Cleveland Buck;1181539 wrote:Unfortunately for all of us, both sides get together just fine when it is time to raise the debt ceiling. The filibuster isn't keeping them from cutting spending.

Unless you advocate defaulting on our loans, then they do have to pass a bill to raise the debt ceiling, or cut sufficient spending to avoid default. Not sure how you think that is ever going to get 60+ votes in the Senate.

IggyPride00;1181545 wrote:Unless you advocate defaulting on our loans, then they do have to pass a bill to raise the debt ceiling, or cut sufficient spending to avoid default. Not sure how you think that is ever going to get 60+ votes in the Senate.

The $2.5 trillion in revenue they take in is plenty to pay the $500 billion in debt service payments. There is no reason they would have to default if the debt ceiling wasn't raised.

Clearly Washington doesn't think deficits matter. And there may actually be something to that argument, at least as long as the UST remains among the safest asset out there (and the USD the global reserve currency).

The other interesting "phenomenon" is that the bulk of the deficit expansion is not actually being funded by foreign buyers, in fact it's actually gone down a bit, I think. No, we've funded it simply by printing more money. This means, basically, the govt owes a lot of that money to itself. As long as inflation remains low (again, for a variety of reasons), you can do that indefinitely (at least in theory).

However, IMO the ballooning debt and deficits (along with the forecasted tax increases as a result) are clearly starting to hurt the economy. Businesses are hoarding cash for a rainy [tax] day and also they are reluctant to invest in the very uncertain tax/regulatory environment created by the Obama regime.

believer;1181531 wrote:Eh, you said it yourself....it started with FDR (IE: before the Boomers). And don't pretend that the Gen X, Y, and Z-er's are immune from sucking the gubmint teet. In fact they were born & raised to do it. FDR got the ball rolling, the Boomers jumped on board, and the puppies don't know the difference.

Gen X, Y, Z etc. aren't getting private sector pensions (particularly backed up by government guarantees), and those that are sucking at the public sector teat...hopefully they should realize by now the milk is dry.

No joke, my father is a retired HS teacher who has a pension worth more than I make in a year, and I'm close to the 1%. Where is this money coming from?

Manhattan Buckeye;1181560 wrote:Gen X, Y, Z etc. aren't getting private sector pensions (particularly backed up by government guarantees), and those that are sucking at the public sector teat...hopefully they should realize by now the milk is dry.

No joke, my father is a retired HS teacher who has a pension worth more than I make in a year, and I'm close to the 1%. Where is this money coming from?

Oh you'll get no argument from me especially on the public school retirement package. My wife's parents are both retired teachers from the Westerville school system. They sold their Dublin-area home and paid cash for their new beach-front property in Wilmington, NC. Both paid cash for their cars this year off of their lucrative pension programs. Pretty good for a couple of "poor" public school teachers who got little attention, recognition, or money when they were "on the job." And both, not surprisingly, are huge supports of Obama.

As far as private sector pensions go, I'm apparently one of the fortunate few greedy selfish Boomers who still have a pension to look forward to. I'll receive $7 a month for every year of service when I retire 10 years from now. That means I'll collect about $299 a month at age 65 along with whatever hasn't been decimated in my 401K plus Social Security assuming, of course, my mandated "investment" money is it's still available in the FDR ponzi scheme in 2022.

I'm looking forward to my Boomer Retirement.

Manhattan Buckeye;1181560 wrote:Gen X, Y, Z etc. aren't getting private sector pensions (particularly backed up by government guarantees), and those that are sucking at the public sector teat...hopefully they should realize by now the milk is dry.

No joke, my father is a retired HS teacher who has a pension worth more than I make in a year, and I'm close to the 1%. Where is this money coming from?

Oh you'll get no argument from me especially on the public school retirement package. My wife's parents are both retired teachers from the Westerville school system. They sold their Dublin-area home and paid cash for their new beach-front property in Wilmington, NC. Both paid cash for their cars this year off of their lucrative pension programs. Pretty good for a couple of "poor" public school teachers who got little attention, recognition, or money when they were "on the job." And both, not surprisingly, are huge supporters of Obama.

As far as private sector pensions go, I'm apparently one of the fortunate few greedy selfish Boomers who still have a pension to look forward to. I'll receive $7 a month for every year of service when I retire 10 years from now. That means I'll collect about $299 a month at age 65 along with whatever hasn't been decimated in my 401K plus Social Security assuming, of course, my mandated "investment" money is it's still available in the FDR ponzi scheme in 2022.

I'm looking forward to my Boomer Retirement.

gut;1181554 wrote:However, IMO the ballooning debt and deficits (along with the forecasted tax increases as a result) are clearly starting to hurt the economy. Businesses are hoarding cash for a rainy [tax] day and also they are reluctant to invest in the very uncertain tax/regulatory environment created by the Obama regime.

I agree, completely.

Cleveland Buck;1181550 wrote:The $2.5 trillion in revenue they take in is plenty to pay the $500 billion in debt service payments. There is no reason they would have to default if the debt ceiling wasn't raised.

Not paying government contractors, workers or other contractual obligations would have been seen by the market as a default, and would have caused our credit rating to be hammered, which in turn would have made out debt more expensive causing the problem to get that much worse. Not to mention, there is no protocol in place to decide who does and doesn't get paid, which would have caused chaos in the market.

Clearly Washington doesn't think deficits matter.

Dick Cheney famously said at the time of the Bush tax cuts "Ronald Reagan proved deficits don't matter."

When that was the mentality of a major leading conservative who was supposed to care about fiscal conservatism, you knew we were in trouble.

Democrats naturally love debt, but some how the Conservatives were co-opted into the movement and we have been dying ever since.

IggyPride00;1181732 wrote:Not paying government contractors, workers or other contractual obligations would have been seen by the market as a default, and would have caused our credit rating to be hammered, which in turn would have made out debt more expensive causing the problem to get that much worse. Not to mention, there is no protocol in place to decide who does and doesn't get paid, which would have caused chaos in the market.

No, it wouldn't. It would increase confidence in our debt since not only would we still be meeting our debt obligations but we would be getting our house in order and not running up any new debt.

IggyPride00;1181741 wrote:**** Cheney famously said at the time of the Bush tax cuts "Ronald Reagan proved deficits don't matter."

When that was the mentality of a major leading conservative who was supposed to care about fiscal conservatism, you knew we were in trouble.

Democrats naturally love debt, but some how the Conservatives were co-opted into the movement and we have been dying ever since.

I'm curious if there's a legit source for this. I know the quote is infamous, but in my internet search Cheney's comment is quoted as biblical from left wing blogs and crappy other websites. Is there a legit source for this?

Cleveland Buck;1181768 wrote:No, it wouldn't. It would increase confidence in our debt since not only would we still be meeting our debt obligations but we would be getting our house in order and not running up any new debt.

You clearly don't understand much about market confidence and psyche.

If the U.S government stops making good on contracts because they can only afford to pay so many of them, there will be a trickle down effect.

The market will see that the government will have to start picking and choosing who they can afford to pay and who they can't, and that will cause chaos because everyone will start wondering if they are on the list of who will get paid and who won't.

While you are drawing a line between official debt payments, and then everything else, the market won't. To them stiffing a weapons maker with a defense contract because they don't have the money is as bad as not making an interest payment on our national debt.

That is by definition the uncertainty which roils markets.

Manhattan Buckeye;1181793 wrote:I'm curious if there's a legit source for this. I know the quote is infamous, but in my internet search Cheney's comment is quoted as biblical from left wing blogs and crappy other websites. Is there a legit source for this?

Paul O'Neil the former Bush II treasury secretary. He was concerned about the deficits that would result from the tax cuts (which did end up happening) and Cheney apparently turned to him in the room in front of everyone else and told him not to worry, "Because Reagan proved deficits don't matter." No one has ever disputed from what I have seen that it didn't happen.

IggyPride00;1181799 wrote:You clearly don't understand much about market confidence and psyche.

If the U.S government stops making good on contracts because they can only afford to pay so many of them, there will be a trickle down effect.

The market will see that the government will have to start picking and choosing who they can afford to pay and who they can't, and that will cause chaos because everyone will start wondering if they are on the list of who will get paid and who won't.

While you are drawing a line between official debt payments, and then everything else, the market won't. To them stiffing a weapons maker with a defense contract because they don't have the money is as bad as not making an interest payment on our national debt.

That is by definition the uncertainty which roils markets.

They paid the weapons maker up front. They didn't get a line of credit from them. If they stop ordering more weapons, that is not a default. They don't owe anyone their welfare check or their farm subsidy check or their green energy subsidy check. Those are not debts. The market would probably sour on the sectors of the economy that depend on the government to be profitable, but they should since that isn't real economic growth or prosperity anyway. The market would not sour on U.S. debt though. They would feel better than ever about it since we wouldn't be flooding the market with more of it.

"Well because, if you take a trillion dollars for instance, out of the first year of the federal budget, that would shrink GDP over 5 percent. That is by definition throwing us into recession or depression. So I'm not going to do that, of course," Romney said in an answer picked up by former bank regulator William Black.

"I don't want to have us go into a recession in order to balance the budget."

http://www.huffingtonpost.com/2012/05/25/romney-spending-cuts-depression-tea-party_n_1545933.html

This is really going to work. Willard (in comments from recent interviews) is promising a round of huge new tax cuts, while taking the Democrat line that we can't cut spending because it will hurt economic growth.

Under what scenario does that not lead to massive deficits as far as the eye can see?

The people who have been thinking this guy is any better than BHO are laughable. He is a big government liberal who bought the Republican nomination.

We are screwed.

IggyPride00;1181804 wrote:Paul O'Neil the former Bush II treasury secretary. He was concerned about the deficits that would result from the tax cuts (which did end up happening) and Cheney apparently turned to him in the room in front of everyone else and told him not to worry, "Because Reagan proved deficits don't matter." No one has ever disputed from what I have seen that it didn't happen.

And that statement was true, to an extent (at least 10 years ago). A (singular) deficit doesn't matter, and there are even arguments to be made that some govt debt is healthy (especially at negative real interest rates).

But the mentality in Washington has taken that statement to an extreme. We're not talking $100B or $200B deficits, we are hitting $1.5T. They literally are just playing Monopoly now where the bank just gives out all its money.

Like I said, the biggest holders of federal debt, almost half, are interagency (i.e. the Fed, UST, SS, etc...) - read debt the govt owes to itself. I'm unsure what happens if they default on some of that - or what might actually happen is a forgiveness or cancellation of debt (Europe can't do this because Germany and others won't allow it). The point of printing money and issuing the IOU (treasury) is, theoretically, it's only a temporary expansion of the money supply (and when the govt pays off the debt, then in theory that money is removed from the supply).

I'd have to look for some research on it. But sometimes I wonder if what isn't actually happening is a transfer of wealth from low/middle income Americans (via globalization) and back to them - via US govt deficits - because of the global deflationary forces. In other words, you lose $100 in wages to China, but this also creates deflationary pressure, so the US just prints $100 and gives it to you and the net impact on prices & wages is 0.

It certainly isn't sustainable indefinitely, but in actuality deficits don't matter so long as you can finance them by simply printing money without repercussions. It IS sustainable, at least temporarily, until the market punishes you with higher interest rates and inflation.

IggyPride00;1181958 wrote: The people who have been thinking this guy is any better than BHO are laughable. He is a big government liberal who bought the Republican nomination.

We are screwed.

That might be true. But since when did politicians start actually doing what they promised in their campaigns? You look at the backgrounds and track records, as opposed to campaign rhetoric, and Romney is infinitely more capable and likely of doing the right thing than Obama. That doesn't mean he'll accomplish it, but when you have just two choices why would you re-up on the proven failure?

Cleveland Buck;1181809 wrote:They paid the weapons maker up front. They didn't get a line of credit from them. If they stop ordering more weapons, that is not a default. They don't owe anyone their welfare check or their farm subsidy check or their green energy subsidy check. Those are not debts. The market would probably sour on the sectors of the economy that depend on the government to be profitable, but they should since that isn't real economic growth or prosperity anyway. The market would not sour on U.S. debt though. They would feel better than ever about it since we wouldn't be flooding the market with more of it.

Spot on. Until more people figure this out (i.e. politicians), then I agree with Iggy, it's over.

http://www.huffingtonpost.com/mobileweb/2012/05/25/romney-spending-cuts-depression-tea-party_n_1545933.html?icid=hp_front_top_art

Welcome back to the land of reason governor Romney...certainly more reasonable than president Obama appealing to the confidence fairy at this time last year. If only the anointed one would so clearly repudiate the tea party

Hopefully we never get to see how wrong cleveland buck would be if we didn't extend the debt ceiling

gut;1181964 wrote:That might be true. But since when did politicians start actually doing what they promised in their campaigns? You look at the backgrounds and track records, as opposed to campaign rhetoric, and Romney is infinitely more capable and likely of doing the right thing than Obama. That doesn't mean he'll accomplish it, but when you have just two choices why would you re-up on the proven failure?

This is, in fact, the bottom-line.

Obama invites GWB to the White House for his portrait. If the painter screws up the portrait, you think Barack will blame Bush?

http://thecaucus.blogs.nytimes.com/2012/05/25/after-digs-at-his-predecessor-obama-will-host-bushes-at-white-house/?src=mv&ref=general

I saw John Kyl out recently touting the same Willard/Democrat line that cutting spending (in his case defense) will lead to a recession and we must avoid it.

Am I in a paralell universe right now or something? When did Republicans adopt the Democrat mantra of "thou shalt not cut govt spending for fear of a recession?"

Where is the Tea Party? I have been to Red State and the National Review, and not even a blog yet that Willard, the stand bearer of the party, has shunned all Conservative principal and indeology in adopting Democrat Party talking points about the importance of government spending.

He conceded that Govt spending does create jobs, which is a major tenant of the Democrat Party, and loathed and abhored by Conservatives and small government advocates?

So much for being "severely conservative" as Willard said in the primaries. Republicans and Conservatives have been conned into allowing a Massachusetts liberal to buy the party nomination to continue the expansion of government started by BHO.

I just want to know where the outrage is? We sent the Tea Party to Washington not even 2 years ago in the biggest electoral landside in almost a 100 years to shrink government. For all that work we get an an ideological leftist as a nominee who is espousing progressive talking points on government spending and everyone is just OK with it and continue to carry the guys water? What has happened to us?

Conservatives from the beginning have said that Romney was "Obama-lite". This comes as no surprise, unfortunately.

As much as I can't stand Obama's policies, Romney is only SLIGHTLY better.

As much as I can't stand Obama's policies, Romney is only SLIGHTLY better.

That is what I am so angry about.

We need a radical course correction in this country, and this guy doesn't ideologically believe in Conservatism. He believes in his core that government is the solution, not the problem.

He is a Keynesian who believes that government spending creates jobs. He believes in government mandating you have buy healthcare. He believes in government bailouts (he was a stong proponent of tarp). He believes in big deficits for as far as the eye can see.

I just don't understand how this happened.

It is not a joke to say that if you listed his positions and core beliefs on paper against Obama you literally would have a hard time telling them apart. That is not what this country needed.