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Obama aide: Debt limit fight could be "catastrophic"

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Obama aide: Debt limit fight could be catastrophic | Reuters

Republicans, who will take control of the House of Representatives this week, are demanding spending cuts to curb the $1.3 trillion budget deficit and several have said they would oppose a higher debt ceiling if Obama does not agree to a range of painful cuts.

White House economic adviser Austan Goolsbee accused Republicans of "playing chicken" with the nation's financial credibility.

"This is not a game. You know, the debt ceiling ... is not something to toy with," Goolsbee told the ABC News program "This Week." "If we hit the debt ceiling, that's ... essentially defaulting on our obligations, which is totally unprecedented in American history."

"The impact on the economy would be catastrophic. I mean, that would be a worse financial economic crisis than anything we saw in 2008," he said.

Without a vote by Congress to raise the limit on government borrowing, the Treasury Department could bump up against the current $14.3 trillion debt limit. Treasury has estimated the limit could be reached during the first or second quarter of this year.

Republican Rep. Michele Bachmann of Minnesota told CBS' "Face the Nation" Republicans were not looking to shut the government down but they do want to cut spending so the debt limit does not have to be raised "continually."

Congress has raised the debt ceiling six times in the last three years to keep pace with our deteriorating financial situation. It is currently pegged at $14.3 trillion, but to put this in perspective, a little over three years ago the debt limit was less than $9 trillion.

It seems the Democrats solution (yes, I blame the Democrats for the last 6 increases, as they were in control and the vote was along party lines), to the problem of spending beyond our means... is to simply increase or credit limit and keep spending.

The GOP wants to end this practice, and the Obama administration considers that possibly catastrophic. Typical.
 
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This is crazy. this would be like me saying every time I get close to the limit on my credit cards, instead of paying them down, I call and have them raise the limits.....

j-mac
 
I'm hoping for "catastrophic".
 
Obama aide: Debt limit fight could be catastrophic | Reuters



Congress has raised the debt ceiling six times in the last three years to keep pace with our deteriorating financial situation. It is currently pegged at $14.3 trillion, but to put this in perspective, a little over three years ago the debt limit was less than $9 trillion.

It seems the Democrats solution (yes, I blame the Democrats for the last 6 increases, as they were in control and the vote was along party lines), to the problem of spending beyond our means... is to simply increase or credit limit and keep spending.

The GOP wants to end this practice, and the Obama administration considers that possibly catastrophic. Typical.
i'll agree, we need cuts....but where...if the repubs think that they are going to force a bunch of cuts in social programs, they are deluding themselves...they will have to put some serious skin in the game as well, and they will have to take some huge cuts in areas that are traditional republican favorites, such as defense spending...and while cutting spending, there will have to be a raise in taxes somewhere, and that is something repubs will have to be willing to accept, if we are ever going to get serious about bringing the deficit/debt down.
 
Reminds me of the days when Clinton was trying cut back and was fought on it every inch of the way by the same people who now think it's a good idea. Better late than never I suppose.

I really don't expect the debt to get cut. I just expect it to get shifted to republican interests where the rich get richer and the poor gets poorer.

Business as usual in D.C. Can't wait for fishing season to start up again.
 
i'll agree, we need cuts....but where...if the repubs think that they are going to force a bunch of cuts in social programs, they are deluding themselves...they will have to put some serious skin in the game as well, and they will have to take some huge cuts in areas that are traditional republican favorites, such as defense spending...and while cutting spending, there will have to be a raise in taxes somewhere, and that is something repubs will have to be willing to accept, if we are ever going to get serious about bringing the deficit/debt down.

i do not disagree with anything you just said.
 
i'll agree, we need cuts....but where...if the repubs think that they are going to force a bunch of cuts in social programs, they are deluding themselves...they will have to put some serious skin in the game as well, and they will have to take some huge cuts in areas that are traditional republican favorites, such as defense spending...and while cutting spending, there will have to be a raise in taxes somewhere, and that is something repubs will have to be willing to accept, if we are ever going to get serious about bringing the deficit/debt down.


We could start with Union pension liabilities, long before we hit defense. Also, let's take a look at those social programs. Start with the Medicare unfunded liability, I believe it is in the hundreds of trillions now.

j-mac
 
We could start with Union pension liabilities, long before we hit defense. Also, let's take a look at those social programs. Start with the Medicare unfunded liability, I believe it is in the hundreds of trillions now.

j-mac
not gonna happen if you wish the repubs to stay in power, there cannot be any sacred cows if we are going to get serious ...both sides are going to want political cover for any massive cuts
 
not gonna happen if you wish the repubs to stay in power, there cannot be any sacred cows if we are going to get serious ...both sides are going to want political cover for any massive cuts

Time to make hamburger out of those cows.
 
… I blame the Democrats for the last 6 increases …

It really doesn't matter who you blame for it, the debt ceiling will be increased by the 112th Congress because failure to do so would be a failure to govern this nation responsibly.

“We are required to do this now in order to avoid a national fiscal calamity.” — Former House Majority Leader Dick Armey¹
 
It really doesn't matter who you blame for it, the debt ceiling will be increased by the 112th Congress because failure to do so would be a failure to govern this nation responsibly.

“We are required to do this now in order to avoid a national fiscal calamity.” — Former House Majority Leader Dick Armey¹

I see it in the direct opposite way. Continuing to raise the debt ceiling is irresponsible and dangerous. Granted, you can't turn this country on a dime, but we have to start somewhere, and we have to start some time. How about a compromise. We keed the debt ceiling right where it is - not higher, not lower. Then we get the scissors out and start cutting... I'm in favor of a 20% cut across the board...
 
I see it in the direct opposite way. Continuing to raise the debt ceiling is irresponsible and dangerous. Granted, you can't turn this country on a dime, but we have to start somewhere, and we have to start some time. How about a compromise. We keed the debt ceiling right where it is - not higher, not lower. Then we get the scissors out and start cutting... I'm in favor of a 20% cut across the board...
would need strong bipartisian support...not a majority of one side and a handful of the other side....majority of reps/senators on both sides to provide cover, or neither will go for it.
 
Trying to extract concessions from the president over passage of the debt ceiling increase is equivalent to holding the American people hostage and threatening to blow a hole in their heads unless your demands are met. Who's the real threat to American prosperity in this picture?
 
The debt ceiling should only be increased enough to avoid immediate crisis. This issue should keep being revisited because spending is out of control. Keep the spending issue before the public. Never let the dispute die. Constant pressure on Obama.
 
would need strong bipartisian support...not a majority of one side and a handful of the other side....majority of reps/senators on both sides to provide cover, or neither will go for it.

Yep... that's a problem alright.
 
The debt ceiling should only be increased enough to avoid immediate crisis. This issue should keep being revisited because spending is out of control. Keep the spending issue before the public. Never let the dispute die. Constant pressure on Obama.
republicans have an issue with spending to. not just a one party problem, something they both share.
 
So, now it's the Democrats who want to borrow and spend. It used to be the Republicans. Have the Democrats become Republicans, now?

$14 trillion, 14 teradollars, just how much is that?

If a hundred dollar bill weighs one gram (which it does, not counting the cocaine soaked into its fibers), then a thousand of them weigh a kilogram, and a million weigh a thousand kilograms, or one ton, and are worth a hundred million. Ten tons, then, of hundred dollar bills is worth a billion, and ten thousand tons is worth a trillion. Fourteen trillion dollars, then, is 140 thousand tons of hundred dollar bills. Can you imagine a pile of hundreds that high?
 
It really doesn't matter who you blame for it, the debt ceiling will be increased by the 112th Congress because failure to do so would be a failure to govern this nation responsibly.

“We are required to do this now in order to avoid a national fiscal calamity.” — Former House Majority Leader Dick Armey¹

spending to your limit, and simply increasing the limit as opposed to reducing your spending... is responsible? Really?
 
So, now it's the Democrats who want to borrow and spend. It used to be the Republicans. Have the Democrats become Republicans, now?
That might be true to the partisan blind. Reality is both have been spending like there's no tomorrow for decades.
 
not gonna happen if you wish the repubs to stay in power, there cannot be any sacred cows if we are going to get serious ...both sides are going to want political cover for any massive cuts


Public is turning against the unions Greenie. Pretty soon the pitch forks, and torches will be handed out.


j-mac
 
Public is turning against the unions Greenie. Pretty soon the pitch forks, and torches will be handed out.


j-mac
the issue is bigger than unions, j...if you think that the repubs are going to force through a bunch of cuts just on democratic sacred cows, you are seriously mistaken.....the repubs arent going to screw with medicare by themselves, that is quite simply, political suicide.....like i said, if we as a country are suddenly going to get serious about cutting the deficit/debt, and having a balanced budget, cuts will come from both sides, and will be roughly equal....your not going to cut 250 bill out of democratic favorites and only a couple bill out of republican favs...aint gonna happen, mark my words.
 
not gonna happen if you wish the repubs to stay in power, there cannot be any sacred cows if we are going to get serious ...both sides are going to want political cover for any massive cuts

So, the real problem is the sacred cows being too costly, economically. But to "touch them" is politically too expensive. So what you're saying is, we're ****ed either way. You do realize that Social Spending far outstrips defense don't you?
 
So, the real problem is the sacred cows being too costly, economically. But to "touch them" is politically too expensive. So what you're saying is, we're ****ed either way. You do realize that Social Spending far outstrips defense don't you?
doesnt matter...defense has been a traditional republican sacred cow, where republicans tend to get alot of campaign contributions from....everything will have to have the axe put to it, or nothing....
 
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