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US debt ceiling reached.

Discussion in 'Politics and Current Affairs' started by Crude, May 16, 2011.

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  1. srkmagnus

    srkmagnus Well-Known Member

    It doesn't look like things are going to get any better anytime soon, either. The Dems and Republicans can't come to a comprise that will better the US Economy. There's no easy solution so I can see why they are so fart apart. But somethings going to give if we want to get out of this mess and prevent our future generations from taking the brunt of our fiscal irresponsibilities that are happening now.
  2. Isthmus

    Isthmus Android Expert

    tell me this. When was the last time that the debt limit was not reached, and raised by congress? IIRC the congress, regardless of which party has been in control and the administration in power at the time (regardless of party) have risen the federal government's borrowing limit every year going back until what, Regan in the 80s?

    sure this is very bad policy in the long term, and real effort should be placed at controlling costs, but both parties are just as responsible for this practice, so lets not turn this into yet another party bashing or administration bashing thread.
  3. srkmagnus

    srkmagnus Well-Known Member

    I wasn't bashing on either party or administration. Just stating the facts that there's a problem and a need for a resolution. It's almost a given that the ceiling will be raised because it's too late for anything else. The government is not going to impose a high tax hike nor are they going to make drastic cuts in spending to cut the deficit.
  4. noah way

    noah way Android Enthusiast

    If the debt ceiling isn't raised the US will default on its bonds. Look at who the biggest bond holders are and imagine the consequences if we default.

    In other words, it won't happen, but that doesn't keep Boner from replaying Gingerich's in 1995 shutdown strategy (again) in his effort to enact a highly partisan corporate agenda. He will lose his seat and his job if Obama ever grows a pair.

    Think of it as political terrorism: They'll bring down the world economy and destroy the US if Obama doesn't give them what they want. It obviously won't happen, but they will certainly be able to achieve some success as the president is owned by the very same corporate interests that are driving everything.

    In case you were wondering what they want, it's to eliminate or privatize (generate corporate profit from) social programs including health and education. What they don't want is any of their corporate sponsors to have to pay taxes (ever) or to pay any taxes themselves. As for ongoing war in Afghaniscam at $10 billion per month, it generates some nice profits ...
  5. srkmagnus

    srkmagnus Well-Known Member

    Very well put, Noah.
  6. noah way

    noah way Android Enthusiast

    The real question is does Obama have the testicular fortitude *not* to compromise with Republican terrorists? If he does, the next question is how to balance the budget if the debt ceiling isn't raised?

    $300 billion a year for Iraq / Afghanistan? Finally, an excuse to leave ...

    $400 billion a year for the Bush Tax Cuts? Boo hoo ...

    $200 billion a year Defense spending (an oxymoron if ever there was one).

    $200 billion a year by eliminating corporate tax breaks and loopholes. Don't worry, they'll make it up by raising prices ...

    That's over a trillion per year in savings right there.
  7. mike114

    mike114 Well-Known Member

    So Noah, when do we say enough is enough? And what the hell is the point of having a debt ceiling if Congress just keeps raising it. Talk about a farce.

    And Republican terrorists huh?? Very nice. Anyway, the comment about the US defaulting if the ceiling isn't raised is absolute B.S.
  8. zapjb

    zapjb Well-Known Member

    Big deal. The debt ceiling under Bush jr. was raised six times.
  9. mike114

    mike114 Well-Known Member

  10. Crude

    Crude Android Expert
    Thread Starter

    Yeah, but it wasn't Bush Jr. that raised the debt ceiling. It's congress that does the raising. And that was, like the war voted on and approved by republicans and democrats.

    Also, the increase to our national debt under Bush in 8 years was a drop in the bucket to the increase we have seen in the last 3 years under Obama.

    Their motives aside, you have to give the republicans credit for trying to curb spending.
  11. noah way

    noah way Android Enthusiast

    terrorism noun, the use of violence and intimidation in the pursuit of political aims.

    OK, it's a little extreme, but it's 50% correct. :D

    As to the debt ceiling, not raising it will mean some things cannot be paid. I suppose that leaves it up to Obama as exec to make cuts. One of the things he could cut is interest payments on foreign held debt. The likelihood of this seems quite small considering the potential global economic consequences, but it remains a possibility, and bond traders have reacted accordingly. A better list of things to cut (from my perspective) is noted in a previous post.

    The debt ceiling as a number is meaningless, debt as a percentage of GDP is what we should be talking about. Therefore even maintaining a constant level of debt as a percentage of GDP would require raising the debt ceiling as GDP increased.

    The entire government, run by private interests for their own benefit, is a farce. Enough was more than enough decades ago.

    We're headed down and there's no stopping it as long as Washington insiders (Democrat and Republican), awash in corporate money, with publicly funded health care and retirement plans, have no desire to do anything other than benefit themselves and the corporations that keep them rolling in dough.
  12. noah way

    noah way Android Enthusiast

    Do you just make this stuff up?

    1) Bush increased the deficit $4.5+ trillion.

    2) Obama hasn't been in office three years yet, and the 2009 budget was set by Bush. The deficit under Bush's budget rose to $12.8 trillion.

    3) The debt ceiling is $14.3 trillion. 14.3-12.8 = 1.5. Under Obama, the deficit has increased about 1/3 of what it did under Bush.

    4) Obama inherited the Bush economy of tax breaks for the rich and multiple wars that was consistently running over $500 billion per year in deficits. Blaming Obama for the result of these conditions ignores the facts.

    5) Rather than pay down the deficit, Bush used the $1.3 trillion Clinton surplus as an excuse to give the rich tax breaks.

    6) Bush, with Republicans (and many Democrats) marching in lock-step, driven by corporate funding and lobbyists, drove the country into economic ruin, and amazingly somehow this is all Obama's fault ... the absolute absurdity of this conjecture defies fact, history and logic.

    Don't misconstrue this into support for raising the debt ceiling: I don't. Nor do I support the ideological charade that Republicans who ignored deficits under Bush are now using to Bash Obama.

    In fact I would very much like to see Obama refuse to negotiate with the ideological right and be forced to make some $750 billion in immediate spending cuts. Then we'd see by his choices just how liberal or conservative he really is.

    Where were they under Bush? This is simply an attempt to undermine a political opponent for personal gain at the expense of American citizens.
  13. Minor correction, the largest holder of USA debit is the the usa , not china.

    Here is the basic problem.

    The only way out of a recession is to spend. You can not save out of a recession, period. We have tried that again and again, and it has failed again and again, around the world.

    The great depression was created because the fed reduced the amount of money in the economy by 1/3 from 1929 to 1933. Banks could not sell bonds because there was no hard cash in the economy.

    In the same effort the only way to get past the recession is to let the corruption go bankrupt and let the economy start to work around the problems, we did neither.

    No matter what theory you use, the government needs to make money available, either to banks, as in loans, reduce taxes to people, or directly in stimulus packages. In the real world, all are needed, with some time for the system to reset.

    Now, the debt ceiling will have to be raised, or the recession will continue.

    There is really no reason to worry about the debt, because compared to gnp, it is not that bad. In the past, gnp to debt has been 2x times higher.

    The only reason this is a conversation right now, is because it is the only way to sabotage the economic recovery going into 2012. If you have a good economy in 2012, you will have democrats winning, if you have a bad economy it will be republicans. And look who wants to stop spending in a recession?
    ElasticNinja and noah way like this.
  14. the roof! the roof! the roof is on fire! we don't need no water! let the m***f***r burn!

    hells yeah.
  15. You know what would happen if you dont raise the debt roof?

    It would more or less destroy the usa government.
  16. good. i haven't been satisfied with our government for a good 20 years or so...
    RAND0M1ZER and Crude like this.
  17. noah way

    noah way Android Enthusiast

    What a sad commentary on American politics. Burn down the house to insure your own personal victory.
  18. mike114

    mike114 Well-Known Member

    We have spent $1 trillion in stimulus and have squat to show for it. Real unemployment at about 18%, almost no growth and we are about to go into a double dip recession. How much more do we need to put on the USA credit card for the keynesians to be satisfied??
  19. Ok. I love how people will just say anything with out posting facts to back it up.

    Show that the united states has not grown in the last 2 years? Oh never mind. Since the last quarter of 2009 the united states gdp has grown over 19%.

    In fact, we are now posting better economic growth then where where from 2005-2008. But of course democrats always produce better economic returns on spent money.

    United States GDP Growth Rate
  20. mike114

    mike114 Well-Known Member

    If you call GDP growth of less than 2.5% per quarter on average a good ROI on $1 trillion, I guess you can call it successful. Since the stimulus, unemployment has gone up, the value of the dollar has gone down, housing is at all time lows, inflation is up, gasoline hovers near $4 a gallon and McDonald's was responsible for half of all jobs created last month. Now this is an economy democrats can be proud of. Of course republicans share lots of blame as they are responsible for this mess as well.
  21. noah way

    noah way Android Enthusiast

    What's your point?
  22. Now to be fair, it is more like 3.6% from the lowest to highest, but we can call it 2.5% if you want. Let us see, that is 10% per year. Anyone would invest in 10% savings account per year. But really we are comparing democrats against republicans. So lets go with the best economy the republicans can produce int he last 60 years.

    Regans gdp percentage per year was...wait for it...wait for it...wait for it....3.5% per year? Wait, that can not be right??? George W. Bush only grew the economy by 2.3% per year.

    Now wait you said per spending. Ok. Regan increased the debt by 1.7 trillion dollars and gets a return of 3.5% per year. George Bush sr, increases the debt by 1.4 trillion, and returned a gdp per percentage of 2.1% per year. Bush Jr, increased the national debt 4.36 trillion dollars, and gave a return of only 2.3% per year. And you are complaining about 10% return on 2.4 trillion?


    Let us look at the real numbers.

    gdp% per year

    Democrat= 4.6% Republicans=2.9%

    Now if you think that republicans are better at the economy then democrats, please prove me wrong. Find one economic factor that proves democrats in the last 60 years have created a worst economy then republicans. I know you can't the only thing the republicans can do is simply increase spending, while strip civil liberties from the people.

    And yes. Republicans increase the debt by about 1.2% per gdp per year. About 4.8% per gdp per term. Democrats decrease the debt by 5.92% per gdp per term.

    The other "fact" you brought up is unemployment, which is only important if you are in a recession. But you can look at employment numbers as a better gage of economic growth. Dems again increase employment by 2.9% a year, republicans, only 1.7%.

    And finally. Obama has increased the economy, by your numbers only 2.5% per quarter, 10% per year, 20% (well 19.7%) in two years. Bush jr only increased the economy 16% in 8 years. Obama is spending just as much as bush did, but is returning twice the value for the same dollar.

    I do not defend the bailouts or the stimulus package, I do think the money could have been used better. But one simple fact remains. When you are in a recession democrats have a better track record. And obama has proven again and again that he can at least double the economic growth of the previous president, in the middle of the second great depression.

    If you doubt any of the numbers, please go to the treasury website, you can look them up and add them up yourself.

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