IBCoupe wrote:Reid's plan includes no tax increases, about $4 trillion in cuts over the next decade (the economy can't afford them now), and a debt ceiling that pushes us past the next election, because, face it: Republicans were keen to push us to the brink of oblivion a year and a half out. Think that in March of next year they're going to be happier to compromise?

And the Democrats want this issue to "go away" so they dont get clobbered in the next election cycle. *Shrug* I am not calling the Republicans saints here, but we have the President who refuses to put anything down on paper and the Senate Majority Leader that keeps saying only "HIS" bill is acceptable (Compromise). Blaming the Republicans is like having two children (close in age) and blaming one for starting a fight. A good parent knows the other isnt a saint. Kind of like my childhood, I would instigate fights and then stand back and let my little sister take the blame. Oh those were the days when the only thing we had to worry about was Global Nuclear War, ending our society.

Encryptshun wrote:Cut/Cap/Balance did indeed contain a heavily-conditioned provision to raise the debt ceiling, but was an unfeasible bill and would have made the situation worse. It was DOA in the Senate thanks to the fact that people actually READ the bill and saw it required any future tax increases to pass both houses with a 2/3 majority (unworkable) and cap future spending at 19.9% of GDP (also unworkable). It would have put a law into effect that would have brought fiscal management of the country to a virtual standstill untill it was repealed.

Besides, my point earlier was that some legistators have said they'd not vote on any bill if it raised the debt ceiling. I cited Bachmann and Paul specifically. Both voted no to CC&B.

Capping Future Spending to 19.9% of GDP when the National Debt is 97% of GDP. Now I see why it is 'unworkable.' I have a feeling that it is 'unworkable' because it cuts into the Democrats platform and thus it is more important to secure power by securing spending to grow the government and the dependence of people (be it States or individuals) on the Federal Government. I am starting to see that 'Starving the Beast' has failed and maybe 'Nuking the Beast' may be what people are up to. The US Federal Government goes into default, T Bills are downgraded by the Credit Agencies, money because to hard to monetize with an asset back security and then the Federal Government is force to not only cut spending, but balance the budget. And here is the Ironic thing, with out the current system of floating debt and working of the Federal Reserve (central banking system), a lot of these obligations in regards to the National Debt will have to be repealed. Either that or Congress will have to jack up tax rates so high (well, well, well beyond 28%) that they will be so unpopular, they will never get re-elected.
On a side note, I would encourage everyone to educate themselves on the role the Federal Reserve plays in all this National Debt finance. Pretty interesting that this dynamic does not make it into this discussion.

CITIZEN- OBEY your Federal Overlords.

Cold_Zero wrote:when the National Debt is 97% of GDP.

And as of today, the number is just under 98.5% (estimated) ... sigh!

Z

IBCoupe wrote:Well, then it's a good thing that no individual or corporation ever borrows in order to increase future earnings, right?

Well ... 49 US states have balanced budget requirements: http://www.ncsl.org/documents/fiscal/St ... ns2010.pdf - is this a bad thing for a government (State not Federal, of course) to do?

Admittedly the definition of "balanced budged" is a bit murky - the above is a good read!

And when the debt starts getting near or above GDP, then I am concerned about the debt interest payments becoming too high a burden on the country.

Sure, I do think it is reasonable for the Government to borrow in certain situations. But, this has to be managed carefully to avoid over-spending - and there has to be a plan to "pay it down" over time - keep it in rational amounts.

BTW, note that individual and corporate limits are [generally] carefully controlled by external entities - they can't be increased by the individual or the corporation directly. In the case of the Federal government, they increase the limit themselves. Borderline conflict of interest and without sufficient and rational "check and balance", IMHO.

Z

Cold_Zero wrote:

Encryptshun wrote:Cut/Cap/Balance did indeed contain a heavily-conditioned provision to raise the debt ceiling, but was an unfeasible bill and would have made the situation worse. It was DOA in the Senate thanks to the fact that people actually READ the bill and saw it required any future tax increases to pass both houses with a 2/3 majority (unworkable) and cap future spending at 19.9% of GDP (also unworkable). It would have put a law into effect that would have brought fiscal management of the country to a virtual standstill untill it was repealed.

Besides, my point earlier was that some legistators have said they'd not vote on any bill if it raised the debt ceiling. I cited Bachmann and Paul specifically. Both voted no to CC&B.

Capping Future Spending to 19.9% of GDP when the National Debt is 97% of GDP. Now I see why it is 'unworkable.' I have a feeling that it is 'unworkable' because it cuts into the Democrats platform and thus it is more important to secure power by securing spending to grow the government and the dependence of people (be it States or individuals) on the Federal Government.

I read this a couple of times and I'm not sure if you're implying that I'm saying what I'm saying because of some partisan affiliation, but I assure you that I'm no Democrat. Besides the math is based in utter fantasy. 2010 GDP was $14.7 trillion. Capping spending at 19.9% of GDP means that you can only spend $2.93 trillion a year. 2011 tax revenue (and remember, this is a DOWN year) is estimated to be $4.7 trillion. So this bill would mean that, no matter what, we would never be allowed to spend more than 60% of our revenue in any given year. Thus, unworkable.

Cold_Zero wrote:I am starting to see that 'Starving the Beast' has failed and maybe 'Nuking the Beast' may be what people are up to. The US Federal Government goes into default, T Bills are downgraded by the Credit Agencies, money because to hard to monetize with an asset back security and then the Federal Government is force to not only cut spending, but balance the budget. And here is the Ironic thing, with out the current system of floating debt and working of the Federal Reserve (central banking system), a lot of these obligations in regards to the National Debt will have to be repealed. Either that or Congress will have to jack up tax rates so high (well, well, well beyond 28%) that they will be so unpopular, they will never get re-elected.
On a side note, I would encourage everyone to educate themselves on the role the Federal Reserve plays in all this National Debt finance. Pretty interesting that this dynamic does not make it into this discussion.

CITIZEN- OBEY your Federal Overlords.

Radical solutions to rational problems very rarely produce beneficial outcomes. And your last comment smacks of paranoia. Do you really think that, in this day and age, with a two-party system in place there is even the most remote of possibilities that the federal government will turn into some Big Brother entity? Really?

More like politicians doing what they do -- posturing for their financial backers and making themselves appear indespensible to their constituencies. Unfortunately, the latter is now taking precedence over the former.

szh wrote:Well ... 49 US states have balanced budget requirements: http://www.ncsl.org/documents/fiscal/St ... ns2010.pdf - is this a bad thing for a government (State not Federal, of course) to do?

It's a bad thing for the federal government to do precisely because the States have balanced budgets: they can only do so with the promise of federal aid and support.

szh wrote:And when the debt starts getting near or above GDP, then I am concerned about the debt interest payments becoming too high a burden on the country.

We just had a deep recession and we're very slowly getting out of it. Let me know what our Debt:GDP ratio looks like when we're not struggling.

szh wrote:Sure, I do think it is reasonable for the Government to borrow in certain situations. But, this has to be managed carefully to avoid over-spending - and there has to be a plan to "pay it down" over time - keep it in rational amounts.

Right. So vote "D," because they're the party less likely to cut taxes in the good times.

szh wrote:BTW, note that individual and corporate limits are [generally] carefully controlled by external entities - they can't be increased by the individual or the corporation directly. In the case of the Federal government, they increase the limit themselves. Borderline conflict of interest and without sufficient and rational "check and balance", IMHO.

In theory, that's what elections are for.

Encryptshun wrote:I read this a couple of times and I'm not sure if you're implying that I'm saying what I'm saying because of some partisan affiliation, but I assure you that I'm no Democrat. Besides the math is based in utter fantasy. 2010 GDP was $14.7 trillion. Capping spending at 19.9% of GDP means that you can only spend $2.93 trillion a year. 2011 tax revenue (and remember, this is a DOWN year) is estimated to be $4.7 trillion. So this bill would mean that, no matter what, we would never be allowed to spend more than 60% of our revenue in any given year. Thus, unworkable.

I was not implying that you were a democrat. I was merely expressing my frustration that now that either party has what they want, runaway spending, all real solutions are ‘unworkable.’ We have racked up debt that now has equaled 100% of our GDP. This speaks to our ability to pay off our debt in the future and if we will be able to cut our spending habits.

I am asking a question here.
We spent $3.46 trillion in 2010, I don’t have this year’s number. If we spend $2.93 trillion in 2012, we have to roughly find $530 billion dollars in cuts (somewhere). So it is a matter of what piece(s) in Ross Perot's pie chart we want to cut out. The amount of tax revenue is irrelevant as at least for this year and maybe(?) next year with these cuts as we appear to be we covering our cash expenditures. If we did spend $2.93 trillion dollars as the measure suggests we would have a $1.77 trillion dollar budget surplus.

Radical solutions to rational problems very rarely produce beneficial outcomes.

I was not implying that 'Nuke the Beast' was a good idea (thought it was a good term that I came up with for the concept). I wanted expressing my understanding of where some of the people that wanted the US to default, were coming from. 'Starve the Beast' policy has failed and the next step in their eyes would be to 'Nuke the Beast.' But what I can’t help to get out of my mind is the thought that everyone (on the right or left) that was crying about the ramifications of not lifting the debt ceiling, was only doing so to maintain the Status Quo. They were not not concerned about doing the right thing (morally) and paying our obligations.

And your last comment smacks of paranoia. Do you really think that, in this day and age, with a two-party system in place there is even the most remote of possibilities that the federal government will turn into some Big Brother entity? Really?
More like politicians doing what they do -- posturing for their financial backers and making themselves appear indespensible to their constituencies. Unfortunately, the latter is now taking precedence over the former.

Call it what you want, I am use to the polemics now. I am very much aware of what my Government is capable of in this day in age. I neither look to the Federal Government for solutions to my problem, nor do I look to it save me. I just want it to do its Constitutionally Enumerated job.

Everyone is making some great points here. If only John Q Public was able to weigh in with the same type of critical thinking. I feel like these points get left out in favor of sensationalist journalism

I neither look to the Federal Government for solutions to my problem, nor do I look to it save me.

This

szh wrote:

Cold_Zero wrote:when the National Debt is 97% of GDP.

And as of today, the number is just under 98.5% (estimated) ... sigh!

Z

And, today, it is 99.996% ...

Z

By the way:

US Federal revenue to date this year is $2.2 Trillion.

US Federal spending to date this year is $3.6 Trillion.

So ... deficit growth this year is $1.4 Trillion ... so far!

Anyone still think that this is okay for the country to do in the long run?

We have to reduce spending ... not instantly, but we must plan for it and execute.

Z

Here are better figures than my estimates above ... from the Congressional Budget Office: http://cboblog.cbo.gov/?p=2589

Actually, the debt is only $1.1 trillion higher in the past 10 months ... my estimate is off since the date range is a bit different, and revenues were higher than I had estimated.

Still a big problem.

Z

szh wrote:

szh wrote:And as of today, the number is just under 98.5% (estimated) ... sigh!

Z

And, today, it is 99.996% ...

Z

And now ... the National Debt has exceeded the GDP ... we are at 100.03%.

Z

szh wrote:Here are better figures than my estimates above ... from the Congressional Budget Office: http://cboblog.cbo.gov/?p=2589

Actually, the debt is only $1.1 trillion higher in the past 10 months ... my estimate is off since the date range is a bit different, and revenues were higher than I had estimated.

Still a big problem.

Z

For fiscal year 2011, the budget deficit was $1.3 trillion ... from the Congressional Budget Office: http://cboblog.cbo.gov/?p=2998

Sigh ...

Z

10-yr T-Bills are at 1.89%.
20-yr T-Bills are at 2.53%.
30-yr T-Bills are at 2.82%.

This is my "not worried" face.