View Poll Results: Should the U.S. have a debt ceiling?

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Thread: Should The U.S. Have A Debt Ceiling?

  1. #21
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    Re: Should The U.S. Have A Debt Ceiling?

    Quote Originally Posted by cpwill View Post
    cut cap and balance is where we will end up

    maybe not because we want to.

    but because we will get to the point where there is no choice.
    How??????????????


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    Re: Should The U.S. Have A Debt Ceiling?

    Quote Originally Posted by Ockham View Post
    The obvious (and I use that term loosely since I have to take account of who I'm speaking with here) then way to control spending is to not authorize it. Rubio was 100% correct on the Senate floor when he said history has proven, give government the ability to spend beyond their means and they will. Therefore a balanced budget amendment and a ceiling cap on spending is the only way to control the amount of spending such that, government doesn't borrow more than it can pay back.

    I'm glad you agree with me.


    It will take however long it will take... it's what we in the business world call... a "long term goal". If it takes 2 years or it takes 12 years it must be done.
    LOL, it didn't even get the 2/3 vote required in the Republican controlled House for passage. It's not a long term goal, it's a pipe dream. Even some of the most reddish states would not vote in favor because they like sucking of the Federal teat as much (maybe more) as anyone else.


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    Re: Should The U.S. Have A Debt Ceiling?

    Quote Originally Posted by pbrauer View Post
    Should the U.S. have a debt ceiling?

    Yes
    No
    Onion Bagel
    I'll have the chicken

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    Re: Should The U.S. Have A Debt Ceiling?

    Some facts about the debt ceiling hysteria

    FACT 1

    The debt ceiling... gawd this is a freaking joke, isn't it? Currently it's viewed as a debt ceiling beyond which we will not borrow any more money.... Yet we will consistently overspend those limits, and just as consistently raise those limits. WHAT IS THE POINT OF WASTING TIME VOTING ON THIS WHEN IT HAS NO PURPOSE TO BEGIN WITH? If it does not serve as an impedance to spending, or even a guideline, it serves no useful purpose. Abolish it or change it.

    This was a law enacted in 1917 to perform an end run around budget restrictions that could hamper our efforts in the Great War, and to allow for more "flexible" borrowing by congress. It was then a justification for a fundamental change in how congress borrowed, and is now just a formality. It was replaced by laws passed in 1939 and 1941, and finally aggregated into a single piece of legislation.


    FACT 2

    Congress, by it's own rules, began automatically raising the ceiling when passing a new budget in 1979, no vote required, simply the passage of a new budget. Any past purpose it might have had (and it had none) died that day. It should have been abolished or repealed. Of course, getting rid of it would remove the extremely thin veil of responsibility our public servants project by admitting they really don't care how much they spend, or these days, how fast. However, it was at this time, and every time after 1979 that we'd missed the opportunity to have the debate that is happening now, during such highly charged and dangerous situations, created by the very people who are asking us to trust them, they can fix this.

    FACT 3

    The Tea Party - On the one hand, it's a debate that has been long coming, and the TP should be credited for making all of us take a look at something that has not served the people well outside of two world wars, and which we have been completely ignorant of until now. But if you all miss the larger, more important underlying issues, what will have been the point?

    On the other, this minority movement (20%) of the flailing and faltering republican party, is holding America hostage. They have used this very crucial time, not just to make a point, but to hold hostage what remains of personal wealth among the average citizen, and further threatening to wreak havoc on the entire world if we default on something that should have been discussed during the last budget, and the one before that, and the one... you get the idea. The rest of the republican party and the rest of the nation should be exerting considerable pressure on them to back the hell down and take up this debate as part of the election platform, and we'll see what merit it has.

    FACT 4

    Default - Not gonna happen. If it did, we would deserve more scorn heaped on us as a people by the citizens of the world than we experienced with Bush. If we default, we affect the world economy, if we don't, but still see a downgrading in our securities rating, that only largely affects us. And we deserve it.

    With an administration so heavily invested in Wall St appointees, there is little chance that a default is in the realm of possibilities... unless it benefits them to do so. If a default happens, I would be very skeptical as to the reasons why.

    We can all spend our lives pointing fingers at this political party or that, to this law maker or that, all while collectively scratching our heads (or asses) wondering how we got here (more likely not wondering at all, see scratching ass). The fault with all of this lies with us, the People. We are the rulers of this country. We have failed to demand accountability of our elected public servants. We have allowed ourselves to be divided from our first responsibility, remain skeptical and vigilant of our government, and when it stops working for the People, change it.

    FACT 5

    The drama over the 14th Amendment. Using the constitution, requiring some manner of interpretation where specifics are absent, is always dangerous when setting precedent. I advise against it, and it is unnecessary. The President can accomplish the same thing using an Executive Order to raise the debt ceiling to avoid crisis and returning the power to congress when and if they get their act together.

    Executive Orders are generally used "as the authorization allowing for their issuance to be justified as part of the President's sworn duties,[1] the intent being to help direct officers of the US Executive carry out their delegated duties as well as the normal operations of the Federal Government"

    The debt ceiling would certainly fall within this description without having to mess about with the constitution and setting dangerous precedents.

  5. #25
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    Re: Should The U.S. Have A Debt Ceiling?

    Quote Originally Posted by pbrauer View Post
    How??????????????
    you know that "real debt ceiling" you talk about? we're going to hit it. and we are going to find out very quickly that you can't get tax revenue above 20% of GDP with any kind of consistency, and you can only get there when you are willing to have low flat rates.

    we're going to have to balance, and that is going to first force us to cut, and then to cap our spending.

    we will be going backwards, and it will be very painful.... but that's the alternative to doing it now.

  6. #26
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    Re: Should The U.S. Have A Debt Ceiling?

    Quote Originally Posted by Ockham View Post
    The obvious (and I use that term loosely since I have to take account of who I'm speaking with here) then way to control spending is to not authorize it. Rubio was 100% correct on the Senate floor when he said history has proven, give government the ability to spend beyond their means and they will.
    That's not always true. From 1945 to 1980, our debt-to-GDP ratio fell dramatically.
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  7. #27
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    Re: Should The U.S. Have A Debt Ceiling?

    Quote Originally Posted by Kandahar View Post
    That's not always true. From 1945 to 1980, our debt-to-GDP ratio fell dramatically.
    because deficits were smaller then than they are now does not negate their existence. And it's worth noting that much of that fall was the result of a protracted debt-ceiling fight.

  8. #28
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    Re: Should The U.S. Have A Debt Ceiling?

    Quote Originally Posted by cpwill View Post
    because deficits were smaller then than they are now does not negate their existence.
    No, but let's not lose sight of what's important. The deficit itself isn't very relevant...even the dollar amount of the national debt isn't too important. What's really important is the debt-to-GDP ratio. THAT is what can cause us economic headaches if it gets too high. So it's possible to consistently run deficits and still reduce the debt-to-GDP ratio, as long as the economy is growing faster than the debt. This was more or less the situation that prevailed for 35 years following WWII.

    What I'd like to see is balanced budgets (or surpluses) during boom times, and deficit spending during recessions. Ideally, we shouldn't have a deficit of more than about 1% over the course of the business cycle IMO.

    And it's worth noting that much of that fall was the result of a protracted debt-ceiling fight.
    Do you have an example of this? It was my understanding that threatening default to extract concessions and/or embarrass the opposition only dates back to the period AFTER the debt-to-GDP ratio started rising again.
    Last edited by Kandahar; 07-31-11 at 06:33 PM.
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  9. #29
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    Re: Should The U.S. Have A Debt Ceiling?

    Quote Originally Posted by Kandahar View Post
    No, but let's not lose sight of what's important. The deficit itself isn't very relevant...even the dollar amount of the national debt isn't too important. What's really important is the debt-to-GDP ratio
    I think you are forgetting the snowballing effect of interest - continuously going deeper into debt will cause you later to go increasingly deeper into debt. And Interest competes with our entitlements as the major driver of our unsustainable debt:



    THAT is what can cause us economic headaches if it gets too high.
    truth; which is why the Presidents' 2012 budget would have been a pathetic joke if it wasn't so serious. Once you have debt high enough to consistently drag your growth below 3%, it becomes incredibly hard to avoid a spiral.

    So it's possible to consistently run deficits and still reduce the debt-to-GDP ratio, as long as the economy is growing faster than the debt. This was more or less the situation that prevailed for 35 years following WWII.

    What I'd like to see is balanced budgets (or surpluses) during boom times, and deficit spending during recessions. Ideally, we shouldn't have a deficit of more than about 1% over the course of the business cycle IMO.
    there again we are going to disagree; but that is a different debate.

    Do you have an example of this? It was my understanding that threatening default to extract concessions and/or embarrass the opposition only dates back to the period AFTER the debt-to-GDP ratio started rising again.


    A sanctimonious president refuses lawmakers the cuts they demand. The federalists in Congress grow cocky. They'd rather force a bond-market crisis than raise the debt ceiling or erode states' rights.

    “I'm not worrying,” the firebrand Virginian leading the opposition to the president says, and charts his own version of the budget. “I'm sticking to my guns. We've got a prairie fire started among the people in favor of cutting the budget.” The president disapproves. The Virginian is downright gleeful. The debt-ceiling fight is giving new life to his already lengthy career.

    This sounds like the story of the very Democratic President Barack Obama and the very Republican House Majority leader Eric Cantor battling in 2011. But it's actually a description of the very Republican President Dwight D. Eisenhower and the very Democratic finance committee chairman, Harry F. Byrd, in 1957. The details of that quarrel are worth remembering, if only to remind us that the meaning and impact of such contests may be different from what politicians, or the public, assume at the time...

    Ike determined that the government must raise the debt limit to $290 billion from $275 billion before he could finish his budgetary cleanup.

    “Despite our joint vigorous efforts to reduce expenditures,” Eisenhower told lawmakers, “it is inevitable that the public debt will undergo some further increase.”

    His second-in-command, Treasury Secretary George Humphrey, played the heavy. If the debt-ceiling increase didn't become law, “it would just cause a near panic,” Humphrey said. Daunting words to children of the Depression. The Dow Jones Industrial Average was only then, after a quarter century, returning to its 1929 level. A panic would jeopardize the last stage of that long- awaited stock recovery.

    But legislators were more alarmed about debt. War spending was becoming forever spending. U.S. debt as a share of the economy was declining, and was lower than it is today, but was still nowhere near as low as in the 1920s or 1930s. The rebels charged that Eisenhower was trying to turn debt levels higher than the New Deal into a new normal...

    Harry Byrd marshalled opposition to Eisenhower's request. The government could scrape by without additional borrowing authority, he insisted. The Treasury had some $9 billion in ready cash. The president had the power to curtail federal expenditures and create even more wiggle room.

    For a while, Byrd prevailed. The apocalypse didn't materialize. The government made it through the first half of the next year using a mixture of ready cash, spending reductions and various financial manoeuvres.

    In August 1954, the Senate finally agreed to raise the limit by $6 billion, but only temporarily. That fall, the Dow finally crossed its 1929 high of 381.

    Still, Byrd tangled with Eisenhower all decade. In 1957, Eisenhower proposed a $72 billion budget; Byrd countered with a “Byrd Budget” that would cut federal spending by $6.5 billion. And so on. The debt ceiling stayed below $290 billion, Ike's original goal, until 1959. Meanwhile, the economy gained ground, which eased the debt burden....
    Last edited by cpwill; 07-31-11 at 07:35 PM.

  10. #30
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    Re: Should The U.S. Have A Debt Ceiling?

    Quote Originally Posted by cpwill View Post
    you know that "real debt ceiling" you talk about? we're going to hit it. and we are going to find out very quickly that you can't get tax revenue above 20% of GDP with any kind of consistency, and you can only get there when you are willing to have low flat rates.

    we're going to have to balance, and that is going to first force us to cut, and then to cap our spending.

    we will be going backwards, and it will be very painful.... but that's the alternative to doing it now.
    President Clinton handed President Bush a budget surplus, but we still had a debt. If it were not for Bush's tax cuts, Bush's unfunded war in Iraq and his unfunded Medicare Part D legislation our debt wouldn't be as much of a problem today.

    How the Deficit Got This Big


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