Are you worried that the debt ceiling will not be raised in time?
Here are just a few of the consequences if this is not done.
What do you think about this impending disaster?
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75 Answers
Yes. I’m worried.
And where were all the screaming banshees that insist the ceiling should not be raised now, when it was raised eight times during the previous administration? Where were those same voices when two wars were started in the last administration and accounted for “off the books” ? Where were the grownups then? Wasn’t it just as important then?
Isn’t it just as NOT important now?
Stupid political posturing.
No – but I’m wondering how much Obama will give up in ransom money so the Republicans agree to raise it.
Let’s say I have a problem paying my credit cards… I can’t handle the payments.
So my credit card company says, “Hey, no problem. We’ll just extend your credit limit”.
How does this help me if my goal is to get out from under debt? I’m just digging myself deeper into what I want to get out of. I can prolong the inevitable crash for a little while, but it’s just going to create more suffering later when it finally hits.
Our problems are not because of lacking credit issues. Our problems are rooted in exorbitant spending issues. Nothing will change until the spending is addressed.
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Money is a lie. Who are we “borrowing” from anyway? Who makes all this mysterious extra money? Who has the authority to suddenly decide my assets are worth more or less today than yesterday? It’s such a sham.
No, I don’t pay any attention to what the talking heads say about money, credit, and value. They don’t decide those things for me. I do.
Yes. I’m especially worried of the Republican posturing and the holier than thou no revenue raising. I’d rather have the Democrats bring this country to the pits than the Republican hypocrites who keep pretending they know how to run things when they do not have any solid record on it. Imo.
Americans have a belief that we can have our cake and eat it too. People want cuts but don’t want to pay for it. Either we ignore our debt issue and turn into Greece or we make difficult choices.
The problem that I have with the Democratic plan (and I will reluctantly say it is a solid plan, mostly) is that they are playing class warfare. Just raising the tax rate on the “rich” would not even come close to paying off the debt. If Democrats are serious about raising taxes (we know they are), all levels of income taxes should be raised and end at least half of the tax subsidies that we give out. That way, we can truly have “shared sacrifice”.
@cletrans2col That sure makes sense, equal taxation. It also makes sense calling it class warfare if the rich are taxed higher. Is that really the case? If it is then yes, how else can it not feel and be that way?
My friend has his answer. He is one of the rich ones you mentioned and he believes the more money you make, it’s fine if you pay higher taxes. To him it does not make sense taking away from the non-rich since it might harm the already struggling economy. He feels no class warfare. He is grateful he has the capacity to share his wealth to the country he loves. I wish there are more of him.
@mazingerz88 I agree with your friend and since we have an ever-increasing disparity between the rich and the poor, I also feel the burden should fall higher on them.
@mazingerz88 It is fair for him to feel that way, but obviously he is one of many. Of course the more you make the more taxes you will pay, but how much is too much? How much does your friend believe he should be taxes?
@cletrans2col I just asked him. He said just post that he will vote for Obama again next year. Lol.
Worried? I’m hoping for it.
No. The most basic common sense will prevail at the end. It has to.
No point in worrying over something I have no control over. Just hope @bob_ is right. Common sense will prevail. Especially since election year is near. :)
I really hope they don’t, but they probably will, oh the cold reality of it all.
Well, I will say that I don’t appreciate the GOP holding America hostage over this issue. I honestly feel that they want America to collapse just so they can blame Democrats, and I plan on doing what I can to keep such an abusive party out of office come the next election.
@cletrans2col I would agree with you if it were not for the fact that effective tax rates currently follow a bell curve. While the rich pay a larger dollar amount, they pay a lower percentage; as low as half of what someone in the middle class pays. There are many millionaires and a few billionaires that agree. For instance, Warren Buffet has often complained that he pays less than 20% while his secretary pays over 30%.
Why pay the rich just for being rich? They should only get paid for earned salary and investment dividends; they don’t need to be subsidized at the expense of the majority of taxpaying citizens too.
@jerv When he was in the Senate, Obama voted against raising the debt ceiling. It’s politics, and both political parties are to blame.
@jerv I agree with ending subsidies that we cannot afford right now.
I would elaborate by saying that all subsidies should be dropped
As far as taxation goes I am ok with raising taxes on everyone. The people really suffering right now are people out of work, not the middle class. Sure I want the taxes higher on the rich for two reasons; one, the rate they actually pay is lower than the middle class in the end because they take advantage of the write off and loopholes; and two, they can afford a percent or two more and it does not impact their spending at all. However, rich is not over $250k, I am talking at least $400k, which is the equivalent when you adjust for inflation from when congress first came up with the $250k cut-off many years ago. But, honestly, even if they just up people making $1million or more that would be ok too.
@bob_ I love how on every Q lately you have been sarcastic and funny, but then on the economics threads totally serious.
@JLeslie Is that the federal budget rolled up in my pocket, or am I just happy to see you?
@JLeslie Leave the tax rates alone but end the subsidies and loopholes. Using your logic, the rich should pay more on other things too, because they can afford it. The problem is not with revenue; it’s spending. The government has promised way too much and the American people seem to think it’s really free. Unfortunately, neither party has the balls to be honest to us.
I’m worried that the Tea Party Republicans may not actually care that much about the global economy. And if they don’t care about that, they really have little reason to vote to raise the debt ceiling. So, yes. I am quite worried.
I think the problem with the American economy is that the average person isn’t making enough money to live within their means(or the expectation of what their means should be), so they can’t spend enough money to keep the economy going. Government can only help so much when the system itself is so pro-business.
@bob_ Since when has that fact actually affected public perception?
Besides, there is a difference between opposing something on it’s own merit and opposing it because you want concessions elsewhere. Given that I have yet to see much in the way of merit-based arguments to oppose it and that there have been many pieces of legislation that have been held up solely as part of a GOP power game in recent history, I gave up on giving the Republicans the benefit of a doubt long ago.
Just don’t take that to mean that I actually like the Democrats much better; I merely consider them the lesser of two evils.
@cletrans2col You can definitetly count me on board with gettinf rid of most subsidies, and I really like getting rid of the loopholes. I generally like the idea of a flat income tax actually, still allowing the poor to pay little to no taxes. Bit, then I question it thinking maybe the game of a higher tax rate and write offs is what American need, like they need the game the power trip that they are gaming the system? Not sure. Since you have not been around these parts long you probably have not had the chance to see me reference the Forbes article that uses IRS data showing the top 400 earners in the US pay an average of 17% in taxes. That shit has to stop.
My SIL said though, that she thinks if they up the percentage they will just do the same thing the wealthy do in Mexico, or what she says they do, move money off shore.
@jerv The Democrats could have raised the ceiling when they controlled both the House and the Senate, but they didn’t, because they didn’t want to deal with the vote before the elections. Was that not thoroughly irresponsible? I’m not giving either party any benefit.
Yeah, both parties suck in my book regarding fiscal responsibility. In my opinion they worry about the voters too much and do not really do what they should. My feeling is most voters are ignorant when it comes to balancing the budget. Look how many Americans cannot keep their own personal budget together? Clinton was the only President who came close to showing some real caring about the deficit.
@JLeslie A good example of that is this discussion. You poll most Americans and they will tell you that they want to balance the budget; ask them how to pay for it and they are adamantly against reforming entitlements, ending subsidies, and anyone else paying taxes other than the rich. Make your minds, America!
@cletrans2col I disagree. That to me sounds like you are annoyed with the democrats, not both sides. Or, am I wrong?
I mostly agree with @cletrans2col. Americans want the best of both worlds. But I don’t think that that is something that can be blamed on any one political party or even America as a whole. It is human nature to want to have your cake and eat it too. People need to get practical. We can’t continue on as we have been going. At the same time, if too much was changed too quickly, our whole way of life would be disrupted.
@JLeslie – I am usually annoyed with Democrats, but I am annoyed with both sides on this issue.
@athenasgriffin – On your last sentence, I agree. But usually these things are stretched out over 8–10 years.
No. We’re screwed pretty much whichever way we go.
@cletrans2col Most Democrats I know are willing to pay for what is spent. The Republicans seem to not want to. Sure we can look at the dems for increasing social programs for the most part, but they also are willing to pay more taxes. The Republicans, well let’s pick on Bush right now and then the Republicans at large, went to war and lowered taxes. Huh? Want to not give a big bill to your children and grandchildren, pay for what you spend. Both sides suck right now, because both sides are making stupid deals and saying stupid things. There are several wealthy democrats out there saying they should pay higher taxes, I don’t see any republicans doing that, maybe there are some?
Republicans want to cut spending to balance the budget, I like the idea of going over the spending with a fine tooth comb also, but they make me nervous, because too much of their talk is a fend for yourself atitude. I think we all have responsibities to not be dependent if we are able, but Americans make too many stupid financial decisions, so I presonally think they need to the government to force them to have some sort of money for the future (social security) and help those who cannot help themselves, and I can make a list. Then there are also things I don’t like fpr instance EIC, and people who do better financially living off the system and working the system, who are able to work, but until society pays everyone a decent wage who does their job well and with integrity, and that wage can afford a safe home and neighborhood, I don’t see it correcting. Integrity is lost, too many employers keep lots of money at the top, and don’t share it with the lower rungs. I don’t really want to tax the wealthy at a higher percent, I want things more level and just before that, at the time of earning the salary or profit.
Our country became incredibly prosperous during a time where unions were forcing wages higher. Our middle class grew, slending increased, or economy churned. I tend to be antiunion, but if a company cannot treat employees fairly they are asking for it, and the once the u ions are in, they are another mess to have to deal, being out for themselves as well, the survival of the union itself. Making the rich richer does not grow the economy from what I can tell. It is a third world recipe.
@JLeslie ~Don’t you know that “Tax and bill the grandkids” is far more financially responsible than “Tax and spend”? Look at the prosperity we had a few years ago when people were getting credit left and right. Nobody needed money since we could push all the bills into the future without consequence.
So why do we need money now when we can just do what we’ve always done and push the bills further into the future? The alternative is a fascist socialism that will deprive hard-working Americans of their hard-earned money so that we can subsidize the drug habits of those too lazy to even look for work when it could be going into the coffers of the top tiers to invest and thus create jobs so that the poor can afford to buy their own crack.
@jerv Are you serious? It’s late and I am very tired, so I don’t have all cylinders working.
Oh, I just saw the ~ never mind :).
Greece, Portugal, Spain, Great Britian… America??
@CaptainHarley Right now we might be on the same track. Would you have said that during the last few years Clinton was President?
I’d like to see these people stop spending quite so much. I’m feeling a little sleepy and punchy, so someone hand me the budget and some white-out. I’ll have this mess sorted out by morning.
@CaptainHarley Before you answer, you might want to look at this. It’s a chart of unemployment rates from Feb 1977 to Nov 2009 along with notes of which party controlled the White House, Senate, and House of Representatives.
There are spikes in Reagan’s first term about on-par with what we have now, though they came back down during his second term, only to steadily rise throughout Bush-41, drop for most of Clinton, follow their normal sine-wave for much of Bush-43 before fucking skyrocketing in early-‘08, well before Obama was elected.
However, what is really interesting is that there really isn’t any correlation between that and who is in charge, and I think the same may be true of many other economic indicators.
The one thing that is constant though is that the rich have been getting richer and everyone else either stagnating or falling behind as we amplify Reaganomics with a steady diet of steroids and meth. And when things start to go awry, the Republicans want to up the dosages while the Tea Party wants to add a little PCP to the mix.
The debt ceiling has never, in its existence, been a limit to spending. Instead, it’s been an opportunity for hypocrisy: Many Members of Congress routinely vote for budgets that any high school bookkeeping student can tell would require raising the debt ceiling, and then vote against raising the debt ceiling.
Look, the arguments for the debt ceiling only make sense if you believe that Treasury goes hog wild, writing checks and selling bonds on their own whims. But they don’t. They write checks because Congress passed laws saying to spend that money, and they sell bonds because there’s not enough tax revenue to pay those checks. When the debt ceiling and the budget conflict, the effect is Congress requiring that the same money be spent and not be spent. At best, this abdicates Congressional control of the purse to the Executive; at worst, this is a decision to create the first default in the history of the United States, in the hopes of short-term political gain.
Let’s remind ourselves of what’s at stake here: The financial markets have spent the last three years acting as it T-bills are the safest thing on Earth, safer than gold. At the last 4-week bond auction, held after QE ended so that wasn’t a factor, there were more than $5 in bids for every bond the government was selling. The interest rate they settled on was 0.000%. That’s right: No interest at all. And those bonds come due August 4th, two days after Geithner said we need to raise the debt ceiling. (This is also one reason why we are not Greece.)
Default would destroy the last “safe” investment on Earth. I’m not sure how the markets would respond, but I expect it would be more like the Great Depression than anything that’s happened in my life.
If raising the debt limit is so great, why do voters oppose raising the debt ceiling by a 45 percent to 32 percent margin? OH! WAIT! I KNOW! Republican propaganda!
@CaptainHarley That are totally correct Republican propaganda, in particular Tea Bager propaganda. The majority of the voters polled apparently are ignorant of the facts that:
-The debt ceiling historically doesn’t mean much, congress is legally bound to spend what they have apportioned (spent). The debt ceiling is a political boundary and is usually treated with a solemn nod when the debt approaches it and then it is raised, again, never with the dire consequences the Tea Baggers pretend it has.
-The downside of not raising the debt ceiling is horrific. Even toying with it raises the possibility that US debt will get downgraded and we will pay higher interest rates. Now that would be a problem.
I wonder how many people knew what the debt ceiling was, or had heard of it before this year if we polled America? I think very few. If not for the news programming we have today, most average citizens would not even know an argument was going on in the government about the debt ceiling, they would be oblivious. Now that they do know they are sure the sky is falling.
@dabbler
Sorry. Not familiar with “Tea Baggers.”
@CaptainHarley What?! You need to get out more! Maybe you will keep up on the current slang. If you didn’t know “Tea Bagger” then you might also be interested to know that people that wear leather vests/jackets and ride Harley Davidsons are called “bikers”, and that people who live North of the Rio Grande and South of Oklahoma somewhere between Louisiana and New Mexico are called “Texans” :D
Be warned though; “Teabagger” has two major meanings. One is “Member of the Tea Party” or “Person who subscribes to the Tea Party ideology” while the other… well, you can Goggle that one yourself.
@jerv
And those who indulge in excessive sarcasm online are called “buttholes!” LOL!
“Tea Party” members are called “Tea Party members.”
I love the caption on the photo from your link @bob_.
”Sunday’s meeting produced an agreement to meet on Monday.”
Now THAT is exactly the kind of progressive thinking I expect to see from our elected officials.
@CaptainHarley That may be what they call themselves, but I rarely hear people use the phrase “cellophane tape”; most people refer to it as “scotch tape” to save on syllables. However, this shorthand rule goes out the window when referring to those who like arguing semantics. Those people are called “flaming assholes” :D
@jerv Aside from a few people who haven’t kept up with the slang, the only people who call them ‘teabaggers’ are those who want to ridicule them into silence, to defame them and their ideologies to the public, and generally want to degrade them. It’s rude and immature, and I really wish that they would stop. The Tea Party isn’t evil, it just happens to have different opinions than you do.
No, not wrong. This will soon become apparent to everyone.
BTW… LMAO @jerv
@Nullo You might be surprised to know that I agree with many (though not all) of their positions, especially those that they held around the time of their founding. However, like many other groups/organizations/movements, they kind of got hijacked and turned into something rather over-the-top. No matter which side of the aisle you look at, insanity and extremist views are increasingly common.
@CaptainHarley RE “If raising the debt limit is so great, why do voters oppose raising the debt ceiling by a 45 percent to 32 percent margin? OH! WAIT! I KNOW! Republican propaganda!”
During the Bush II presidency, current GOP leaders voted several times to raise the debt ceiling, so it must have appeared to be a good idea then. Here’s a rundown. And yes, the current Dems generally opposed it then, but favor it now. In short, the debt ceiling isn’t about debt, it’s about political posturing. When one team is in the white house, the other team votes against it, no matter who it is.
Here’s another handy chart showing that Republican support for raising the debt ceiling dropped off when it became Obama’s term in office. If raising the debt ceiling is such a bad idea, why didn’t the Republicans come out against it in public so heartily before? My guess is very similar to your sarcastic answer. ;)
Personally, I couldn’t give a crap what the Republicans do. They’re no better than the damned Democrats.
@cletrans2col I think most intelligent Americans either are or already have.
I think the political parties are “tweetledum” and “tweedledumber,” and they’re in a race for last place! Heh!
No. I’m worried about how stupid, lame and/or corrupt so many people in government seem, but this detail doesn’t worry me. I think at some point, some crapola will hit some fans, and things will have to change, with a lot of suffering for people who don’t deserve it, but that major change is needed eventually.
I would not have bailed out the moneylenders back in 2008–2009. I think the credit card companies and mortgage lenders should have been abolished, property given to the people living in the houses, and the whole system reorganized, instead.
@Zaku
Great answer! The bailouts were an abomantion! “To big to fail” my ass!
@Zaku How would people get houses if no one will lend to them?
I recognize there are many unscrupulous lenders out there, but there are also many people how borrowed more than they could afford. And before you say “those people were tricked”, people should not sign something until they understand it.
@Zaku and @CaptainHarley Indeed, the wrong folks got bailed out.
Along with reigning in the banksters, the ratings companies should have had their butts kicked yet appear to have gotten away free of consequences. They were key enablers to keeping the flow of toxic loans from “lender” into bundles of junk going, by magically turning aggregations of moderate to poor quality assets into ‘securities’ with ratings way above their average content.
@dabbler Using averages instead of medians is one way to fool people into thinking we’re better off though. Take one guy earning ten million dollars a year and nine jobless people and you wind up with an average income of one million dollars a year; that makes us look rich even when 90% of us are homeless and starving.
@bob_ Maybe sometime when I feeling like beating my head against a wall, but I used my daily supply of masochism discussing economics with @jaxk.
@jerv Why bother discussing economics? People already know everything ~
@bob_ Like I said, masochism :D
@cletrans2col If the banks were allowed to crash, new banks would be formed, and the system would hopefully be reformed. The new banks would lend if needed. I would hope (idealist that I am) that the situation would also result in house prices being more affordable, instead of being artificially inflated by the convention of borrowing massive amounts from banks, which to my mind is awful.
As for, “people should not sign something until they understand it.” Yes, in principle. However, when the conventional contracts are written such that A) Most people can’t understand them and B) no competing contracts or real negotiation is really on the table, then that’s kind of a BS argument because the system is screwed up, and that exists with all sorts of contracts from rental agreements to insurance contracts to software EULAs. Not that I was about to argue that anyone was tricked, anyway. What about the social contract that banks ought to be accountable for their actions, especially when they are in the business of punishing other people for not having tons of capital, not paying bills on time, etc.
@Zaku I respect that answer.
@Zaku There are something like 7,000 banks in America if I remember correctly. I would need to ask my husband the right number, he would know, maybe that includes S & L’s not sure exactly. There were plenty of banks that were just fine. I doubt they would have formed new ones, but without the TARP or bail out money there would have been different mergers and aquisitions than what actually happened I think. My husband’s bank was basically forced to take the money on the first round, they didn’t need it really. They had to because they had to make their statements look good so they did not get eaten up by another bank, because banks were taking the money. Kind of like a domino effect.
As far as housing, for me at this point the big question in my mind is, how much does it really cost to build a house? Builders were making huge profits before, if they had not been so greedy, prices would have stayed down, but that’s how the free market tends to work. Of course the lending machine helped them get the high prices, and people were stupid enough to take mortgages there was no way they could afford. It was a perfect storm. At any moment if there was just a little bit more ethical behavior in any of those three, things could have been much different.
@JLeslie Yes. Although I think eventually, the way it was needed to change, and hopefully it will eventually be much better, instead of just massive profiteering by large companies and investors, at the expense of the most people being able to afford to own a home.
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