Poll

10 votes (35.71%)
18 votes (64.28%)

28 members have voted

AZDuffman
AZDuffman
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July 15th, 2011 at 2:22:10 PM permalink
No, it does not. Imagine if Capital One (or whoever) shut off your credit card because you were at your limit. You still pay your credit card, car payment, insurance, and mortgage. As cash flow is tight, you call the guy who mows your lawn and say, "Sorry, Bo, I need to cut back, cash flow is tight." You may feel bad since he has been a good contractor, but did you default? NO.

On the debt subject, looks like the left realizes it is losing the argument as the race card has been played. http://www.realclearpolitics.com/video/2011/07/15/dem_congresswoman_blames_debt_ceiling_fight_on_obamas_race.html. I find her speech pathetic and wonder where she was when Obama himself voted against raising the debt limit in 2006? Maybe someone should tell her those who want respect give respect?
All animals are equal, but some are more equal than others
AZDuffman
AZDuffman
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July 15th, 2011 at 2:30:33 PM permalink
Quote: Wizard


By the way, I think this crisis illustrates that the so-called Social Security trust funds do not exist. Otherwise we could borrow from them for at least a short-term solution.



Not totally sure about this, but didn't the "trust fund" go negative cash flow this year or last? IOW, instead of all the FICA deduction money going to pay benefits then the excess contributions Treasury Securites now the FICA deductions do not cover current benefits and the SSA now has to redeem its holdings (special issues payable on demand with no penalties) to meet monthly obligations. I thought I heard this and I thought I heard it happened a few years ahead of forecast.

A question for Wiz--when you did acturial predictions was it mostly the aging of the population or did the economy come into play. And for that matter, how much did you change your predictions for a slowing economy causing more people to take partial benefits early? Just curious.
All animals are equal, but some are more equal than others
Nareed
Nareed
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July 15th, 2011 at 2:32:39 PM permalink
Default means to stop payments on a debt previously contracted or assumed. usually this means you don't pay the bank for a credit they extended you, be it a loan, mortgage or credit card. If you miss a payment now and then, it's not default so long as you intend to keep paying. Most banks require you to miss several payments in a row before they deem you to ahve defaulted on the debt.

For countries it can be more complex, because while they may own money to banks all too often they owe it to another country. Sometimes to a government, sometimes to a bank or banks which extended credit backed by a governmetn (remember the loan gurantees to Mexico in the mid-90s?), sometimes to a combination of both.

In the US, and to a lesser extent in other countries, the debt is owed to people, institutions or countries who've purchased debt instruments like bonds. I think all the US sovereign debt is in the form of such instruments, not outright laons from banks or other governments. But these isntruments are owned by banks, brokerages, individuals and the governments of other countries. And to complicate matters more, as has been said the US owes some of that money to itself (or rather one aprt of the government owes them to another part)

Default then would be if the US stopped paying what the government owes in such instruments.

BTW raising the debt ceiling means granting the Dept. of the Treasury to issue more bonds and such.
Donald Trump is a fucking criminal
Calder
Calder
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July 15th, 2011 at 5:14:13 PM permalink
Quote: thecesspit

I would suspect the knife to much sharper under a Republican leadership to cut deep into certain areas very easily, but never make a tough decision to raise taxes



I'd argue that politically, raising taxes is far easier than cutting spending. There is always some billionaire not "paying his fair share", or an evil corporation "exploiting hardworking taxpayers through tax loopholes." The tax raisers are lauded as being courageous.

Spending cuts generate news accounts of the working poor no longer able to heat their apartments, and throwing grandma into the streets. Tax cutters are Scrooges.
AZDuffman
AZDuffman
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July 15th, 2011 at 5:44:10 PM permalink
Quote: Calder

I'd argue that politically, raising taxes is far easier than cutting spending. There is always some billionaire not "paying his fair share", or an evil corporation "exploiting hardworking taxpayers through tax loopholes." The tax raisers are lauded as being courageous.

Spending cuts generate news accounts of the working poor no longer able to heat their apartments, and throwing grandma into the streets. Tax cutters are Scrooges.



This is sadly so true. Lately the game the left has been playing is saying "Americans want higher taxes, polls show it!" But it is about taxes on someone else and it seems about 40% of this country has gotten very greedy to the point they are happy someone else's taxes go up.
All animals are equal, but some are more equal than others
thecesspit
thecesspit
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July 15th, 2011 at 5:46:14 PM permalink
Hmm, if that were the case, wouldn't the removal of the Bush tax breaks be sailing through congress/the Senate?

I think both are hard to do, and it depends on the prevailing wind whether it's tax hikes or spending cuts that political will is there for. I have no idea what the mood of the US public as a whole is for either choice (or both).
"Then you can admire the real gambler, who has neither eaten, slept, thought nor lived, he has so smarted under the scourge of his martingale, so suffered on the rack of his desire for a coup at trente-et-quarante" - Honore de Balzac, 1829
EvenBob
EvenBob
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July 15th, 2011 at 5:55:27 PM permalink
Quote: guido111



On PAPER, SS looks good,



It looks like a giant Ponzi scheme, which it is. Have a lot of people pay in to support a small number of people at the top. Squander whats left over. When the people at the top outnumber those paying in, it tips over and there's nothing left because its all been stolen. I remember reading this 30 years ago, so they knew it was happening, while it was happening. Mark Twain said all politicians are crooks, steal as much as they can while in office, and leave the problems for the next guy. And that was 125 years ago, long before SS.
"It's not enough to succeed, your friends must fail." Gore Vidal
AZDuffman
AZDuffman
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July 15th, 2011 at 6:29:11 PM permalink
Quote: thecesspit

Hmm, if that were the case, wouldn't the removal of the Bush tax breaks be sailing through congress/the Senate?

I think both are hard to do, and it depends on the prevailing wind whether it's tax hikes or spending cuts that political will is there for. I have no idea what the mood of the US public as a whole is for either choice (or both).



Where have you been? If not for procedural rules (ie: cloture) the Democrats would have erased the Bush Cuts their first month in office. In 1993 they were applauding and cheering right on the floor when they raised taxes. You cannot get a Democrat to talk for five minutes on camera without them saying they want to raise taxes.

And in 2001 look at all the uproar over cutting taxes in the first place--when we had a surplus!

The hidden and unexpected beauty of the Bush Cuts is the way the "expiration" packages them. When one cut expires they all expire. Obama couldn't just let them expire on some people and not on others. And the moment most people's paycheck was smaller he would have gotten blamed.
All animals are equal, but some are more equal than others
thecesspit
thecesspit
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July 15th, 2011 at 6:47:04 PM permalink
Quote: AZDuffman

Where have you been? If not for procedural rules (ie: cloture) the Democrats would have erased the Bush Cuts their first month in office. In 1993 they were applauding and cheering right on the floor when they raised taxes. You cannot get a Democrat to talk for five minutes on camera without them saying they want to raise taxes.



Up in Canada. I'm not denying that Democrats want to raise taxes, I'm just saying if it was easy they'd have passed already. It's obviously not easy to raise taxes, due to a variety of reasons.


Quote:

And in 2001 look at all the uproar over cutting taxes in the first place--when we had a surplus!



Yet the tax cuts happened, right? Meaning it's possible to cut taxes (this doesn't surprise me...).

I'm only taking issue with the statement it's easier to raise taxes than cut services. I'm not convinced either are easy if the prevailing will of the parties in power are against them. This isn't meant to be a party political statement, and I'm making no value judgement on whether taxes should be raises, spending cut or the entire eastern seaboard of the US sold to China in return for cancellation of the debt.

Quote:

The hidden and unexpected beauty of the Bush Cuts is the way the "expiration" packages them. When one cut expires they all expire. Obama couldn't just let them expire on some people and not on others. And the moment most people's paycheck was smaller he would have gotten blamed.



Cunning. Very cunning. I don't expect anyone to bite the bullet and let them all expire.
"Then you can admire the real gambler, who has neither eaten, slept, thought nor lived, he has so smarted under the scourge of his martingale, so suffered on the rack of his desire for a coup at trente-et-quarante" - Honore de Balzac, 1829
ItsCalledSoccer
ItsCalledSoccer
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July 15th, 2011 at 6:54:55 PM permalink
Quote: Wizard

I agree with SOOPOO, but still voted "yes." If the government can't borrow more money then spending at the current rate will exceed tax revenue. However, as SOOPOO said, that doesn't mean it can't pay all its debts. It could still pay most of them. In the short term it could cut non-essential spending. However, eventually, it would not be able to cover in full obligations like Social Security and interest payments. That is why I voted "yes." Had the question been phrased as meeting its obligations on Aug 2, I would have voted "no."

By the way, I think this crisis illustrates that the so-called Social Security trust funds do not exist. Otherwise we could borrow from them for at least a short-term solution.



I'm sure this is an oversight on your part ... spending at the current rate is already exceeding tax revenue, hence the "need" to increase the debt limit. Not increasing the limit would mean that the government can no longer spend at at a rate that exceeds tax revenue without breaking the law. Which means, they have to decide what they will spend the money on.

Anyone else still having withholding, MED, and OESA taken out of their paycheck? If so, who is collecting that money? If it's the government, then the government is still bringing in revenue.

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