a simple analogy about the debt ceiling crisis

[wiegie]

Let's hope the Chinese don't mind.

Too bad for them I say:

 

Me Uncle Sam

Me play joke

Me sell you bonds

And now me's broke

[SEC=UGA]

Would someone like to tell me how taxes are job killers when we have right now (with historically low tax rates) the highest unemployment for decades while during a period of higher taxes e.g. the 90s, we had virtual full employment?

 

The creation of a new industry sparked near full employment, it was an industrial revolution of sorts. When that bubble burst, we entered into a recession. We came out of that recession and had a lower tax rate and the US had the highest revenue that it had experienced in the history of the nation, higher than the 90's... and then we dropped into this current economic skull fu(k.

 

Aside from that, both parties are being whiney little bitches about this. They should have jumped on the gang of six plan. THe republicans are being obstinate about raising taxes, the dems are being obstinate about making the necessary cuts to entitlement programs... There you have it, children, children just raising their middle fingers to the collective populace of the US who they claim to be representing.

 

Keep electing these a-holes, both sides, and we'll have nothing left. So keep on bitching and moaning about what Rep. so and so from Arkansas is doing while praising your dude, a dude who is just a culpable for this quagmire we are in as the other dude you are bashing. Keep your blinders on, guys, and keep blaming the other side. It works, oh, so, well....

[SayItAintSoJoe]

IMHO

 

The "Gang of Six" proposal will never become law so it doesn't really matter.

 

The "Cut, Cap, and Balance" bill will never become law so it doesn't really matter.

 

I predict congress along w/ the Pres. will not come to an agreement on how to raise the debt ceiling before 8/2. I hope I'm wrong.

 

 

After hearing tonight's speeches I just wanted to reiterate the above prediction. Plus, the markets will start to react negatively soon; the pres will invoke the 14th amendment; and the debt ceiling will be raised without any cuts; the whole thing will end up in the courts;

[Duchess Jack]

Question:

 

I've heard for a long time now from the Perch's of the world that Obama's policies are killing businesses. When I pointed out how corporations have made more money than ever but still aren't hiring (so much for trickledown), I was given the answer that this is because of uncertainty.

 

So - how come when Obama says that he doesn't want to debate raising the debt ceiling again in six months and waste all this time (again) in mindless partisan bickering because is breeds uncertainty, that uncertainty is suddenly no longer a bad thing for the market. Suddenly his suggestion of uncertainty is about his getting re-elected and the suggested uncertainty has zero to do with the economy?

 

I don't understand the disconnect.

[SEC=UGA]

Question:

 

I've heard for a long time now from the Perch's of the world that Obama's policies are killing businesses. When I pointed out how corporations have made more money than ever but still aren't hiring (so much for trickledown), I was given the answer that this is because of uncertainty.

 

So - how come when Obama says that he doesn't want to debate raising the debt ceiling again in six months and waste all this time (again) in mindless partisan bickering because is breeds uncertainty, that uncertainty is suddenly no longer a bad thing for the market. Suddenly his suggestion of uncertainty is about his getting re-elected and the suggested uncertainty has zero to do with the economy?

 

I don't understand the disconnect.

 

It's political gamesmanship. They'll use the debt ceiling debate prior to the elections to try and bludgeon him. The Republicans (and the Dems, for that matter) no longer give a fu(k what happens to us, they only care about beating up the other guy to get re-elected.

 

Uncertainty with regard to regulatory and monetary policy is killing us, make no mistake about it. There are no indicators that demonstrate a solid recovery is taking hold; 140K jobs created one month, 18K jobs the next. Housing starts up significantly, housing starts down significantly. Durable goods sales up one month, the next they are down. THe economy is moving in fits and lurches, CNN Money gives you some of these examples:

 

NEW YORK (CNNMoney) -- Despite a pick-up in growth at the end of last year, the economy has taken a hard turn for the worse in the last few months.

 

On Friday, the government will report how much the economy expanded in the second quarter -- but don't expect much good news.

 

CNNMoney survey of economists forecasts the economy grew only 1.8% in the second quarter, which would be a slight slowdown from the first quarter, when it grew an already lethargic 1.9%.

 

That sluggishness comes after some encouraging growth of 3.1% in the last quarter of 2010. Things seemed to be moving in the right direction.

 

But then in 2011, the recovery was hit by a series of events, including a precipitous rise in gas prices, natural disasters that disrupted major world economies and a worsening sovereign debt crisis in Europe. And lawmakers' bickering about the debt ceiling here at home certainly hasn't helped either.

 

All of those factors are rattling consumers, whose spending habits alone account for roughly 70% of the nation's gross domestic product.

 

 

Spending takes a hit: Just when spending was finally starting to pick up, consumers pulled back in February, and growth began to slow for the next three months.

 

Can you blame them? During that time, gas prices rose to a national average of $3.98 a gallon, its highest level since 2008, and hit Americans' wallets hard.

 

"Higher gas prices were robbing other areas of spending, and that -- first and foremost -- shows up in GDP," said Ellen Zentner, senior U.S. economist for Nomura.

 

In June, consumer confidence -- as measured by the Conference Board -- hit its lowest level since November.

 

Zentner predicts Friday's report will show consumer spending only picked up 0.6% in the quarter -- less than half the 2.2% rate it grew in the first three months of the year.

 

"That kind of growth represents households that are spending only on necessities," Zentner said. "We don't have households reaching for credit. They're still very much mired in that mind set of paying down debt, rather than taking on debt. And that, on top of a weak labor market, is keeping consumers from spending."

 

Where the jobs are

Job market slumps: The year began on strong footing, with job growth picking up and layoffs tapering off.

 

But then hiring hit a snag in the second quarter, and employers began to tap on the breaks. After adding 497,000 jobs in the first three months of the year, growth started to slow in April. By June, the job market barely showed a pulse.

 

Meanwhile, at least 400,000 Americans file fresh unemployment claims each week and about 14 million people are currently unemployed.

 

Housing double dips: Making matters worse for Main Street, home prices plunged to their lowest level since 2002 earlier this year.

 

While some signs show the housing market has hit bottom, low home prices continue to impact both consumers' spending patterns, and their ability to relocate for jobs, Zentner said.

 

Because of this effect, economists predict residential investment -- which accounts for about 2% of the country's GDP -- slowed in the second quarter.

 

 

Manufacturing slows down: After a solid eight months of accelerating, growth in the manufacturing sector started to slow in March, according to the ISM Manufacturing Index.

 

Recently, several regional reports have also pointed to a manufacturing slowdown and on Wednesday, a government report showed orders for durable goods like aircraft, autos and computers fell in June.

 

Part of the recent weakness could still be due to the impact of Japan's earthquake and tsunami on the global supply chain, but economists also say it appears lower demand is also taking its toll.

 

Fed to the rescue? Not so fast

The few bright spots: Second quarter GDP is basically riding on two key strengths -- a ramp up in business investment and stronger exports, said Jim O'Sullivan, chief economist for MF Global.

 

"Corporate profits are growing even more, and companies have been piling up cash," he said, pointing to reports that show businesses have recently boosted their spending on items like equipment and software.

 

While those strong corporate balance sheets have yet to translate into meaningful job growth for average Americans, business spending accounts for about 10% of GDP -- so it will help the growth numbers look better.

 

Meanwhile, rapid growth in emerging markets like China has also helped U.S. exports pick up. Exports grew rapidly in the second quarter, whereas imports barely changed due to fewer shipments from Japan. That effect is expected to add to the GDP figures, even if it is only temporary.

 

Now, to get back to your question, the Republicans and the Democrats are being contrarian to making a concerted effort for a fix. Democrats won't touch entitlements, Republicans won't raise taxes. It is a complete and utter clusterfu(k right now with bothe sides heading full steam to one of the biggest debacles in our country's history.

 

THis impasse will be resolved, but the final legislation will accomplish nothing but raising the debt ceiling, keeping entitlements in tact, keeping the tax cuts in place, and keeping defense spending bloated. The money "saved" or "cut" will be insignificant enough where no one loses their pet projects and no one upsets their constituency. Further, they will be so insignificant that no real saving will occur, it will merely be savings through creative accounting.

 

Both sides need to have their sacks yanked.

Edited July 28, 2011 by SEC=UGA

[TimC]

Both sides need to have their sacks yanked.

 

When you lead by fear and threats, you will never succeed. Bush tried it, Obama is doing it -- both are equally worthless. It's no way to lead a population. If our economy is threatened to fail every 6 months, wiegie should be out of a job since it our economy is flimsier than wet paper. What an f'n joke.

[Ursa Majoris]

It's political gamesmanship. They'll use the debt ceiling debate prior to the elections to try and bludgeon him. The Republicans (and the Dems, for that matter) no longer give a fu(k what happens to us, they only care about beating up the other guy to get re-elected.

This will no doubt be unpopular but it might be worth examining the electoral system. When everyone is up for election every two years, it is no wonder that almost everything they do is with one and a half eyes on the next election because it's always so damn close.

 

Why not have a House election every four years, not two, maybe in opposite cycle to the presidential election?

[SEC=UGA]

Why not have a House election every four years, not two, maybe in opposite cycle to the presidential election?

 

I'm in. Two term limits would be nice, also. And banning lobbyists. I'm getting close to agreeing with public financing rules, and the abolition of PACs, as well.

[Duchess Jack]

I'm in. Two term limits would be nice, also. And banning lobbyists. I'm getting close to agreeing with public financing rules, and the abolition of PACs, as well.

no doubt. so long as people see their job as "trying to get elected again" nothing is going to change. it would put an end to a lot of old grudges as well.

[MikesVikes]

link

 

We can all thank President Richard Nixon for current debates over the national budget and the debt ceiling. In 1973, the debt ceiling was $465 billion, and debt was set to hit that level in the summer. In order to prevent the government from reaching its debt ceiling, Nixon took it upon himself to “impound” $3.4 billion in Congressionally appropriated funds. During that exertion of his executive power in a situation that should have been left to the legislative branch, he paved the way for the Congressional Budget and Impoundment Control Act of 1974, which established the Congressional budget process we have today and created the Congressional Budget Office in order to limit the president’s power in the future.

 

Of course, the history of the debt ceiling dates back much further, to 1917 and the beginning of U.S. involvement in World War I, when Congress passed the Second Liberty Bond Act in order to raise funds to pay for the war. Since the act implemented the debt ceiling into law, it has been increased 77 times, surprisingly common considering the heated debate in Congress and their inability to make a decision to increase the debt ceiling until they agree on significant budget cuts. In fact, the debt ceiling has already been increase three times during Obama’s presidency, twice in 2009 and once in 2010 when both the House and Senate were led by Democrats.

 

During President George W. Bush’s two terms in office, the debt ceiling was raised 7 times, the first time by a Republican-led House and a Democrat-led Senate in June 2002, the second with a Republican majority in both houses less than a year later, and the final time by a Democratic majority in both houses in November 2008. During Bush’s tenure, the debt ceiling was increased from $5.95 trillion to $11.315 trillion.

 

Historically, both Republican and Democratic leaders have witnessed significant increases to the debt ceiling during their tenure, with lawmakers in both parties coming together to make decisions. During President Clinton’s eight years in office, the debt ceiling was raised four times, from $4.145 trillion to $5.95 trillion, an increase of 43.5%, while the debt ceiling was raised a total of 17 times during President Reagan’s two terms, tripling from $935.1 billion to $2.8 trillion. Even George H.W. Bush saw the ceiling increased four times during his single term in office. Not including the current administration, 16 presidents have served a total of 23 terms in office since the Second Liberty Bond Act was passed. In that time, the debt ceiling was raised 74 times, averaging 3.22 increases per term — nearly once a year.

 

In that time, the closest the government ever came to default was a last minute deal in 1979. Though the deal was finalized in time, computer malfunctions led to $122 million in Treasury payments being delayed, technically amounting to temporary default and thus permanently increasing interest rates by 0.6%, resulting in $12 billion in additional annual debt payments, costing the government roughly $384 billion to date. We can only imagine the toll a default, even temporary, could take on today’s economy.Though majority leadership in both the House and Senate was continually fluctuating, with divisions within and between Houses, between the legislative and executive branches, members of each party, no matter how they were divided or which group was in control, managed to increase the debt (NYSE:TLT) ceiling, while avoiding default, a grand total of 77 times to date.

[WaterMan]

What I find absolutely assinine about this whole issue is how republicans constantly beat the drum that any tax increases are "job killing" tax increases while spending cuts will seemingly have no negative effect on the economy. I'm sorry but if you remove trillions of dollars of economic activity (govt spending) out of the economy you are going to kill demand and kill jobs as well. Potato, potahto. Stop playing politics and acknowledge that all paths will be painful but are necessary. Cut spending and raise taxes. It's a horrible pill to swallow but it needs to be done.

 

Please explain why this is wrong gb. And do it somehow tying Obama into it.

[Yukon Cornelius]

I'm in. Two term limits would be nice, also. And banning lobbyists. I'm getting close to agreeing with public financing rules, and the abolition of PACs, as well.

i am with yah on all counts

[gbpfan1231]

Please explain why this is wrong gb. And do it somehow tying Obama into it.

I am laughing very hard right now.

 

The idiot who posts an average of two words in each reply and for the most part those two words rarely even make sense is telling someone to explain something.

 

Thanks for putting a smle on face today.

[WaterMan]

I am laughing very hard right now.

 

The idiot who posts an average of two words in each reply and for the most part those two words rarely even make sense is telling someone to explain something.

 

Thanks for putting a smle on face today.

 

If you can't explain something to an idiot then...

 

But you are really too easy to rile up.

[gbpfan1231]

If you can't explain something to an idiot then...

 

But you are really too easy to rile up.

Good job - moving that average up - Good job dude.

[WaterMan]

Good job - moving that average up - Good job dude.

 

Unlike DMD, I don't get paid for long articles. Are you going to pay me to type more?

[bushwacked]

Please explain why this is wrong gb.

 

It's apparent he can't.

[Ursa Majoris]

It's apparent he can't.

So it would appear. Not only will failing to raise the debt ceiling kill jobs as well as the US credit rating, it will also add hundreds of billions to the debt through higher interest, so we won't even get anything for our spending.

 

Awesome logic.

[muck]

One of the problems is that NOBODY has published a priority list of who gets paid what if we have limited funds.

 

Is the entire federal government going to cease paying for ALL operations immediately at 12:01am on August 3nd? Or, is the US treasury going to pay some things and not others? The checks that are to go in the mail next week are being printed within the next few days in order to make the mail drops in time to get where they're supposed to go in time.

 

EVERYONE is afraid of publishing a priority list, and that's causing quite a few of the problems.

[muck]

Well, making anonymous comments is better than making no comments at all, I guess.

[Duchess Jack]

I am laughing very hard right now.

 

The idiot who posts an average of two words in each reply and for the most part those two words rarely even make sense is telling someone to explain something.

 

Thanks for putting a smle on face today.

Doesn't it make sense, that if you were trying to make a point, that you'd want to try to explain that point to make sure it was recieved and understood if not agreed upon? The list of reasons why somebody who was trying to make a point would fight explaining themselves is short and unflattering.

[gbpfan1231]

Doesn't it make sense, that if you were trying to make a point, that you'd want to try to explain that point to make sure it was recieved and understood if not agreed upon? The list of reasons why somebody who was trying to make a point would fight explaining themselves is short and unflattering.

I said it a bit earlier that I don't claim to have the answers. I also said that I agree we are in too big of a hole to handle this with only cutting spending. Is that OK for you guys?

 

I also said I am sick of the spending spree that we have been on for a long long time and it sure seems like people don't give that much of a crap and don't have real issues with raising taxes. I am just bitching because I am sick of it. I also don't think raising taxes on the wealthy is fair. Let ALL the people who want to raise taxes pitch in extra and try to cover it but it is just easier to say raise taxes on them not me.

 

Hey Waterman - notice no Obama in this thread so you can now go back to calling people racists and hating on anyone who is actually successful.