View Poll Results: Which do you choose

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  • Cut spending to match revenue and default on the debt

    3 10.71%
  • Cut spending to match revenue and pay the debt service from that revenue

    17 60.71%
  • Other (specify)

    8 28.57%
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Thread: If the debt ceiling is not raised...

  1. #21
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    Re: If the debt ceiling is not raised...

    Quote Originally Posted by phattonez View Post
    That'll set a great precedent.
    So will defaulting on our debt (regardless of whether we literally default, or just de-facto default by stop paying OTHER obligations). The entire concept of the debt ceiling is ridiculous. It's just a disaster waiting to happen; it should be repealed entirely.
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    Re: If the debt ceiling is not raised...

    Quote Originally Posted by Kandahar View Post
    So will defaulting on our debt (regardless of whether we literally default, or just de-facto default by stop paying OTHER obligations). The entire concept of the debt ceiling is ridiculous. It's just a disaster waiting to happen; it should be repealed entirely.
    It is meant to keep our budgets realistic, and now is the time when it was really meant to play a role and force us to balance our budget. If we ignore it now, then it is just another worthless law.

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  3. #23
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    Re: If the debt ceiling is not raised...

    Quote Originally Posted by tessaesque View Post
    ...how much could we make off the sale of Hawaii and Alaska?
    alaska has oil and hawaii has girls in grass skirts. sell the southern portion of California.




    seriously, the government does have alot of stuff it could sell - it's the largest landowner and it's not using alot of that stuff. limousines in the government fleet have exploded in the last couple of years; i would suggest we don't need all those as well. Gold is selling pretty high, and it strikes me that we have quite a bit of that as well...

  4. #24
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    Re: If the debt ceiling is not raised...

    Quote Originally Posted by Kandahar View Post
    I choose:
    3. The White House directs the Treasury to ignore the debt ceiling and borrow money anyway, and dares Congress to do anything about it.
    i am thinking if your goal is stable markets, that is not the path you want.



    unless you think a Constitutional Showdown where nobody even knows if the new debt is legal or would therefore be honored would be beneficial. but it's hard to imagine a situation where the President of the United States going on trial would stabilize markets dependent on him and congress striking compromises.
    Last edited by cpwill; 07-10-11 at 06:39 PM.

  5. #25
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    Re: If the debt ceiling is not raised...

    Quote Originally Posted by phattonez View Post
    It is meant to keep our budgets realistic,
    Congress has always raised the debt ceiling when it has needed to raise the debt ceiling, and always will (although sooner or later they might push the brinkmanship too far and wait until AFTER we're in default to raise the debt ceiling). Therefore it does nothing to keep the budgets realistic; Congress routinely passes budgets that it knows will exceed the debt ceiling.

    and now is the time when it was really meant to play a role and force us to balance our budget. If we ignore it now, then it is just another worthless law.
    Where do you suggest we find 43% of the budget to eliminate in the next four weeks?
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  6. #26
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    Re: If the debt ceiling is not raised...

    Quote Originally Posted by cpwill View Post
    i am thinking if your goal is stable markets, that is not the path you want.

    unless you think a Constitutional Showdown where nobody even knows if the new debt is legal or would therefore be honored would be beneficial. but it's hard to imagine a situation where the President of the United States going on trial would stabilize markets dependent on him and congress striking compromises.
    I agree that it's not ideal. But the alternative is the sudden elimination of 43% of federal spending with virtually zero advance notice. That would certainly do a lot more to destabilize markets than taking on some additional debt would (which would of course be honored once the debt ceiling is raised or eliminated). As for the President going on trial...well, when there are contradictory laws on the books, there isn't any choice but to violate one law or the other. Congress could just as easily put him on trial for not following the law if he doesn't fund the programs laid forth in the 2011 federal budget.
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  7. #27
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    Re: If the debt ceiling is not raised...

    Let's go over some economic and political realities, and then see what conclusions can be reasonably drawn from them:

    1. The debt ceiling WILL be raised (or eliminated, or ignored, or found unconstitutional). There is no way we can eliminate 43% of federal spending within the next four weeks and sustain that kind of draconian cut for any length of time, let alone permanently. So any talk about not raising the debt ceiling and using this as an opportunity to balance the budget is flat-out not going to happen. It's just a question of whether the debt ceiling hike happens BEFORE or AFTER we're in de-facto default on our obligations.

    2. Our fiscal problems are chronic, not acute. We are in no imminent economic danger of being unable to make good on our debts...we are only in danger of a POLITICAL default if Congress chooses not to raise the debt ceiling even though we are perfectly able to honor our commitments. The greater danger is our long-term structural deficit.

    3. Of the four main drivers of our structural deficit (social security, health care, military, and tax policy), only military cuts still seem to be on the table. Health care was never up for negotiation, because the gulf between the two parties is simply too large at this point. Social security was briefly offered up for negotiation by Obama...but promptly came right back off the table when the Republicans refused to reciprocate with putting tax policy on the table. Therefore the whole debt ceiling showdown is a joke. The only cuts being proposed are for discretionary spending...which (aside from military expenditures) is not particularly worrisome in the first place.

    4. The debt ceiling is a horrible idea from a legislative perspective. It has never been an issue of principle (the in-party virtually ALWAYS votes to raise it, and the opposition virtually ALWAYS opposes increasing it unless their votes are actually needed to raise it). It is simply a tool that the opposition uses to bludgeon the in-party and to occasionally extract concessions on whatever issue is pissing them off at the moment. Sooner or later, someone is going to push their brinkmanship too far and not be able to walk it back and raise the debt ceiling until after we're in default. This would be catastrophic. We'd be far better off just eliminating the debt ceiling entirely, instead of going through these annual sideshows where everyone knows it will eventually be raised but one side pretends to have a principled objection to doing so.


    ...

    My conclusions are that we should raise/eliminate the debt ceiling immediately with minimal associated spending cuts. (Although if Biden's team and congressional Republicans have already jointly identified some, I don't object to them being included.) We need to reform social security, reform our tax code, and drastically scale back military spending. But none of these items should be tied to the debt ceiling, nor should the debt ceiling be tied to non-defense discretionary spending cuts.
    Last edited by Kandahar; 07-10-11 at 07:41 PM.
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  8. #28
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    Re: If the debt ceiling is not raised...

    Quote Originally Posted by Kandahar View Post
    Congress has always raised the debt ceiling when it has needed to raise the debt ceiling, and always will (although sooner or later they might push the brinkmanship too far and wait until AFTER we're in default to raise the debt ceiling). Therefore it does nothing to keep the budgets realistic; Congress routinely passes budgets that it knows will exceed the debt ceiling.
    The demands of democracy, unfortunately enough.

    Where do you suggest we find 43% of the budget to eliminate in the next four weeks?
    Ultimately I'd like to see federal welfare and the department of education eliminated, along with federal student loans. And we should start cutting the military budget as well. I wouldn't raise the debt ceiling until we put in motion plans to do at least that.

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  9. #29
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    Re: If the debt ceiling is not raised...

    Quote Originally Posted by phattonez View Post
    The demands of democracy, unfortunately enough.



    Ultimately I'd like to see federal welfare and the department of education eliminated, along with federal student loans. And we should start cutting the military budget as well. I wouldn't raise the debt ceiling until we put in motion plans to do at least that.
    That is nowhere close to sufficient to eliminate 43% of the federal budget. If you suddenly cut the military budget in half and completely eliminated the entire non-defense discretionary budget, you'd STILL be short. There are only five budgetary items of any significance. So your options for coming up with a 43% cut need to come from them:

    Defense 25%
    Health care: 23%
    Social security/pensions: 21%
    Debt interest: 5%
    Everything else: 26%
    Last edited by Kandahar; 07-10-11 at 08:06 PM.
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  10. #30
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    Re: If the debt ceiling is not raised...

    Getting spending to 2003 levels would have us spending the same amount as our current revenue.

    Auction Off the State - Robert P. Murphy - Mises Daily

    Then there's always the option, even if you are still somehow short, of selling off assets. The US government holds an enormous sum of land.

    Who shall ascend the hill of the Lord? And who shall stand in his holy place? He who has clean hands and a pure heart, who does not lift up his soul to what is false, and does not swear deceitfully. Psalm 24
    "True law is right reason in agreement with nature . . . Whoever is disobedient is fleeing from himself and denying his human nature [and] will suffer the worst penalties . . ." - Cicero

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