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Waaaay of topic, Debt ceiling

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hanovertom

Member
Can anyone explain why the debt ceiling has to be raised to prevent default on loans? It seems to me that would be the same as requiring another credit card to prevent bankruptcy!Bottom line is we are still spending more than receiving.
 
(quoted from post at 04:19:19 07/20/11) Can anyone explain why the debt ceiling has to be raised to prevent default on loans? It seems to me that would be the same as requiring another credit card to prevent bankruptcy!Bottom line is we are still spending more than receiving.
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Agreed!! When you are in over your head, the first thing you should do is STOP BORROWING!!
 
My understanding.... once you reach the debt ceiling, you can't borrow any more. Given that borrowing is what's paying the current bills... when you can't borrow... you can't pay the bills.
I certainly would not disagree that spending less (borrowing less) is the only real long term solution... but in the short term something will have to bridge the gap.

Rod
 
Certainly we need to change course and stop borrowing however the issue is to go about it in responsible manner. In the past we have simply raised the limit and gone on our way for example, I was surprized to learn the debt was raised 17 times under Regan. Currently we face a double whammy in that spending was increased (two wars, bail outs, etc.) and tax revenues have dropped (recession); for each dollar we spend; 60 cents is from tax revenues and 40 cents is borrowed.

Maintaining the debt limit at the current level simply means 40% of our bills need to go away immediately - who will not get paid. Raising the debt limit allows time to get spending in line with revenues without causing collateral damage.

The issue is not the debt limit the issue is the spending level needs to be pulled back.
 
"The issue is not the debt limit the issue is the spending level needs to be pulled back."

Bingo! Sadly, this is not likely to happen any time soon.

Dean
 
The real problem we have is the professional politian if we could remove all the incentives to stay in politic then we get people into office that would do a job and go home and have another come in and so on.
 
"need time to get spending in line", "bridge the gap". etc. is doing the insanity thing of keep on doing the same thing & expecting different results!
The idiots will spend all the sorry so in so's can, up to the limit, new limit, etc. every time.......only interest is in buying votes to stay in their comfy 'power' position. Been spending over income for too long & current admin has went to the sky with the bail out, stimulus (political pay offs & slush fund), and humongus Health (external_link) Care debacle. We are at the point now of borrowing to pay interest! That will never get things well !! Got to start cutting spending NOW! And even more important ....stop increasing spending!! Unless of course the point is to bring America to it's knees, to put USA in third world category........and it appears more & more everyday, that such is the grand plan.
 
If I remember right, the bail-out of Wall Street was started at the tail-end of W time in power. Yes, we need to do something BUT a Balanced Budget Amendment with a back door in it so it can be voted out is no answer. If a Balance Budget Amendment HAD been in effect when W started Afghanistan, which we needed to do and Iraq WHICH WE DID NOT NEED TO DO, our situation would be little different because the Balanced Budget Amendment would have been voted out each year and these wars would have been fought/nation building in Afghanistan and Iraq would have been done with borrowed money JUST LIKE IS BEING DONE TODAY. THERE SHOULD BE NO BACK DOOR IN A BALANCED BUDGET AMENDMENT. IF you want to go to war, RAISE TAXES TO PAY FOR THE WAR or DO NOT start a war.

Kent
 
The worst thing that could happen, from the goobermint's perspective, is for the debt ceiling to be reached and the world doesn't end. The goobermint needs crisis, they thrive on crisis, and so they do whatever they can to create crisis. That probably isn't the reason the founders created a Constitution to limit the scope of goobermint, but it was a nice by-product, while it lasted.
 
From where I sit, if we can't pay our bills from borrowing till we can't borrow any more, the loan institution reposesses what we have. Soooo maybe it's time we as the owners of this great nation reposess our country. We can start by removing ALL those who have missmanaged our finances---CONGRESS & SENATE. Vote all out of office who are incombants. I hear all the time, it's the nnalert or it's the nnalert. Got news for Ya---IT'S BOTH. Why would anyone spend millions to get a job that pays thousands? It's the money they get from special intrest groups. Now, I don't like our president because I don't think he's doing anything constructive for our country, nor have the last few, but he's really not the one with the power to correct the problem. Just my thoughts before this gets poofed. Keith
 
It does not have to raised if spending were cut immediately, like you or I or IBM or Microsoft would have to do if faced with the same situation. One interseting thing that is not getting any air play -- the social security ""trust fund"" lie, ZERO himself exposed this fraud by invoking the old abundant scare tactic that grandma was gonna be lucky to get dog food next month because the checks may not go out if the debt ceiling was not raised, a lie in itself.
 
Basically the debt ceiling is equivalent to the spending limit of a credit card. Congress can vote to raise the debt ceiling so that the Gov't can borrow/spend more money. Supposedly the Treasury issue bonds to "fund" the spending of the Gov't. I interpret this as B.S.!

Apparently the Pres has the authority to make a unilateral decision to raise the debt ceiling by citing the 14th Amendment...then the supreme court gets involved when opposing sides start bickering.
 
Because we're borrowing money to pay interest,plain and simple.
They interviewed some professor yesterday on the local news. Asked him "how it would effect the average person" if they don't raise it. Best he could come up with was that it would raise interest rates. ???????? You mean that I might be able to get more than a quarter percent interest on the money I have in the bank? And that that would be a BAD thing???
 
Double bingo!!

Eliminating career politicians would immediately solve nearly all of the fundamental problems with our government.

Of course, absent armed insurrection, we will never see meaningful term limits.

Dean
 
I don't think the 14th amendment give him the authority to raise the debt ceiling, I think it might make a Congressionally mandated debt ceiling invalid, though. The effect would be pretty much the same, the Executive branch could continue to make any payments authorized by law.
 
I'm not sure about it either. Bill Clinton has claimed recently that if he were President he would cite the 14th Amendment as reason to make an executive decision to do this.
 
(quoted from post at 14:30:05 07/20/11) I'm not sure about it either. Bill Clinton has claimed recently that if he were President he would cite the 14th Amendment as reason to make an executive decision to do this.
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Blame Bush:
BO_hastakenus_part1.jpg

BO_hastakenus_part2.jpg

BO_hastakenus_part_3.jpg
 
Too, these figures went up during Mr. Barak external_links' presidency..

prices for

wheat.....corn......soybeans....sorgum....

course you wouldn't mention that...would you :lol:
 
(quoted from post at 17:01:33 07/20/11) Too, these figures went up during Mr. Barak external_links' presidency..

prices for

wheat.....corn......soybeans....sorgum....

course you wouldn't mention that...would you :lol:
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Corn is in the list, but darn near everything we buy has gone up, so the list would be hundreds or thousands of items long in all were itemized.

A better addition might be a list of what's gone down. Probably a really, really short list. :cry:
 
(quoted from post at 14:19:31 07/20/11)
(quoted from post at 17:01:33 07/20/11) Too, these figures went up during Mr. Barak external_links' presidency..

prices for

wheat.....corn......soybeans....sorgum....

course you wouldn't mention that...would you :lol:
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Corn is in the list, but darn near everything we buy has gone up, so the list would be hundreds or thousands of items long in all were itemized.

[b:fa8d604918]A better addition might be a list of what's gone down. Probably a really, really short list.[/b:fa8d604918] :cry:
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[size=18:fa8d604918][b:fa8d604918]JOBS!!!![/b:fa8d604918][/size:fa8d604918] :cry:
 
(quoted from post at 18:39:32 07/20/11) So much missing from your cut and paste.
Looks like the Bush/Cheney war machine spent fom a 236 billion surplus to a 304 billion deficit.
If there's billions spent monthly on the war how does anything else get right?
Bush screwed stuff so bad it may take 50 years to fix if it ever can be.
bush_deficit_graphic.gif
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You must have a serious problem counting! Your chart & mine show 300 billion for Bush, which is only 1/5 th or 20% of BO's current (& growing) 1.4 trillion. Or in the same billions units, 1,400 billion for BO, compared to Bush's 300 billion. :roll:

Missing from my chart!!?? You conveniently stopped at 2001...I wonder why? :roll:
 
(quoted from post at 12:19:19 07/20/11) Can anyone explain why the debt ceiling has to be raised to prevent default on loans? It seems to me that would be the same as requiring another credit card to prevent bankruptcy!Bottom line is we are still spending more than receiving.
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We have to raise the debt ceiling so we can borrow more money from Communist China to send aid to the rest of the world :!: :!:
One other reason--I saw a report on Fox News that the largest employer in this country is the Federal Government with average wage of $59,000 ?? and the fireing rate is less then 1% !
Three years ago, I retired from a Union Pay Scale job at a large Aluminum plant, as a Machinist and without overtime my salery was close to $40K!!
 
Bingo jmor. Who was it that said "the definition of insanity is doing the same thing over and over and expecting different results" I don't have the answer but we have to try something else.
 
"IF you want to go to war, RAISE TAXES TO PAY FOR THE WAR or DO NOT start a war." Well said.

And I might add - reinstate the draft.

Together, that would stop the foolishness.
 
By 2040 interest on the debt will consume 50% of GDP. Not 50% of revenues, 50% of the entire US economy. Tell me how we go on like that?
 
(quoted from post at 22:58:36 07/20/11) Bingo jmor. Who was it that said "the definition of insanity is doing the same thing over and over and expecting different results" I don't have the answer but we have to try something else.
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hat we have to do is very simple; stop spending more than income.
Why is this a problem, it seems so simple?
Because when voters on the take begin to out number the tax paying voters, they will always vote themselves a raise in their dole...it costs them nothing & the politicians realize this means votes to keep them in their comfy positions of power/money if they offer the freeloaders more. Cross that threshold & we are done. We are at about that point right now. Amnesty.......we are done.
 
Politicians of all parties for the last 50 years
have created the problem as has the American public by living far beyond their financial means thru Gov't grants,payments,welfare and whatever.No matter it has to be stopped now and giving these politicans another couple Trillion to throw away and expect it to stop their wasteful ways is like buying an alcholic a case of Jim Beam and expect it make him stop drinking.
 
common sense ain't so common, limited government with checks and balances has to be brought back to life. I remember when the constitution used to stand for something, but when you have rampant corruption and buy votes with taxpayer money you will have what is happening in this day and time----serious cuts have to be made-How many wasteful govt programs are there? how many agencies have competing agendas. the current admin will try to say they won't be able to pay the military, or pay on the debt... how about trimming the EPA, getting rid of the dept of Education (they are not doing a good job), cowboy poetry festivals, allow some companies to fail--that is how the free market works.. the gov takes in large sums from taxes--if it was a household the family would have to cut expenses-this should be no different, keep the essential--military, SSI, medicare etc.. cut out the non essential- scare tactics designed to get the career politicians some political currency by stealing more taxpayer money...
 
I agree with most that has been posted. We need to cut spending like 30 years ago. But nobody knows what to do with the 800 lb gorilla in the room that is SSI and Medicare.

Everyone thinks they are paying into it for their own care in the future. Not so. We are paying for our parents, grandparents right now. The money is gone and there aren't enough people working and paying taxes to keep up with rising costs. I believe this is one reason the nnalert want amnesty so bad. It will bring in millions of new taxpayers and secure their future jobs. Permanently.

And now the nnalert have given up repealing Zerocare, so there is another hole in our bucket...

The health care reform bill that was passed "to see what was in it", did not reform health care at all. It just added millions more nonpaying people to the problem. Insane.
 
The reason the debt ceiling must be raised:

Let's use your credit card example...

We are currently overspending our means. We have been borrowing on a credit card to pay our bills. That credit card is maxed out and we have a payment coming up. If we do not make the payment we have coming up we will default on that card. As you know or should know defaulting on 1 card will raise the interest rate of that card and many if not all of our additional loans. This will then put us further into debt.

Similarly to a family or individual, the country cannot just stop paying some of its bills without risking default. Ideally we will either get a more lucrative job to make more income (aka tax increase) or quit going out to dinner etc. (cut spending) or both. However, the payment is due tomorrow and even if you got a new job today you wouldn't see the benefit for a few weeks minimum. If you quit going out to eat you also won't see that benefit immediately. The only protection you have RIGHT NOW to pay your bill and therefore not default (which will only make the situation even worse) is to get another card and use the money from it to pay the bills until your strategies of more money and/or less spending start to bring things back in line.

Simply deciding to say screw it and not pay the bill is not really an option.
 
(reply to post at 03:37:42 07/22/11)I believe this is one reason the nnalert want amnesty so bad. It will bring in millions of new taxpayers and secure their future jobs. Permanently.
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Yeah, and the nnalert want to keep 'em illegal so they can continue to exploit them. If illegals start talking equal rights, call the INS and ship 'em home. Then go out and get more illegals. We need to put some employers of illegals in jail. That'll stop the problem overnight. BUT you better be prepared to pay a LOT more for the food illegals are used to process. Every aspect of our food industry has illegal labor in it. AND the price increase won't go to the farmers!

Ryan in WI has it right. You don't just lie down and let the government default if there's another option. Most of you fellas act like you want blood in the streets. Careful what you wish for... It just might be your or your family's blood.

Both nnalert and nnalert are in yet another pissing match. There's a emergency plan ready to be implemented, but you can bet your sweet behind it won't go into effect until both parties have had their say - over and over and over and over and over again. Everyone who's hyperventilating on here trying to blame the nnalert alone really should shut off Fox, Rush, etc. They're playing you for fools. They're all modern day Doc Brinkleys. The nnalert deserve their fair share of blame, but the nnalert are at least as responsible.
 
If it were to get bad enough that we do not get our SS checks---Will politicians get their pay :?: :?:
I think if they did not, there would be more effort on their part to get this matter settled :!:
 
(quoted from post at 22:09:49 07/22/11) The reason the debt ceiling must be raised:

Let's use your credit card example...

We are currently overspending our means. We have been borrowing on a credit card to pay our bills. That credit card is maxed out and we have a payment coming up. If we do not make the payment we have coming up we will default on that card. As you know or should know defaulting on 1 card will raise the interest rate of that card and many if not all of our additional loans. This will then put us further into debt.

Similarly to a family or individual, the country cannot just stop paying some of its bills without risking default. Ideally we will either get a more lucrative job to make more income (aka tax increase) or quit going out to dinner etc. (cut spending) or both. However, the payment is due tomorrow and even if you got a new job today you wouldn't see the benefit for a few weeks minimum. If you quit going out to eat you also won't see that benefit immediately. The only protection you have RIGHT NOW to pay your bill and therefore not default (which will only make the situation even worse) is to get another card and use the money from it to pay the bills until your strategies of more money and/or less spending start to bring things back in line.

Simply deciding to say screw it and not pay the bill is not really an option.
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yan, the thing that is wrong with continuing to borrow more & more to pay interest on current & future debt, is that you quickly run into the situation where all income goes totally toward paying interest, none toward principle. At that point no more borrowing is possible, as the income isn't even sufficient to pay interest. Boom! We should have never been in a borrowing situation to begin with & the sooner we get away from such foolishness, the better off we will be. At least, then ALL income can go toward paying for services rather that toward interest to lenders, where is buys you & I nothing.
 

Scare tactic to try and force more crap down our throats like the other times in the last 2 yrs. There will not be any disruption in SS checks unless the mighty king on his throne declares it to be so. The gov. takes in enough every month to meet those obligations and the interest on the debt as well. Non- essential gov. workers, (most of them are just that) will get some days off without pay, but that's the pitfalls of being an employee of us, the taxpayer. The world will not come to an end.
 
(quoted from post at 08:21:00 07/23/11)Ryan, the thing that is wrong with continuing to borrow more & more to pay interest on current & future debt, is that you quickly run into the situation where all income goes totally toward paying interest, none toward principle. At that point no more borrowing is possible, as the income isn't even sufficient to pay interest. Boom! We should have never been in a borrowing situation to begin with & the sooner we get away from such foolishness, the better off we will be. At least, then ALL income can go toward paying for services rather that toward interest to lenders, where is buys you & I nothing.
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I am in complete agreement that this is not sustainable. No where did I even pretend to indicate that it was. Obviously income and spending need to be brought in line with one another. The point of raising the debt ceiling is not to allow that to continue forever, it is to prevent default. Defaulting on any loan is never good.

In terms of this being a bunch of hooey that lawmakers are using to scare people, unfortunately that just is not true. While the government does take in enough money to pay SS each month it does not take in enough money to pay ALL the bills each month. Which were you planning on no longer paying? This would be like saying that you needn't change your personal financial situation because you take in enough money to pay your car payment. However, you need to take in enough money to pay all your bills: mortgage, car payment, insurance etc.

Raising the debt ceiling, where we are financially, is a requirement at this point. It has been raised numerous times in the past, by presidents on both sides of the aisle. It would be to the benefit of the American people if they would look past who is in the White House and make a decision that is best for the country.
 

" It has been raised numerous times in the past, by presidents on both sides of the aisle."

Exactly!

On the other hand you say "it isn't sustainable"......so when do we stop?
 
(quoted from post at 09:21:27 07/23/11)
(reply to post at 10:14:15 07/23/11)
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" It has been raised numerous times in the past, by presidents on both sides of the aisle."

Exactly!

On the other hand you say "it isn't sustainable"......so when do we stop?
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When it doesn't cause default. The issue is the default. Not the spending. It will be the default that causes the biggest issues. Default allows our lenders to raise interest rates and immediately call in loans in some cases. This is what causes many people to end up in bankruptcy.

Secondly, I wish to ammend my previous statement. The president doesn't raise the debt ceiling, Congress does. Therefore: "It has been raised numerous times in the past, by Congresses on both sides of the aisle."
 

It has been raised numerous times in the past. Agreed. It was rightly called "Kicking the can down the road." by one of those politicians. That means "Let someone in the future deal with this non-sustainable practice, not me." So here we are. Time to deal with it. We all do it in our household and our business. The almighty gov. is going to have to live with a buget. Never has it had to do so. It has to now. NO MORE KICKING THE CAN DOWN THE ROAD. If we don't do it now, we will never be able to rein it in.
 
(quoted from post at 11:13:44 07/23/11)
It has been raised numerous times in the past. Agreed. It was rightly called "Kicking the can down the road." by one of those politicians. That means "Let someone in the future deal with this non-sustainable practice, not me." So here we are. Time to deal with it. We all do it in our household and our business. The almighty gov. is going to have to live with a buget. Never has it had to do so. It has to now. NO MORE KICKING THE CAN DOWN THE ROAD. If we don't do it now, we will never be able to rein it in.
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If it is going to cause default now, then it darn well will cause default when it grows even larger!
Yes, it is all about spending....overspending.
Raising debt limit isn't necessary now, since we are spending about 40% of intake on interest, but it will be when we are spending 60, 90, 100% (?) on interest. Right now we have 60% of that total which we can trim on & still meet interest payments. At the rate we are going, soon we will have 0% to trim on. The overspending has got to stop. Big problem: those on the receiving side of the ledger don't want to see any of their take disappear, even though it is a result of overspending. The way it is, it is only a burden to those on the paying side of the ledger. Keep it up & there will be none left on the paying side. Then, where is your 'take'?
 
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