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If the debt ceiling is not raised...

Which do you choose


  • Total voters
    20
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.
 
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.
 
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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.
 
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%
 
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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.
 
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's not accurate - firstly, federal spending goes in bursts, not in a constant stream. secondly, much of federal spending can be delayed rather than removed. thirdly, the government has alternate ways to push funds around, and fourthly, the government has other revenue - producing possibilities open to it than taxation or borrowing (land and gold, the government has huge amounts of both). the cuts would need to be drastic, yes, but not straight up 43% of the current level of federal spending.


and none of that would have the disruptive effect of throwing the government into constitutional chaos in the middle of all this.

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.

violating the Constitution (which reserves for Congress the right to issue debt) > not spending money that was agreed upon in a budget. the President is not breaking the law if he does not spend money that has not been appropriated by the only branch of Government authorized to do so. The tradition of Presidents refusing to spend money allocated by Congress, in fact, goes back to Jefferson.
 
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President Regan once said

President Obama once said

“The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Increasing America’s debt weakens us domestically and internationally. Leadership means that “the buck stops here.” Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.”
 
My personal feeling is i'd like to see the debt cieling raised along with spending cuts and to fight the battle of spending without the notion of default looming over everyones heads.

However, sticking to the thread topic of the hypothetical that it is not raised, I'd rather significantly cut spending entire across the board...entitlements, military, infastructure services, welfare services, etc...so as to be able to pay out debt payment.
 
Ignore the debt limit and issue more?

I am quite far from a conservative.

However, I don't think ignoring the debt limit is the answer. It's not a good idea to just keep borrowing money constantly to pay for things if we don't do anything to deal with what caused these financial downturns in the first place.

Personally, I would prefer if we simplified the tax code, got rid of loopholes, and got rid of subsidies. However, Republican politicians call those "tax increases" and so are opposed to them even though dealing with those issues will help raise federal revenue and will end federal spending on some things. Why do they do this?

Because Republicans would rather spend government money on their campaign donors with corporate interests rather than stay true to their own doctrine.

The Republican politicians in Congress still support welfare - corporate welfare. And corporate welfare has to stop just as much as individual welfare has to stop, at least as long as the corporate welfare benefits corporate executives more than it does low- and middle-class employees.
 
Wow.. I have never seen a post full of such lies and misinformation.. Well.. Except the last time I read a post written b y a conservative..

So the rich create jobs?? Really?? Are you sure?? Because the last I checked the unemployment rate sky rocketed after we gave the rich tax cuts.. So where are these jobs you speak of?? Are we not at around 9% unemployment?? We have had the tax cuts for almost 10 years now.. Where are the jobs.. With an investment of 3.2 trillion over 10 years.. We should have a lower unemployment rate shouldn't we??

Federal revenue up 20%??? Really?? Link it or your full of it..

What mistakes has Obama made and what does he need to take responsibility for??

Welfare recipients won the lotto?? All live so far below the poverty level it is sickening.. Just like your ignorance.. How about an extra 320 billion a year?? Let the damn tax cuts for rich expire.. Those tax cuts are getting us nothing in return.. You would be better off giving that 320 billion to the poor.. At least they will dump it back into the economy instead of just letting sit in the bank with their other millions.. There is some demand for you.. Where are the jobs??

There is no consumer demand moron because much of the middle class has become poor or worse.. Where are the jobs?? You can't take mony from the poor and give it to the rich and expect the poor to have money to buy stuff.. Cut the damn tax cuts..

Now why don't you learn to accept responsibility for supporting a party that has done nothing to create jobs.. You want to know what is wrong with the economy?? Go look in the mirror..

Surely by now you've made the realization in your head that a personal income tax obligation has nothing to do with small businesses creating jobs. That tax break "for the rich" was for their personal income, not for corporate expenditures. It's silly that people want to manipulate facts to make a point.
 
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My personal feeling is i'd like to see the debt cieling raised along with spending cuts and to fight the battle of spending without the notion of default looming over everyones heads.

However, sticking to the thread topic of the hypothetical that it is not raised, I'd rather significantly cut spending entire across the board...entitlements, military, infastructure services, welfare services, etc...so as to be able to pay out debt payment.

What is your position on subsidies?

What is your position on cutting tax loopholes that are for the benefit for certain industries but aren't given to all businesses?

Not trying to trap you or anything. It's just that there are Democrat politicians who agree to cut spending as well. And want to make things more "even" with regards to which businesses pay taxes. For example, oil companies receive a lot in the way of tax breaks and G.E. got so many tax breaks it didn't pay any corporate income tax last year. However, Republican Congressmen call this de facto tax increases, and so are opposed to them. This doesn't seem very fair to smaller businesses who are just as important to the American economy but aren't individually (and in many cases not collectively) large enough for Republican Congressmen to intercede on their behalf.

So what is your opinion on making corporate income taxes fairer across the board, especially between large businesses and small businesses?
 
I am quite far from a conservative.

However, I don't think ignoring the debt limit is the answer. It's not a good idea to just keep borrowing money constantly to pay for things if we don't do anything to deal with what caused these financial downturns in the first place.

Personally, I would prefer if we simplified the tax code, got rid of loopholes, and got rid of subsidies. However, Republican politicians call those "tax increases" and so are opposed to them even though dealing with those issues will help raise federal revenue and will end federal spending on some things. Why do they do this?

Because Republicans would rather spend government money on their campaign donors with corporate interests rather than stay true to their own doctrine.

The Republican politicians in Congress still support welfare - corporate welfare. And corporate welfare has to stop just as much as individual welfare has to stop, at least as long as the corporate welfare benefits corporate executives more than it does low- and middle-class employees.

Republicans in Congress have already voted to end all of those subsidies and get rid of the Corporate Welfare. It's called the "House 2012 Budget" or "The Ryan Plan".

the trick is, you want to do it without raising effective tax rates, which are different from your nominal rates.

For example, you run a business making whatever (i refuse to use widgets), and your profit is $150,000 - your corporate tax rate is %35. But you rate a series of deductions and write offs, and your final tax bill is only $37,500 - your effective tax rate is 25%. The trick is, qualifying for all of those deductions and write-offs costs you extra money as well, whether it's in less-productive investment or hiring an expensive accountant / tax attorney. The Democrat argument is, we need to raise your effective tax rate, the Republican argument is, we need to keep your effective tax rate the same, but get rid of the loopholes, the credits, and your associated costs.

So, Republicans argue for lowering the nominal rates while getting rid of deductions, credits, shelters, and loopholes at the same pace in order to keep effective tax rates the same for businesses. Businesses are now free to invest in what will be most productive rather than what will reduce their tax exposure, and take the resources they spent previously on such efforts and plow them back into their operations.

Good for the economy. Good for the government. Just not good for class-warfare-rhetoric.
 
Subsidies would absolutely need to be cut in the given hypothetical. In regards to in general, I'm fine with the cutting of many types of subsidies.

As far as the "Tax loopholes" its a horribly open ended question and are things I think are as often used as political weapons by those trying to "Close" them as keep them open. In general, I'm for closing them, but I also think this is more an issue of our tax code and that its so riddled with holes and weak parts that the "Closing" of most of these loopholes likely has a number of unexpected consequences. I think we just need a full on, complete, rework of our tax code. In general, I'm okay with tax loophole closures but these are much more on a case by case basis and I reject the commonly held notion that only those looking to keep them open are somehow play politics are seeking to do something to benefit who lines their pockets.

As far as this notion that somehow the Republicans not taking action against large businesses or "the wealthy" is somehow a case of them not caring for small businesses or the middle class....a theme your post seems to hold and comes from others...I find it disengious and to be frank a complete crock. There is no where near the push currently to increase burden upon those groups so its reasonable to expect there will not be as much time spend attempting to actively look out for them either. When the majority of the attack is on "the wealthy" and larger businesses its reasonable to expect most of the defense is going to come towards them. If the Democratic focus was on attacking the Middle Class and small businesses I have no doubt you'd see a similar amount of defense mounted by the Republicans focused on those groups...however, that's simply not the case.

I don't believe that closing loopholes on big businesses or making things more difficult for them directly correlates to helping out smaller businesses. Can there be a slight effect in certain circumstances where the small business is competing directly with a larger? Yes. But other than that, this ridiculous notion that "sticking it to", as others (not yourself) have suggested, big businesses or "the wealthy" somehow helps out the little guy is ridiculous. It does nothing but make them, at best, FEEL good that someone is getting "what they deserve" based off the natural human inclination to be jealous and or bitter towards those who are more successful.

So somehow that the Republicans are not interceding on behalf of small business by not closing loopholes on large businesses is a notion I absolutely reject and think is a bit ridiculous, as is the notion that somehow Republicans aren't looking out for small businesses.

As far as the corporate income tax rates, I'm not sure of what the actual rates are on "coprorations" compared to small businesses, so I can't make an honest comment here. I will say that basing law off of what seems "fairer" is a completely ridiculous and illogical means of building law imho as "fair" is a complete and utter abstract thing that can be manipulated and contorted to fit the world view and agenda of the individual imposing the standard of which the "fairness" will be based on.

In our current economic situation, as a general sense, I would not be in favor of any kind of tax hikes unless it was one that is at least somewhat targeted across the board...anything less to me is nothing but an excuse to pander for votes by targetting an extreme minority that one can hold up as the great and vile enemy to rally people behind and is a behavior I find abhorent.

Furthermore, history has shown that Tax Hikes do not result in reduced spending or extreme fiscal responsability but simply as justification for why more spending is okay because suddenly its "revenue neutral" and there's no need to cut, which then leads to the standard historical trend of spending more than what is currently revenue neutral leading to this whole ordeal again. Perhaps if the government shows that it can be anything other than the bloated gluttonous pig of waste that it is then I'd be willing to suggest we need to actually feed the beast more. Until that time it may very well be a situation similar to that with a severe addict and that by continuing to give into them all you do is feed the addition and prolong the inevitable.
 
President Obama once said

“The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Increasing America’s debt weakens us domestically and internationally. Leadership means that “the buck stops here.” Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.”
There is a huge difference from being a U.S. Senator and POTUS. I am willing to bet that if any member of the GOP who is against raising the limit would think differently if the were sitting in the Oval Office.

Lets not forget that the debt limit was raised 7 times under President Bush - that's almost once per year in office. And much of the debt today is because of the lose if Income tax revenue due the downturn economy. Plus the tax rates haven't been lower in like 50 years.
 
There is a huge difference from being a U.S. Senator and POTUS. I am willing to bet that if any member of the GOP who is against raising the limit would think differently if the were sitting in the Oval Office.

Lets not forget that the debt limit was raised 7 times under President Bush - that's almost once per year in office. And much of the debt today is because of the lose if Income tax revenue due the downturn economy. Plus the tax rates haven't been lower in like 50 years.

Have we lost more than $4 trillion in tax revenue in 2.5 years?
 
Have we lost more than $4 trillion in tax revenue in 2.5 years?
I didn't say it was, I don't know how much it is, but tax revenue is really down. Also, Obama's first year I office, was with Bush's budget.
 
I didn't say it was, I don't know how much it is, but tax revenue is really down. Also, Obama's first year I office, was with Bush's budget.

But that has nothing to do with tax rates and everything to do with the fact that we're in a recession.
 
My personal feeling is i'd like to see the debt cieling raised along with spending cuts and to fight the battle of spending without the notion of default looming over everyones heads.

However, sticking to the thread topic of the hypothetical that it is not raised, I'd rather significantly cut spending entire across the board...entitlements, military, infastructure services, welfare services, etc...so as to be able to pay out debt payment.

However no cut in defense until we see a cut in welfare. When I see a "real" cut in welfare vote for by the left, then I'll believe they are sincere.
 
We made Wall Street (investment banks) whole. We gave them billions of dollars and they are still gleefully sitting 0n those billions. We should not be taxed for that. I don't doubt that the GOP would not support this but if we are going to raise taxes there are two areas we should do it.

1. Tax Capital Gains the same as regular income
2. Impose a tax on trades.

I see TImmy saying how we need to raise taxes but yet, I don't see him suggesting we raise taxes on those he gave billions to. (his buddies)
 
We already made the mistake by bailing those guys out. Raising capital gains taxes will not justify that misstep. In fact, it would make the recovery even worse as it would decrease investment.
 
We already made the mistake by bailing those guys out. Raising capital gains taxes will not justify that misstep. In fact, it would make the recovery even worse as it would decrease investment.

You seem to have missed that they are not investing it but sitting on it. I am NOT willing to pay more taxes to make up for what we paid for the sleazebags. Let's make something else clear. Creating bubbles is not "investment". That is just about all Wall Street is good at today.

A tax on trades will not harm investments either. If you are investing in something, you aren't in-out-in-out-in-out-in-out.
 
We made Wall Street (investment banks) whole. We gave them billions of dollars and they are still gleefully sitting 0n those billions. We should not be taxed for that. I don't doubt that the GOP would not support this but if we are going to raise taxes there are two areas we should do it.

1. Tax Capital Gains the same as regular income
2. Impose a tax on trades.

I see TImmy saying how we need to raise taxes but yet, I don't see him suggesting we raise taxes on those he gave billions to. (his buddies)

I think we should add a national sales tax and close the tax loopholes. There shouldn't be any loopholes at all when it comes to taxes.
 
I think we should add a national sales tax and close the tax loopholes. There shouldn't be any loopholes at all when it comes to taxes.

A national sales tax would of course hit the poorest the hardest.
 
A national sales tax would of course hit the poorest the hardest.

Depends if it exempts food, housing, and medication like most examples I've heard proposed or if it really ison everything
 
Why do you lean "undisclosed"? With those comments you coulld be Bertha Lewis>

1. Clinton's budget surplus was no where near enough to pay off the debt under his adm. There was a surplus of $1.9 billion in fiscal 1999 and $86.4 billion in fiscal 2000.
The debt increased under Clinton from 3.6 trillion in 91 to 5.6 trillion in 2000.

So let me get this straight?? You are complaining because the surplus wasn't big enough?? ROFL!!! You just totally shot yourself in the foot.. When was the last time a president took offive with a budget surplus?? How much did Bush grow the deficit and the debt?? Give me a break dude!!

President Clinton announces another record budget surplus - CNN

The surplus was $230 billion according to this..

PRESIDENT CLINTON: THE LARGEST BUDGET SURPLUS AND DEBT PAY-DOWN IN HISTORY

Another one that puts it over $100 billion..

The Budget and Deficit Under Clinton | FactCheck.org

$200 billion here.. Seems to me you are simply wrong..

Have a nice day..
 
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