A Republican Speaks To The Debt Limit

[1sickbastard]

How to Freeze the Debt Ceiling Without Risking Default
Next year, the government will have 10 times more income than it needs to honor its interest obligations.


By PAT TOOMEY

As members of Congress debate whether to raise the U.S. debt ceiling—the limit on our government's debt—we should all agree on at least one thing: Under no circumstances is it acceptable for the U.S. to default on its debt. Not only are we morally obligated to honor our debts, but we benefit greatly from the nearly universal conviction that those who lend to us will always be repaid, on time and in full. We should never undermine that conviction.

Fortunately, even if Congress doesn't raise the debt ceiling, a default on our debt need not follow when our borrowings reach their limit in the next few months. I intend to introduce legislation to make sure of this.

For months, some political leaders and commentators have argued that failure to raise the debt ceiling would necessarily cause the U.S. to default on its debt. President Obama's Council of Economic Advisors chairman, Austan Goolsbee, recently warned, "If we get to the point where you've damaged the full faith and credit of the United States, that would be the first default in history caused purely by insanity. I don't see why anybody's talking about playing chicken with the debt ceiling."

In fact, if Congress refuses to raise the debt ceiling, the federal government will still have far more than enough money to fully service our debt. Next year, for instance, about 6.5% of all projected federal government expenditures will go to interest on our debt, and tax revenue is projected to cover about 67% of all government expenditures. With roughly 10 times more income than needed to honor our debt obligations, why would we ever default?

To make absolutely sure, I intend to introduce legislation that would require the Treasury to make interest payments on our debt its first priority in the event that the debt ceiling is not raised. This would not only ensure the continued confidence of investors at home and abroad, but would enable us to have an honest debate about the consequences of our eventual decision about the debt ceiling.

If we do not raise it, the government's tax revenue will enable us to fund roughly two-thirds of projected expenditures, including interest payments. Without the ability to borrow the other third, spending cuts would be sudden and severe: Projects would be postponed, some vendor payments would be delayed, certain programs would be suspended, and many government employees might be furloughed. Default would easily be avoided, but these cuts would certainly be disruptive. That's why I hope we can avoid this scenario.

But it would be even worse simply to raise the debt ceiling without regaining control of federal spending. The recent surge in spending, both in absolute dollars and as a percentage of our GDP, has driven us to record deficits and an explosion of debt. The growth in discretionary spending has been the most dramatic, but in the future mandatory entitlement spending will be the deficit driver. Congress must address both in order to put the government back on a sustainable fiscal path.

The vote on whether to raise the debt ceiling—and, if so, by how much—is our best opportunity to insist that any increase in our nation's debt be coupled with concrete steps toward fiscal sanity. Congress should make increasing our debt contingent on immediate cuts in spending and effective reforms of the spending process that helped get us into this mess.

For too many years, Congress has ignored or exacerbated the looming fiscal crisis created by overspending. Last fall's elections were largely a call to finally deal with this imminent threat, and the vote on the debt ceiling is Congress's opportunity to begin making real progress. We can do so without jeopardizing the full faith and credit of our country—and we should.

http://online.wsj.com/article/SB100...6089963912388314.html?mod=WSJ_Opinion_LEADTop

Sounds nice in theory, but reality is that not a single fucking politician in congress is gonna risk re-election by making their contituents do without. & I'm not talking about the welfare, foodstamps, unemployment benefits or social security. The cuts in funding will directly impact unemployment rates (sending them higher) and wages (sending them lower).

Y'all can argue and disagree whether this scenairo may or may not be the case & it won't matter.
The simple perception that it MIGHT be the case will keep those gutless douchbags from doing anything of substance, even the the much vaunted 'tea-baggers'.

 

[moman75]

I see no problem, the stock market is doing great.

Gee....I wonder why that is? Surely it has nothing to do with the Fed printing money......nahhhh!

 

[koalabear]

I know, I'm making money hand over fist and wondering how long it can last.

11,830.48Down-159.35

 

[rosco rathbone]

11,830.48Down-159.35

I can't watch!

*looks through fingers

 

[unregistered]

 

[koalabear]

I can't watch!

*looks through fingers

You just had to mention how good you were doing in it.

 

[mercury14]

Once drastic cuts are made, and they do need to be made, there is no solution without them, more revenue can be directed at the principle.

So... Why don't your beloved Republicans cut their way out of this mess? How come they can't cut shit? Yes I know someone floated a plan to cut $250 billion per year, but that plan hasn't been picked over by the legislature yet and isn't a realistic number. And of course it's not nearly large enough to allow us to pay down the debt anyway.

 

[mercury14]

11,830.48Down-159.35

Too bad even with that dip the market is still way up. Watch what happens when Egypt settles down, mkay? Besides, I'm sitting on a bucket of cash and needed the dip to buy in more.

 

[coastal-boy]

I don't have to try anything, events will prove it out. Reducing the cost of government to the private sector will be a shot in the arm to the free market, which is the only entity capable of producing us out of this tremendous burden, that is not to say it can be done overnight. Major sacrifice is on the horizon whether we impose it, or it is imposed on us by economic reality.

events will prove it? How about showing one other example where cutting the Govt by 1/3 will provide a "boost" to private sector. One. Again...what "jobs" will the private sector provide to these Fed employees that get cut this yr?

I don't think you get it. The private sector's profits are being eaten alive by rising health care costs. Where is this "profit"? You should do a quick search for "corporate taxes" and actually see what proportion of the Fed revenue comes from the "free market". The Federal income comes from the individual. Lay off 1/3 of all Federal employees....what "income" will there be left?

 

[mercury14]

events will prove it? How about showing one other example where cutting the Govt by 1/3 will provide a "boost" to private sector. One. Again...what "jobs" will the private sector provide to these Fed employees that get cut this yr?

I don't think you get it. The private sector's profits are being eaten alive by rising health care costs. Where is this "profit"? You should do a quick search for "corporate taxes" and actually see what proportion of the Fed revenue comes from the "free market". The Federal income comes from the individual. Lay off 1/3 of all Federal employees....what "income" will there be left?

The fact that the unemployment rate and welfare lists would skyrocket after a 1/3 layoff doesn't enter their minds. They have their heads in the sand...

The fact that government probably couldn't function in a lot of ways is something they refuse to consider as well. That and the fact that America doesn't want to have 1/3 fewer EMS crew members in their community.

 

[koalabear]

Too bad even with that dip the market is still way up. Watch what happens when Egypt settles down, mkay? Besides, I'm sitting on a bucket of cash and needed the dip to buy in more.

You do realize a bucket doesn't hold much cash. Moron

 

[mercury14]

You do realize a bucket doesn't hold much cash. Moron

I fill mine with 1 million dollar bills.

But no seriously we're making a crap ton of money right now. Sorry you're left out in the cold again. Maybe you could resort to some second amendment solutions to make a buck sometime?

 

[koalabear]

I fill mine with 1 million dollar bills.

But no seriously we're making a crap ton of money right now. Sorry you're left out in the cold again.

I'm just warm as toast.

 

[Liar]

Is this graph a more-or-less accurate description of the situation?

Kill all old people and reduce the military by half. Problem solved.

 

[mercury14]

I'm just warm as toast.

Nobody believes you. A man who's warm as toast right now because of the market wouldn't be a harbinger of economic doom and gloom at every turn. Sorry, you have no credibility.

People with money on the market don't go around pointing out every dip, taking every opportunity (real or fake) to point out that people are losing money. You're a joke and you're probably pretty poor.

 

[koalabear]

Nobody believes you. A man who's warm as toast right now because of the market wouldn't be a harbinger of economic doom and gloom at every turn. Sorry, you have no credibility.

People with money on the market don't go around pointing out every dip, taking every opportunity (real or fake) to point out that people are losing money. You're a joke and you're probably pretty poor.

What you call money is chicken feed, you have already posted you think being able to buy a Mercedes means you are rich, Moron.

 

[mercury14]

What you call money is chicken feed, you have already posted you think being able to buy a Mercedes means you are rich, Moron.

Quote me, liar.

 

[koalabear]

Quote me, liar.

The Fed is pumping 600 bil into the economy to increase the speed of the recovery.

And sorry, the market has been on an upward trend now for over a year-and-a-half. You're choosing to ignore this fact and take a tiny segment of that time (when the market went up sharply) and make a negative generalization about the recovery.

Shrug. Keep your assets in low-risk places if you wish. The rest of us will be making money during the recovery. I'm about to go double a large investment I made in Red Hat (ticker: RHT).

And yes I could buy a Mercedes with my profit.

http://forum.literotica.com/showpost.php?p=36016407&postcount=3500

 

[mercury14]

The Fed is pumping 600 bil into the economy to increase the speed of the recovery.

And sorry, the market has been on an upward trend now for over a year-and-a-half. You're choosing to ignore this fact and take a tiny segment of that time (when the market went up sharply) and make a negative generalization about the recovery.

Shrug. Keep your assets in low-risk places if you wish. The rest of us will be making money during the recovery. I'm about to go double a large investment I made in Red Hat (ticker: RHT).

And yes I could buy a Mercedes with my profit.

http://forum.literotica.com/showpost.php?p=36016407&postcount=3500

Quote me where I said "if you can buy a Mercedes, you're rich". The quote above says nothing like that.

Liar.

 

[koalabear]

Quote me where I said "if you can buy a Mercedes, you're rich". The quote above says nothing like that.

Liar.

"And yes I could buy a Mercedes with my profit."

and what does that imply Gomer? You need not answer, you may want to go to the gloom and doom thread and edit out your gloating. You Moron.

 

[Luk]

"And yes I could buy a Mercedes with my profit."

and what does that imply Gomer? You need not answer, you may want to go to the gloom and doom thread and edit out your gloating. You Moron.

How does that imply anything let alone him saying he was rich? You fucked up and much like vette are to much of a coward to admit as much.

 

[mercury14]

How does that imply anything let alone him saying he was rich? You fucked up and much like vette are to much of a coward to admit as much.

Just look how much is *pains* him to admit he was wrong. So he just keept making things up that never happened.

 

[jeninflorida]

Just look how much is *pains* him to admit he was wrong. So he just keept making things up that never happened.

why can't you admit being wrong, 99% of the time?