US Debt

[Triple Vacuum Seal]

 

1) Disagree. The root cause of Greece's deficit is historically low productivity and lack of economic competitiveness caused by an economy biased heavily in favour of non-productive, non-revenue or revenue neutral economic activity- a bloated and inefficient public sector and relatively small private sector, put simply. Greece has the lowest productivity per capita of any European nation by quite some margin, but its public debt to GDP ratio isn't that different to most other European nations so the reason for less of investor confidence cannot be linked to that alone. If that were the case, then why do the UK and Canada, both of which have debt to GDP ratios of over 100% still have the highest credibility on the borrowing markets? Size of government debt and ability to service it are quite different things.

 

2) Investor confidence is seldom if ever solely related to deficit. If that were the case, then why do nations with huge deficits continue to command excellent borrowing rates whereas numerous nations with comparatively low debt-to-GDP ratios can't? At the end of the day, investors are looking for a return and will put their money where it can be most readily delivered. The additional issue in Japan was (and is) a lack of cross-pollenation, with 96% of Japanese government debt internally held.

 

3) What about my various other examples? Some of these have been potentially catastrophic in theory but have only had very limited real-world impact. I'm not entirely dismissing the role that deficits play in economic crises but to portal them as the primary cause of investor exiles and economic contraction appears to be completely contradictory to all available evidence. If this were the case, why does the UK command an AAA rating despite sluggish growth and a debt of more than 100% GDP?

- I agree that Greece has low productivity, but that is why they were so vulnerable to a debt crisis which is indeed the crisis they are facing. You said it yourself; their productivity was "historically low" but the nation hasn't been historically in crisis. A nation a can survive with low productivity (GDP growth) all day if they live within their means. If they don't live within their means (overspending), then debt is the catalyst for crisis plain and simple.

 

Secondly, simply eclipsing the 100% percent debt to GDP ratio as we've recently done doesn't call for an immediate credit downgrade (though it should) since 100% is manageable with deficit reduction measures. Credit ratings are also based on ability to pay debt and not financial standing. Credit rating agencies also have their heads in their asses anyway. Simply staying quiet about the long term debt issue back in late 2012 would've kept our credit rating at AAA. Sad. Canada's debt is no where near 100% of their GDP either. It's more in the upper mid 80s. Your UK figure is off as well. They are seeing public debt levels at ~86%. In fact, when they saw 180% levels after WW2, UK intelligently took austerity measures. The US isn't the only western nation that's overspending, we just have a more stubborn political landscape that won't allow us to handle the issue properly.

 

- In reality, bond holders are dealing with a pretty liquid instrument in which the value won't plummet without a series of major red flags (such as a real credit downgrade and not one that was basically from "excellent" to "good" we received last year). This is why a investors in bonds haven't been sidelined over the debt issue. Time is money. Because bonds can be traded prior to either maturity or devaluation, I don't see how continued participation in the US treasury bond market exempts us from having debt trouble. I also never said that investor confidence is ever solely related to deficit. I'm saying that investor confidence is always related to the financial health of the underlying institution.

 

- There is also no recent historically example of a nation's debt bubble as large as the US (in terms of assets) bursting so we have a blurry picture on what the quality of life will be like. One picture we do have, is the late 2000's recession resulting from the housing bubble, which is a much smaller bubble than public and private debt. As pointed out earlier your UK debt figures are off and the credit rating agencies are more reactive than proactive when it comes to rating the creditworthiness of nations with historically good reputations. The UK's debt situation isn't comparable to the US' simply because people here in the states have no intentions of spending cuts and we have a much larger debt.

 

*Keep in mind that a lot of Americans are financially incompetent and don't save/invest a penny for retirement, healthcare, kid's college, etc. on their own. We rely on a diminishing breed of employers that care to do it for us. Most of our equity is in our homes.

Edited January 9, 2013 by canttakemyid

[Stephan90]

 

Secondly, simply eclipsing the 100% percent debt to GDP ratio as we've recently done doesn't call for an immediate credit downgrade (though it should) since 100% is manageable with deficit reduction measures.  Credit ratings are also based on ability to pay debt and not financial standing.

Isn't it very paradox to give ratings based on the capability of a country to get cheap new credits (which is possible because it has already an AAA rating) to pay coming due debts?!

 

When you rate a country based on it's capability to reduce it's deficit with it's own power, then 100% percent debt to GDP with a constant foreign trade deficit, for example USA: -473 billion $, is not justified.

 

Personally I think Obama was f*cked from day one as president, because the starting position was already bad. He can only cut the tremendous military budget, raise the taxes on capital income and personal income tax for higher earners. And I am by far not a friend of socialism.

Edited January 9, 2013 by Stephan123

[King Of Monra]

*Meanwhile in Norway*

 

Dept, wtf is that?

You'll find out once demand for Norwegian oil drops.

Oh, you think that is our only income?

 

Also, that awkward moment when we keep finding more and more oil, and we found coal.

 

But yes, the oil will run oat, and so will the coal that we found, yes, we found coal, anyway, it wont go out as long as I live.

 

So I stick with what I said.

[Triple Vacuum Seal]

 

 

Personally I think Obama was f*cked from day one as president, because the starting position was already bad. He can only cut the tremendous military budget, raise the taxes on capital income and personal income tax for higher earners. And I am by far not a friend of socialism.

Definitely. Coaches in sports get put in the same predicament and have to take sh*t when their team sucks regardless of whose coaching it.

 

As for socialism, I agree. It's not business-friendly enough for cultures to realize their true economic potentials. All of the anti-wealth sentiment on the far-left (socialism) just leads to over-regulation making it even harder for the poor to get richer (as they have a broader social strata to overcome) and easier for the rich to stay rich with even smaller incentive to invest (spread the wealth). Though wealth disparity is the key issue that drives the far-left crusade against the far-right. Socialism inadvertently creates the same conditions it was intended to prevent.

[sivispacem]

I'll respond in full later, but I don't think your totally misleading, unhelpful and incorrect (may I say very Americanised) put down of Socialism is very helpful in the context of this discussion. It's almost as if they teach a completely different meaning of the word in the 'States than they do everywhere else in the world. Socialism intrinsically has absolutely nothing to do with anti-wealth sentiment or even corporate regulation.

[Stephan90]

 

I'll respond in full later, but I don't think your totally misleading, unhelpful and incorrect (may I say very Americanised) put down of Socialism is very helpful in the context of this discussion. It's almost as if they teach a completely different meaning of the word in the 'States than they do everywhere else in the world. Socialism intrinsically has absolutely nothing to do with anti-wealth sentiment or even corporate regulation.

There is no single definition of socialism. The basic ideas may be solidarity, equality, freedom and justice. The consequential idea is the state proberty of the means of production, because capital creates social and economical dependence of the people.

 

But sometimes when I watch news, I get the feeling that in America things that are considered standard and normal here like statutory health insurance are considered socialist by some Americans.

Edited January 9, 2013 by Stephan123

[Triple Vacuum Seal]

 

Socialism intrinsically has absolutely nothing to do with anti-wealth sentiment or even corporate regulation.

Inherently, no. However, that's how it translates into American politics. If you want to support socialism in America, you usually have to align yourself with political groups that hold those exact thoughts of anti-wealth and regulation.

 

Political parties and the factions within them are the only ones with real authority here. Their political motives and beliefs come packaged.

[Stephan90]

Socialism intrinsically has absolutely nothing to do with anti-wealth sentiment or even corporate regulation.

Inherently, no. However, that's how it translates into American politics. If you want to support socialism in America, you usually have to align yourself with political groups that hold those exact thoughts of anti-wealth and regulation.

 

Political parties and the factions within them are the only ones with real authority here. Their political motives and beliefs come packaged.

That leaves you with not many possiblities for voting.

[Triple Vacuum Seal]

I'll respond in full later, but I don't think your totally misleading, unhelpful and incorrect (may I say very Americanised) put down of Socialism is very helpful in the context of this discussion. It's almost as if they teach a completely different meaning of the word in the 'States than they do everywhere else in the world. Socialism intrinsically has absolutely nothing to do with anti-wealth sentiment or even corporate regulation.

There is no single definition of socialism. The basic ideas may be solidarity, equality, freedom and justice. The consequential idea is the state proberty of the means of production, because capital creates social and economical dependence of the people.

 

But sometimes when I watch news, I get the feeling that in America things that are considered standard and normal here like statutory health insurance are considered socialist by some Americans.

It's usually just the ignorant far-right here that labels anything they don't want to pay for as socialism. Socialism isn't the problem nor the solution as it's too loosely defined to be either a threat or a remedy for a national economy. It's seems more philosophical than anything. The unreasonable fear of socialism in America seems to stem from the fear of communism.

 

 

@sivispacem

My main criticism with socialism is the fact that all too often, public ownership = government ownership. Governments and corporations aren't too different. Look at a board of directors for a publicly traded company and look at a Presidential cabinet. In fact, both of these decision-making bodies (both of similar backgrounds too) are even voted in. Governments are voted by people looking after their best interest just like stockholders voting for a corporate board and officers. With the existence of lobbying, more financial interest in a given party equals a heavier voting power just like a corporation. The main difference in private and public entities is that private entities have to make money and compete while the government ("public") does neither.

 

 

I don't hate socialism. I just don't like how I've seen it done. Capitalism brings out the most fierce competition and innovation among market participants. I'd honestly like to see a hybrid of Socialism and Capitalism here in the US in the near future. Socialism, as we've seen it, creates the illusion of a power transfer to the public. The same influential individuals control things regardless. The reason why I say socialism "as we've seen it" is because economic systems like socialism seem like a goal more than an actual condition in our world today. Same goes for capitalism. America isn't purely capitalistic.

[Dingdongs]

 

@Irviding I don't see what's stupid about limiting how out of control our spending can get. I just think that the placement and flexibility of the ceiling should be handled better. It's simply a credit limit; which is a standard that every other agent in the global economy seems to be held to. Why not our government?

 

Our spending is not out of control. This is a government, not a household. When there is a slump in the economy spending increases to make up for the lower amount of economic activity.

 

The ceiling is not a credit limit - you are fundamentally misunderstanding it. Congress passes a bill; the executive branch is legally obligated to spend the money to cover what is in said piece of legislation. The debt ceiling does not mean "ok now you can spend more" - it means "ok, you can pay the bills on what has already been appropriated"

 

Please get a basic understanding of economics before talking about it - the average person would never spew bullsh*t pretending to know about marine biology, but he/she is happy to do that with economics. After all, the government is the same thing as a household!

[El Dildo]

 

Socialism intrinsically has absolutely nothing to do with anti-wealth sentiment or even corporate regulation.

Inherently, no. However, that's how it translates into American politics. If you want to support socialism in America, you usually have to align yourself with political groups that hold those exact thoughts of anti-wealth and regulation.

 

Political parties and the factions within them are the only ones with real authority here. Their political motives and beliefs come packaged.

the problem with socialism is that no country on Earth has actually tried it yet...

 

USSR communism was not socialism.

but somehow the political Right-wing in the United States has convinced the electorate that socialism = communism and that communism = atheist dictatorship.

 

which - of course - could not be further from the truth.

actual socialism has yet to be implemented and experimented with by any country or government to date. we don't actually know how it would work within the current climate of global economics, let alone at home for an individual society.

[Icarus]

but somehow the political Right-wing in the United States has convinced the electorate that socialism = communism and that communism = atheist dictatorship.

It probably didn't help the cause when most of the countries in the Eastern Bloc called themselves a "socialist state," when in reality, they were communist states and puppets of the USSR.

[Triple Vacuum Seal]

 

@Irviding I don't see what's stupid about limiting how out of control our spending can get. I just think that the placement and flexibility of the ceiling should be handled better. It's simply a credit limit; which is a standard that every other agent in the global economy seems to be held to. Why not our government?

 

Our spending is not out of control. This is a government, not a household. When there is a slump in the economy spending increases to make up for the lower amount of economic activity.

 

The ceiling is not a credit limit - you are fundamentally misunderstanding it. Congress passes a bill; the executive branch is legally obligated to spend the money to cover what is in said piece of legislation. The debt ceiling does not mean "ok now you can spend more" - it means "ok, you can pay the bills on what has already been appropriated"

 

Please get a basic understanding of economics before talking about it - the average person would never spew bullsh*t pretending to know about marine biology, but he/she is happy to do that with economics. After all, the government is the same thing as a household!

If I had a dime for every time I've heard the "government is not a household" to excuse irresponsible spending...

 

 

Debt ceilings and credit limits are both in place for the same reason. To promote proper debt management instead of spending more money we don't have. Every business school professor (two of them with Ph.Ds in Economics) I've ever had, in addition to just about every financial services professional I've ever heard speak on the matter acknowledges that our government has a spending problem and I'm the one "spewing bullsh*t"? I've never seen you address the 900lb gorrilla in the room in any of your posts; which is the fact that every deficit dollar spent is received from bond purchasers. The only alternative is printing more money. In modern times, printing more money = Fed buying up our debt with money they "created".

 

*I also got a B in Micro and an A in Macro so f*ck off with the patronizing sh*t for once. It gets old.

[Dingdongs]

 

 

Debt ceilings and credit limits are both in place for the same reason.  To promote proper debt management instead of spending more money we don't have.  Every business school professor (two of them with Ph.Ds in Economics) I've ever had, in addition to just about every financial services professional I've ever heard speak on the matter acknowledges that our government has a spending problem and I'm the one "spewing bullsh*t"?

 

Business school professors do not properly consider the macroeconomy. They think everything is about confidence - plain and simple. If you don't have any confidence in the government to not run massive deficits, businesses cry and the job creators are too scared to create jobs. But they are unfortunately wrong. Look at Britain - they are doing massive budget cuts in a time of contraction/slump and they caused a double dip and contracted the economy more - and nope, no job creators coming around due to confidence.

 

There are long term fiscal problems we have - but there is absolutely no reason to cut spending right now, it's one of the most stupid things we can possibly do - stupider than the debt ceiling itself. I've been a long proponent of passing a massive infrastructure rebuilding project which will bring jobs back and thus reduce the deficit in itself. At the same time, we can include an 8-9 trillion over 12 years deficit reduction package, to go into effect come 2014 or 2015 when the economy is actually expanding at a good rate - not the anemic state it's in now.

 

And again, you fail to understand what a debt ceiling is. It has nothing to do with limiting further spending - it is unconstitutional (contradicts the 14th amendment directly) and stops us from paying ALREADY APPROPRIATED SPENDING. This is a fact, I'm sorry - the debt ceiling is not the same thing as the credit limit on your credit card - they are fundamentally different. Do some more research into what the debt ceiling is.

 

 

I've never seen you address the 900lb gorrilla in the room in any of your posts; which is the fact that every deficit dollar spent is received from bond purchasers.  The only alternative is printing more money.  In modern times, printing more money = Fed buying up our debt with money they "created".

 

 

Of course it's from bond purchasers - this is how the macroeconomy works - it's very complicated and, a lot of it is all "imaginary" per se, but it works. Yup - that's what it is, and it works and is not inflationary. The fed expanded the monetary base threefold and we are at 1.4~ percent inflation right now, which is anemic in itself. We should be raising the inflation target and printing more money right now since we are unwilling to do any type of fiscal stimulus.

 

 

*I also got a B in Micro and an A in Macro so f*ck off with the patronizing sh*t for once.  It gets old.

 

Congratulations on taking two economics classes, one of them not having much to do with this discussion at all. Perhaps you should delve further into economics at the college level and you'll understand this stuff more. You're not entirely uneducated on these matters; I didn't mean to patronize you but I was making a general statement. Why is it ok to talk about matters you don't have a higher education background in if it's economics or politics, but science or math or whatever it isn't? It's frankly ridiculous.

Edited January 10, 2013 by Irviding

[Triple Vacuum Seal]

 

And again, you fail to understand what a debt ceiling is. It has nothing to do with limiting further spending - it is unconstitutional (contradicts the 14th amendment directly) and stops us from paying ALREADY APPROPRIATED SPENDING. This is a fact, I'm sorry - the debt ceiling is not the same thing as the credit limit on your credit card - they are fundamentally different. Do some more research into what the debt ceiling is.

 

Every source I've read including the Investopedia, Princeton, and terms of the Liberty Bond Act of 1917 itself (that established the debt ceiling) defines it as a limit on debt our government can issue; which is essentially a credit limiting measure.

 

*Never did I refer to credit card limits. I am referring to credit limits in their general sense; a barrier preventing further issuance of debt.

[Stephan90]

 

I'd honestly like to see a hybrid of Socialism and Capitalism here in the US in the near future.  

 

 

That's what we have in Germany and it's called "Socziale Marktwirtschaft" = "Scoial market economy"

 

http://en.wikipedia.org/wiki/Social_market_economy

 

 

USSR communism was not socialism.

 

USSR was neither a pure communist state. According Karl Marx's idea communism includes public property of all goods and not only the means of production.

 

 

in addition to just about every financial services professional I've ever heard speak on the matter acknowledges that our government has a spending problem and I'm the one "spewing bullsh*t"?

 

The USA have surely not a spending problem in the fields: health care, social welfare and education. These are all investments in the competitiveness of the nation in the long view.

 

http://en.wikipedia.org/wiki/2013_United_S..._federal_budget

 

After seeing this, I think it is safe to assume that the spendings on the Department of Defense are the big problem on the spending site.

 

 

defines it as a limit on debt our government can issue; which is essentially a credit limiting measure.

 

But still the debt limit is broken because of the enoumous interest created by the public debt. Some of the Republicans just wished for the debt ceiling, because it would automatically trigger laws that reduce spendings and raises taxes for all people and not just for the rich. But this would be incredibly stupid as it would lead the country into a recession. And this must be avoided by all means.

Edited January 10, 2013 by Stephan123

[Triple Vacuum Seal]

 

 

The USA have surely not a spending problem in the fields: health care, social welfare and education. These are all investments in the competitiveness of the nation in the long view.

 

http://en.wikipedia.org/wiki/2013_United_S..._federal_budget

 

After seeing this, I think it is safe to assume that the spendings on the Department of Defense are the big problem on the spending site.

 

http://www.whitehouse.gov/omb/budget/Historicals/ (table 3.2)

 

The military must be cut as well, but only cutting military spending to solve all spending issues is easier said than done. Fortunately, the military has already in a BRAC (Base Realignment And Closure) phase for while now. Judging from the chart, 2012 estimates for military spending are projected to peak in 2012 (because it will be cut from there) with a total of ~$716 billion...

 

Personnel (salaries an benefits) ~ $156 billion

Operations and Maintenance (actual missions and mission preparedness) ~ $294 billion

Procurement (buying things from private defense companies such as Boeing, Lockheed Martin, BAE, Raytheon, Northrop Grumman etc.) ~ $139 million

R&D (military research projects) ~ $76 billion

Construction (building and tearing down) ~ $18 billion

Family Housing (housing benefits for military families) ~ $2 billion

Other ( ) ~ $2 billion

Atomic Energy Defense ( ) ~ $20 billion

Defense-Related Activities ( ) ~ $8 billion

 

With defense, spending cuts aren't as simple as allotting less money. Some costs will rise as a result of scaling back. It cost money safely dismantle bases/operations (which we have in over 100 countries), destroy weapons systems, store weapons systems, and pay people to do all of the above. Keep in mind that when personnel spending is cut, our national economy must be in a state that allows us employee veterans returning from service or that will create problems. One rather trivial result would be poverty, mental illness, and crime plaguing a portion of our vets as it had done in the past. In the chart, the most immediate cuts have already been projected to be in R&D and procurement, but even Democrats have no idea what exactly they plan to cut within the military and how they plan on doing it. At the end of the day, even when the military is properly cut, it would likely continue to have the highest cost in the world as the US has the most assets to defend.

 

 

As for social security. Our generation could do without social security. Social Security in the US has now become a system where the government takes a portion out of our incomes to maybe feed back to us for retirement (since by the time "we" retire, SS will be long bankrupt) mostly because too many Americans don't know how to save money on their own for some reason. The older generation of baby boomers, who are also politically in charge, are the only ones that truly need that money as they've planned their retirements around it. In the next couple of decades, the program should be restructured or scrapped.

 

As for health care, the system needs to be reformed. Simply spending more may distract us from the real problem; costs have skyrocketed. Obamacare (Patient Protection and Affordable Care Act), was a step in the right direction given it's expansive structure over time, it shifts costs from consumers, and the fact that it actually became a law. However, the law is line after line of regulations/cost shifting on the insurance companies who handle the costs, instead of the hospitals and other health care firms that create them. The health care industry is where the outrageous costs come from; not the insurance industry. This law does nothing to change the fact that my Band-Aids will cost $10 at a hospital, patient meals cost the same as fine dining, people can be prescribed $4000 per pill medication, some doctors receive hundreds of dollars in compensation even for briefly addressing you, $800-$900 dollars for an ambulance ride (more in some areas), and every time a hospital X-Ray machine has to be turned on for a few seconds the patient pays a few hundred dollars. The law does very little to curb this because it's much harder to antagonize the busy hospital instead of some large insurance firm. We'll get there though.

Edited January 10, 2013 by canttakemyid

[MIKON8ERISBACK]

The whole Western World is very highly "programmed" nowadays. The US National Debt is evidence by itself that they're headed into an economic collapse death spiral. It's a lethal cocktail of many things. Spending more money than can be found on the planet, printing money like there's no tomorrow, threatening tax hikes that can put entire companies out of business, you name it.

 

The fans of those entertainment news TV programs never fail to amaze me with their level of stupidity and ignorance towards much more real issues.

[twinkiller]

The people in washington don't really care about it in my opinion besides a few. And the truth is that both parties are to blame between George W Bush's spending and Barack Obama's spending our nation is being thrown away because of a less informed population and a president who is quite simply a big spending democrat. But the argument is that obama had to spend all that money to save us from economic ruin. Fine. But if the economy is now stable like he says please do something to cut spending. The fiscal cliff deal is a prime example of why we are in trouble. Obama and Boehner just bickered and bickered until it was up to Joe Biden of all people and Mitch Mcconnel to hammer out a deal that really just sticks it to all americans not just the one percent. More than 70% of all americans saw a tax increase. We are in deep deep troulbe and it is time for a third party system to form in this country.

[Triple Vacuum Seal]

 

We are in deep deep trouble and it is time for a third party system to form in this country.

The trend seems to be that the two party system creates more polarizing views over time leading to a third party to come appeal to the middle for some time. Maybe you're right here. I personally think that our real choices at the ballot suck as well....

 

-Democrats have a sustainable outlook only because they appeal to the lowest common denominator and have no back bone. They never hold the American public accountable for anything ("the voter is always right approach") and simply support whatever ideas are the most popular. They tell people what they want to hear; often exploiting the uninformed public for their votes. They give the public a belly-rub.

 

 

-Republicans lack credibility with an American public that is looking increasingly different from them demographically. They have larger racial barriers to overcome as they are disproportionately southern white males in a culture of growing racial diversity. They generally have more financial discipline than the Democrats (except for on military matters) and are much more in touch with the American entrepreneur. However, their social policies on things like religion, gay-rights, abortion, drugs, and crime are all utterly and embarrassingly retarded.

[nightwalker83]

We are in deep deep trouble and it is time for a third party system to form in this country.

The trend seems to be that the two party system creates more polarizing views over time leading to a third party to come appeal to the middle for some time. Maybe you're right here. I personally think that our real choices at the ballot suck as well....

 

-Democrats have a sustainable outlook only because they appeal to the lowest common denominator and have no back bone. They never hold the American public accountable for anything ("the voter is always right approach") and simply support whatever ideas are the most popular. They tell people what they want to hear; often exploiting the uninformed public for their votes. They give the public a belly-rub.

 

 

-Republicans lack credibility with an American public that is looking increasingly different from them demographically. They have larger racial barriers to overcome as they are disproportionately southern white males in a culture of growing racial diversity. They generally have more financial discipline than the Democrats (except for on military matters) and are much more in touch with the American entrepreneur. However, their social policies on things like religion, gay-rights, abortion, drugs, and crime are all utterly and embarrassingly retarded.

A party that can appeal to the public and has a backbone, etc there has to be one around somewhere. We have the same problem in Australia.

[twinkiller]

We are in deep deep trouble and it is time for a third party system to form in this country.

The trend seems to be that the two party system creates more polarizing views over time leading to a third party to come appeal to the middle for some time. Maybe you're right here. I personally think that our real choices at the ballot suck as well....

 

-Democrats have a sustainable outlook only because they appeal to the lowest common denominator and have no back bone. They never hold the American public accountable for anything ("the voter is always right approach") and simply support whatever ideas are the most popular. They tell people what they want to hear; often exploiting the uninformed public for their votes. They give the public a belly-rub.

 

 

-Republicans lack credibility with an American public that is looking increasingly different from them demographically. They have larger racial barriers to overcome as they are disproportionately southern white males in a culture of growing racial diversity. They generally have more financial discipline than the Democrats (except for on military matters) and are much more in touch with the American entrepreneur. However, their social policies on things like religion, gay-rights, abortion, drugs, and crime are all utterly and embarrassingly retarded.

totally agree!

[Dingdongs]

 

And again, you fail to understand what a debt ceiling is. It has nothing to do with limiting further spending - it is unconstitutional (contradicts the 14th amendment directly) and stops us from paying ALREADY APPROPRIATED SPENDING. This is a fact, I'm sorry - the debt ceiling is not the same thing as the credit limit on your credit card - they are fundamentally different. Do some more research into what the debt ceiling is.

 

Every source I've read including the Investopedia, Princeton, and terms of the Liberty Bond Act of 1917 itself (that established the debt ceiling) defines it as a limit on debt our government can issue; which is essentially a credit limiting measure.

 

*Never did I refer to credit card limits. I am referring to credit limits in their general sense; a barrier preventing further issuance of debt.

Yes... that is what it is. I am not very pedagogical but I'll try to explain. The debt ceiling (again, unconstitutional) of course stops FURTHER ISSUANCE of debt as you said. But that's not what it does in practical terms. It IS NOT like a credit limit. The government WILL DEFAULT ON ITS OBLIGATIONS if the debt ceiling is not raised as it has to continually pay bills in order to pay what was already appropriated by Congress - when congress passes a federal law saying we are going to spend 4 billion on some education program. We have to borrow money to pay that - again, nothing wrong with borrowing - the executive branch is LEGALLY MANDATED to spend that money. That could have been passed in say, April of 2010 and it calls for 1 billion every year to various states to increase test scores or some garbage, whatever - it's irrelevant. So that money has already been appropriated and therefore the treasury must pay out that 1 billion every year - if it cannot borrow money to pay that 1 billion, AND it cannot pay the bills on the say, 2 billion already borrowed, guess what? THE GOVERNMENT HAS DEFAULTED. This is something you would not really go over in macro and obviously not in micro. I suggest you take a US financial system class or a fiscal policy class to understand it further - but basically, you and the rest of these uninformed people who claim that not raising the debt ceiling will stop the government from overspending are grossly incorrect, and, well, don't have a clue what you're saying.

 

 

Also -

 

 

Thought you'd be interested in that.

Edited January 11, 2013 by Irviding

[Triple Vacuum Seal]

 

And again, you fail to understand what a debt ceiling is. It has nothing to do with limiting further spending - it is unconstitutional (contradicts the 14th amendment directly) and stops us from paying ALREADY APPROPRIATED SPENDING. This is a fact, I'm sorry - the debt ceiling is not the same thing as the credit limit on your credit card - they are fundamentally different. Do some more research into what the debt ceiling is.

 

Every source I've read including the Investopedia, Princeton, and terms of the Liberty Bond Act of 1917 itself (that established the debt ceiling) defines it as a limit on debt our government can issue; which is essentially a credit limiting measure.

 

*Never did I refer to credit card limits. I am referring to credit limits in their general sense; a barrier preventing further issuance of debt.

Yes... that is what it is. I am not very pedagogical but I'll try to explain. The debt ceiling (again, unconstitutional) of course stops FURTHER ISSUANCE of debt as you said. But that's not what it does in practical terms. It IS NOT like a credit limit. The government WILL DEFAULT ON ITS OBLIGATIONS if the debt ceiling is not raised as it has to continually pay bills in order to pay what was already appropriated by Congress - when congress passes a federal law saying we are going to spend 4 billion on some education program. We have to borrow money to pay that - again, nothing wrong with borrowing - the executive branch is LEGALLY MANDATED to spend that money. That could have been passed in say, April of 2010 and it calls for 1 billion every year to various states to increase test scores or some garbage, whatever - it's irrelevant. So that money has already been appropriated and therefore the treasury must pay out that 1 billion every year - if it cannot borrow money to pay that 1 billion, AND it cannot pay the bills on the say, 2 billion already borrowed, guess what? THE GOVERNMENT HAS DEFAULTED. This is something you would not really go over in macro and obviously not in micro. I suggest you take a US financial system class or a fiscal policy class to understand it further - but basically, you and the rest of these uninformed people who claim that not raising the debt ceiling will stop the government from overspending are grossly incorrect, and, well, don't have a clue what you're saying.

 

 

Also -

 

 

Thought you'd be interested in that.

Not having the money to meet you obligations whether it be a smart decision in your eyes or not is still a limit on the US line of credit as I've maintained. I'm not misunderstanding this matter. I think you've simply misinterpreted my point. The way I see it, any barrier whatsoever in obtaining credit to meet obligations is a credit-limiting measure. My final chapter in Macro was all about the budget and my professor often went on a tangent about our debt and deficit spending. Though I don't favor defaulting, the mayhem of not raising the debt ceiling will certainly bring awareness to the public about our fiscal policy and in affect lead to a better handle on our spending. That's all I've maintained. The public is so unconcerned and uninformed on this matter. This ultimately threatens our national security. Threatening the very services they take for granted is what it will take to bring a sensible amount of awareness.

 

 

*I'm fully aware that the debt ceiling violates the 14th amendment, but that's for another discussion because we could make arguments for tons of policies being unconstitutional.

Edited January 11, 2013 by canttakemyid

[Dingdongs]

 

 

Not having the money to meet you obligations whether it be a smart decision in your eyes or not is still a limit on the US line of credit as I've maintained.

 

Can you restate this in different words? I'm not sure I understand what you mean here -

 

 

The way I see it, any barrier whatsoever in obtaining credit to meet obligations is a credit-limiting measure.

 

Sure, but you do understand that not meeting said obligations results in an actual crisis, whereas the current deficit/debt is nothing more than a long term issue which is easily solved by 1.4 TRILLION MORE IN SPENDING REDUCTION - quite easy. Defaulting on debt is absolutely stupid and will cause panic and probably throw us down to sub 1 percent growth, if not a V recession.

 

 

Though I don't favor defaulting, the mayhem of not raising the debt ceiling will certainly bring awareness to the public about our fiscal policy and in affect lead to a better handle on our spending. That's all I've maintained. The public is so unconcerned and uninformed on this matter. This ultimately threatens our national security. Threatening the very services they take for granted is what it will take to bring a sensible amount of awareness.

 

I'd argue the contrary. I think the public is actually concerned - but I will agree that they are uninformed on the matter. At least you have the brains to recognize that defaulting is ludicrious - do you know how many people out there who are supposedly concerned about the debt want us to default and cut spending by 70 percent or 80 percent or whatever other bullsh*t number? The public is concerned about the debt/deficit when they shouldn't be - in a slump. When we are in a boom in 2015 or so guess what? They won't give a f*ck about it when it's actually time to work on debt/deficits.

 

It's not a matter of national security. If we were running today's deficits during a boom then it absolutely would. Like the graph I posted before shows, as the economy comes back to steam and the bush tax cut expiration goes into effect, we will only need 1.4 trillion in reductions to get things back on a perfectly sustainable route.

[Clem Fandango]

 

Why is it ok to talk about matters you don't have a higher education background in if it's economics or politics, but science or math or whatever it isn't? It's frankly ridiculous.

Because certain individuals in the media like to get people riled up with rhetoric; divorcing the issues in question from the relevant sciences. You have no idea how many debates I've been in with Americans where they've responded to my stance (normally based on some kind of social-scientific model) with emotionally charged rhetoric. On another forum the other day I stumbled into a thread about African-American's disadvantage and it was out-and-out circle jerk of right wing hyperbole "the blacks need to pull themselves up by their bootstraps like my grandpappy!" I tried explaining that being a respectable member of society isn't the natural state of being, it's a sociological 'role' that someone can't just adopt whenever they feel like it, it requires facilitation, and nobody saw fit to address that, they just bombarded me with "the time for excuses is over! no hand outs!" I asked how people with no interest in social mobility were supposed to attain it. The answer? "WITH HARD WORK!"

 

If you don't understand, and have no intention of listening to explanations of, the science behind issues, you shouldn't comment on them.

 

Economics is even worse, any attempt to explain how interest on debt isn't necessarily "wasted money" because consistent/increased spending on the public sector stimulates supply-side leading (in theory) to increased tax revenue, is countered with "17 trillion is not sustainable! no more socialist entitlement programs, eventually we'll go completely bankrupt paying for the democrat's bloated social conscience!"

 

Yanks...

[Urban Legend]

I just put Alaska on craiglist... cha-ching baby!