National Debt And Stuff

[laughing dog]

Higher debt is not a problem? OK, but

NO on raising the debt ceiling also is not a problem!


1st -- fact check: The debt has consistently increased

Whatever the arithmetic and convoluted rationale, the debt has consistently increased percentagewise ....

The debt/GDP ratio has not consistently increased since the 1930s

This is false, and it matters, because this is fundamentally what the topic is about. Our topic is "The National Debt" -- and this obviously includes the question whether the Debt has become too large.

So getting the facts correct on this point is essential. Here's the graph again:

US Debt to GDP - Updated Chart | Longtermtrends

The Debt-to-GDP ratio is the ratio between a country's debt and its gross domestic product. These charts show the government-, corporate-, and household-debt to gdp.

www.longtermtrends.net

There was a significant decline in the debt/GDP only 3 times since the early 1800s. Each was directly following a major war. Also a small short decline in the late 1990s, and very tiny one at the end of the 1930s. Obviously we had virtually no debt increases, before the 1930s, other than to pay for war cost.

The longest decline was the one after WW2, which was arguably the highest debt/GDP ever in history, so it's to be expected that after such a huge debt explosion we'd have a long decline period…..

So it is not false that the debt/GDP has not consistently increased since 1930.



GDP vs. "Assets"
What's the difference?

I acknowledge that I gave a bad response to this earlier -- ignoring the "value of assets" as a technical ---- or --- I'll just acknowledge that you are exactly correct on that terminology. So you win the jargon debate on that point. The important question for the topic is whether the debt limit should be increased.

The ability to service and repay the debt is not a technical nor a trivial issue. It is pertinent to issue of the appropriate level of debt. It is disingenuous or stupid to claim otherwise.

…..
Write it on the Blackboard 100 times -- It's a fact, which you have proved in your much more efficient and brief Wall of Text. And eventually, seriously, some solution like this is very likely to happen. If not this time around, soon in a future Congress the debt ceiling will finally be rejected, and the sky will not fall because the President will do some kind of Executive Order, even selling off the White House (who knows?) -- we don't need to determine the exact details -- but some Executive action will be take to save necessary programs, prevent any real disaster, even if the higher debt ceiling is rejected.

This is a fact, and you know it, and you're lying if you deny it.

Since no President has asserted such power you claim they have, I suspect your view is “wishful thinking”.

You are long on flinging accusations and straw men but short on specifics. I asked earlier about your view on the appropriate debt/GDP ratio. If I missed your response in your wall of text rant, I apologize, but would you please either repeat it or actually answer?

 

[Elixir]

Lumpy’s knickers are all in a bunch for fear that national debt is “too big”. But “too big for WHAT?” remains unaddressed.
It reminds me of every other focus of RW paranoia; it’s just more stuff that only matters when Democrats are in the White House. Ok if Trump gives away a few TRILLION taxpayer dollars to his campaign donors, but allocate a few billion to a social safety net, and they freak right out.

 

[Lumpenproletariat]

Higher debt is not a problem? OK, but

NO on raising the debt ceiling also is not a problem!


1st -- fact check: The debt has consistently increased

Whatever the arithmetic and convoluted rationale, the debt has consistently increased percentagewise ....

The debt/GDP ratio has not consistently increased since the 1930s

This is false, and it matters, because this is fundamentally what the topic is about. Our topic is "The National Debt" -- and this obviously includes the question whether the Debt has become too large.

So getting the facts correct on this point is essential. Here's the graph again:

US Debt to GDP - Updated Chart | Longtermtrends

The Debt-to-GDP ratio is the ratio between a country's debt and its gross domestic product. These charts show the government-, corporate-, and household-debt to gdp.

www.longtermtrends.net

There was a significant decline in the debt/GDP only 3 times since the early 1800s. Each was directly following a major war. Also a small short decline in the late 1990s, and very tiny one at the end of the 1930s. Obviously we had virtually no debt increases, before the 1930s, other than to pay for war cost.

The longest decline was the one after WW2, which was arguably the highest debt/GDP ever in history, so it's to be expected that after such a huge debt explosion we'd have a long decline period…..

So it is not false that the debt/GDP has not consistently increased since 1930.

By that reasoning, life expectancy has not consistently increased since 1500. I said several times "with ups and downs along the way." The overall upward pattern is obvious if you pay attention to the graph.

GDP vs. "Assets"
What's the difference?

I acknowledge that I gave a bad response to this earlier -- ignoring the "value of assets" as a technical ---- or --- I'll just acknowledge that you are exactly correct on that terminology. So you win the jargon debate on that point. The important question for the topic is whether the debt limit should be increased.

The ability to service and repay the debt is not a technical nor a trivial issue. It is pertinent to issue of the appropriate level of debt. It is disingenuous or stupid to claim otherwise.

Yes, you're right again -- and your point in bringing this up is to make it clear that all the debt will be repaid, no matter how high, because the U.S. has plenty of assets to liquidate in order to pay it if necessary. And this is your best argument for raising the debt ceiling: Not that the higher and higher debt will be a good investment to improve the nation's future, but that default will be impossible because of all the assets the U.S. can liquidate, and so therefore we should have no worry about the debt going too high ---- just raise it higher and higher without limit, and it's no problem.

That's your reasoning. We don't disagree on your point that repaying it will be easy because there is so much wealth in America which can be liquidated.

…..
Write it on the Blackboard 100 times -- It's a fact, which you have proved in your much more efficient and brief Wall of Text. And eventually, seriously, some solution like this is very likely to happen. If not this time around, soon in a future Congress the debt ceiling will finally be rejected, and the sky will not fall because the President will do some kind of Executive Order, even selling off the White House (who knows?) -- we don't need to determine the exact details -- but some Executive action will be take to save necessary programs, prevent any real disaster, even if the higher debt ceiling is rejected.

This is a fact, and you know it, and you're lying if you deny it.

Since no President has asserted such power you claim they have, I suspect your view is “wishful thinking”.

No President would ever say such a thing, even though he knows it's what he'd have to do. You clearly implied it by saying the resources are there, one way or another, to pay off the debt no matter how high it goes.

You said all the resources/assets could be sold if necessary. But who do you think is going to sell those assets, if it happens? There's absolutely no way the Congress would ever do it. Who then?

The only way those assets could be sold would be by Executive action. The President has the power to do it, even if it's illegal. But we all know that nothing could be done to stop him, because at most the House would impeach him.

President Nixon was condemned for impounding funds appropriated by Congress. That case wasn't so desperate, but something similar could happen again. Even though Congress pretended to make it illegal by passing a law. But there's no one to enforce that law, if the crisis should actually happen. And also, most of us know he would have to do it, to make sure the bondholders get paid, and so there would not be any serious effort to stop him.

You are long on flinging accusations and straw men but short on specifics. I asked earlier about your view on the appropriate debt/GDP ratio.

It should be somewhere lower than 80%. Some figure should be agreed upon, and then there should be whatever austerity measures are necessary to keep it down to that maximum agreed level.

In the 1930s it reached about 40%, and we can see now, with hindsight, that it was too high, because this unusually high debt helped prolong the Depression. Though you could argue that there were other bad policies of Hoover/FDR which are also to blame. (This doesn't mean all the FDR programs were wrong. A good guess is that half were waste and half were legitimate, but maybe the good programs should have been paid for by higher taxes rather than higher debt.)

The consensus, for decades, was that the debt/GDP should be maximum 80%, and many also thought it should be less. Probably there are a few outlier economists now who think higher is OK. It's a judgment call. At present we're way higher than anything ever thought to be the upper limit.

Except for those fanatics, some posting here, who crusade for higher debt with no limit or maximum, because higher and higher debt is always better. And no one here is saying there should be a maximum, but all are giving arguments for doing away with any debt limit.

There is no way to prove scientifically exactly what the debt limit should be. This is a "gray area" situation where it's known scientifically that there has to be a limit, but it's not possible to determine the exact percent. Crusaders Left and Right cancel each other out, leading to the ever-higher debt, as there are no austerity crusaders to refute the pretentious dogmas of the Left and Right fanatics. In this message board we have the Left crusaders posing as experts who can prove the great benefits to gain by eliminating any debt limit. Though they have no evidence that the higher-debt policy since the 1930s has succeeded and in their ignorance make nut-ball claims that all our science and technology since then must have originated from the FDR higher deficits of the 1930s (but somehow not from his predecessor who initiated this higher public debt religion).

The entire period of higher public debt against which you are railing (between the 1930s and the present) has produced the highest standard of living in human history.

With such fanatics of the Left and Right running our nation, it's difficult to find agreement on a reasonable maximum limit.

 

[Elixir]

There is no way to prove scientifically exactly what the debt limit should be.

Guess we should settle for Lumpy's pronouncements, then?
No thanks.

 

[laughing dog]

By that reasoning, life expectancy has not consistently increased since 1500.

That is a typical example of your illogic, but it is not reasoning.

I said several times "with ups and downs along the way." The overall upward pattern is obvious if you pay attention to the graph.

You made the claim that the debt/GDP consistently increased since 1930. For over 30 years in that 90 year time frame (over 1/3) it seriously declined. Your claim was false - as many of your claims about economic history are. Either be more careful with your claims of fact or simply refrain from further reducing your credibility with these blatant misrepresentations of fact.

Yes, you're right again -- and your point in bringing this up is to make it clear that all the debt will be repaid....

No, that is not my point at all. Nowhere did I say that any asset would necessarily be used to repay anything. One of my points is as a last ditch effort, assets could be sold off. Another one of points is that your analysis has no basis in economics or finance.

No President would ever say such a thing, even though he knows it's what he'd have to do.......

Not only do you have no idea what powers the POTUS have, you have no idea what one would ever say or not say.

You are long on flinging accusations and straw men but short on specifics. I asked earlier about your view on the appropriate debt/GDP ratio.

It should be somewhere lower than 80%. Some figure should be agreed upon, and then there should be whatever austerity measures are necessary to keep it down to that maximum agreed level.

Finally, a succinct and lucid answer. You do realize that a 80% (or any other %) ratio that is fixed means that debt will increase as long as GDP increases. Which is inconsistent with your manic complaints about every increasing debt.

 

[Elixir]

You do realize that a 80% (or any other %) ratio that is fixed means that debt will increase as long as GDP increases. Which is inconsistent with your manic complaints about every increasing debt.

Lol! Hypocrisy aside, I’d be wondering what happens at debt exceeding 5x GDP that doesn’t happen at .8 GDP

 

[bilby]

Yeah, I am still waiting to hear what the disastrous consequences of this national debt will be, and what will trigger those consequences.

Will the debt cause the Yellowstone caldera to erupt and cover the USA in metres of ash and pumice? Will cats and dogs lie down together? Will aliens invade Earth and use humans for food?

What, exactly, are the consequences of increasing national debt, other than shrieking panic from the ignorant, and everyone else going, "Oh, look. A bigger number"?

 

[barbos]

Yeah, I am still waiting to hear what the disastrous consequences of this national debt will be

I understand that inability to pay for chinese import of real stuff with fake money would be disastrous.

 

[Cheerful Charlie]

The problem with massive deficits caused by GOP tax cuts for the wealthy and corporations is that the same GOP blames deficits unfairly on Democrats and uses deficits as excuses for slashing social programs. This is stupid and evil.

 

[Lumpenproletariat]

Higher debt is not a problem? OK, but

NO on raising the debt ceiling also is not a problem!


1st -- fact check: The debt has consistently increased

Whatever the arithmetic and convoluted rationale, the debt has consistently increased percentagewise ....

The debt/GDP ratio has not consistently increased since the 1930s

This is false, and it matters, because this is fundamentally what the topic is about. Our topic is "The National Debt" -- and this obviously includes the question whether the Debt has become too large.

So getting the facts correct on this point is essential. Here's the graph again:

US Debt to GDP - Updated Chart | Longtermtrends

The Debt-to-GDP ratio is the ratio between a country's debt and its gross domestic product. These charts show the government-, corporate-, and household-debt to gdp.

www.longtermtrends.net

There was a significant decline in the debt/GDP only 3 times since the early 1800s. Each was directly following a major war. Also a small short decline in the late 1990s, and very tiny one at the end of the 1930s. Obviously we had virtually no debt increases, before the 1930s, other than to pay for war cost.

The longest decline was the one after WW2, which was arguably the highest debt/GDP ever in history, so it's to be expected that after such a huge debt explosion we'd have a long decline period…..

So it is not false that the debt/GDP has not consistently increased since 1930.

So we need to nitpick over the semantics?

OK, you win, O Wall-of-Text-Demander and time-waster.

More precise statement of the higher debt trend: It is a fact that since 1930 the debt/GDP has consistently risen much more than it has fallen, and the only time it fell significantly was following a major War for which the debt had sharply increased to record levels.

This is a bad trend unless you believe that higher debt without limit is always good. Those who believe that there can be such a thing as TOO MUCH DEBT have to be alarmed at this consistent bad trend overall toward higher debt. And it is dishonest, or a lie, to claim that this trend does not exist.

GDP vs. "Assets"
What's the difference?

I acknowledge that I gave a bad response to this earlier -- ignoring the "value of assets" as a technical ---- or --- I'll just acknowledge that you are exactly correct on that terminology. So you win the jargon debate on that point. The important question for the topic is whether the debt limit should be increased.

The ability to service and repay the debt is not a technical nor a trivial issue. It is pertinent to issue of the appropriate level of debt. It is disingenuous or stupid to claim otherwise.

Possibly you're right again. You did state the importance of the large amount of assets. You made it clear that the riskiness of debt is that there might not be enough resources to repay it, and since this is the only risk, all that matters is that we make sure the borrower (USA) has lots of assets which can easily be liquidated in order to pay off the debt when it's due, and so therefore not to worry about the ever-rising debt (as a % of the economy), because all we have to do is just have a garage sale (my term, not yours) to sell off half the nation's resources (or only 1/3 or maybe 2/3, however much is required) -- and so with all those rich assets there ready to be sold, there's never a reason to worry about the higher and higher debt.

So you're right on that point that we have plenty of goodies to sell off, half or more, whatever it takes, and so the current debt is nothing to worry about no matter how high it is. I could have done better at giving you credit for emphasizing that point about selling off the nation's wealth as a good reason to raise the debt higher and higher, and always raise the debt ceiling as much as needed to be able to pay right now for everything we want regardless of the need for it or whether it's worth the cost and regardless of any waste.

…..
Write it on the Blackboard 100 times -- It's a fact, which you have proved in your much more efficient and brief Wall of Text. And eventually, seriously, some solution like this is very likely to happen. If not this time around, soon in a future Congress the debt ceiling will finally be rejected, and the sky will not fall because the President will do some kind of Executive Order, even selling off the White House (who knows?) -- we don't need to determine the exact details -- but some Executive action will be take to save necessary programs, prevent any real disaster, even if the higher debt ceiling is rejected.

This is a fact, and you know it, and you're lying if you deny it.

Since no President has asserted such power you claim they have, I suspect your view is “wishful thinking”.

I.e., something which could never happen.

But then, what will happen? Why are you afraid to answer this question: What if the higher debt ceiling is voted down by Congress? or the vote never happens and the debt ceiling remains where it is for another year or 2?

Will you quit running away from what's important and just answer what will or would be the consequence if that higher debt ceiling is rejected. What will be done in order to pay off the bondholders?

If you say the bondholders can shove it and not get paid, what does that mean for future borrowing? i.e. the future budget for 2024 and 2025? No more budget deficit? What will then happen to all your favorite sacred programs? -- Oh, let's not talk about that? Your wishful thinking is: We'll just pretend that it's impossible for that to ever happen -- somehow.

So my wishful thinking is to conjecture what would happen if the debt ceiling is not raised by Congress, and your wishful thinking is to pretend it can't ever happen, or we mustn't talk about it. Which is the worst wishful thinking? -- to suggest what would happen? or to refuse to even consider what would happen as a result because it makes you or someone feel bad to think about such a possibility?

Those who fantasize that the President could not do anything with Executive Power are not saying what would really happen instead of this.

There are two sentiments about the possibility of the debt not being raised: 1) speculate what will be the result, and 2) bury your head in the sand and preach propaganda why the debt has to always keep going higher and higher.

But what if it does NOT go higher? What should be done when the bondholders have to be paid?

 

[bilby]

This is a bad trend unless you believe that higher debt without limit is always good.

No, it's not.

It's a bad trend if you can show that a debt that steadily trends higher over time is necessarily bad.

Which you have been repeatedly asked to do. And have completely failed to do.

What, exactly, is the disastrous consequence of a national debt that steadily trends higher over time, and (given that that disaster has not yet befallen us after ninety years), what are the possible triggers of that disaster?

I contend that national debt should and must steadily increase over time, to approximately match the trend in GDP, and that if it does not, the result will be recession. My evidence for this is that wherever and whenever austerity measures have been applied in an attempt to "balance the budget", the result has been that growth has stalled.

Your only response to this evidence based claim is to assert (without evidence) that you don't believe it, and to hyperbolically express incredulity that anyone would even consider a balanced national budget to be a bad thing. Your lack of understanding and knowledge, and your disbelief in evidence, isn't an argument for anything.

 

[laughing dog]

So we need to nitpick over the semantics?

Economic literacy is not semantics.

OK, you win, O Wall-of-Text-Demander and time-waster.

No one demands your walls of text.

Possibly you're right again. You did state the importance of the large amount of assets. You made it clear that the riskiness of debt is that there might not be enough resources to repay it, and since this is the only risk, all that matters is that we make sure the borrower (USA) has lots of assets which can easily be liquidated in order to pay off the debt when it's due, and so therefore not to worry about the ever-rising debt (as a % of the economy), because all we have to do is just have a garage sale (my term, not yours) to sell off half the nation's resources (or only 1/3 or maybe 2/3, however much is required) -- and so with all those rich assets there ready to be sold, there's never a reason to worry about the higher and higher debt.

So you're right on that point that we have plenty of goodies to sell off, half or more, whatever it takes, and so the current debt is nothing to worry about no matter how high it is. I could have done better at giving you credit for emphasizing that point about selling off the nation's wealth as a good reason to raise the debt higher and higher, and always raise the debt ceiling as much as needed to be able to pay right now for everything we want regardless of the need for it or whether it's worth the cost and regardless of any waste.

Another wall of text based on a persistent straw man. I never said that the ability to sell off assets was a good reason to raise the debt ceiling. That is a complete fabrication on your part. My point is that the higher debt is not necessarily as bad as your chicken little hysterics claim because you are ignoring the other side of the balance sheet. Focusing solely on the liabilities gives a distorted view.

I.e., something which could never happen.

But then, what will happen?.......

We don't know what will happen. There is a clear possibility of some bondholders will not be paid which means default.

 

[Lumpenproletariat]

Taboo Question you're not supposed to ask:

What if Congress fails to raise the debt ceiling?
Evade this question at all cost.

Maybe you're right again. You did state the importance of the large amount of assets. You made it clear that the riskiness of debt is that there might not be enough resources to repay it, and since this is the only risk, all that matters is that we make sure the borrower (USA) has lots of assets which can easily be liquidated in order to pay off the debt when it's due, and so therefore not to worry about the ever-rising debt (as a % of the economy), because all we have to do is just have a garage sale (my term, not yours) to sell off half the nation's resources (or only 1/3 or maybe 2/3, however much is required) -- and so with all those rich assets there ready to be sold, there's never a reason to worry about the higher and higher debt.

So you're right on that point that we have plenty of goodies to sell off, half or more, whatever it takes, and so the current debt is nothing to worry about no matter how high it is. I could have done better at giving you credit for emphasizing that point about selling off the nation's wealth as a good reason to raise the debt higher and higher, and always raise the debt ceiling as much as needed to be able to pay right now for everything we want regardless of the need for it or whether it's worth the cost and regardless of any waste.

Another wall of text based on a persistent straw man. I never said that the ability to sell off assets was a good reason to raise the debt ceiling. That is a complete fabrication on your part.

You said:

Financially, when one analyzes the credit-worthiness of a borrower, one usually looks at their income and their wealth. In most discussions about the US national debt, the wealth of the US gov't is completely ignored. The US gov't has trillions of dollars in assets. The US gov't owns thousands of acres of land, and multitudes of physical assets such as dams, bridges, buildings, planes etc... that conceptually could be sold to pay off debt.

What is your point in saying this if not that such assets could be sold in order to pay off the debt, and that therefore there is no need to worry about how high the debt goes? i.e., with all these available assets, there's little or no need to worry about the debt because it can easily be solved by just selling off whatever assets necessary to pay for it? What did you mean if not that this is a reason to keep raising the debt ceiling? and so not to worry about it?

My point is that the higher debt is not necessarily as bad as your chicken little hysterics claim because you are ignoring the other side of the balance sheet. Focusing solely on the liabilities gives a distorted view.

Right, same thing I understood you to be saying: We got lots of resources we could sell off, so why worry about the high debt? It's no problem, you're saying, with all those goodies we could sell -- have a garage sale, liquidate however much necessary, etc.

But the real question is:
What if Congress votes against raising the debt ceiling?
What then?

. . . some Executive action will be taken to save necessary programs, prevent any real disaster, even if the higher debt ceiling is rejected.

This is a fact, and you know it, and you're lying if you deny it.

Since no President has asserted such power you claim they have, I suspect your view is “wishful thinking”.

I.e., something which could never happen. But then, what will happen? Why are you afraid to answer this question: What if a higher debt ceiling is voted down by Congress? or the vote never happens and the debt ceiling remains where it is for another year or 2?

. . . answer what will or would be the consequence if that higher debt ceiling is rejected. What will be done in order to pay off the bondholders?

If you say the bondholders can shove it and not get paid, what does that mean for future borrowing? i.e. the future budget for 2024 and 2025? No more budget deficit? What will then happen to all your favorite sacred programs? -- Oh, let's not talk about that? Your wishful thinking is: We'll just pretend that it's impossible for that to ever happen -- somehow.

So my wishful thinking is to conjecture what would happen if the debt ceiling is not raised by Congress, and your wishful thinking is to pretend it can't ever happen, or we mustn't talk about it. Which is the worse wishful thinking? -- to suggest what would happen? or to refuse to even consider what would happen as a result because it makes you or someone feel bad to think about such a possibility?

Those who fantasize that the President could not do anything with Executive Power are not saying what would really happen instead of this.

There are two sentiments about the possibility of the debt not being raised: 1) speculate what will be the result, and 2) bury your head in the sand and preach propaganda why the debt has to always keep going higher and higher.

But what if it does NOT go higher? What should be done when the bondholders have to be paid?

laughing dog: We don't know what will happen. There is a clear possibility of some bondholders will not be paid which means default.

No, you're not being serious. That's not a possibility because it would mean collapse of US borrowing in the future, loss of future bondbuyers, which would mean meat-axing a large percent of the future US budget, slashing SS and other programs. This severe slashing of cherished programs would spell the end of the President in office and his Party, for many years into the future. The program-slashing would begin before the next presidential election. Even if the program recipients are not cut immediately, before the election, the facts about the coming massive cuts would be announced and made known to everyone, without any doubt, so voters would know it's coming, and they would blame the current Administration and his Party for causing it.

OR -- OK, maybe you think the President should lie to the public? somehow hold off the actual program cuts until after the election, and only then, after being re-elected because he lied, then he could tell the truth that their cherished programs are cut in half. Are you sure he'd get away with it? Can you imagine Biden promising no cuts in SS, and then in December 2024 the massive cuts in SS begin after he got re-elected? Is that your answer?

So stop fantasizing and running away from the question. What would happen, other than Executive Orders to ensure the bondholders get paid no matter what?

If you can't answer, it means you know the President would do whatever it takes, maybe even some modest program cuts, in order to get the revenue needed to pay the bondholders so that future borrowing would still happen. Of course there could also be some kind of effective tax increase, or selling off assets, etc. -- but program cuts would be easier. Anything he does will be challenged as illegal, and he'll be impeached by the House, but nothing could stop him, and many would recognize that he has to do it, because the alternative would be worse.

You cannot seriously suggest that screwing the bondholders is a practical option. Destroying the credit for future borrowing would cause much worse consequences. It's lying to suggest otherwise.

All you can do is just refuse to answer. Just pretend that Congress will always raise the debt ceiling and so this hypothetical scenario can't ever happen.

 

[Harry Bosch]

Taboo Question you're not supposed to ask:

What if Congress fails to raise the debt ceiling?
Evade this question at all cost.

Maybe you're right again. You did state the importance of the large amount of assets. You made it clear that the riskiness of debt is that there might not be enough resources to repay it, and since this is the only risk, all that matters is that we make sure the borrower (USA) has lots of assets which can easily be liquidated in order to pay off the debt when it's due, and so therefore not to worry about the ever-rising debt (as a % of the economy), because all we have to do is just have a garage sale (my term, not yours) to sell off half the nation's resources (or only 1/3 or maybe 2/3, however much is required) -- and so with all those rich assets there ready to be sold, there's never a reason to worry about the higher and higher debt.

So you're right on that point that we have plenty of goodies to sell off, half or more, whatever it takes, and so the current debt is nothing to worry about no matter how high it is. I could have done better at giving you credit for emphasizing that point about selling off the nation's wealth as a good reason to raise the debt higher and higher, and always raise the debt ceiling as much as needed to be able to pay right now for everything we want regardless of the need for it or whether it's worth the cost and regardless of any waste.

Another wall of text based on a persistent straw man. I never said that the ability to sell off assets was a good reason to raise the debt ceiling. That is a complete fabrication on your part.

You said:

Financially, when one analyzes the credit-worthiness of a borrower, one usually looks at their income and their wealth. In most discussions about the US national debt, the wealth of the US gov't is completely ignored. The US gov't has trillions of dollars in assets. The US gov't owns thousands of acres of land, and multitudes of physical assets such as dams, bridges, buildings, planes etc... that conceptually could be sold to pay off debt.

What is your point in saying this if not that such assets could be sold in order to pay off the debt, and that therefore there is no need to worry about how high the debt goes? i.e., with all these available assets, there's little or no need to worry about the debt because it can easily be solved by just selling off whatever assets necessary to pay for it? What did you mean if not that this is a reason to keep raising the debt ceiling? and so not to worry about it?

My point is that the higher debt is not necessarily as bad as your chicken little hysterics claim because you are ignoring the other side of the balance sheet. Focusing solely on the liabilities gives a distorted view.

Right, same thing I understood you to be saying: We got lots of resources we could sell off, so why worry about the high debt? It's no problem, you're saying, with all those goodies we could sell -- have a garage sale, liquidate however much necessary, etc.

But the real question is:
What if Congress votes against raising the debt ceiling?
What then?

. . . some Executive action will be taken to save necessary programs, prevent any real disaster, even if the higher debt ceiling is rejected.

This is a fact, and you know it, and you're lying if you deny it.

Since no President has asserted such power you claim they have, I suspect your view is “wishful thinking”.

I.e., something which could never happen. But then, what will happen? Why are you afraid to answer this question: What if a higher debt ceiling is voted down by Congress? or the vote never happens and the debt ceiling remains where it is for another year or 2?

. . . answer what will or would be the consequence if that higher debt ceiling is rejected. What will be done in order to pay off the bondholders?

If you say the bondholders can shove it and not get paid, what does that mean for future borrowing? i.e. the future budget for 2024 and 2025? No more budget deficit? What will then happen to all your favorite sacred programs? -- Oh, let's not talk about that? Your wishful thinking is: We'll just pretend that it's impossible for that to ever happen -- somehow.

So my wishful thinking is to conjecture what would happen if the debt ceiling is not raised by Congress, and your wishful thinking is to pretend it can't ever happen, or we mustn't talk about it. Which is the worse wishful thinking? -- to suggest what would happen? or to refuse to even consider what would happen as a result because it makes you or someone feel bad to think about such a possibility?

Those who fantasize that the President could not do anything with Executive Power are not saying what would really happen instead of this.

There are two sentiments about the possibility of the debt not being raised: 1) speculate what will be the result, and 2) bury your head in the sand and preach propaganda why the debt has to always keep going higher and higher.

But what if it does NOT go higher? What should be done when the bondholders have to be paid?

laughing dog: We don't know what will happen. There is a clear possibility of some bondholders will not be paid which means default.

No, you're not being serious. That's not a possibility because it would mean collapse of US borrowing in the future, loss of future bondbuyers, which would mean meat-axing a large percent of the future US budget, slashing SS and other programs. This severe slashing of cherished programs would spell the end of the President in office and his Party, for many years into the future. The program-slashing would begin before the next presidential election. Even if the program recipients are not cut immediately, before the election, the facts about the coming massive cuts would be announced and made known to everyone, without any doubt, so voters would know it's coming, and they would blame the current Administration and his Party for causing it.

OR -- OK, maybe you think the President should lie to the public? somehow hold off the actual program cuts until after the election, and only then, after being re-elected because he lied, then he could tell the truth that their cherished programs are cut in half. Are you sure he'd get away with it? Can you imagine Biden promising no cuts in SS, and then in December 2024 the massive cuts in SS begin after he got re-elected? Is that your answer?

So stop fantasizing and running away from the question. What would happen, other than Executive Orders to ensure the bondholders get paid no matter what?

If you can't answer, it means you know the President would do whatever it takes, maybe even some modest program cuts, in order to get the revenue needed to pay the bondholders so that future borrowing would still happen. Of course there could also be some kind of effective tax increase, or selling off assets, etc. -- but program cuts would be easier. Anything he does will be challenged as illegal, and he'll be impeached by the House, but nothing could stop him, and many would recognize that he has to do it, because the alternative would be worse.

You cannot seriously suggest that screwing the bondholders is a practical option. Destroying the credit for future borrowing would cause much worse consequences. It's lying to suggest otherwise.

All you can do is just refuse to answer. Just pretend that Congress will always raise the debt ceiling and so this hypothetical scenario can't ever happen.

What happens if the debt ceiling isn't raised?? All fucking bad: higher interest rates, market panic, higher mortgage rates; T-bill collapse, inflation increased. This is about the dumbest fucking idea in the country right now. Here's a great idea: if republicans don't want a higher deficit (which I agree is a problem); then quit voting for them!! Your side votes for the items that leads to the deficits, then when it's time to pay you don't want to pay for it. When I was a banker, we'd call people who followed this strategy dead beats who should be defaulted on.

I'm sorry for sounding so harsh, but it really is pathetic to run up a deficit; but then not be willing to pay for it. If you want to cut the deficit, then cut spending in a budget and/or raise taxes! It's not rocket science. But to not pay the bills that your side jointly ran up with the democrats, is criminal.

 

[laughing dog]

Taboo Question you're not supposed to ask:

What if Congress fails to raise the debt ceiling?
Evade this question at all cost.

You are babbling. The question has been asked and answered many times. Failure to raise the debt ceiling will cause unnecessary turmoil and panic in the financial markets. And by unnecessary, I mean costly.

How much turmoil and panic depends on how any failure to raise the debt limit plays out.

What is your point in saying this if not that such assets could be sold in order to pay off the debt, and that therefore there is no need to worry about how high the debt goes? i.e., with all these available assets, there's little or no need to worry about the debt because it can easily be solved by just selling off whatever assets necessary to pay for it? What did you mean if not that this is a reason to keep raising the debt ceiling? and so not to worry about it?

I have never thought nor written that there is no need to worry about how high the debt goes. Never. (hopefully, that will eliminate your persistent straw man).

There is no point in dignifying the remainder of your word salad with a response.

 

[Elixir]

What if Congress votes against raising the debt ceiling?
What then?

Google is your friend, Lumpy.

Read and Learn What Happens if Congress Votes Against Raising the Debt Ceiling

If you don't know (and have to ask) what happens if Congress votes against raising the debt ceiling, quaking in your boots in fear that someone is going to knock on your door to collect the National Debt is just silly. But that's what you appear to be doing. Click the link provided above, and learn about the consequences of raising or not raising the debt ceiling.
Get back to us if you still have questions once you have learned about it.

 

[Lumpenproletariat]

What if Congress votes against raising the debt ceiling?
What should be done when the bondholders have to be paid?

laughing dog: We don't know what will happen. There is a clear possibility of some bondholders will not be paid which means default.

No, you're not being serious. That's not a possibility because it would mean collapse of US borrowing in the future, loss of future bondbuyers, which would mean meat-axing a large percent of the future US budget, slashing SS and other programs. This severe slashing of cherished programs would spell the end of the President in office and his Party, for many years into the future. The program-slashing would begin before the next presidential election. Or even if the program recipients are not cut immediately, before the election, the facts about the coming massive cuts would be announced and made known to everyone, without any doubt, so voters would know it's coming, and they would blame the current Administration and his Party for causing it.

OR -- OK, maybe you think the President should lie to the public? somehow hold off the actual program cuts until after the election, and only then, after being re-elected because he lied, then he could tell the truth that their cherished programs are cut in half. Are you sure he'd get away with it? Can you imagine Biden promising no cuts in SS, and then in December 2024 the massive cuts in SS begin after he got re-elected? Is that your answer?

So stop fantasizing and running away from the question. What would happen, other than Executive Orders to ensure the bondholders get paid no matter what?

If you can't answer, it means you know the President would do whatever it takes, maybe even some modest program cuts, in order to get the revenue needed to pay the bondholders so that future borrowing would still happen. Of course there could also be some kind of effective tax increase, or selling off assets, etc. -- but program cuts would be easier. Anything he does will be challenged as illegal, and he'll be impeached by the House, but nothing could stop him, and many would recognize that he has to do it, because the alternative would be worse.

You cannot seriously suggest that screwing the bondholders is a practical option. Destroying the credit for future borrowing would cause much worse consequences. It's lying to suggest otherwise.

All you can do is just refuse to answer. Just pretend that Congress will always raise the debt ceiling and so this hypothetical scenario can't ever happen.

Harry Bosch: What happens if the debt ceiling isn't raised?? All fucking bad: higher interest rates, market panic, higher mortgage rates; T-bill collapse, inflation increased.

No, why would the President let that happen? If you were President it would not happen -- you'd do what's necessary to prevent it (or your Treasury Secretary would do it). The answer is that the President would have to take steps to make sure the bondholders get paid, whatever it takes. That's what you would do if you were President. And as long as the bondholders get paid, none of the above would happen.

But I'll take some of the blame for the misunderstanding -- my question should have been: What would have to be done if Congress does not increase the debt ceiling? Not just "what will happen?"

Things don't just happen on their own -- someone chooses to do something. In this case the President (or the Treasury Secretary) does the necessary steps to make sure the bondholders get paid, to prevent the default.

This is about the dumbest fucking idea in the country right now. Here's a great idea: if republicans don't want a higher deficit (which I agree is a problem); then quit voting for them!!

No one votes for higher deficits. They vote for more spending on programs, and they also vote for tax cuts (or against tax increases). And it's not necessarily the same Congressmembers who do each of these. Your idea doesn't work, because republicans will vote to cut some programs (even defense budget!) enough so as to reduce the deficit. So you can't say they're voting for higher deficit. They're voting to reduce the deficit by reducing the spending.

Your side votes for the items that leads to the deficits, then when it's time to pay you don't want to pay for it. When I was a banker, we'd call people who followed this strategy dead beats who should be defaulted on.

I'm sorry for sounding so harsh, but . . .

No, not at all ---- be harsh. More harsh. The populists and their mob have to be told the truth: Their favorite programs will have to cut, AND they will have to pay higher taxes. And actually that will end up happening if Congress votes against raising the debt ceiling.

. . . but it really is pathetic to run up a deficit; but then not be willing to pay for it. If you want to cut the deficit, then cut spending in a budget and/or raise taxes! It's not rocket science. But to not pay the bills that your side jointly ran up with the democrats, is criminal.

You're right on all the above. And the way it will happen -- if the Congress fails to increase the debt ceiling -- is that the President will have to exercise executive power, to do exactly what you're demanding here: He will impound some appropriated funds in order to repay the bondholders, and maybe he will find a way to effectively raise revenue -- even though both of these steps might be unconstitutional. But nothing can be done to stop him, because the only retaliation is impeachment by the House, which won't remove him from office.

It's not "criminal" for the Congress to run up deficit but not pay for it with higher debt. Congressmembers may legally vote for programs but also against higher taxes to pay for it, and also against higher debt. Which is why we have to rely on the Executive Branch to solve the impasse, if the debt comes due and the ceiling isn't raised yet.

It's perfectly legitimate for the Congress to refuse to raise the debt higher, because members truly want a lower debt level, and there's no way to force this to happen other than to vote "NO" on raising the debt ceiling. Each member has his/her plan to reduce spending or increase taxes, but they don't all agree on how to do each of these necessary steps. So there's nothing left other than to toss it to the Executive Branch which does have the power to ensure that the bondholders get paid, so there's no default.

So your formula for reducing the debt is exactly what will happen if the debt ceiling is not raised. Some spending will be cut, by Executive Order, and some revenue might be raised, by one mechanism or another. Possibly even some assets sold off, as laughing dog points out.

Actually there's no reason to get hysterical about the possibility of the debt not being raised higher.

 

[bilby]

What if Congress votes against raising the debt ceiling?

Then Congress are fucking morons, who voted to spend more than they voted to collect in taxes; and then also voted not to spend more than they voted to collect in taxes.

This sounds to me like it's a problem of having a bunch of fucking crazy numpties running your country, and not a problem of any other kind whatsoever.

 

[laughing dog]

laughing dog: We don't know what will happen. There is a clear possibility of some bondholders will not be paid which means default.

No, you're not being serious. ...[/quote] I am being serious. Your claim about executive orders saving the day is pure fantasy.

 

[Cheerful Charlie]

What if Congress votes against raising the debt ceiling?

Then Congress are fucking morons, who voted to spend more than they voted to collect in taxes; and then also voted not to spend more than they voted to collect in taxes.

This sounds to me like it's a problem of having a bunch of fucking crazy numpties running your country, and not a problem of any other kind whatsoever.

Trump tax cuts were temporary. The GOP leadership now proposes to make them permament. While shrieking about deficits and the need for a balanced budget. Public outcry has forced Mitch McConnell and Kevin McCarthy to announce that cuts to Social Security and Medicare are now off the table. The 2023 defence budget is $858 billions, highest defense budget ever. Most GOP congress critters have signed the Grover Norquist pledge to never raise taxes for any reason. The U.S. national debt is $31 trillion. A balanced budget will not bring the National Debt down a penny.

This is insanity.