US Debt Ceiling

[Forboding Angel]

I'm only mildly interested in this discussion at the most, but lemmie spell it out for those of you non-USians

The reason it's even a question is that once it is raised, Mr. Obama and co. will just go spend us even further into debt. The american people are pretty pissed off about Mr. Obama's spending habits already.

The republicans are doing exactly what we asked them to do, and when asked about raising the debt ceiling the majority said "Fuck that", but then as the debate went on, public opinion shifted over to the "Lets make a deal" side.

Of course, the issue of it affecting other countries around the world is serious, I don't think anyone is denying that, but if the US Congress and president does not have the hammer brought down squarely upon their nuts, they will not learn anything and we will be even more worse off than before.

Europe loves to the the US to mind it's own business and stay out of everyone elses'... Well, that is exactly what is happening here. It is obvious to people in the US that if we were to actually do what europe asks, we would be vilified for it, and if we do the opposite we are vilified for that as well.

Then the hypocrisy of interfere here and not there starts up and it's an ugly mess.

Back on track, I am not particularly concerned whether it swings one way or the other. I am only dimly aware of the particulars because I cba to care. Politics and parties are so fucked up at this point it just doesn't matter to me anymore. Also, part of me wonders what exactly would happen if it were not raised. Moreover, in the long term, would it end up being a positive or a negative?

This is a very good article on the subject: http://money.cnn.com/2011/05/16/news/ec ... /index.htm

In the end, a deal will be made. To think otherwise is just silly, so europe need not fret, however, it will be as close to the deadline as possible. This is political "making a statement". This is the equivalent of bringing the hammer down upon nuts but stopping just before the hammer hits.

[FLOZi]

The entire system is in crisis, not an irretrievable one (there's no such thing, there's always a way out on the backs of the working class) but surely one unimagined in generations.

"it is a curse to live in interesting times"

[Das Bruce]

This is not a troll question.

Say they don't raise the debt ceiling, what happens the next morning? People get up and go to work? The sky falls?

[KDR_11k]

The US will have to cut whatever needs money next without getting to decide whether it's a good idea or not. That may either mean defaulting on a loan (immediately destroying the trust in US bonds which will devastate the economy with enough ripples to cause a worldwide recession) or failing to pay for something else the govt has to fund which may also be considered defaulting. There's no way to balance the budget fast enough.

Any action which results in US bonds no longer being a 100% surefire investment will kick off a worldwide recession as it drops the value of bonds held by thousands of banks and companies and trigger some automated lending rules that demand specific ratings for investments before buying them. Investors will become wary of US bonds and AFAIK there's a rule that no company can be rated higher than its parent country so you'd see all US companies get a lower credit rating.

A major problem is that the Reps seem to demand that under no circumstances be the Bush tax cuts repealed. Obama offered a compromise: Do the cuts the Reps demand, remove the tax cuts like the Dems demand. The Reps declined. It's absolutely mandatory that the debt ceiling is raised, anyone acting like that's something only the Dems want is crazy. As for govt spending habits, the Dems have a much better track record for handling the budget than the Reps do.

I think there's a real chance that the tea party fanatics will try to stop the debt ceiling rise but those are hopefully outnumbered.

[Satirik]

yeah it's probably obama who made your national debt reach the limit

[det]

The reason it's even a question is that once it is raised, Mr. Obama and co. will just go spend us even further into det.

This is blatantly false, where do you even get your information? I haven't received a single cent from Mr. Obama.

[KDR_11k]

This is blatantly false, where do you even get your information? I haven't received a single cent from Mr. Obama.

lol

[TheMightyOne]

Wasn't it the plan of the Reps all along?

Look how Bush doubled the debt in the last year of his presidency, washed his hands and was like: "There you go Obama, here is the White House, here is your oval office. Oh and yea, I've just doubled our debts, here they are all yours now to deal with. Problem?"

Of course Obama fails to deal with it or in order to get the situation under control some unpopular actions have to take place. Everybody is unhappy with Obama although it were the Reps who created the whole mess and then in the end the heroic Reps appear to tell the sheeps:

"Hah! You see?! A democratic president in the White House and immediately all hell breaks lose! We knew nothing good will come out of it. *Insert some racial insult here* Burn! Burn the democrats. But the reps are here to save you! God bless America!"

P.S. And whats up with this bullshit of "We have the best economy in the world"? I've heard this so many times now, the last one was at one of the TED talks on youtube. How can the best economy have the biggest debts in the world?! If thats not propaganda then what is? People under the communist regime believed that they lived in the best country in the world. How is the situation in America any different now? (This is probably a bit exaggarated but you get my point. Also if it sounded anti-american to any of you let me make clear that it was not my intention to offend anybody.)

[Forboding Angel]

yeah it's probably obama who made your national debt reach the limit

Hmm, too bad that chart only goes to 2008. You do realize that in his first year iirc (maybe first 2 years), obama managed to spend more than bush did in BOTH terms.

This is not a troll question.

Say they don't raise the debt ceiling, what happens the next morning? People get up and go to work? The sky falls?

^^ this.

Edit: Also, why the point fingers at parties anyway? It's pretty irrelevant here in this discussion. I doubt many of us here will claim to belong to either party. For example, I myself am an independent, as are 75% of the United States voting public.

[Regret]

How can the best economy have the biggest debts in the world?!

Money = dept, that's the base of capitalism.

You do realize that in his first year iirc (maybe first 2 years), obama managed to spend more than bush did in BOTH terms.

Citation needed.

[Forboding Angel]

http://washingtonexaminer.com/politics/ ... s-spending << 2 years old
http://www.cafetax.com/2010/09/20/bush- ... the-truth/ << one year old

Obama's total spending after his first 50 days in office- $2,290,000,000,000 ($2.29 trillion)

That equals out to be:

$45,800,000,000($45.8 billion a day) for every single day Obama has been in office

$1,908,333,333 ($1.908 billion an hour) for every single hour Obama has been in office

$3,180,555 ($3.18 million per minute) for every single minute Obama has been in office

$530,092 for every single second Obama has been in office.

That is right. Obama spent $530,092 for every second he has been in office.

(Speaking only of the first 50 days in office)

http://scottystarnes.wordpress.com/2010 ... -spending/


(This graph is a year old)

etc etc etc

This is not news...

[AF]

Obama Spending

Obamas spending is dwarfed by the bail out money. Started by Bush, and then continued by Obama. Not because Obama is bad at spending ( Bush was republican and he issued bail outs too ), but because it was necessary. It was no democrat ideology or policy, it was emergency fiscal measures.

Obama was forced into it.

"Obama fanboi are we?" "Republicans would never have done it" "Nonsense Obama is just a cashwhore who spends spends spends"

• Every western power with any kind of money has done exactly the same thing. This is out of necessity not choice. Even China has done this
• These other countries are not following the US' lead, infact its said the US was following the lead of UK bailouts. If anything this is not an Obama democrats policy, its a Gordon Brown New Labour policy

Europe

Im not sure what it is about the US and thinking Europe is lecturing, but what we here in europe have heard has come straight from the mouths of senior US politicians. Not Merkel or Sarkozy or Cameron etc

Do you think european leaders are spending their time meddling in US budgets? That right wing propoganda, and propoganda that fails utterly to comprehend the situation here in europe

We've watched the effective bankruptcy of Ireland Portugal Iceland and Greece, our governments have spent trillions bailing out companies banks and entire nations, and we're still faced with major problems.

What's more, your US situation is frought with ideological party politics. From what we've seen its the Republicans refusal to raise taxes that's blocked the cuts needed. Cuts European countries did very quickly and repeatedly, that the US has failed to do because of petty squabling.

Why should nonUS parties be interested or bothered at all?

Because your not some outback out of the way country, your the center of the world economy, and what happens to you happens to all of us. The decisions made on the hill sometimes have bigger effects for entire countries than it does for US citizens where economics are concerned.

[Das Bruce]

What is the magic 2.6% line?

[smoth]

Honestly I think the saudis are more important that the US globally

[scifi]

Come on not like ronald reagan raised the debt ceiling.
ÔÇ£The debt ceiling was raised 17 times when Ronald Reagan was president, "
Hows that for a fact. You can say the amount is a lot bigger, but it was considered big at the time.

Seriously this talk about republican/democrat nonsence just pisses me off.
The issue is simple raise the debt ceiling or face another worldwide recession.

You afraid Obama spends the money, lol, like he could even do it, he cant pass a single god dam bill, without the republicans.

The US congress has been frozen , neither party has the majority, you guys are on a pre-election environment already.

Just raise the debt-ceiling then both partys can go back to theyr usual political nonsence.

[Hoi]

There's a few things going on here...

Forb is, as always hating on democrats, and having faith that with a republican president things will be "ok". The fact is, both sides are the same bullshit, and the system is made to distract you from the problems. If you fight each other or fight rep/dem then you can not look at the real problems.

And what are those real problems. Besides from the cancerous corporatism that is spread throughout the world, with corrupt governments, most of the economic problems are caused by the economy being a ponzi scheme, the so called "fractional reserve banking".

The taxes you are paying are going directly to the federal reserve and it's owners. The name says federal, but the federal reserve is in fact a PRIVATELY owned bank, where neither the government, congress or supreme court is allowed in. They are the only institution allowed to print money, and loan this money to banks and government for interest. Adding this for "fun", the last president to attempt to make his own money, the last one who stood up against the FED, was JFK, who was assassinated just before he started putting the fed out of business. The next president cancelled JFK's orders.

THAT is where the debt is coming from. The debt is the governments debt to the reserve. They need to pay interest, but in the system, creating more debt creates more money, and more money creates more debt. Why do you think banks and other companies want you to get a credit card and consume so badly? The more you loan, the more money they get!

The federal reserve does not only give the government money, for a lot of interest. They also give the banks money, for interest. The banks borrow it to you, but there is more trickery involved. The banks need to have 10% of what they borrow. Assume a bank has $1.000.0000, they can now loan 9 million to people. This 9 million is "loaned", but transferred to a bank account, which is added to the total deposits of the bank. This means that the bank can now loan an additional 81 million. This continues forever, and the printing and creating money out of thin air is what is causing massive inflation; it's a hidden tax, theft. The worst part, is that the system WILL fail. That's a logical consequence, but the elite and rich do not care: they use the system to transfer all money from the poor to the rich. That's why currently 1% of the world owns 60% of the wealth, and 60% of the world owns 1% of the wealth. (this is NOT a joke, but a FACT!)

Of course this can't work very well, and eventually the ponzi scheme collapses. The banks should go bankrupt... or not? Ever heard of "too big to fail"? That's right, they steal your money, collapse because of their system, and then your tax money is being used to keep them from going bankrupt.

My prediction: The system will soon collapse entirely. Sooner than you think, the entire global economy collapses. It doesn't matter what bubble bursts first, because they are all connected. The housing bubble in China? Greece? Debt ceiling? Or just the bubble in general? It will happen, and when something happens everything is going down. I hope people will start listening and understanding what is wrong, and I hope they will demand change. Not only to this but also to the cancerous corporatism and corrupt governments.

[scifi]

Hoi let me just, coment your post, Ok the economic system is far from perfect, and there are unfair practices, but let me tell you , theres more probability of the world turning into a fully privatised run world, than the whole economic/capitalist system falling apart.

There are to many interests like you said, preventing the fall of the system, its like Greece, nobady wants to help, yet they do , because if Greece falls its worse for everyone in europe.

So Greed and Self-serving Interests may save us in the long run.

[Hoi]

Hoi let me just, coment your post, Ok the economic system is far from perfect, and there are unfair practices, but let me tell you , theres more probability of the world turning into a fully privatised run world, than the whole economic/capitalist system falling apart.

There are to many interests like you said, preventing the fall of the system, its like Greece, nobady wants to help, yet they do , because if Greece falls its worse for everyone in europe.

So Greed and Self-serving Interests may save us in the long run.

The enormous collapse of the economy in the near future is a fact. This does not mean that, if "they" get things their way the world will be fully privatized. However, such a world is not sustainable, just like our enormously ineffective system of today is unsustainable, and will crash soon, simply because it is not sustainable.

Nobody is attempting to help Greece, they are trying make profit from helping Greece. They want to loan money to Greece with high interest rates, which obviously won't work.

The economy is based on a lot of speculation and debt, in an "infinite growth paradigm". And well, infinite growth does not exist, and we have already hit the limit of growth. Soon the collapse will begin, trust me. And the day it does, I will watch the news with some popcorn, and laugh at all their incorrect information, bullshit and fear mongering.

The only way to survive and live well is overthrow corrupt governments and evil corporations that are causing all of this. Greed and Self-serving Interests will not and never save us, they will only make everything worse.

[AF]

Visdualised US debt:

http://www.wtfnoway.com/

And indeed, there will be a calamitous crash in the near future. I dont know if it will be a total crash but it will be significant. All the bad debt has been swapped from AAA rated private to AAA sovereign. We've swapped a private debt bubble for a sovereign debt bubble.

The arguements on the hill cant be solved in a rush to agree at the last moment like last time. By then it will already be too late. The US doesnt deserve its AAA rating but its been allowed to keep it because it would be unprofitable for all involved to do so. This will not last forever.


What we have here is a system where

• the banks can do as they please.
• Banks then get into trouble after squirreling away the profits.
• Government is forced to bail them out to keep order
• Government is blamed for it all
• Bankers repeat process and offload further bad debts to government
• Bankers and Media Moguls owning rightwing corporations report the bail outs not as emergency measures, but as spending measures, thrift
• Bankers get away scot free
• People best placed to fix the issue are penalised
• Public attention shifted from Banker politics and regulation, to government politics and spending

[KaiserJ]

Reagan de-regulated banking in such a way as to favor corporations over the individual in order to strengthen the USA's position in the world economy

as AF touched on, the problem is with investment ratings and debt. during the bush administration, financial de-regulation allowed banks and investment groups to reclassify investments to higher ratings than they should have had, which then backfired when the lies were exposed and people were bilked out of their money.

i'm honestly not that worried about the rest of the world; in the wake of the 2009 era bank collapses, EVERY OTHER country made policy changes after being shafted by investing in american funds (that i can think of ATM... iceland, france, malaysia) to prevent inaccurate classification of AAA bonds and to restrict their governments use of them.

harkens back to the end of WW2, where every "defeated" country was drafted a constitution guaranteeing everyone in that country food, shelter, work, and an education. as time went on, average quality of life in said countries (germany, japan etc) increased dramatically from the US instituted policy while at the same time it decreased in the US.

and these days, after getting hit hard with collapsing US investments, these countries form new policies to protect themselves from sour expenditure, while the US plows along in the exact same path as before

by keeping the majority of people poor and with few options to advance themselves or any sort of power, the banks essentially hold the populace hostage against the government... people will support a short-term solution to protect their own families and themselves because general collapse is presented as a surety

how did canada avoid getting poop on it (as our economy is linked at the hip with that of the US)? we never de-regulated banking, so nobody got bilked out of their money.

forboding your chart massively disproves your point; it shows a dramatic decrease in spending by the obama administration after a giant increase by bush; the future rise is projected. currently you are on the the way down.