Well, that's just a question of accounting more than a question of policy
:shrug: fine. by not lowering the top marginal tax rate to 5%, I posit that Republicans have already hiked taxes by 15 Trillion dollars over the next ten years, and demand that Democrats cut at least as much. They can do that by calling off the invasion of China, and so we break even and the deficit/debt crises will be fixed! yay! well. until we hit the 2020's. Then we become Greece. Because it turns out that reality doesn't care if we played make-believe with the baseline. Or it could happen earlier, as the Bond Markets realize that doing so means we aren't serious about getting our house in order.
It depends how you predict whether we would otherwise spend money on it (which is always somewhat subjective), and what baseline you use for your savings estimates (which is always subjective). We could actually make our debt-to-GDP ratio SHRINK over the next 40 years if Congress simply took no action at all to change the status quo on taxes and
spending (...not that anyone actually thinks that would be desirable).
that is incorrect - because increases in spending are written into the entitlements, which are set to expand dramatically.
There absolutely is. Reducing the deficit reduces the interest payment, which is a form of spending. Therefore spending was cut.
BS. no spending on anything was cut. It's a bogus abuse of the notion that writing something on paper makes it reality - much like the make-believe baselines above.
Playing cute with the full faith and credit of the United States is not a good idea, regardless of whether you think it's for a just cause.
the only thing currently threatening that is the debt itself, not the debt ceiling. everyone at this point holding bonds has realized that they get paid first and there is more than enough money to cover them. what would go are other government expenditures, in inverse order of their political importance to the President.
In the future the shoe could be on the other foot; we might have a Republican president and a Democratic Congress (and therefore Congress would treat the debt ceiling as the Republicans' problem).
that is, in fact, precisely what occurred in the 50's, when Dwight Eisenhower asked for a debt ceiling increase and Congress fought him on it under Democratic leadership.
Would you like it if the Democrats, under those circumstances, used it as a weapon to extract concessions from the Republicans on various items on the liberal wish list?
this isn't a Republican Wish List anymore - this is about us surviving the next two decades with any kind of economic order. Because under current law, we don't.
If not, then I fail to see how this can possibly be viewed as a tool of good governance. We are the only nation in the world that has a debt ceiling (except Denmark, which keeps its debt ceiling at an impossibly high limit). Every single time we have a debate over the debt ceiling, there is a chance that the government will fail to act and we will default.
that is incorrect, as you well know. we will not default on the debt by going past August 2nd. we
will eventually default on the debt if we keep adding to it at the pace that the Administration currently has charted out for us.
And no, it's not like getting a dead virus to protect you from the real killer.
absolutely it is. reaction against the artificial debt ceiling serves as a potential ward against the danger of ever hitting the
real debt ceiling.
The US is in no imminent economic danger of not being able to pay its debts
thank you, precisely.
This crisis is completely political.
of course it is - everything the government does is political. that's why we call it 'politics'
If no agreement is reached (and if Obama chooses to not simply ignore the debt ceiling), then we'll have to cut federal spending by 43%. If you set aside money for the bondholders first, you need to cut everything else by 45% (assuming that interest rates didn't rise at all). If you assumed that it caused interest rates to rise by 1% immediately, and that 10% of bonds were not rolled over, then you'd have to eliminate virtually all other federal spending. A lot more than the Department of Agriculture would be affected.
we have enough coming in to service the debt, pay off social security, and pay the active duty troops. that's not counting the other options available to the Treasury. a deal that is reached post-Aug-2 will include large economic disruptions, that is true; but it won't be a default.
And bondholders are not quite that stupid; just because the government prioritized THEIR payments for a few days doesn't mean that they would be unable to recognize the political dysfunction of our Congress. Many of them would, quite reasonably, conclude that our nation was not trustworthy for paying its debts in the future..
dude. our unfunded liabilities are larger than World GDP. we are
already not trustworthy for paying off everything that we have promised. it is absent
entitlement reform that we become untrustworthy, not August 3rd.
important note: "entitlement reform" does not include "add another hugely expensive entitlement"
No we aren't. We are nowhere close to Greek levels of debt.
yet. frankly, we'll never get to Greece's level of debt. There are entities capable of lending to Greece, capable of bailing Greece out. There is no such entity for the US.
If we were, why have bond interest rates been so low up until now?
1. Europe is facing alot of the same troubles, only as they are further along this path than we are, theirs are worse. So
up until now, we have served as the "flight to safety" option. That appears to be shifting somewhat to Britain, though.
2. Up until very recently the Fed has been buying roughly 70% of our issuance, driving up price and depressing yields.
3. Everyone in the Bond Market knows that what you wrote up top about us going into Default is not accurate - we will not go into default.
This is semantics. We would be paying a lesser amount toward an expenditure (i.e. debt interest) than we otherwise would, in the absence of action. That is a spending cut by any definition of the word.
raising taxes does not get you spending reductions; certainly not when you are trying to trade the one for the other.
Then Medicare/Medicaid truly will go bankrupt if the Republicans succeed in stripping out the cost control provisions, such as the Heritage Foundation-designed individual mandate.
The Supreme Court is going to be stripping that one out. Republicans
and Democrats will be stripping out the
rationing board IPAB. Because there are
much better ways to actually hold down
costs rather than just
expenditures.
And our nation will too. It's **** like this that explains my answer to the poll question. Republicans - at least the current breed of them - don't give a damn about the deficit.
BS: You don't like they way they go about solving it - but right now, that's their raison d'etre (raison d'ebt?), but Republicans remain the only party in Washington to have actually proposed Entitlement reforms and the only party in Washington that even pretends to be serious about the deficit.