If the DEBT CEILING is not raised? What then?

[Jimmy Higgins]

Of course default would trigger some bad things, but there won't be any default. So forget it.

That has got to be the funniest thing ever said... seriously.

Default would be bad, but that's WHY no one will let us default. It'd be too bad!

Kinda reminds me of Scott Adams in 2016 insisting Trump would be a good president. Why? Because no one wants to be remembered as a bad president. He'll be good just because expectations are so high.

Yeah, whoops.

I remember when Scott Adams wasn't insane.

Or maybe it was I remember when I didn't know Scott Adams was insane.

 

[Jimmy Higgins]

translation: The world comes to an end unless the U.S. runs up 2 or 3 or 4 trillion $$$$ in higher debt every year -- reducing the annual deficits is unthinkable -- we must religiously keep increasing the debt without limit forever, because we must repudiate everything people thought prior to 1930 when they didn't know we could just borrow more and more without limit in order to the pay an annual budget increasing without restraint, never decreasing, in order to gratify our instant gratification regardless of the longer-term damage, which doesn't matter because "in the end we're all dead."

You say that like the Fed Chairman noted that "Shit... we can just borrow billions of trillions with no issue at all. Hakuna Matata bitches!"

 

[Lumpenproletariat]

Reds and Blues: our only hope is INSTANT GRATIFICATION.

"In the long run we're all dead."

After working for more than 40 years, my father received a monthly check of $1,200. Slicing 10% off of that doesn't sound like much, but if it is your sole source of income, it is a lot.

This just proves the point: There is no rationale for higher debt other than crybaby emotionalistic outbursts. The fact is that everyone will be worse off long-term if the creditors are not paid. But who needs facts when we can emit our knee-jerk impulses?

The notion that it is okay to stiff people on social security but not creditors of the US gov't is morally obnoxious and legal nonsense.

again -- nothing but emotionalistic outbursts are the only reason we must increase the debt. The truth is that everyone will get stiffed, including the poor, if the creditors are not paid on schedule.

If there was a way to stiff ONLY the creditors and the rest of us would live happily ever after, it would have been done ages ago. But that is fantasy and Crybaby Economics. Stiffing the creditors would cause future budgets to be slashed far worse than if we just slash the budget now and increase taxes to stop the chronic debt.

This nothing to prevent the US gov't from enacting a law declaring their debt worth 90% of its face value.

This babble has already been debunked:

After working for more than 40 years, my father received a monthly check of $1,200. Slicing 10% off of that doesn't sound like much, but if it is your sole source of income, it is a lot.

The notion that it is okay to stiff people on social security but not creditors of the US gov't is morally obnoxious and legal nonsense. This nothing to prevent the US gov't from enacting a law declaring their debt worth 90% of its face value.

Donald J. Trump suggested such a discount on U.S. bonds! . . .

I don't know how foreign investors and bankers would respond to the U.S. abrogating its SocSec covenant. (Just postponing the mailing of SocSec checks might be a more realistic possibility.) But I think the "haircut" you describe on U.S. Treasury debt would plunge the world into a financial crisis eclipsing any other credit crisis in memory. Not just a stock market crash — exchanges and banks all around the world would close their doors.

and future federal budgets slashed far worse because even modest deficit would be made impossible.

You want to destroy the poor and those on SS -- just keep up this babble you were taught by your Pope Trump that it's OK to stiff the creditors.


It all boils down to only one argument for the current chronic higher and higher debt: "In the long run we're all dead."

So let's just plunder and instantly gratify ourselves today -- there is no future.

Same as the argument to enjoy cheap energy now and do nothing serious about climate change. And so far this gospel (of both the Reds and Blues) is winning the day.

 

[Elixir]

There is no rationale for higher debt other than crybaby emotionalistic outbursts. The fact is that everyone will be worse off long-term if the creditors are not paid.

What are you doing Lumpy? Exploring the boundaries of self contradiction?
"There is no rationale for higher debt ... everyone will be worse off"

That IS the rationale.
It is the government's job, whether or not undermined and opposed by the Republican Party, to make everyone BETTER off, not worse off.

 

[Jimmy Higgins]

This just proves the point: There is no rationale for higher debt other than crybaby emotionalistic outbursts. The fact is that everyone will be worse off long-term if the creditors are not paid. But who needs facts when we can emit our knee-jerk impulses?

The US deficit is prog'd to be around $1.8 trillion in 2022. That is 1/3 the budget. Is your contention that the US economy can manage retracting $2 trillion in spending (around 10% of our GDP) without substantial economic setbacks? To be clear, without additional debt, we could cut out all discretionary spending (military and non-military) and still not break even. Of course, that is only on paper. That would be a lot of jobs lost and a lot of lost revenue. The deficit is supposed to get to a new norm of $1 trillion a year in 2023.

2022 Budget-ish

Discretionary ($1.67 trillion)
- Military $0.9 trillion
- Non-military $0.75 trillion

Non-Discretionary ($3.7 trillion)
- Social Security $1.2 trillion
- Medicare $0.8 trillion
- Medicaid $0.5 trillion
- Other - $1.3 trillion

Interest ($0.3 trillion)

 

[Swammerdami]

... And the fact is that there absolutely will be no "default" on the debt. That would totally end any future borrowing (at least for many years/decades) which the Congress would never do.

This would ring true in the olden days when a large majority of Congresspeople wanted what was best for their country and its people. But that is not the present situation. Mitch McConnell, Kevin McCarthy, Loren Boebert, MTG, Madison Cawthorn and many other Congresscritters are eager to inflict maximum destruction on America, hoping that a fascist Christian-White supremacist oligarchy emerges from the ashes. With Sinema and Manchin possibly siding with the fascists, as many as 12 Republicans may be needed to avert calamity. Will there be twelve? Only three QOP Senators come to mind who don't obviously hate democracy.

Although only a Representative, Liz Cheney is sometimes mentioned as a GOPster who distances herself from the fascists. But recall that she voted almost 100% for the Trump-Putin agenda, finally breaking with QOPAnon only AFTER the Sixth of January.

Yes, QOPAnon Congresscritters will probably vote to avert default — or, more likely, the Ds will submit to QOPAnon extortion — but nothing is certain in this upside-down U.S.A.

Of course paying the debt obligations would have to take top priority over everything else, and Congress would have to increase taxes enough to pay that and also for whatever programs it prioritizes, so the obvious result of not raising the debt ceiling would be higher taxes and major cuts in programs.

This comment is baffling. Tax hikes and spending cuts will take months or even years to have effect. Treasury checks will start bouncing in two weeks if the debt ceiling isn't raised.

... There are various ways to increase taxes, and property/real estate is one kind of asset to tax, which has been neglected.

Much of the "tax shelter" hidden assets is tied up in real estate investments. In the following PBS News Hour clip, every example of hidden assets referred to is some form of real estate investment.
... It is asinine to simply say there is nothing to tax, and yet we must keep increasing spending by a trillion or so per year, and so we have no choice but to keep running up trillion-$$$$ deficits every year without limit, and so there can be no "debt ceiling" = no limit whatever to federal debt, because "debt" means nothing to the government which can magically just keep running up spending without any increased taxing.

And there are probably a million ways to reduce spending. It is Nutcase Wacko Moonbeam Economics to insist on "free college" for all, at $30 or $40 thousand per year per student. What's wrong with meathead Democrats who can't figure out ways to bring down these education costs?
...

translation: The world comes to an end unless the U.S. runs up 2 or 3 or 4 trillion $$$$ in higher debt every year -- reducing the annual deficits is unthinkable -- we must religiously keep increasing the debt without limit forever, because we must repudiate everything people thought prior to 1930 when they didn't know we could just borrow more and more without limit in order to the pay an annual budget increasing without restraint, never decreasing, in order to gratify our instant gratification regardless of the longer-term damage, which doesn't matter because "in the end we're all dead."

Is it true that it would take a "20% meat cleaver"? If so, then slash it 20%. Or if it requires 30%, slash it 30%.

[ SIZE=4]Do what y'gotta do[/SIZE] and stop pandering to the instant-gratification crybabies.

I agree that higher taxes would be appropriate; real estate tax might be a very good way to raise money. I also agree that free college for all may be progressive excess gone too far. (Though several European countries offer this IIUC.)

HOWEVER the debt ceiling is being breached even WITHOUT such progressive spending. Instead many important types of government spending have been FALLING in recent decades. By implying that high spending is as much to blame for deficits as tax cuts, you play into the hands of right-wing liars.

 

[Lumpenproletariat]

No, "default" means failure to pay creditors, not failure to increase debt.

Tax hikes and spending cuts will take months or even years to have effect. Treasury checks will start bouncing in two weeks if the debt ceiling isn't raised.

No they won't. Contracting new higher debt is not necessary to pay current debt due, because there is current revenue already being spent (or about to be spent) on existing programs, which could be suspended or slashed as necessary to free up the $$$$ to pay debt due. The current revenue exists and is paying for programs.

They will not choose to destroy the country later -- a year or 2 from now -- in order to pay a few bills today which could be postponed. The President alone has the power to do it if need be, even if it would legally be challenged, and since it would be a national emergency, he'd have to do it. He would not choose the alternative of national suicide and long-term chaos rather than paying the debt due.

If need be the entire budget, every program, could be shut down -- zero funding to anything other than to pay the current debt obligation -- some programs/payments postponed, others canceled. The current debt payment is not 2 trillion $$$ all at once, as it would have to be to make it impossible for it to be paid. If everything currently funded -- Defense, SS, Medicare, etc. -- everything is suspended, or 60 or 70 or 80% of it, most worker paychecks postponed, etc., the necessary funding exists without increasing the debt. (And it's not close to that desperate.) Several arbitrary meat axes are available if necessary.

The President effectively has power to impound funds, because it would take police action to stop him, and there would be no such action. The Congress would be unable to authorize its own "police" to seize the President in order to stop him. What would happen is that there would be legal challenge, theoretically based on the law prohibiting the President from doing this, but no action taken to stop it, and the legal action would finally fail, as everyone would recognize that it had to be done. And even though some members of Congress would pretend they could stop him, they could not. The main reason he could not be stopped and the Congress could do nothing about it is that virtually everyone would recognize that in this case it was the only option -- no other choice.

Biden or any President, Republican or Democrat, would recognize that it was the only alternative.

By taking the desperate measures to impound funds to pay creditors, it means the government would still be able to do modest borrowing in the future. To not do the immediate desperate measures would mean the end of future borrowing.

If instead somehow the President allowed the default to take place, then all future budgets would have to be cut by 1/3 or 1/2 of the present levels, far into the future, including SS and Medicare and everything, and the chaos would be far worse, with no way to recover from it.

Whereas doing what's necessary would result in large cuts the first year only, and eventually restoring the budgets to something like 80 or 90% of the present levels, and maintaining modest borrowing for the foreseeable future -- and a far lower level of chaos. That's the worst-case scenario if the ceiling is not raised and the Congress is unable to enact the needed spending cuts and tax increases needed to avoid such desperate Presidential action.

But it's better for Congress (and maybe states also) to do the needed tax increases, so the spending cuts don't have to be so severe.

 

[Swammerdami]

Tax hikes and spending cuts will take months or even years to have effect. Treasury checks will start bouncing in two weeks if the debt ceiling isn't raised.

No they won't. Contracting new higher debt is not necessary to pay current debt due, because there is current revenue already being spent (or about to be spent) on existing programs, which could be suspended or slashed as necessary to free up the $$$$ to pay debt due. The current revenue exists and is paying for programs.

Outgo exceeds income. Has Yellen submitted a plan of what she would actually have to do to comply with the debt ceiling?

Most U.S. soldiers, sailors and airmen get free food and board, so they don't need their salaries. But stopping all those paychecks would only save what? $2 billion per week? The shortfall is much larger than that. And even a week's delay in soldier paychecks would cause consternation. Stop all Medicare reimbursements?

I suppose the "logical" procedure would be across-the-board haircuts: Pay 40 cents on the dollar in the paychecks of our fighting men, 50 cents on the dollar for Medicare reimbursements, 75 cents on the dollar to SocSec retirees — some of them really need the money. Reimbursement of food stamps could be delayed indefinitely. A few measures like this and outgo could be brought down below income. (Income would also be falling however, as tax clerks begin quitting in anticipation of paycheck cuts.)

Is this what you have in mind?

The President effectively has power to impound funds, because it would take police action to stop him, and there would be no such action. The Congress would be unable to authorize its own "police" to seize the President in order to stop him. What would happen is that there would be legal challenge, theoretically based on the law prohibiting the President from doing this, but no action taken to stop it, and the legal action would finally fail, as everyone would recognize that it had to be done. And even though some members of Congress would pretend they could stop him, they could not. The main reason he could not be stopped and the Congress could do nothing about it is that virtually everyone would recognize that in this case it was the only option -- no other choice.

Biden or any President, Republican or Democrat, would recognize that it was the only alternative.

Setting aside the platinum-coin solution which solves the problem at once, it might seem that there is "no other choice" than to plunge the country into chaos and recession. But recall that the whole debt ceiling is a pointless anachronism. And do you really think that "Moscow Mitch" McConnell has no other choice than to plunge the country into chaos, for no purpose except to ... what? ... promote civil war? Foment even more hatred of government than Americans have already?

 

[funinspace]

Outgo exceeds income. Has Yellen submitted a plan of what she would actually have to do to comply with the debt ceiling?

Most U.S. soldiers, sailors and airmen get free food and board, so they don't need their salaries. But stopping all those paychecks would only save what? $2 billion per week? The shortfall is much larger than that. And even a week's delay in soldier paychecks would cause consternation. Stop all Medicare reimbursements?

I suppose the "logical" procedure would be across-the-board haircuts: Pay 40 cents on the dollar in the paychecks of our fighting men, 50 cents on the dollar for Medicare reimbursements, 75 cents on the dollar to SocSec retirees — some of them really need the money. Reimbursement of food stamps could be delayed indefinitely. A few measures like this and outgo could be brought down below income. (Income would also be falling however, as tax clerks begin quitting in anticipation of paycheck cuts.)

Is this what you have in mind?

^Yep. It would be full stop for about a month in this fantasy while still paying on our Treasury notes, to recalibrate downward by some 40-50% initially to deal with some costs that just don't stop (A warship based in Qatar doesn't just stop needing fuel; I'm sorry FEMA, those materials you need are COD now; I'm sorry VA, those medical supplies are now COD). All contract negotiations would just stop for months. The poor would be royally fucked, as charity would be completely overwhelmed by the added load. I suppose that after 3-4 months, most payouts would finally get back up to a 25% cleaving, assuming that our Congressional Critters have joined the funny farm in this fantasy.

The weirdest part of this idea that this debt limit law should be entertained in a fantasy post about how the government 'could live with it', is that this concept is only in place in about 2 other countries in the world. It is one thing to argue that there are sane ways to head back towards a balanced budget over a period of years (which is still just us mumbling into our mug of beer), but at least it doesn't appear to be a LSD trip...

 

[Jimmy Higgins]

Tax hikes and spending cuts will take months or even years to have effect. Treasury checks will start bouncing in two weeks if the debt ceiling isn't raised.

No they won't. Contracting new higher debt is not necessary to pay current debt due, because there is current revenue already being spent (or about to be spent) on existing programs, which could be suspended or slashed as necessary to free up the $$$$ to pay debt due. The current revenue exists and is paying for programs.

They will not choose to destroy the country later -- a year or 2 from now -- in order to pay a few bills today which could be postponed. The President alone has the power to do it if need be, even if it would legally be challenged, and since it would be a national emergency, he'd have to do it. He would not choose the alternative of national suicide and long-term chaos rather than paying the debt due.

If need be the entire budget, every program, could be shut down -- zero funding to anything other than to pay the current debt obligation -- some programs/payments postponed, others canceled. The current debt payment is not 2 trillion $$$ all at once, as it would have to be to make it impossible for it to be paid. If everything currently funded -- Defense, SS, Medicare, etc. -- everything is suspended, or 60 or 70 or 80% of it, most worker paychecks postponed, etc., the necessary funding exists without increasing the debt. (And it's not close to that desperate.) Several arbitrary meat axes are available if necessary.

The President effectively has power to impound funds, because it would take police action to stop him, and there would be no such action. The Congress would be unable to authorize its own "police" to seize the President in order to stop him. What would happen is that there would be legal challenge, theoretically based on the law prohibiting the President from doing this, but no action taken to stop it, and the legal action would finally fail, as everyone would recognize that it had to be done. And even though some members of Congress would pretend they could stop him, they could not. The main reason he could not be stopped and the Congress could do nothing about it is that virtually everyone would recognize that in this case it was the only option -- no other choice.

So why is this option of 'well he has no choice' better than just ignoring the debt ceiling because Congressionally approved spending can be implicit approval for borrowing to spend it?

 

[funinspace]

Tax hikes and spending cuts will take months or even years to have effect. Treasury checks will start bouncing in two weeks if the debt ceiling isn't raised.

No they won't. Contracting new higher debt is not necessary to pay current debt due, because there is current revenue already being spent (or about to be spent) on existing programs, which could be suspended or slashed as necessary to free up the $$$$ to pay debt due. The current revenue exists and is paying for programs.

They will not choose to destroy the country later -- a year or 2 from now -- in order to pay a few bills today which could be postponed. The President alone has the power to do it if need be, even if it would legally be challenged, and since it would be a national emergency, he'd have to do it. He would not choose the alternative of national suicide and long-term chaos rather than paying the debt due.

If need be the entire budget, every program, could be shut down -- zero funding to anything other than to pay the current debt obligation -- some programs/payments postponed, others canceled. The current debt payment is not 2 trillion $$$ all at once, as it would have to be to make it impossible for it to be paid. If everything currently funded -- Defense, SS, Medicare, etc. -- everything is suspended, or 60 or 70 or 80% of it, most worker paychecks postponed, etc., the necessary funding exists without increasing the debt. (And it's not close to that desperate.) Several arbitrary meat axes are available if necessary.

The President effectively has power to impound funds, because it would take police action to stop him, and there would be no such action. The Congress would be unable to authorize its own "police" to seize the President in order to stop him. What would happen is that there would be legal challenge, theoretically based on the law prohibiting the President from doing this, but no action taken to stop it, and the legal action would finally fail, as everyone would recognize that it had to be done. And even though some members of Congress would pretend they could stop him, they could not. The main reason he could not be stopped and the Congress could do nothing about it is that virtually everyone would recognize that in this case it was the only option -- no other choice.

So why is this option of 'well he has no choice' better than just ignoring the debt ceiling because Congressionally approved spending can be implicit approval for borrowing to spend it?

Good point. That rational has been used like a dozen times to get around the war powers act, when Congress funds a military effort in some place, but doesn't declare war.

 

[laughing dog]

This just proves the point: There is no rationale for higher debt other than crybaby emotionalistic outbursts. The fact is that everyone will be worse off long-term if the creditors are not paid. But who needs facts when we can emit our knee-jerk impulses?

The irony of your question is fascinating. There is no evidence that everyone will be worse off if some of our creditors are not paid. You are employing chickenlittle economics

again -- nothing but emotionalistic outbursts are the only reason we must increase the debt. The truth is that everyone will get stiffed, including the poor, if the creditors are not paid on schedule.

If there was a way to stiff ONLY the creditors and the rest of us would live happily ever after, it would have been done ages ago. But that is fantasy and Crybaby Economics. Stiffing the creditors would cause future budgets to be slashed far worse than if we just slash the budget now and increase taxes to stop the chronic debt.

More emotional chickenlittle economics. There is no evidence to support your babbling claims about the effects on “everyone” or “future budgets” or “chronic debt”.

BTW, as a point of fact - I did not advocate stiffing creditors. I rebutted your nonsense about it being illegal to do so.

 

[Swammerdami]

So Moscow Mitch betrayed his Kremlin masters and agreed to delay the forcing of the U.S. Government into bankruptcy for seven or eight full weeks. The details of the vote may be interesting.

Moscow Mitch wanted to let the debt ceiling hike pass 50-50 with Kamala Harris casting the deciding vote. That way all 50 R's could vote Nay and not be in open defiance of Donald Trump or Vladimir Putin. However Ted Cruz and Rand Paul announced their intention to "filibuster." This would force ten QOPAnon Senators to go on record as opposing bankruptcy. Failure to force the first-ever default by the U.S. Treasury will enrage the QOP rank-and-file. Those Senators now risk being primaried by QAnoners more willing to please Putin and the base by forcing a default.

In the event, eleven QOPAnon Senators voted to defy Putin, Hannity and Trump and prevent default, Here are their names:

John Barrasso of Wyoming
Roy Blunt of Missouri
Susan Collins of Maine
John Cornyn of Texas
Mitch McConnell of Kentucky
Shelley Moore Capito of West Virginia
Lisa Murkowski of Alaska
Rob Portman of Ohio
Mike Rounds of South Dakota
Richard Shelby of Alabama
John Thune of South Dakota​

The name Mitt Romney — once considered a moderate and a man of integrity — is conspicuously missing. Apparently Utah's Senator thought it best to force a bankruptcy and send the Dollar plummeting.

Especially amusing is that BOTH Senators from South Dakota voted to keep the U.S. Dollar as the world's reserve currency; SD was the only state with two QOPAnon Senators where both voted to protect the Dollar. Why is this?

We can't be sure, but the recent publication of the "Pandora Papers" tells us that, in addition to famous tax havens and money-laundering centers like the Cayman Islands, Belize, the Seychelles, etc. there is a new big player in the multi-trillion dollar money-laundering industry.

Show

South Dakota !!! ... has almost $400,000,000,000 in secretly sheltered wealth.

So those Senators had a special motive to keep the Dollar strong.

 

[Jimmy Higgins]

I noticed the missing of Mitt Romney as well. That guy is a wind sock puppet, you have no idea where he is jutting to next.

It is quite incredible that McConnell has lost control of the GOP. Despite all of his victories and the BS he has pulled, he doesn't have control. The Cruzies of the GOP know McConnell is old and are positioning to take over control in the Senate. How the GOP has fallen.

 

[Lumpenproletariat]

There's no evidence that chronic debt is making us better off.

The only argument to continue with chronic debt is that it gives us instant gratification -- like doing nothing to reduce carbon emissions.

Outgo exceeds income. Has Yellen submitted a plan of what she would actually have to do to comply with the debt ceiling?

The choice has to be to cut spending to whatever point would yield the $$$$ necessary to pay the current debt due to creditors. The simplest "plan" would be to identify the amount needed to pay creditors, then cut this amount from all the spending, for no-matter-what, and do it across-the-board to everything without distinction of any kind.

That would fix the immediate crisis, and it could be done. And no matter what instant-gratification damage it causes -- you can scream bloody murder all you want -- the fact is that not doing this would produce even greater damage later, probably less than a year, after creditors get stiffed and there's no more borrowing at all. In which case the future pain would end up far greater than the temporary pain immediately in order to pay the current debt obligations.

There's no argument against this other than to scream and scream, realizing that if this did not happen, the screaming later would be even greater still. Of course you can wish that someone in Congress would change their mind -- Reds or Blues -- to allow the debt ceiling to be raised. But that's irrelevant to the question, which is: What if the debt ceiling does not get raised? what then? And the answer is that we'd have to endure the severe spending cuts, like it or not, in order to be able to pay the creditors -- and so there would be no default! Because not paying them would cause a still greater calamity.

Everyone knows this, and so there'd be no choice except to do this, and it would have to happen even if it means that the President illegally impounds funds in order to do it. And, there'd be no legal action to actually stop him, even if some formal action should be initiated -- it would be symbolic only and would be dropped. And everyone knows that the President would have no other choice, so no real action would be taken to stop him. Even if the Congress somehow had power to order him arrested by the Marines or someone (which it doesn't), it would not do so. He would have to do it in order to prevent the country from collapsing even worse a year or so later.

Somehow everyone would have to suffer through the difficulty of the reduced budgets. And one way or another, virtually everyone would continue working, because they'd have no choice. In fact, those few who quit would quickly be replaced, so the necessary work running the country would still continue.

Most U.S. soldiers, sailors and airmen get free food and board, so they don't need their salaries. But stopping all those paychecks would only save what? $2 billion per week?

It is mathematically impossible for the debt payment need to be so large that it would exceed the current spending level on programs. Of course you could argue that if the timing is exactly wrong, the immediate payment to creditors is high, on a certain day or hour, compared to the momentary spending need at that exact point in time.

However, it's ludicrous to suggest that those making the allocations are incapable to see ahead a week or two in order to recognize when the spending cuts must begin. You can't seriously suggest that they would do absolutely nothing ahead of time, not even a few days, planning ahead when to start the program cuts. To believe that, you must suspect Biden's appointees have a malicious desire to destroy the country, like many Red fanatics believe. Probably even one week's advance foreknowledge of the upcoming payments due would be enough to see what program cuts will be necessary, on which day, in order to free up enough $$$$ to meet the upcoming debt payments.

In formulating your doomsday scenario, you have to remain within the bounds of reality.

The shortfall is much larger than that.

It's not possible for the debt payments due to be greater than all funds available for near-term programs. Those funds will have to be cut sufficiently to meet the debt payment need.

And even a week's delay in soldier paychecks would cause consternation.

"And there shall be wailing and gnashing of teeth." But twice as much, and no end to it, if the drastic spending cuts are not done.

Stop all Medicare reimbursements?

Stop, reduce, or delay. Along with all the other payments to be stopped, reduced, or delayed.

I suppose the "logical" procedure would be across-the-board haircuts: Pay 40 cents on the dollar in the paychecks of our fighting men, 50 cents on the dollar for Medicare reimbursements, 75 cents on the dollar to SocSec retirees — some of them really need the money. Reimbursement of food stamps could be delayed indefinitely. A few measures like this and outgo could be brought down below income. (Income would also be falling however, as tax clerks begin quitting in anticipation of paycheck cuts.)

Those who quit would be quickly replaced by someone who'll agree to be paid half as much, and probably longer hours, until the worst of the crisis is over.

Is this what you have in mind?

It's what has to be done if the chronic debt problem is to be corrected. Which it has to be, unless your philosophy is "Aaaaaaa, who cares? In the long run we're all dead!"

And that is the only reasoning anyone ever gives why we don't have to put a stop to the runaway debt.

The President effectively has power to impound funds, because it would take police action to stop him, and there would be no such action. The Congress would be unable to authorize its own "police" to seize the President in order to stop him. What would happen is that there would be legal challenge, theoretically based on the law prohibiting the President from doing this, but no action taken to stop it, and the legal action would finally fail, as everyone would recognize that it had to be done. And even though some members of Congress would pretend they could stop him, they could not. The main reason he could not be stopped and the Congress could do nothing about it is that virtually everyone would recognize that in this case it was the only option -- no other choice.

Biden or any President, Republican or Democrat, would recognize that it was the only alternative.

Setting aside the platinum-coin solution which solves the problem at once, it might seem that there is "no other choice" than to plunge the country into chaos and recession.

Yes, into a lesser "chaos and recession" than it will be plunged into if the creditors are not paid, or long-term if the chronic debt problem never gets fixed, which it never will if we continue on doing what we're doing. And "in the long run" the no-limit debt course we're now following will do more damage than a course which puts an end to it and imposes modest restrictions on the borrowing, which we don't have yet.

Of course you can still always fall back on the traditional argument that "Aaaaaaaa, in the long run we're all dead, so forget it."

But recall that the whole debt ceiling is a pointless anachronism.

translation: "In the long run we're all dead anyway!"

Even though the "debt ceiling" is technically an illogical solution, or not the most efficient solution -- how often does the government come up with the most efficient solution to anything? -- the fact still remains that it puts some limits to spending, or curtails some spending, and communicates that there is a limit to debt. And the public probably would oppose simply eliminating it without replacing it with something else, or a new kind of "debt ceiling" or limit that might be more logical. Any politician who preaches to simply put an End to the debt ceiling! will have difficulty getting re-elected.

It is better to reform the "debt ceiling" and promote making it more reliable, or more efficient than the current flawed "ceiling" and to introduce some new measures to restrict debt from growing so fast and driving up the debt-to-GDP ratio.

And do you really think that "Moscow Mitch" McConnell has no other choice than to plunge the country into chaos, for . . .

Maybe, if the only alternative is Bolshevik Bernie.

for no purpose except to ... what? ... promote civil war? Foment even more hatred of government than Americans have already?

Of course Blues have their Bash-McConnell fix and Reds have their Bash-Pelosi fix, and both are equally right (or wrong). And simply put, each side has the same fix: banish the other side from having any power and keep stampeding more of the masses into your camp. Once the other side is totally vanquished, we'll finally achieve utopia -- i.e., the Blue or the Red Utopia.

 

[Swammerdami]

@ Lumpenproletariat — You are operating under a severe misconception. I apologize on behalf of all TFTers for not bringing this to your attention and emphasizing it earlier. To focus discussion, let us consider TWO (2) separate and unrelated problems:

(A) The mounting debt of the Unites States government. A month ago this was $28.4 trillion. CBO projections expect this to grow by about $1 trillion per year, up to perhaps $40 trillion in 2031. Some people would favor "austerity" measures to hold this debt down to, say, $35 trillion in 2031. Who's right? Would it be better to grow the debt by about $12 trillion over the next decade, or to follow a strict path of "fiscal conservatism" and try to hold the increase to a paltry $7 trillion IF WE CAN? Start a new thread to discuss that. That is not the topic of this thread. By the way, over $8 trillion of the current $28 trillion debt is held by government entities, most notably the Social Security Trust Fund, the Military Retirement Trust Fund, and the Federal Reserve Bank of New York. Start yet another thread if you're curious why that debt ("self-debt") is included in many debt measures and subject to the "debt ceiling." (FedRes-owned bonds are included in "debt owned by the public." SocSec-owned debt is not so included, but is still subject to the ceiling.)

The $28 trillion debt which is on its inexorable rise to $40 trillion is NOT a sudden crisis! It was over 35 years ago that Ronald Reagan allegedly but famously "proved that deficits don't matter." The problem, if it is a problem, has been a long time in the making. Solution, if there is a solution, will also require much time.

Let's repeat the key point for clarity. By the 2024 election the total national debt will be at least $31 trillion. This is NOT a projection based on the enactment of "progressive wet dreams." It is the inevitable result of present levels of income and outgo.

(B) Amending section 1 of the second Liberty bond act, as amended. In 1917 the Congress authorized the U.S. Treasury to borrow money, but placed a limit on the total debt. The dollar value of that ceiling has been raised over the years. The limit prior to McConnell's patriotic gesture to keep the U.S. out of default was $28.4 trillion or thereabouts. That ceiling has now been raised by some paltry amount so the Kremlin, QAnon and their sympathizers can repeat this nonsense in December.

Again: Increasing the debt from $28 trillion to $31 trillion in three years may be an interesting topic to discuss. It has nothing whatsoever to due with the recent crisis. That crisis was caused by section 1 of the second Liberty bond act, as amended. If Janet Yellen had increased the debt from $28,400,000,000,000.00 to $28,400,000,001,000.00 she would have been in violation of federal law.

Is this clear?

The choice has to be to cut spending to whatever point would yield the $$$$ necessary to pay the current debt due to creditors. The simplest "plan" would be to identify the amount needed to pay creditors, then cut this amount from all the spending, for no-matter-what, and do it across-the-board to everything without distinction of any kind.

That would fix the immediate crisis, and it could be done.

Which "immediate crisis" are you speaking of? The huge deficits began 2 decades ago with Bush-43's tax cut and expensive military adventures. It will take many years to "fix." The immediate "crisis" was unrelated and explained in (B) above. If we wanted to see a REAL crisis, we'd follow your suggestion — stop paying our fighting men, turn off the cash spigots to retirees and food stamp recipients, shut down VA hospitals, and so on. Following your suggestion would immediately plunge the country (and probably the rest of the world) into a depression worse than that of 1930-1934.

The rest of your post is similarly wrong. You've confused problems (A) and (B). You also seem unaware that the $1 trillion-plus annual shortfall in annual funding represents a LOT of income to a lot of people. To "balance the budget" immediately would not mean that SocSec retirees have to turn down their thermostats a little. Their power would be turned off completely and their Medicare doctors — no longer being reimbursed — would turn them away.

Of course Blues have their Bash-McConnell fix and Reds have their Bash-Pelosi fix, and both are equally right (or wrong). And simply put, each side has the same fix: banish the other side from having any power and keep stampeding more of the masses into your camp. Once the other side is totally vanquished, we'll finally achieve utopia -- i.e., the Blue or the Red Utopia.

Oh my. "Both sides are to blame." Adolf Hitler had his faults but Kurt von Schleicher wore a tan suit, so ... Same-same.

 

[Lumpenproletariat]

If you admit that INSTANT GRATIFICATION is what really matters, regardless of future cost, you win the argument.

Our economy is worse today because of excess deficits 10 and 20 and 30 years ago. (But those deficits did produce instant gratification at that time.)

I suppose the "logical" procedure would be across-the-board haircuts: Pay 40 cents on the dollar in the paychecks of our fighting men, 50 cents on the dollar for Medicare reimbursements, 75 cents on the dollar to SocSec retirees — some of them really need the money. Reimbursement of food stamps could be delayed indefinitely. A few measures like this and outgo could be brought down below income. (Income would also be falling however, as tax clerks begin quitting in anticipation of paycheck cuts.)

Is this what you have in mind?

^Yep. It would be full stop for about a month in this fantasy while still paying on our Treasury notes, to recalibrate downward by some 40-50% initially to deal with some costs that just don't stop (A warship based in Qatar doesn't just stop needing fuel; I'm sorry FEMA, those materials you need are COD now; I'm sorry VA, those medical supplies are now COD). All contract negotiations would just stop for months. The poor would be royally fucked, as charity would be completely overwhelmed by the added load. I suppose that after 3-4 months, most payouts would finally get back up to a 25% cleaving, assuming that our Congressional Critters have joined the funny farm in this fantasy.

translation: In the long run we're all dead. Instant gratification is our only hope. Just as with climate change there is no hope except instant gratification now, and let the future pay the consequences.

All the above projections of disaster are a description of the loss of instant gratification if we do anything to put an end to the chronic debt which we've allowed to get worse and worse. At any one moment along the way there was no immediate harm in letting it get just a little worse. Only in the late 1990s did we have a short period of stopping the increasing damage being caused.

Every time the deficits increase again (by a large percent), it inflicts damage over the years following, maybe not until 5 or 10 or 15 years, always long enough that it's no immediate harm, but only harm several years later, which is disregarded because "in the long run we're all dead."

The weirdest part of this idea that this debt limit law should be entertained in a fantasy post about how the government 'could live with it', is that . . .

The current "debt ceiling" law could be changed into something that might be better, in the details of how it works. But to say there should be no "debt limit" policy -- law -- of any kind is the same as saying, again, aaaaaaaaa, fuck it! "We're all dead in the long run" anyway, so let's just have our instant gratification now and ignore the damage we're inflicting on those later who will pay the consequences.

Once you admit that this is what you're saying, then maybe you can argue the case against having a "debt limit" law. Because this "we're all dead in the long run" argument is the only logic to doing away with a "debt limit" law. You could make an argument for improving the "debt limit" law, so it works better, but to just do away with it makes no sense unless you're preaching that instant gratification is all that matters, and that there's no need to worry about the bad consequences 10 or 20 or 30 years later.

. . . weirdest part . . . is that this concept is only in place in about 2 other countries in the world. It is one thing to argue that there are sane ways to head back towards a balanced budget over a period of years (which is still just us mumbling into our mug of beer), but at least it doesn't appear to be a LSD trip...

translation: anything other than instant gratification is an LSD trip, and any effort to avoid bad consequences in the future is an LSD trip.

So Republicans/Trumpsters/Reds are right to disregard the need to reduce fossil fuel emissions, because it's an LSD trip to worry about 2 or 3 generations into the future. We can't do anything right now to fix any of the current bad consequences of climate change, even if we totally stop emitting carbons. All we can do now is make changes which will ensure a better future in 20 or 40 or 60 years from now, and so we should not do it, because instant gratification is all that matters.

That's the only argument anyone can give to not impose a "debt limit" or fix the debt problem.

In both these examples, the debt, and climate change, we are choosing the route of instant gratification and "in the long run we're all dead."

 

[laughing dog]

The notion that "instant gratification" is eliminating the debt limit is an example of chickenlittle economics - it has nothing to do with reality. If the gov't wishes to borrow, and people are willing to lend to it, why should there be a limit? Isn't that called free market economics?

 

[Lumpenproletariat]

immediate solution: get out the MEAT AX

long-term solution: MEAT AX + tax increases

Tax hikes and spending cuts will take months or even years to have effect. Treasury checks will start bouncing in two weeks if the debt ceiling isn't raised.

No they won't. Contracting new higher debt is not necessary to pay current debt due, because there is current revenue already being spent (or about to be spent) on existing programs, which could be suspended or slashed as necessary to free up the $$$$ to pay debt due. The current revenue exists and is paying for programs.

They will not choose to destroy the country later -- a year or 2 from now -- in order to pay a few bills today which could be postponed. The President alone has the power to do it if need be, even if it would legally be challenged, and since it would be a national emergency, he'd have to do it. He would not choose the alternative of national suicide and long-term chaos rather than paying the debt due.

If need be the entire budget, every program, could be shut down -- zero funding to anything other than to pay the current debt obligation -- some programs/payments postponed, others canceled. The current debt payment is not 2 trillion $$$ all at once, as it would have to be to make it impossible for it to be paid. If everything currently funded -- Defense, SS, Medicare, etc. -- everything is suspended, or 60 or 70 or 80% of it, most worker paychecks postponed, etc., the necessary funding exists without increasing the debt. (And it's not close to that desperate.) Several arbitrary meat axes are available if necessary.

The President effectively has power to impound funds, because it would take police action to stop him, and there would be no such action. The Congress would be unable to authorize its own "police" to seize the President in order to stop him. What would happen is that there would be legal challenge, theoretically based on the law prohibiting the President from doing this, but no action taken to stop it, and the legal action would finally fail, as everyone would recognize that it had to be done. And even though some members of Congress would pretend they could stop him, they could not. The main reason he could not be stopped and the Congress could do nothing about it is that virtually everyone would recognize that in this case it was the only option -- no other choice.

So why is this option of 'well he has no choice' better than just ignoring the debt ceiling because . . .

The option of not increasing the debt but also paying the current debt obligation (and thus making drastic spending cuts) is the better option because there is a need to respect the interests of future generations, who will suffer if we ignore it and choose the route of instant gratification only as our guide to what's good for the nation.

(Also, the "drastic spending cuts" are not the only drastic action to be taken, because drastic TAX INCREASES are also part of the remedy, but as far as immediate action to take to pay the debt due immediately, the only action is to impound funds or revenue already there. Possibly a further drastic action would be seizure of assets in some form, by executive order. Theoretically even that cannot be ruled out. But the revenue already exists and is about to be paid for programs in the budget. The simplest direct action to take is to impound those funds and redirect them to payment of current debt.)

These are 2 separate questions: 1) Should the debt ceiling be ignored? and 2) -- If it's not and new borrowing is prevented, does that require defaulting on the debt?

The short answer to both is NO.

The answer to #1 is that we need something to limit the debt beyond whatever we've done so far. The debt has increased too much, so something further has to be done to stop the upward course it is taking and has been taking almost constantly for about 90 years now. The "debt ceiling" is one way, or the only real obstacle to it going up even faster than it has already been going.

So if the current "debt ceiling" is to be ignored, it has to be replaced by something else which will do what the "debt ceiling" is intended to produce, which is a limit on the rising debt.

Unless, of course, everyone agrees that "in the end we're all dead" and so nothing needs to be done to put a limit to the debt, because it's based on instant gratification as the only good, and it's OK to sacrifice the future. So the instant-gratification approach is to just increase the debt and ignore the future, like we're doing with the climate change issue.

And the answer to 2) is that default on the debt would NOT happen even though the "debt ceiling" is not raised, because there are ways to pay the current debt obligation without any new debt. And the way to pay it is simply to put the meat ax to the budget spending programs, as necessary to produce the $$$$ needed to pay the current debt due. Then, shortly after, there must also be tax increases to help reduce the pain caused by the severe spending cuts.

. . . because Congressionally approved spending can be implicit approval for borrowing to spend it?

But that's not what congressionally approved spending is or will be. We need something which puts some kind of LIMIT to this "approval for borrowing" more and more beyond reasonable limits, and the "debt ceiling" procedure so far is all we have.

Again, if your premise is "In the end we're all dead," so all that matters is instant gratification right now and to hell with the future -- then yes, you win the argument that there should be no "debt limit" or "debt ceiling" or anything other than just spending out of control. You win that argument, if your premise is that the future can go fuck itself.

When they choose how much to spend on programs, each one is passed with the intention that this particular program will not bust the budget, because it's only the other programs that are busting the budget, not this one. There is no way that the voting on any one program alone can prevent the total spending from exceeding the "debt limit" agreed to.

Of course Congress can set a total limit on all spending, and probably has been doing that, or pretending to, for decades. But whatever it has done is not enough. The debt has gone way beyond anything that can be reasonably called a "debt limit" in any sense. Every time these new deficits are added, it inflicts more pain onto the future, 5 or 10 or 20 years later.

So far there is nothing to prevent the Congress from continuing this other than the "debt ceiling" rule. If some other procedure existed for doing it, that would be fine. But what procedure is that? If you just give the Congress a free ticket to enact all their spending with no "debt limit" rule like this one, how can we believe that there will be any change?

Your premise has to be that there's no need for change, that it's OK for the debt to increase a trillion $$$ per year, 2 trillion $$$ per year, 3 trillion $$$ per year, etc., as much as instant gratification requires, and somehow this can never do any harm, no matter how high it might get.

Your premise has to be that the annual deficit should be increased to the $5 trillion or $6 trillion or $7 trillion necessary to pay the budget for each year, so that no tax revenue will ever be needed, and so all taxes can be ended. I'm sure Grover Norquist would congratulate you for that new insight and offer you membership in his club.

It should be obvious that both drastic spending cuts and also drastic tax increases are the solution, and without both, we are operating on the philosophy of instant gratification only and inflicting harm onto the future. This harm has already happened, but could get much worse later.

No one has ever proved how paying off debt by reliance on only future debt can make society better off. What has been proved is that debt is beneficial when it is paid back later as a result of future work or future production of new wealth.

 

[funinspace]

Silly Fonts Like Lumpy

Our economy is worse today because of excess deficits 10 and 20 and 30 years ago. (But those deficits did produce instant gratification at that time.)




translation: In the long run we're all dead. Instant gratification is our only hope. Just as with climate change there is no hope except instant gratification now, and let the future pay the consequences.

All the above projections of disaster are a description of the loss of instant gratification if we do anything to put an end to the chronic debt which we've allowed to get worse and worse. At any one moment along the way there was no immediate harm in letting it get just a little worse. Only in the late 1990s did we have a short period of stopping the increasing damage being caused.

Every time the deficits increase again (by a large percent), it inflicts damage over the years following, maybe not until 5 or 10 or 15 years, always long enough that it's no immediate harm, but only harm several years later, which is disregarded because "in the long run we're all dead."

Is this one of your new weird things: "translation:"? Oky doky

translation:



Yet, the UBER BOOGIEMAN Debt Ceiling, didn't crash the known world when it was just raised, so your whole argument must be swiss cheese. That is how this Stupid Translation Thing works, isn't it?

Or there is something called reality, between your gibberish and real concerns about national debt...or do you even realize that there are millions of people living pay check to pay check, or SS check to SS check, that you would fuck over in your fantasy version of "its all just instant gratification"?

The weirdest part of this idea that this debt limit law should be entertained in a fantasy post about how the government 'could live with it', is that . . .

The current "debt ceiling" law could be changed into something that might be better, in the details of how it works. But to say there should be no "debt limit" policy -- law -- of any kind is the same as saying, again, aaaaaaaaa, fuck it! "We're all dead in the long run" anyway, so let's just have our instant gratification now and ignore the damage we're inflicting on those later who will pay the consequences.

Once you admit that this is what you're saying, then maybe you can argue the case against having a "debt limit" law. Because this "we're all dead in the long run" argument is the only logic to doing away with a "debt limit" law. You could make an argument for improving the "debt limit" law, so it works better, but to just do away with it makes no sense unless you're preaching that instant gratification is all that matters, and that there's no need to worry about the bad consequences 10 or 20 or 30 years later.

. . . weirdest part . . . is that this concept is only in place in about 2 other countries in the world. It is one thing to argue that there are sane ways to head back towards a balanced budget over a period of years (which is still just us mumbling into our mug of beer), but at least it doesn't appear to be a LSD trip...

translation: anything other than instant gratification is an LSD trip, and any effort to avoid bad consequences in the future is an LSD trip.

So Republicans/Trumpsters/Reds are right to disregard the need to reduce fossil fuel emissions, because it's an LSD trip to worry about 2 or 3 generations into the future. We can't do anything right now to fix any of the current bad consequences of climate change, even if we totally stop emitting carbons. All we can do now is make changes which will ensure a better future in 20 or 40 or 60 years from now, and so we should not do it, because instant gratification is all that matters.

That's the only argument anyone can give to not impose a "debt limit" or fix the debt problem.

Not at all, its just "the only argument" you seem to entertain while in what appears to be a LSD trip. The wheels are not coming off the bus. And you can (re)read my argument from post #20 right here on this thread:
https://talkfreethought.org/showthr...ised-What-then&p=942584&viewfull=1#post942584