Raising the US debt ceiling

punked · July 28, 2011

And yet Democrats still accuse them of "draconian cuts." I'm glad Republicans have at least set the agenda for actually cutting spending. A few short months ago, Obama and the Dems wanted a debt ceiling increase without any cuts at all. My how things have changed!

No it is the 1.6 Trillion they are demanding that be found in the next debt ceiling raise that are draconian cuts. This one actually cuts nothing. Learn something about your sides position so I don't have to educate you.

Shady · July 28, 2011

No it is the 1.6 Trillion they are demanding that be found in the next debt ceiling raise that are draconian cuts.

So cutting $160 billion dollars per year out of a nearly $4 trillion dollar yearly budget is draconian? :rolleyes:

You need some new talking points cause it's barely a drop in the bucket. Something more like Chretien/Martin is what's really needed.

bush_cheney2004 · July 28, 2011

...Something more like Chretien/Martin is what's really needed.

True, but that won't happen until their tits are already in the downgrade wringer, just like it happened in Canada.

punked · July 28, 2011

So cutting $160 billion dollars per year out of a nearly $4 trillion dollar yearly budget is draconian?

You need some new talking points cause it's barely a drop in the bucket. Something more like Chretien/Martin is what's really needed.

Not what I said. Try again Shady. Not against cuts heck you should be with the Dems on this one they cut way more then the GOP does.

Edited July 28, 2011 by punked

Shady · July 28, 2011

Not what I said. Try again Shady. Not against cuts heck you should be with the Dems on this one they cut way more then the GOP does.

Are their cuts draconian too? :rolleyes:

Edited July 28, 2011 by Shady

punked · July 28, 2011

Are their cuts draconian too?

It is list you don't listen the problem with the GOP's plan is it mandates that in 6 months the government MUST CUT 1.6 TRILLION from SS, or Medicare those are the Draconian cuts. GO BACK AND READ. That is what I said the first time.

Shady · July 28, 2011

It is list you don't listen the problem with the GOP's plan is it mandates that in 6 months the government MUST CUT 1.6 TRILLION from SS

That's a complete and utter lie. The GOP plan for social security was to raise the retirement age by 2 years for people under the age of 50. Anyone over 50 wouldn't see a single change to the program or the money they receive from it. Stop the lies already.

pinko · July 28, 2011

That's a complete and utter lie. The GOP plan for social security was to raise the retirement age by 2 years for people under the age of 50. Anyone over 50 wouldn't see a single change to the program or the money they receive from it. Stop the lies already.

I am just curious how you know this. Perhaps you could provide a link.

punked · July 28, 2011

I am just curious how you know this. Perhaps you could provide a link.

He doesn't know what it says. He has already proven this.

pinko · July 28, 2011

He doesn't know what it says. He has already proven this.

He seems to have a vivid imagination.

Bitsy · July 28, 2011

That's a complete and utter lie. The GOP plan for social security was to raise the retirement age by 2 years for people under the age of 50. Anyone over 50 wouldn't see a single change to the program or the money they receive from it. Stop the lies already.

Whose plan was that, Shady, there have been serveral proposed. One of the reasons I ask is the age of 50 being cut off point, I have not heard that. Or maybe you have a link.....thanks.

Scotty · July 29, 2011

The mean income tax rate in the US is about 28%, which is among the lowest in the western world. Germany's is over 50%, by comparison. And that doesn't even tell the full story. Americans have no national sales tax, unlike most other countries. In European countries it's often around 15%. Americans don't have to pay the high gas taxes which exist in most other western countries either. In short, Americans pay some of the, if not THE lowest taxes of any industrialized nation by a long shot. But you'd never know it listening to the bleating of the tea party types, constantly squealing about how hard done by they are and how immensely unfair are their onerous taxes.

Of course, most others get a hell of a lot more out of their taxes. European social safety programs are far more generous than American programs. Most every other western country has more generous programs than Americans (in fact, as far as I now EVERY western nation is more generous). If you're old, poor, frail and inform, or disabled, you'd be better off being almost anywhere in the western world rather than in the United States. The home of God fearing people seems curiously lacking in Christian charity, being more concerned with accumulating more consumer products than helping their fellow citizens.

So here you have the contradiction. The Republicans, who basically represent rich America, are determined to lower taxes further. As for all those "entitlement programs" in the American social safety net - they don't care about those. Those are for poor people, for minorities, for people who don't vote Republican, so they don't see any problem at all with slashing them to the bone. Again, this is a party which prides itself on it's bible thumping adherence to God fearing Christianity. Yet it has no problem slashing programs which feed poor children, which subsidize poor people's heating, which help states pay for education, which helps disabled people get work and adapt their houses, which takes care of the sick and the elderly.

"Screw em all", say the tea party. "We're tired of paying for those loafers! If you can't pay for your own heat, then freeze to death in the dark! If you can't feed your children, let them starve! If you're sick and can't pay for an operation, then just die! It's our money and that's it!"

God bless America. Jesus would have been so proud. I can see Jesus now, kicking a homeless beggar in the face, then laughing as he gets into his BMW for a drive to the golf club.

bush_cheney2004 · July 29, 2011

...God bless America. Jesus would have been so proud. I can see Jesus now, kicking a homeless beggar in the face, then laughing as he gets into his BMW for a drive to the golf club.

America specifically has nothing to do with your "Jesus" by design, however, that kind of baggage can be found in the Canadian Constitution Act.

maple_leafs182 · July 29, 2011

"Screw em all", say the tea party. "We're tired of paying for those loafers! If you can't pay for your own heat, then freeze to death in the dark! If you can't feed your children, let them starve! If you're sick and can't pay for an operation, then just die! It's our money and that's it!"

God bless America. Jesus would have been so proud. I can see Jesus now, kicking a homeless beggar in the face, then laughing as he gets into his BMW for a drive to the golf club.

You don't understand what the tea party is about at all. You clearly don't understand how inefficient government is.

Spending billions of dollars on programs to help the poor ends up hurting the poor. These programs become so massive they need to be paid for using debt which eventually leads to inflation when the Central Bank is forced to print currency to service and buy up that debt. This resulting inflation hurts the poor because they have to pay higher food and energy prices.

I understand the whole "it's the right thing to do" thing and I thing we should just be helping each other but acting like state socialism is some sort of answer shows your ignorance towards economics.

Bitsy · July 29, 2011

You don't understand what the tea party is about at all. You clearly don't understand how inefficient government is.

Spending billions of dollars on programs to help the poor ends up hurting the poor. These programs become so massive they need to be paid for using debt which eventually leads to inflation when the Central Bank is forced to print currency to service and buy up that debt. This resulting inflation hurts the poor because they have to pay higher food and energy prices.

I understand the whole "it's the right thing to do" thing and I thing we should just be helping each other but acting like state socialism is some sort of answer shows your ignorance towards economics.

Are you seriously suggesting that our social programs are the reason we have this deficit? Because if you are, let me remind you of two unfunded wars, two rounds of unfunded tax cuts, and an unfunded prescription give away to the pharmaceutical companies.

bush_cheney2004 · July 29, 2011

Are you seriously suggesting that our social programs are the reason we have this deficit? Because if you are, let me remind you of two unfunded wars, two rounds of unfunded tax cuts, and an unfunded prescription give away to the pharmaceutical companies.

No, but the "social programs" (including unfunded pharma) are the biggest problem going forward, particularly Medicare. The wars will not go on forever. Entitlements must be curtailed to fix the imbalance. Tax cuts don't have to be funded...deficits start with spending, no matter what the government objective.

Bonam · July 29, 2011

Are you seriously suggesting that our social programs are the reason we have this deficit? Because if you are, let me remind you of two unfunded wars, two rounds of unfunded tax cuts, and an unfunded prescription give away to the pharmaceutical companies.

It's pointless to assign the deficit to any one set of spending or tax cuts. The deficit exists because spending exceeds revenues, period. That's all the spending, including social programs, wars, and everything else, and all the revenues, with the current tax rates as they stand. If spending was lower, whether we do that through cutting social programs or through cutting wars, the deficit would be lower. It's really pretty straightforward... trying to cloak the simple fact that one number is larger than another in partisan language is silly.

dre · July 29, 2011

It's pointless to assign the deficit to any one set of spending or tax cuts. The deficit exists because spending exceeds revenues, period. That's all the spending, including social programs, wars, and everything else, and all the revenues, with the current tax rates as they stand. If spending was lower, whether we do that through cutting social programs or through cutting wars, the deficit would be lower. It's really pretty straightforward... trying to cloak the simple fact that one number is larger than another in partisan language is silly.

The problem is, this wasnt any kind of accident. A conscious decision was made to finance the government by selling bonds instead of by collecting enough taxes, and to basically get negative interest rates by deflating the units the bonds are doniminated in. Its really hard to change that because taxes will need to go up. A LOT.

Heres what happened to tax rates between 1954 and 1990...

1954-1963 20% 91%

1988-1990 15% 28%

That shows the top and bottom brackets. The wealthy were able to get government to reduce their taxes by nearly 70%, and transfer their share of the tax burden to the rest of the world. And what happened?

http://www.brillig.com/debt_clock/history.gif

See that steep red cliff that happens once tax rates are slashed? The reason Americans pay so little taxes, and about 1/2 as much for things like oil as other comparable countries is because the rest of the world is paying their taxes FOR them.

You arent going to be able reduce spending enough to balance the budget without raising taxes without letting the country rot into the ground. And its rotting into the ground already... theres zillions worth of infrastructure upgrades due in the next few decades and an aging population to boot.

And youre up against the fact that Generation Useless doesnt want to pay any taxes. This wierd ant-tax religion has developed in the minds of a generation of people that inherited a beautiful modern country, and then let it rot while they went on the biggest spending spree in the history of the universe with the national credit card. And you also have the false perception that raising taxes will destroy the economy.

Bonam · July 29, 2011

The problem is, this wasnt any kind of accident. A conscious decision was made to finance the government by selling bonds instead of by collecting enough taxes, and to basically get negative interest rates by deflating the units the bonds are doniminated in. Its really hard to change that because taxes will need to go up. A LOT.

Heres what happened to tax rates between 1954 and 1990...

1954-1963 20% 91%

1988-1990 15% 28%

That's kind of misleading. Tax revenues as a percent of GDP have fallen only very slightly over that timespan according to charts I've seen. Tax revenue / GDP has stayed around 15-20%. As income tax rates have fallen, taxes have been collected in more other ways from more people. For example, the entry of women into the workforce over that time has probably close to doubled the portion of the population that are taxpayers.

That shows the top and bottom brackets. The wealthy were able to get government to reduce their taxes by nearly 70%, and transfer their share of the tax burden to the rest of the world. And what happened?

http://www.brillig.com/debt_clock/history.gif

Normalizing that chart by GDP would make it less misleading:

http://www.usgovernmentspending.com/include/us_fed_debt_20c.png

It's still at a record high since WWII, but it's not the kind of catastrophic runaway exponential that is shown in your chart.

You arent going to be able reduce spending enough to balance the budget without raising taxes without letting the country rot into the ground. And its rotting into the ground already... theres zillions worth of infrastructure upgrades due in the next few decades and an aging population to boot.

I dunno about rotting infrastructure. When I lived in Quebec, we'd cross down into NY and other states every weekend to go hiking. Trust me, the roads were in WAAAAY better shape down there than up in QC. If US roads are rotting, Canadian ones must be skeletal remains. Further, right where I live in Seattle, we have a freeway bridge being twinned, a light rail system being expanded, an old viaduct being replaced with a tunnel, and a few other major infrastructure projects. It doesn't look to me like it's being neglected and rotting away.

I think claims of rotting infrastructure are far overstated. Perhaps the infrastructure is not being expanded and upgraded fast enough to accommodate optimal economic growth and prosperity, but it's certainly not just rotting away.

And youre up against the fact that Generation Useless doesnt want to pay any taxes. This wierd ant-tax religion has developed in the minds of a generation of people that inherited a beautiful modern country, and then let it rot while they went on the biggest spending spree in the history of the universe with the national credit card. And you also have the false perception that raising taxes will destroy the economy.

I don't think raising taxes a few % on the top few % of earners is a big deal. The main thing with tax rates is you gotta remain competitive with other nations. The US can stand to raise tax rates a bit without losing its competitive edge relative to other advanced Western nations, and it can't compete with less developed nations on a cost basis anyway. At the same time, raising taxes to pay for uncontrollably ballooning spending sets a horrible precedent. US spending has grown hugely in the last several years and needs to be reduced. If there is still a structural deficit, yeah, you can look at raising some more revenue, but the current spending certainly has to be curtailed.

Edited July 29, 2011 by Bonam

dre · July 29, 2011

That's kind of misleading. Tax revenues as a percent of GDP have fallen only very slightly over that timespan according to charts I've seen. Tax revenue / GDP has stayed around 15-20%. As income tax rates have fallen, taxes have been collected in more other ways from more people. For example, the entry of women into the workforce over that time has probably close to doubled the portion of the population that are taxpayers.

Normalizing that chart by GDP would make it less misleading:

http://www.usgovernmentspending.com/include/us_fed_debt_20c.png

It's still at a record high since WWII, but it's not the kind of catastrophic runaway exponential that is shown in your chart.

I dunno about rotting infrastructure. When I lived in Quebec, we'd cross down into NY and other states every weekend to go hiking. Trust me, the roads were in WAAAAY better shape down there than up in QC. If US roads are rotting, Canadian ones must be skeletal remains. Further, right where I live in Seattle, we have a freeway bridge being twinned, a light rail system being expanded, an old viaduct being replaced with a tunnel, and a few other major infrastructure projects. It doesn't look to me like it's being neglected and rotting away.

I think claims of rotting infrastructure are far overstated. Perhaps the infrastructure is not being expanded and upgraded fast enough to accommodate optimal economic growth and prosperity, but it's certainly not just rotting away.

I don't think raising taxes a few % on the top few % of earners is a big deal. The main thing with tax rates is you gotta remain competitive with other nations. The US can stand to raise tax rates a bit without losing its competitive edge relative to other advanced Western nations, and it can't compete with less developed nations on a cost basis anyway. At the same time, raising taxes to pay for uncontrollably ballooning spending sets a horrible precedent. US spending has grown hugely in the last several years and needs to be reduced. If there is still a structural deficit, yeah, you can look at raising some more revenue, but the current spending certainly has to be curtailed.

Yes a balanced budget would require large tax hikes and large spending cuts as well.

The problem with looking at national debt as a percentage of GDP, is that GDP isnt the pool of money used to service debt. That pool of money is the federal budget, and its only loosely tied to GDP, and the problem is that you have this wierd anti tax religion going on, and any significant tax increases are virtually impossible right now. Generation Useless would rather just let things go to seed than step up and pay more. A politician campaigning on tax hikes down there will be about as popular as a child rapist.

I dunno about rotting infrastructure. When I lived in Quebec, we'd cross down into NY and other states every weekend to go hiking. Trust me, the roads were in WAAAAY better shape down there than up in QC. If US roads are rotting, Canadian ones must be skeletal remains.

About 2 trillion dollars worth of repairs are required.

The nation's roads, bridges, levees, schools, water supply and other infrastructure are in such bad shape that it would take $2.2 trillion over five years to bring them up to speed. But even that huge chunk of change would only raise their grade from a "D" average to a "B," according to the latest "Report Card for America's Infrastructure" released today by the American Society of Civil Engineers (ASCE).

Combine that with the cost of an aging population, and its really hard to see any scenario where spending is reduced significantly. More revenue is required no matter what. My guess is youre going to see move to legitimize and tax some of Americas huge underground economy... things like soft drugs and prostitution, but youre also going to see big tax hikes.

Bitsy · July 29, 2011

It's pointless to assign the deficit to any one set of spending or tax cuts. The deficit exists because spending exceeds revenues, period. That's all the spending, including social programs, wars, and everything else, and all the revenues, with the current tax rates as they stand. If spending was lower, whether we do that through cutting social programs or through cutting wars, the deficit would be lower. It's really pretty straightforward... trying to cloak the simple fact that one number is larger than another in partisan language is silly.

My reply was in response to maple leaf’s post regarding our social programs, note I did not say SS or Medicare, I was speaking of programs for the poor and the less fortunate. There is no denying that the programs I listed are far more responsible for where we find ourselves that those for the poor. These debts that the Republicans are willing to see go into default are debts they voted and authorized albeit that was different time, a time when “deficits don’t matter.”

O'Neill, fired in a shakeup of Bush's economic team in December 2002, raised objections to a new round of tax cuts and said the president balked at his more aggressive plan to combat corporate crime after a string of accounting scandals because of opposition from "the corporate crowd," a key constituency.
O'Neill said he tried to warn Vice President Dick Cheney that growing budget deficits-expected to top $500 billion this fiscal year alone-posed a threat to the economy. Cheney cut him off. "You know, Paul, Reagan proved deficits don't matter," he said, according to excerpts. Cheney continued: "We won the midterms (congressional elections). This is our due." A month later, Cheney told the Treasury secretary he was fired.

The vice president's office had no immediate comment, but John Snow, who replaced O'Neill, insisted that deficits "do matter" to the administration.

http://www.ontheissues.org/2004/Dick_Cheney_Budget_+_Economy.htm

pinko · July 29, 2011

Unlike the bumbling dysfunctional ideological quagmire in the USA Canada seems to be doing quite well according to the article linked below.

http://www.winnipegfreepress.com/canada/canadas-credit-still-top-notch-126391483.html

Here is an excerpt from the article.

As the debt spectacle continues in Washington, Moody's Investor Service renewed Canada's AAA credit rating on Thursday. While all eyes are on the United States as it tries to hammer out a deal to raise its borrowing limit by Aug. 2, avoid a debt default and a possible debt downgrade, Canada sailed through its annual credit checkup with flying colours.

Moody's said the country's high resiliency, government financial strength and low susceptibility to risk were key to the top marks.

Here's a breakdown of the reasons why Moody's says Canada deserves the highest possible credit rating.

-- Economic strength: very high

Yukon Jack · July 29, 2011

"God bless America. Jesus would have been so proud. I can see Jesus now, kicking a homeless beggar in the face, then laughing as he gets into his BMW for a drive to the golf club."

If Jesus was here today, His vehicle would not be a BMW, but a Christler.

Oleg Bach · July 29, 2011

Enough of this crap. When will people understand that you can not keep spending money that does not exist? The whole monetary system world wide is broken down - No one has any real money that is actually worth something. The lenders are bastards...I suggest to America that they simply declare themselves insolvant and start fresh - to hell with paying interest to parasites.

Oleg Bach · July 29, 2011

"God bless America. Jesus would have been so proud. I can see Jesus now, kicking a homeless beggar in the face, then laughing as he gets into his BMW for a drive to the golf club."

If Jesus was here today, His vehicle would not be a BMW, but a Christler.

If Jesus were here today he would make a whip and flog all the damned Christian rats. This buisness about putting the onus on God and beseaching him to "bless America" is bull shit - people bless people - God has better things to do that do the work that humans should be doing for each other - LET AMERICA BLESS AMERICA!