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McConnell: No debt increase without benefit cuts

danarhea

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WASHINGTON (AP) — Senate Republican Leader Mitch McConnell warned on Friday that GOP senators will not vote to increase the government's borrowing limit unless President Barack Obama agrees to rein in Social Security, Medicare and Medicaid, laying down a high-stakes marker just weeks before the debt ceiling is reached.

In an interview with The Associated Press, McConnell complained that Obama has refused his offers — both public and private — to work on a bipartisan plan to tackle the nation's massive benefit programs, which threaten to overwhelm the budget in coming years.

OK, folks. Get ready. The United States of America is about to default on its debt. However, despite the political rhetoric here by McConnell, I am inclined to agree with him. Who owns much of the debt? The banksters, who have already been given large chunks of money, via Bush and Obama. What better way to make the banksters pay for their dishonesty with the taxpayers than to tell them we aren't paying back what we borrowed, but they can keep all those billions of dollars we already gave them, after they ran their banks into the freaking ground?

China is going to be pissed off too. They own the largest chunk of all our debt. Screw them too. They have been gaming the Capitalist system against us for years. We can game it too, by giving them a big, fat middle finger, and saying to them "What debt?".

The Arabs? That's another story. They own a good chunk of debt too, but if we give them the finger, they will give us two fingers, by launching an oil embargo. All the more reason for us to wean ourselves off their oil so that, one day, we can tell them to either pay 10 times what food is worth, or eat their oil. :mrgreen:

Who else owns US debt? I don't give a crap. Let 'em burn too. Yea, things will be tough for a while. We might even have another Great Depression. But damn it - We have great land for growing food. We have the capacity to make our own steel and cars, if we get off our asses, and just do it. And, damn it, we have a resource that nobody in the world can hold a candle to - The American worker. Yea, things will be tough for a while, but we will not only come out of it better off than we were, but we will be finally be forced to balance the budget each year, because nobody in their right mind will ever again lend us so much as a dime. Works for me. LOL.

Article is here.
 
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Um. Hitting the debt limit hurts a lot more people than just those who happen to own US debt.
 
I think what McConnell said was absolutely fair. I agree that the debt is getting out of hand but to suggest that the US is close to defaulting on it is disingenuous, so I'll just assume Dan was exaggerating.
 
I think what McConnell said was absolutely fair. I agree that the debt is getting out of hand but to suggest that the US is close to defaulting on it is disingenuous, so I'll just assume Dan was exaggerating.

He's not exaggerating. There's a statutory limit to how much debt teh US can incur. Beyond that we have nothing left to spend.

We are very close to this limit.
 
He's not exaggerating. There's a statutory limit to how much debt teh US can incur. Beyond that we have nothing left to spend.

We are very close to this limit.

I think the limit is a separate issue from actually having to default on the debt.
 
I think the limit is a separate issue from actually having to default on the debt.

The government needs to learn to live on what it takes in. I say freeze all spending until a budget is produced.


j-mac
 
The government needs to learn to live on what it takes in. I say freeze all spending until a budget is produced.


j-mac

I agree in principle j-mac, but that's SOOOO much easier said than done.
 
I think what McConnell said was absolutely fair. I agree that the debt is getting out of hand but to suggest that the US is close to defaulting on it is disingenuous, so I'll just assume Dan was exaggerating.

To be honest, I was exaggerating a bit, and having a little fun with it, but at the same time, I really don't think I'd mind it if the world got turned upside down a little, just so that we can get back to sane fiscal policy.
 
To be honest, I was exaggerating a bit, and having a little fun with it, but at the same time, I really don't think I'd mind it if the world got turned upside down a little, just so that we can get back to sane fiscal policy.

I agree dan. But like I've said multiple times it's all easier said than done. It's always easier to talk about spending cuts than to actually do something about it. It's politically easier to cut spending and lower taxes to please your constituents, but it's 10 times harder to raise taxes and reduces spending to solve a debt problem. As the saying goes, good economics =/= smart economics.
 
OK, folks. Get ready. The United States of America is about to default on its debt. However, despite the political rhetoric here by McConnell, I am inclined to agree with him. Who owns much of the debt? The banksters, who have already been given large chunks of money, via Bush and Obama. What better way to make the banksters pay for their dishonesty with the taxpayers than to tell them we aren't paying back what we borrowed, but they can keep all those billions of dollars we already gave them, after they ran their banks into the freaking ground?

China is going to be pissed off too. They own the largest chunk of all our debt. Screw them too. They have been gaming the Capitalist system against us for years. We can game it too, by giving them a big, fat middle finger, and saying to them "What debt?".

The Arabs? That's another story. They own a good chunk of debt too, but if we give them the finger, they will give us two fingers, by launching an oil embargo. All the more reason for us to wean ourselves off their oil so that, one day, we can tell them to either pay 10 times what food is worth, or eat their oil. :mrgreen:

Who else owns US debt? I don't give a crap. Let 'em burn too. Yea, things will be tough for a while. We might even have another Great Depression. But damn it - We have great land for growing food. We have the capacity to make our own steel and cars, if we get off our asses, and just do it. And, damn it, we have a resource that nobody in the world can hold a candle to - The American worker. Yea, things will be tough for a while, but we will not only come out of it better off than we were, but we will be finally be forced to balance the budget each year, because nobody in their right mind will ever again lend us so much as a dime. Works for me. LOL.

Article is here.

You know what's weird? This is a straight AP story and yet it's biased, on purpose.

Headline:

McConnell: No debt increase without benefit cuts

Them's fightin' words. He never uses the word "cuts." He's talking about reform. I'm very surprised.
 
You know what's weird? This is a straight AP story and yet it's biased, on purpose.

Headline:



Them's fightin' words. He never uses the word "cuts." He's talking about reform. I'm very surprised.

In terms of deficit reduction, doesn't reform necessarily imply cuts? I don't think it matters whether or not McConnell actually used the word "cuts." In practical terms they're the same thing.
 
Add defense spending to that list and I agree with McConnell completely.
 
In terms of deficit reduction, doesn't reform necessarily imply cuts? I don't think it matters whether or not McConnell actually used the word "cuts." In practical terms they're the same thing.

No, I really don't think so....but I could be wrong.

I could see reforming Social Security by raising the retirement age by six months or so, making it taxable over a smaller amount than it is as present and having that revenue go into the SS fund, removing fraud from the system in terms of SS disability (plenty there) and in terms of survivorship benefits, (Got stories there, too.) removing the "you can earn all you want after your full retirement age" deduction in our personal income tax and putting that revenue into the SS fund. I'm sure I could think of more.

Believe me, when the average senior reads "benefit cuts to Social Security," he's thinkin' his check's gunna get smaller. And that will never happen.
 
No, I really don't think so....but I could be wrong.

I could see reforming Social Security by raising the retirement age by six months or so, making it taxable over a smaller amount than it is as present and having that revenue go into the SS fund, removing fraud from the system in terms of SS disability (plenty there) and in terms of survivorship benefits, (Got stories there, too.) removing the "you can earn all you want after your full retirement age" deduction in our personal income tax and putting that revenue into the SS fund. I'm sure I could think of more.

Believe me, when the average senior reads "benefit cuts to Social Security," he's thinkin' his check's gunna get smaller. And that will never happen.

Ah I see where you're coming from Maggie. I think I can agree, but realistically again tackling all the quote unquote "waste fraud and abuse" is always easier said than done.
 
Ah I see where you're coming from Maggie. I think I can agree, but realistically again tackling all the quote unquote "waste fraud and abuse" is always easier said than done.

In all honesty, I can't think of a single time when it HAS been done.
 
If democrats would follow their own laws like pay go we wouldn't have such a big problem
 
In terms of deficit reduction, doesn't reform necessarily imply cuts? I don't think it matters whether or not McConnell actually used the word "cuts." In practical terms they're the same thing.

I guess you have never worked on putting together a budget. Deficit reduction can mean outright reductions of certain things or if you have someone who understands an issue or business it could mean doinf the same or more but be more efficient thus reducing spending.

Spending more does not necessarily mean getting more.
 
FYI, if the debt limit is not increased, that does not mean that the U.S. would automatically default on its debt. The U.S. would need to cease borrowing funds in excess of its debt limit, meaning in effect that it would have to completely eliminate its budget deficits so long as the debt limit is not increased. As there is tax revenue coming in, the federal government would need to make some wrenching choices: continuing meeting its debt obligations or partially default to allow for more money to be used for current expenditures. The latter course would be very dangerous, as it damage the U.S. credit rating and lead to a long-term risk re-adjustment, meaning higher future borrowing costs. The former could be very unpopular depending on what programs/activities are suspended and potentially painful, too (aggregate demand would contract and that would adversely impact GDP; reductions in social welfare benefits could also adversely impact recipients of those benefits, etc.). The tradeoffs considered, the former course would be the better one, if such a political crisis unfolds.

Of course, such a crisis is completely avoidable. Given the stakes involved, I believe both the White House and Congress should, in fact, avoid such a stand-off. Instead, they should commit themselves to credible long-term fiscal consolidation. To be credible, at least some of the recommendations made by the two fiscal commissions late last year, should be incorporated in fiscal consolidation legislation that would follow agreement to increase the debt ceiling. As a downpayment toward credible fiscal consolidation, if the President and Congress want to demonstrate through actions that they are truly serious about addressing the nation's long-term fiscal imbalances, perhaps an increase in the Social Security eligibility age could be tied to legislation to increase the debt limit.
 
He's not exaggerating. There's a statutory limit to how much debt teh US can incur. Beyond that we have nothing left to spend.

We are very close to this limit.

Tax revenue is still coming in. To give a rough idea, projected tax receipts for FY 2011 are around $2.2 trillion and for FY 2012 they are around $2.6 trillion. Projected expenditures for those years are about $3.8 trillion and $3.7 trillion respectively. Net interest payments are estimated at $205 billion and $240 billion respectively.

So, if one takes an average of the two fiscal year's figures to estimate monthly figures for the next few months (tax revenue should be rising as the economy continues to grow), the monthly averages would be:

Revenue: $200 billion
Expenses: $312.5 billion
Net Interest Payments: $18.5 billion

Under such a scenario, no default would occur if the federal government paid its $18.5 billion monthly interest expense and then spent no more than $181.5 billion per month on all its other activities. Clearly, that would be extremely painful. For example, if the federal government chose to pay Medicare, Medicaid, Social Security, and all the other mandatory spending programs, it would have less than $2.5 billion per month for everything else. This is just an idea to illustrate the point that technically a debt default need not occur. The numbers are not precise and there would be fluctuations, e.g., a disproportionate share of revenue would become available in April. On the current fiscal path, were such a situation to occur even a few years in the future, there might then be no way to avoid a partial debt default.

Politically, the above would not be a sustainable course, but a partial debt default would have long-term adverse implications. The bottom line is that both the President and Congress should avoid such a situation, as it would not be sustainable for more than a very short period of time. Given the nation's long-term fiscal imbalances and the incremental risks associated with pursuing yet another status quo budget, the effort to lay out a credible path to fiscal consolidation should begin in earnest. Some spending reductions should begin immediately now that the economy has been growing for almost two years. Such an approach would be compatible with the nation's long-term interests and it is feasible in the context of a growing economy.
 
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I guess you have never worked on putting together a budget. Deficit reduction can mean outright reductions of certain things or if you have someone who understands an issue or business it could mean doinf the same or more but be more efficient thus reducing spending.

Spending more does not necessarily mean getting more.

I stand corrected.
 
To be honest, I was exaggerating a bit, and having a little fun with it, but at the same time, I really don't think I'd mind it if the world got turned upside down a little, just so that we can get back to sane fiscal policy.

you are exaggerating alot, but hey, anything for attention :)

big government conservatives aren't going to pay this game of chicken to it's ultimate conclusion, and every democrat knows it.. it would ultimately amount to base closings and massive scaling back of military operations. there ego's couldn't handle not being the biggest kid on the block from such a scale down.
 
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