is not enough demand and thus rates will have to go up to create the demand. The higher rates will further exacerbate our future problems of repaying the debt. Hence the need to cut spending now (by which I mean, getting the long term plan in place prior to a raise in the debt ceiling).

 

[Cancel 2016.2]

But there is no credit card company.

yes... there is. Who do the politicians answer to dolt?

 

[Bonestorm]

Again, the debt ceiling is in place because in order to raise it, the idiots in DC must VOTE to do so. That means we the people can see who voted yes and who voted no. It is then up to us to determine if we think either of the groups should be replaced with more fiscally responsible parties.

That's asinine. The debt ceiling has much much more to do with past expenditures than it does with future expenditures. As you acknowledge, voting to increase the debt ceiling is a necessity. Voting yes is the only responsible course of action to take.

 

[Dixie - In Memoriam]

Like I said previously, you are a fucking idiot.

Well how can I argue with such a well-reasoned rebuttal. I rest my case.

 

[Cancel 2016.2]

That's asinine. The debt ceiling has much much more to do with past expenditures than it does with future expenditures. As you acknowledge, voting to increase the debt ceiling is a necessity. Voting yes is the only responsible course of action to take.

It has everything to do with past AND future expenditures you dolt. As I stated earlier... you can vote yes to raising the debt limit AND enacting future spending cuts AT THE SAME TIME.... THAT is the only responsible thing to do. Raising the debt ceiling without a long term plan to lower our nations debt is truly moronic.

 

[Bonestorm]

It has everything to do with past AND future expenditures you dolt. As I stated earlier... you can vote yes to raising the debt limit AND enacting future spending cuts AT THE SAME TIME.... THAT is the only responsible thing to do. Raising the debt ceiling without a long term plan to lower our nations debt is truly moronic.

The only thing raising the debt ceiling does is authorize the Treasury to borrow money to pay for things that Congress has already said it should pay for. It has everything to do with the past and very little to do with the future. It does not require or authorize any new spending at all. The only responsible thing to do is to vote to raise the debt ceiling, whether or not any strings are attached. Hell, you've already conceded that it has to happen.

And there is no need to "enact future spending cuts" at all, let alone as part of the debt ceiling increase. If Congress wants to cut future spending, it can just not enact laws that spend money. It's not difficult. And even if this Congress passes a law that says that the government cannot spend more than X in FY2013, it isn't binding on future Congresses who can just change the law.

 

[Based Chad]

no, I believe everyone should be accountable for their own actions. As for spending, the accountability lies with the idiots in DC. We must hold THEM accountable for continually outspending revenue.

You want programs for poor and the elderly cut. you want to balance the budget on the backs of the poor.

 

[Cancel 2016.2]

The only thing raising the debt ceiling does is authorize the Treasury to borrow money to pay for things that Congress has already said it should pay for. It has everything to do with the past and very little to do with the future. It does not require or authorize any new spending at all.

Again, you are wrong. It has everything to do with the future of the idiots in DC to continue to out spend revenue. It provides them the ability to continue outspending in the future. Congress can also CHANGE ITS MIND and decide all of that spending is not necessary. They can CUT the amount they thought they 'needed' to spend.

The only responsible thing to do is to vote to raise the debt ceiling, whether or not any strings are attached. Hell, you've already conceded that it has to happen.

Yes and AS I STATED, there is NO rationale reason why it can't have long term spending cuts and debt reduction amendments attached to the increase. you know... showing some resemblance of fiscal sanity.

And there is no need to "enact future spending cuts" at all, let alone as part of the debt ceiling increase.

AND BACK to the Dem talking points your masters laid out for you.

If Congress wants to cut future spending, it can just not enact laws that spend money. It's not difficult.

Exactly... not difficult at all... that is why it has been 50+ years since they last lowered our nations debt. The above is truly fucking idiotic.

And even if this Congress passes a law that says that the government cannot spend more than X in FY2013, it isn't binding on future Congresses who can just change the law.

which again is the WHOLE FUCKING REASON FOR THE DEBT CEILING. They CAN make it binding. But they WON'T, because people like you are too friggin gullible and continue to buy their lines of bullshit over and over again and so they take advantage of idiots like you.