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ZRX1200
Herf-A-Holic

3 years ago

#21

GOP blackmail
Janet Yellen
Through the back door
Tax loopholes

You know what a loophole is? Complying with the law. Engaging in this use of language is pathetic just like the guy who’s always wrong PK.

RayR
Herf-A-Holic

3 years ago

#22

That Keynesian Krugman, what a piece of work. Pure rhetorical hogwash. The Republicans are taking "the economy hostage by refusing to raise the federal debt limit"? Really? As lame as the Republican party is, at least they are trying to stem the tide of the ceaseless Democrat Build Back Better spending that WILL destroy the economy.

I always knew he hated the American system of federalism, you know as he wrote that "weird and dysfunctional system in which Congress enacts legislation that determines federal spending and revenue" He especially hates it only when big-spending Keynesians in Congress don't get their way doing unconstitutional spending.
I think he would much prefer a Left-Wing Dicktator to decide how to spend the stolen loot—much simpler that way.

Edited by user 3 years ago | Reason: Not specified

DrMaddVibe
Herf-A-Holic

3 years ago

#23

Pedo Joe and his handlers never though the Republican's in Congress would unite and send over a budget.

They've done their job.

The Senate and the President haven't. They're the same political party.

As a nation we're spending more on the interest than we do for our military.

See the problem yet? No? You NEVER will.

JGKAMIN
Herf-A-Holic

3 years ago

#24

Pedo Joe and his handlers never though the Republican's in Congress would unite and send over a budget.

They've done their job.

The Senate and the President haven't. They're the same political party.

As a nation we're spending more on the interest than we do for our military.

See the problem yet? No? You NEVER will.

DrMaddVibe wrote:

And don’t forget the contributions to the Ukraine…🇨🇮

RayR
Herf-A-Holic

3 years ago

#25

I heard the Demo-Bolsheviks don't need a stinking budget because federal spending and money printing is an open-ended affair they say.

rfenst
Herf-A-Holic Topic Starter

3 years ago

#26

No negotiations ever lead to settlement unless both parties have something at stake. Their commonality is an impending deadline- as it is in most negotiations. I was a Florida Supreme Court Certified Mediator and have participated in an uncountable number of mediations. You know when parties virtually always reach settlement? Lunch or dinner time when both sides are getting hungry and the mediation bill is running up. No difference here, thus far.

RayR
Herf-A-Holic

3 years ago

#27

"...prioritizes interest payments.

Needless to say, the Imperial City fears these three bolded words more than Dracula feared a glittering crucifix. Yet what hangs in the balance is whether even a semblance of fiscal sanity can be recouped based on this primal and only remaining source of budgetary leverage."

Why Grandma Yellen Must Be Forced To Prioritize Spending

By David Stockman
David Stockman's Contra Corner
May 17, 2023

Let’s first reprise the great 2011 debt ceiling showdown. On July 28, just a few days prior to when the Treasury’s borrowing authority would have been exhausted, the yield on the benchmark 10-year UST note stood at 2.98%. And despite months of heated warnings to the freshly elected GOP House majority about its duty to promptly pass a “clean” debt ceiling increase that figure was actually down considerably from the 3.36% yield of early January 2011.

That’s right. As shown below, the whole seven month ordeal on Capitol Hill about the expiring borrowing authority resulted in, well, an irregular but marked decline of the benchmark bond yield.

On July 31st the House GOP famously capitulated, agreeing to a big debt ceiling increase in return for what was advertised to be $2.1 trillion of deficit reductions over the next decade. At that point the yield dropped further to 2.58% on August 5th, the day S&P dramatically cut the UST credit rating from AAA to AA+ after the market closed.

The folks at S&P were apparently not amused by the banana republic “brinkmanship” that had prevailed on Capitol Hill for the better part of the year. So they sternly admonished Washington that—

The downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenge,” the company said in a statement

.Did the yield soar the next week in response to America’s loss of its purported pristine credit rating, as had been warned ad nauseam by the Wall Street and Washington powers that be in the run-up to the crisis?

Why, no, it did not. By year-end 2011 the yield had further fallen to 1.89% and, as shown above, by the first anniversary of the downgrade in early August 2012 it had plummeted to just 1.50%.

Moreover, by the latter point the Y/Y inflation rate was running at 2.0% on our trusty 16% trimmed mean CPI. In effect, one-year after all the debt ceiling strum and drang of 2011 the real yield on the benchmark government security was negative 50 basis points. That is to say, the US government lost its pristine credit rating and was rewarded with tens of billions of annual debt service savings!

It might be argued, of course, that the $2.1 trillion deficit reduction plan which accompanied the GOP debt ceiling capitulation was what caused yields to go down, not up. But that doesn’t wash, either.

These deficit reductions were to be achieved by—

A defense and nondefense discretionary appropriations freeze that was to save $900 billion over ten years;
A further $1.2 trillion of savings from entitlements based on permanent reforms to Social Security, Medicare, Medicaid and Food Stamps etc. via the recommendations of a Joint Select Committee on Deficit Reduction.

More...

https://www.lewrockwell.com/2023/05/david-stockman/why-grandma-yellen-must-be-forced-to-prioritize-spending/

rfenst
Herf-A-Holic Topic Starter

3 years ago

#28

No, the government doesn’t have to pay off its debts like you do. Here’s why.

NYT Opinion by Paul Krugman
Whenever I write about debt and deficits, I receive the same letter — OK, not exactly the same letter, but a number of letters with more or less the same gist. They read something like this: “If I borrow money from the bank, the bank expects me to pay the money back. Why isn’t the same true for the government? Why can we keep borrowing when we already owe $31 trillion?”

Just about every economist will reply that it’s misleading to make an analogy between household and government finances. But it seems to me that we often aren’t clear enough about why, perhaps because we don’t say it bluntly enough. So here’s the difference: You are going to get old and eventually die. The government isn’t.

I don’t mean that governments are immortal. Nothing is, and no doubt someday America will, as Rudyard Kipling put it, be “one with Nineveh and Tyre.” But individuals face a more or less predictable life cycle in which their earnings will eventually dwindle:

(graph)

And lenders therefore demand that individual borrowers pay off their debts while they still have the income to do so.
Governments, on the other hand, normally see their revenues rise, generation after generation, as the economies they regulate and tax grow:

(graph)

Governments, then, must service their debts — pay interest and repay principal when bonds come due — but they don’t necessarily have to pay them off; they can issue new bonds to pay principal on old bonds, and even borrow to pay interest as long as overall debt doesn’t rise too much faster than revenue.

In fact, when governments for one reason or another run up large debts, it is, as far as I can tell, unusual to pay those debts off.

The most famous example, albeit one that many people apparently don’t know about, is the debt America incurred to fight World War II. By the war’s end, this debt was around 100 percent of gross domestic product — roughly comparable to the debt level today. So how did we pay off that debt?

We didn’t. John F. Kennedy entered the White House with federal debt roughly the same as it was on V-J Day:

(graph)

Why, then, wasn’t the 1960 election dominated by questions of how to pay off the national debt? Because while the dollar value of debt hadn’t gone down, economic growth and modest inflation meant that the ratio of debt to G.D.P. had fallen by half:

(graph)

This kind of thing could in some cases happen for an individual family: If people buy a house when they’re young, then make substantial income gains, their mortgage payments may dwindle as a percentage of their income even before the mortgage is paid off. But it’s normal for governments, which can expect to see their tax receipts grow year after year with no end in sight.

Revisiting the story of America’s failure to repay World War II debt, I found myself wondering whether governments borrowing large sums that they never repay could be thought of as a newfangled, dubious innovation — hey, this is the 1950s we’re talking about, but there are people out there who are still predicting doom from F.D.R.’s decision to take us off the gold standard in 1933.

Well, governments have often borrowed to fight wars, sometimes on an impressive scale. By the end of the Napoleonic Wars, the British government’s debt, according to Bank of England estimates, was 184 percent of G.D.P. — far above America’s debt at the end of World War II. Most of that debt, by the way, consisted of consols — perpetual bonds that pay interest forever but never require repayment of principal. Still, even those can be retired. So how did Britain pay off its Napoleonic debt? It didn’t.

Reviewing the whole history of British debt over the centuries would obscure what happened (modern numbers are so large that historical movements become invisible), so let’s zoom out just a little and focus on the period between 1776, when Britain began an expensive colonial war you may have heard about, and 1851, the date of the Crystal Palace exposition celebrating industrial and technological progress:

Sure enough, British public debt when Prince Albert opened the Crystal Palace was basically unchanged from its level when the Duke of Wellington won the Battle of Waterloo 36 years earlier. The idea that we should expect governments to pay off their debt isn’t just ill-informed, it’s also centuries out of date.

In fact, Britain’s willingness to let its Napoleonic debt just sit there is in a way even more remarkable than America’s later willingness to live with its World War II debt. After all, 19th-century Britain didn’t experience sustained inflation, and while it was experiencing economic growth at a rate never before seen in history — hence the Crystal Palace — that growth was still fairly slow by later standards. As a result, debt relative to national income was still quite high in 1851: 130 percent of G.D.P.

Yet as far as I know, panicky moralizing about the debt didn’t dominate British politics, which seemed to adopt the attitude satirized in “1066 and All That”: “The National Debt is a very Good Thing and it would be dangerous to pay it off, for fear of Political Economy.” Instead, the public was preoccupied with issues like the Great Stink of 1858.

In much more recent history, when governments were mistakenly pursuing fiscal austerity in the face of high unemployment, I used to accuse deficit scolds of being obsessed with Victorian virtues. I was, I now realize, being unfair to the Victorians.

So for all those whose instinct is to assume that a responsible government would, like a responsible individual, pay off its debts as soon as it can, again: Governments aren’t like people. If death and taxes are the only sure things in life, well, death isn’t an issue for governments, and taxes are an asset — a growing asset — rather than a liability.

RayR
Herf-A-Holic

3 years ago

#29

Krugman is such a condescending jerk squawking from his perch. It's like he's talking down to a little kid.
So he starts with basically this...Let me tell you little Johnny, the government is not like you or your mommy and daddy, although government isn't immortal, it generally lives much much longer than you mortals before it turns to dust.

So that thing called government is not constrained by time or the laws of economics that mortals are. As a matter of fact, if you mortals failed to pay your debts, especially those debts that the government has arbitrarily decided you owe it, then you could have everything you own confiscated by the government and you may even end up in prison too.

Not government though, it doesn't have to earn its income since its only income is gained by stealing in one form or another.
It's even got better plundering techniques than an organized crime protection racket.
Government plunders primarily by taxation, especially direct taxation of the mortals these days, secondly since the year 1913 (incidently the same year it invented the power of direct taxation through constitutional amendment) it now plunders by the stealth tax of inflation which it does by ever-increasing public debt creation which has exploded since the dollar was disconnected from any honest money limiting factor like gold and silver. The mortals only experience this tax by getting poorer watching the buying power of their fiat money dwindle, although most mortals are unaware of why this happening, many even may have bought into the FED prophaganda that inflation is perfectly normal, don't worry about it.

rfenst
Herf-A-Holic Topic Starter

3 years ago

#30

Debt-Ceiling Standoff Could Start a Recession, but Default Would Be Worse

Economists assess the damage that could occur in three scenarios ranging from a last-minute deal to lengthy impasse

WSJ
Prolonged debt-ceiling squabbling could push the U.S. economy into recession, while a government default on its obligations might touch off a severe financial crisis.

U.S. lawmakers are negotiating over raising the federal government’s borrowing limit and may have just days to act before the standoff reverberates through the economy.

Treasury Secretary Janet Yellen said that the government could become unable to pay bills on time by June 1. In that case, the Treasury Department could halt payments, such as to federal employees or veterans.

In a worst-case scenario, a failure to pay holders of U.S. government debt, a linchpin of the global financial system, could trigger severe recession and send stock prices plummeting and borrowing costs soaring.

Many economists don’t expect a default for the first time in U.S. history. But they outline three potential ways the standoff could affect the economy and financial system, ranging from not great to extremely scary.

Scenario 1: Last-Minute Deal
The economy is already slowing due to rising interest rates, with many forecasters expecting a recession this year. While lawmakers haggle, uncertainty could cause consumers, investors and businesses to retrench, increasing the chances of a recession, said Joel Prakken, chief U.S. economist at S&P Global Market Intelligence.

Workers aren’t likely to lose their jobs, but the unpredictability of the economic outlook could cause them to put off purchases.

Stock prices could start to decline as June 1 nears. In 2011, when Congress raised the debt ceiling just hours before a deadline, stocks fell and took months to recover, Prakken said. In the aftermath, the nation’s credit rating was downgraded.

“Even if we get an agreement before we run out of resources there still could be a legacy effect of the uncertainty that restrains economic growth,” Prakken said.

S&P Global Market Intelligence projected in March that financial turmoil similar to 2011 could slow growth in U.S. gross domestic product to 0.1% in the fourth quarter of this year from a year earlier, from an estimated 0.6% gain otherwise.

Scenario 2: Deal After Deadline
If negotiations extend beyond Thursday June 1, economists expect a more severe reaction from financial markets, as the possibility for default looks more real.

“The shock would tend to accelerate quite rapidly” on June 1, said Gregory Daco, chief economist at Ernst & Young.

If consumers’ retirement and investment accounts suddenly shrink, they could sharply curtail their spending, the lifeblood of the U.S. economy. Businesses could pause hiring and investment plans.

There is a possible window between June 1 and any missed payments. Yellen wrote that the actual date Treasury exhausts its cash could be days or weeks later than estimated. The Bipartisan Policy Center projects Treasury to spend $622.5 billion in June while taking in $495 billion in tax revenue. The exact timing of those inflows and outflows impact cash reserves.

Another possibility is that for a short time, the government gives priority to debt payments over others, such as Social Security benefits. Economists at UBS say that would have a notable, but less-severe, economic impact than a debt default.

They estimate under that scenario GDP would contract at a 2% annual rate in the third quarter, and shrink further in the fourth quarter. Employers would shed 250,000 jobs in the second half of the year.

The silver lining of an economic downturn: Inflation would likely come down, as the Federal Reserve wants. The central bank could also cut interest rates to help offset some of the economic weakness.

Scenario 3: No Deal
If no deal is reached and the government can’t pay all its bills for days or weeks, repercussions would be enormous.

“There would be chaos in the global financial system because Treasurys are so important,” said Wendy Edelberg, an economist at the Brookings Institution. “What happens when that thing that everybody is benchmarking themselves to proves to be one of the riskiest things out there?”

Ernst & Young’s Daco said a default would trigger a recession more severe than the 2007-09 downturn.

The value of Treasurys would fall, as investors sell off and possibly permanently reduce their holdings. Missed payments would disrupt multitrillion-dollar global flows in short-term dollar borrowing, which are critical to how banks and companies fund operations.

Investment funds, companies and banks all hold Treasurys. Their falling value would hammer balance sheets. Recent bank runs were sparked by falling values of Treasury debt, and the declines could be much steeper in a default.

Analysts also say many investors would flee from risky assets of all sorts. The stock market would plummet 45% in the following months, and unemployment would shoot up by 5 percentage points, a White House report said. UBS said a month-long impasse would cause the economy to contract for four-straight quarters.

Treasury yields influence interest rates across the economy, so consumers could see rates jump for credit-card debt, mortgages and auto loans.

Unlike in the 2020 Covid-19 recession—when the economy shed more than 20 million jobs but the government pumped trillions of dollars of stimulus—Washington would be unable to offer support, the White House report said.

rfenst
Herf-A-Holic Topic Starter

3 years ago

#31

See how the national debt grew to $31 trillion

WAPO
The United States owes $31 trillion. Washington now spends about $1 trillion more each year than it collects in revenue, forcing the Treasury Department to borrow to make up the difference. Which means the national debt is still growing.

Without big changes, the debt will soon be bigger as a share of the economy than when it peaked at the end of World War II. Most of that debt has accumulated over the past 20 years. In 2001, the nation actually had a cash surplus — the Treasury collected more in taxes than it spent on government services.

Since then, four presidents, 10 sessions of Congress and two wars have contributed to the tide of red ink. Thanks in part to policy decisions made generations ago, Social Security and Medicare are growing in cost, also adding to the debt. Although interest payments remain low by historical standards as a share of the nation’s economy, that could change quickly.

More recent decisions — budget-busting tax cuts, bipartisan spending deals and staggering sums to cope with the coronavirus pandemic — have all forced the nation to sink more deeply in debt. Here are nine key moments that show how we got here.

The Bush tax cuts | June 7, 2001
$5.7 trillion Total debt
President George W. Bush signs the first of two major tax cuts into law, slashing rates on ordinary income as well as on capital gains and dividends. In 2012, the Congressional Budget Office estimated that the Bush tax cuts added roughly $1.5 trillion to the national debt. The majority of these tax cuts would later be made permanent in a deal between congressional Republicans and President Barack Obama, adding to their cost.

Wars in Iraq and Afghanistan | March 19, 2003
$6.5 trillion Total debt
After the Sept. 11, 2001, terrorist attacks, the United States invades Iraq. America would go on to spend roughly 20 years fighting wars in the Middle East, leading to a surge in spending on the Pentagon and veterans. A Harvard analysis has found that the conflicts in Iraq and Afghanistan cost the nation between $4 trillion and $6 trillion.

Prescription drug expansion | Jan. 1, 2006
$8.4 trillion Total debt
Medicare Part D — a major expansion of Medicare that offered prescription drug coverage to seniors — goes into effect nearly three years after being signed into law by Bush. Republicans who controlled Congress did not pay for the popular, but expensive, initiative.

2008 recession and response | Feb. 17, 2009
$11.1 trillion Total debt
A crisis in financial markets triggers the Great Recession, the worst downturn since the Great Depression. This dramatically expands the national debt in two ways: First, there is a sharp drop in tax collections. Second, there is a big jump in spending on increased unemployment benefits and other programs to help people weather the downturn. Congress and the Obama administration also approved a major economic stimulus package. Brian Riedl, an economist at the Manhattan Institute, estimates the Bush and Obama administrations together enacted about $2 trillion in emergency measures to respond to the financial crisis and the ensuing recession.

Obama-Republican deal to extend Bush tax cuts | Jan. 1, 2013
$16.8 trillionTotal debt
With the Bush tax cuts set to expire amid a sluggish recovery, Obama agrees to make almost all of them permanent, extending tax relief for all but the very richest Americans. Congressional Republicans, in turn, agree to extend some economic stimulus measures. At the time, the Congressional Budget Office estimated the deal would cost roughly $4 trillion over 10 years.

The Trump tax cuts | Dec. 22, 2017
$20.5 trillionTotal debt
President Donald Trump signs a sprawling tax cut bill, centered on a plan to reduce the rate paid by large U.S. corporations from 35 percent to 21 percent. The law also cut taxes for most individual taxpayers. The Joint Committee on Taxation of Congress estimated the measure would cost roughly $1.5 trillion over 10 years. A later analysis by the Committee for a Responsible Federal Budget, a Washington think tank, found the cumulative impact of the law could be closer to $2.9 trillion if Congress votes to extend certain provisions, which are set to expire in different years throughout this decade.

Bipartisan spending deals under Trump | Aug. 1, 2019
$22.7 trillion Total debt
Democrats and Republicans in Congress agree to ramp up federal spending as Trump disregards Republican orthodoxy on shrinking the size of government. It is the second such deal in two years. The spending helps fuel a strong labor market but exacerbates budget deficits. The bills added a combined $2 trillion to the national debt, according to the Committee for a Responsible Federal Budget.

Congress spends trillions in coronavirus emergency response | Dec. 27, 2020
$27.7 trillion Total debt
Trump signs into law the second of what will eventually be three major relief packages approved by Congress in response to the coronavirus pandemic. The first and most expensive is a bipartisan $3.4 trillion deal reached in March 2020, with the U.S. economy in a black hole. Another $900 billion follows in December 2020. In 2021, Democrats under Biden approve an additional $1.9 trillion with no Republican support.

The Biden economic agenda | Aug. 24, 2022
$31 trillion Total debt
Biden announces a $400 billion plan to cancel student debt, which is quickly put on hold while awaiting review by the U.S. Supreme Court. Meanwhile, Biden pushes Congress to spend more on veterans health, physical infrastructure, and government agencies. Biden’s Inflation Reduction Act spends more on an array of other programs, including the Internal Revenue Service, but is projected to slow borrowing by imposing higher taxes on businesses.

Debt totals are according to the Treasury Department via Federal Reserve Economic Data. Amounts represent total debt at the end of the quarter for each moment, not on specific dates. Graphics by Alyssa Fowers. Editing by Mike Madden, Karly Domb Sadof and Kate Rabinowitz. Design and development by Talia Trackim. Copy editing by Anjelica Tan

(Lots of economic supporting graphs omitted)

Edited by user 3 years ago | Reason: Not specified

rfenst
Herf-A-Holic Topic Starter

3 years ago

#32

Liberals Are Persuading Themselves of a Debt Ceiling Plan That Won’t Work

BY Ezra Klein/Opinion Columnist
NYT
The debt ceiling might be the single dumbest feature of American law. Congress decides to spend money and later schedules a separate vote on whether the government will pay its bills. If the government doesn’t pay its bills, calamity ensues.

Moody’s Analytics estimates that even a short debt ceiling breach could cause a recession. An analysis by the White House’s Council of Economic Advisers modeled a more protracted default and foresaw a crash on the order of the 2008 financial crisis: The stock market falls 45 percent, unemployment rises by five points, and America’s long-term borrowing costs are much, much higher. All of this to pay money we already owe and can easily borrow. Madness.

Defenders of the debt ceiling will tell you that the limit has been around a long time and has largely operated to the good. America has never defaulted on its debts, but the debt ceiling has often motivated compromise between the two parties. That may be true, but it’s a bit like saying that since America has won every game of Russian roulette it’s played so far, it should keep playing.

And so I understand — and share — the interest in ways to render the debt ceiling null and void. Democrats should have eliminated the debt ceiling when they held Congress and the White House in 2021 and 2022. But they didn’t.

Now two more unconventional tactics are proving particularly popular in the liberal imagination.

In one, President Biden simply declares the debt ceiling unconstitutional, pointing to the 14th Amendment, which holds that “the validity of the public debt of the United States … shall not be questioned.” Five Senate Democrats, including Bernie Sanders and Elizabeth Warren, are circulating a letter calling on Biden to do just that. On Friday, 66 progressive congressional Democrats sent the president their own letter making a similar case.

In the other, the Treasury Department uses a loophole in a 1997 law to mint a platinum coin of any value it chooses — a trillion dollars, say — and uses the new money to keep paying the government’s debts.

In remarks after a meeting with House Speaker Kevin McCarthy, Biden said he was “considering” the argument that the debt ceiling is unconstitutional. The problem, he continued, is that “it would have to be litigated.” And that’s the problem with all these ideas and why, in the end, it’s doubtful that Biden — or any Democrat — will try them.

The legality of the debt ceiling or a trillion-dollar platinum coin doesn’t depend on how liberals read the Constitution or the Coinage Act. It depends on how three conservatives read it: John Roberts, Brett Kavanaugh and Neil Gorsuch, who are the closest the Supreme Court now comes to having swing justices.

It’s easy enough to come up with counterarguments that conservative justices are likely to find persuasive. Michael McConnell, a former judge on the U.S. Court of Appeals for the 10th Circuit, to which he was appointed by President George W. Bush, just offered one in these pages. “For the United States to fail to pay interest or principal on its debt would be financially catastrophic, but it would not affect the validity of the debt,” he wrote. “When borrowers fail to make payments on lawfully incurred debt, this does not question the validity of those debts; their debts are just as valid as before. The borrowers are just in default.”

The coin gambit is similarly easy to poke holes in if one wants to. Preston Byrne, a partner at the law firm Brown Rudnick, notes that the Supreme Court has often looked at statutes for which a simple reading of a limited law would seem to grant the executive almost unlimited powers. In many such cases, the court struck down those readings. Congress, the court has said, does not “hide elephants in mouse holes.”

My point is not that more conservative readings of these laws are right in some absolute sense. It’s that no such absolute sense matters. We just watched this Supreme Court wipe out decades of precedent to overrule Roe. It has repeatedly entertained cases that even conservative legal scholars thought farcical just a few years earlier. I still remember Orin Kerr, a law professor who clerked for Justice Anthony Kennedy, telling me at the beginning of the Obamacare case that there was “a less than 1 percent chance that the courts would invalidate the individual mandate,” only to update that to a “50-50 chance” as the court prepared to rule.

The Supreme Court does what it wants to do. Does it want to let the Biden administration dissolve the debt ceiling using a novel legal theory?

If testing the question wouldn’t cost anything, there would be no harm in trying. But I don’t think it is. The strength of the Biden administration’s political position is that it stands for normalcy. The debt ceiling has always been raised before, and it must be raised now. But if the administration declares the debt ceiling unconstitutional, only to have the Supreme Court declare the maneuver unconstitutional, then Biden owns the market chaos that would follow. Who will voters blame in that scenario? Republicans, who say they just wanted to negotiate over the budget, as is tradition? Or Biden, who did something no other president had done and failed?

Right now the positions are clear. The White House is open to budget negotiations but opposed to debt ceiling brinkmanship. Republicans are the ones threatening default if their demands are not met. They are pulling the pin on this grenade, in full view of the American people. Biden should think carefully before taking the risk of snatching it out of their hands and holding it himself.

Edited by user 3 years ago | Reason: Not specified

DrMaddVibe
Herf-A-Holic

3 years ago

#33

I stopped reading that after the words "Liberals Persuading".

Yeah, No.

Not only no, F@CK NO! The insanity has to stop with the spending. As a nation we're spending more on the interest of our debt than we do the entire military budget.

rfenst
Herf-A-Holic Topic Starter

3 years ago

#34

DrMaddVibe wrote:

LOL. The article is about why some liberals are dead wrong. Thought you'd love that. Reading must be a drag!

BTW, what is the proper ratio of the interest payment on our debt to the entire military budget? Why does that particular ratio even matter?

Isn't being able to pay BOTH, as well as other obligations, critically important?

Read #48 for an opposing view about whether the debt limit even maters in his opinion.

Edited by user 3 years ago | Reason: Not specified

RayR
Herf-A-Holic

3 years ago

#35

It's pretty funny how Biden is considering "invoking the 14th Amendment", where most people haven't got a clue to its origins or intent as a post-War to Prevent Southern Independence fabrication by the original one-party rule American Leftists—the Radical Republicans.

DrMaddVibe
Herf-A-Holic

3 years ago

#36

rfenst wrote:

Some??? Haven't seen one hit a dart board with logical business sense yet.

Reading is essential. Garbage in garbage out though, as evidenced with you promoting Krugman from the NYT! Both are non-starters from the git-go.

The ratio per se isn't that important, however you have to look at what we're doing with the money and it's wasteful. Having a well (even though ours is woke and will weaken us...just watch!) funded military is essential.

We should take a sledgehammer to nations we give money to that actually hate us. Then there's the stupid crap that Biden is doing say in Ecuador (https://www.newsweek.com/fact-check-biden-administration-funding-drag-shows-ecuador-1753649) or Afghanistan (https://defconnews.com/2023/05/09/obiden-regime-still-shoveling-u-s-taxpayer-money-into-afghanistan/). You don't have to look too hard to see where the stupid is on display with taxpayer dollars. Didn't the Taliban get enough money from the US taxpayer???

RayR
Herf-A-Holic

3 years ago

#37

DrMaddVibe wrote:

Robert must think that the only valid opinion and news come from newspapers, left-leaning ones at that.
Are we supposed to believe Ezra Klein who is of the LEFT is making some stinging criticism of some "liberals" because he thinks that some "liberals" are barking up the wrong tree pushing that "novel legal theory" based on Section 4 of the 14th Amendment to blow the roof off the debt ceiling? The truth is the JACOBIN LEFT will stop at nothing to achieve Ill-gotten gains of power and wealth, so none of their novel ideas to that end surprise.

Yes, I noticed too that Klein makes no criticism of wasteful, or even unconstitutional spending promoted by some "liberals".
Maybe he's just like Krugman and never really saw government spending he didn't like.

Edited by user 3 years ago | Reason: Not specified

rfenst
Herf-A-Holic Topic Starter

3 years ago

#38

Traders anxious about a possible government default are shunning U.S. Treasury bills, generally considered the world’s safest investment.

WSJ
They’re saying goodbye to Treasurys that will mature over the next several months while paying a premium to buy debt issued by Microsoft and Johnson & Johnson, two of the highest-rated U.S. companies. The result is—yes, you’re reading this correctly—corporate bonds trading at a yield discount to Treasurys. Wall Street’s uncertainty about the fate of Washington’s debt-ceiling negotiations also sent U.S. stocks falling. Meanwhile, President Biden is trapped in a lose-lose situation. If Democrats and Republicans fail to make a deal to raise the debt limit and the government is unable to pay its bills—an outcome expected as early as June 1—he’ll have a possible recession and the potential for global financial chaos hanging over his head as he runs for reelection. If Biden comes to an agreement with House Speaker Kevin McCarthy, critics will accuse the president of backtracking on his refusal to bargain over the borrowing limit.

So, investors believe some American corporate debt is less risky than U. S. Treasury Bills and will take on the corporations' risk- such that the interest rate on Treasury Bills has or will have to increase to attract buyers- and this in turn will result in a fall in the value of U.S Treasury Bonds. Bad news for a Treasury Bill owners whose Bills mature over the next several weeks, at least.

RayR
Herf-A-Holic

3 years ago

#39

Lies Lies Lies...Yes, we've seen this movie before. It always ends badly for the proles.

Three Lies They're Telling You about the Debt Ceiling

Ryan McMaken

Negotiations over increasing the federal debt ceiling continue in Washington. As has occurred several times over the past twenty years, Republicans and Democrats are presently using increases in the debt ceiling as a bargaining chip in negotiating how federal tax dollars will be spent.

Most of this is theater. We know how these negotiations always end: the debt ceiling is always increased, massive amounts of new federal debt are incurred, and federal spending continues its upward spiral. In fact, since the last time we endured a major debate over the debt ceiling—back in 2013—the national debt has nearly doubled, soaring from $16.7 trillion ten years ago to $32 trillion in 2023. Over that same period, federal spending has increased more than 80 percent from $3.4 trillion in fiscal year 2013 to $6.2 trillion in fiscal year 2022.

So here we are again with policymakers essentially discussing how long it will take for the national debt and federal budget to double again. As far as Washington is concerned, that's all fine. The debt ceiling will rise sizably. We know this because what really matters—as far as DC policymakers are concerned—is that the taxpayer gravy train never stops. Equally important is that the federal government not default on any of its massive debt to ensure continued access to cheap debt—and thus massive amounts of deficit spending—now and forever.

To take this narrative at face value, however, we have to buy into some big myths that policymakers are quite enthusiastic about repeating. These lies persist because the regime needs to convince the voters and the taxpayers that no matter what happens, no major changes to the tax-and-spend status quo can ever be allowed to occur. Let's look at three of those myths now.

More...

https://mises.org/wire/three-lies-theyre-telling-you-about-debt-ceiling

HockeyDad
Herf-A-Holic

3 years ago

#40

The Democrats recently had control of the House, Senate, and Presidency. Has anyone asked why they did not eliminate the debt ceiling or just raise it to $60 trillion?

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