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Thread: The debt ceiling

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    Quote Originally Posted by donttread View Post
    IMO the destruct button is the one that increases the debt limit.
    ????

    Not raising the debt ceiling means defaulting on our debts, I.E. not paying people what we’ve already agreed to pay them. That includes things like SS payments and checks for folks in the military. I think EVERY economist agrees it would be catastrophic for the nation. It would be N unprecedented failure for the nation.

    I totally understand arguing against the US passing new spending bills it can’t pay for, or wanting the national debt lowered, but surely we should always meet our existing obligations, if not for the sake of staving off economic ruin, then just as a matter of honesty and responsibility.

    To use the household analogy again, the debt ceiling isn’t [just] about allowing for new spending, at the moment it’s about paying the bills already sitting on our table.

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    Quote Originally Posted by Prof. Dilettante View Post
    ????

    Not raising the debt ceiling means defaulting on our debts, I.E. not paying people what we’ve already agreed to pay them. That includes things like SS payments and checks for folks in the military. I think EVERY economist agrees it would be catastrophic for the nation. It would be N unprecedented failure for the nation.

    I totally understand arguing against the US passing new spending bills it can’t pay for, or wanting the national debt lowered, but surely we should always meet our existing obligations, if not for the sake of staving off economic ruin, then just as a matter of honesty and responsibility.

    To use the household analogy again, the debt ceiling isn’t [just] about allowing for new spending, at the moment it’s about paying the bills already sitting on our table.

    Then the simple solution is to cut double the amount of spending as the rise in debt ceiling requires for current bills, before paying any of those bills. Politicians aren't going to do what is right without a serious incentive.

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    Quote Originally Posted by Prof. Dilettante View Post
    ????

    Not raising the debt ceiling means defaulting on our debts, I.E. not paying people what we’ve already agreed to pay them. That includes things like SS payments and checks for folks in the military. I think EVERY economist agrees it would be catastrophic for the nation. It would be N unprecedented failure for the nation.

    I totally understand arguing against the US passing new spending bills it can’t pay for, or wanting the national debt lowered, but surely we should always meet our existing obligations, if not for the sake of staving off economic ruin, then just as a matter of honesty and responsibility.

    To use the household analogy again, the debt ceiling isn’t [just] about allowing for new spending, at the moment it’s about paying the bills already sitting on our table.
    Its also kicking the can down the road yet again. They count on this. The more they are given, the more they will spend. Cutting the 35% of the govt. payroll that isn't needed at all and you'll be able to pay those bills. Figure it out DC, you fucking assholes!

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    Quote Originally Posted by fmw View Post
    Then the simple solution is to cut double the amount of spending as the rise in debt ceiling requires for current bills, before paying any of those bills. Politicians aren't going to do what is right without a serious incentive.
    Quote Originally Posted by covfefe saved us View Post
    Its also kicking the can down the road yet again. They count on this. The more they are given, the more they will spend. Cutting the 35% of the govt. payroll that isn't needed at all and you'll be able to pay those bills. Figure it out DC, you fucking assholes!
    That's all well and good and cutting spending (especially unnecessary spending) is a desirable thing that the people should rightly demand. But that doesn't fix the problem of not having enough money to pay what we already committed to paying TODAY (or, in this case, next month) without raising the debt-ceiling.

    I.E. You can absolutely commit to spending less and saving more from here on out, cancel all your streaming subscriptions, and agree to stop eating out. BUT if you don't at least make the minimum payment on the bills ALREAY ON THE TABLE it will absolutely wreck your credit here and now and all that saving you're going to do in the future will be canceled out by your new, higher interest rates.

    Any good financial advisor will tell you to spend less and save more. But they will also tell you, for the love of God, don't miss a credit card payment because screwing up your credit and hiking your interest rates makes EVERYTHING worse.

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    Also, from a purely political perspective, if the GOP forces the Democrats to shove the debt-ceiling into the $3.5 tril reconciliation bill, the pressure on the likes of Sienna and Manchin to hold their nose and pass the thing will be enormous, because then it will be about saving the good faith and credit of the US.

    If McConnell's not careful, he's going to end up helping Pelosi and Biden get their bill through.

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    Quote Originally Posted by Prof. Dilettante View Post
    Any good financial advisor will tell you to spend less and save more. But they will also tell you, for the love of God, don't miss a credit card payment because screwing up your credit and hiking your interest rates makes EVERYTHING worse.
    For openers, I simply do not believe in spending money that one does not yet have. So, although I use my credit card frequently--and for just about everything--it is not a crutch. In fact, it is set up for automatic debit of the full amount, each month.

    And I strongly believe in the Pay Yourself First method of handling one's finances: According to this method, one sets aside a certain amount in savings first--before paying the bills, and even before putting food on the table--with everything else to follow. (Paying the bills--on time, yet--and eating adequately are not likely to suffer here; it is much more likely to be entertainment that is curtailed--or even, if necessary, even eliminated entirely.)

    But returning to the actual subject at hand: I am certainly not arguing that we should not pay our bills--or send out Social Security checks. Rather, I am arguing that the entire idea of a "debt ceiling"--which is never honored, anyway; it is just routinely raised--is downright silly.

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    Quote Originally Posted by Prof. Dilettante View Post
    That's all well and good and cutting spending (especially unnecessary spending) is a desirable thing that the people should rightly demand. But that doesn't fix the problem of not having enough money to pay what we already committed to paying TODAY (or, in this case, next month) without raising the debt-ceiling.
    Sure it does. Pass a law reducing spending by an amount equal to 2 times the amount required to pay those bills and then raise the ceiling to half that amount as a sort of short term loan.

    I.E. You can absolutely commit to spending less and saving more from here on out, cancel all your streaming subscriptions, and agree to stop eating out. BUT if you don't at least make the minimum payment on the bills ALREAY ON THE TABLE it will absolutely wreck your credit here and now and all that saving you're going to do in the future will be canceled out by your new, higher interest rates.
    Wrecking the federal government's credit rating sounds like a sensible things to do as it might help reduce even more spending. The congress needs to control itself. Let's provide some incentive.

    Any good financial advisor will tell you to spend less and save more. But they will also tell you, for the love of God, don't miss a credit card payment because screwing up your credit and hiking your interest rates makes EVERYTHING worse.
    Only if you use a lot of credit. I can tell you from the experience of having virtually no debt that it is a good way to handle personal finances. it would be good for government as well. I'd like to own a private airplane for the fun of it and I could probably finance it but I know better and I don't do it. These idiots want to spend an extra 3.5 to 8 trillion on their pet projects. They need to say no.
    Last edited by fmw; 09-22-2021 at 02:50 PM.

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    Quote Originally Posted by pjohns View Post
    But returning to the actual subject at hand: I am certainly not arguing that we should not pay our bills--or send out Social Security checks. Rather, I am arguing that the entire idea of a "debt ceiling"--which is never honored, anyway; it is just routinely raised--is downright silly.
    Agreed. It clearly isn't an effective check on spending, it just periodically gives us the opportunity to wreck the economy. They should abolish it outright, or replace it by something more useful and less self-destructive.

    Maybe a law which, instead of forcing the nation into default, automatically imposes new taxes and/or specified cuts in spending when a certain debt threshold is crossed?

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    Quote Originally Posted by fmw View Post
    Sure it does. Pass a law reducing spending by an amount equal to 2 times the amount required to pay those bills and then raise the ceiling to half that amount as a sort of short term loan.
    That would be a sensible Republican counter-offer. A small raise of the ceiling to stave off immediate disaster and but still force the Democrats to run into this problem again soon if they continue to increase spending as planned.

    Quote Originally Posted by fmw View Post
    Wrecking the federal government's credit rating sounds like a sensible things to do as it might help reduce even more spending. The congress needs to control itself. Let's provide some incentive.
    I'm not sure there's any incentive there. It would just mean that we'd be spending much, MUCH more of government revenue on interest payments in the future. That's not really a win for anyone (except, I guess, government creditors). Given that even a short-term default is almost universally predicted to hit the stockmarket hard and trigger massive job losses, if anything we'd like see even more demand for government spending to deal with the economic fallout.


    Quote Originally Posted by fmw View Post
    Only if you use a lot of credit. I can tell you from the experience of having virtually no debt that it is a good way to handle personal finances.
    That can be true. But on the other hand, maintaining some debt is good because it establishes your credit and creates a record proving that you keep your financial promises in a timely fashion.

    E.G. It's much easier to get people to loan you money if you have a long history of timely mortgage payments than if you've never taken out a loan before. If you've never been in debt, no one knows whether or not you're reliably pay your debts in the future. Alexander Hamilton argues that the same was true of a national debt all the way back in the 1800s. So long as the government always made its interest payments, maintaining the debt constantly proved that investing in the US was a good bet and that kept our interest rates nice and low.

    The key thing, in either the personal case or the national one, is never miss a payment​.

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    Quote Originally Posted by Prof. Dilettante View Post
    Agreed. It clearly isn't an effective check on spending, it just periodically gives us the opportunity to wreck the economy. They should abolish it outright, or replace it by something more useful and less self-destructive.
    No temporary shutdown has ever hurt the economy. It is the shut downs of businesses that hurts the economy. Something more useful would be to reduce spending.

    Maybe a law which, instead of forcing the nation into default, automatically imposes new taxes and/or specified cuts in spending when a certain debt threshold is crossed?
    How about avoiding all of this nonsense by operating government with fiscal responsibility?

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