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Title: Democrats warn of US shutdown over debt
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URL Source: http://www.activistpost.com/2011/02 ... -of-us-shutdown-over-debt.html
Published: Feb 3, 2011
Author: AFP/Activist Post
Post Date: 2011-02-03 19:01:17 by Capitalist Eric
Keywords: None
Views: 6457
Comments: 13
WASHINGTON - Senate Democrats warned Thursday of dire economic consequences if Congress fails to raise the US debt ceiling, saying it could prompt a shutdown of the federal government. "It's playing with fire," said US Senator Chuck Schumer said of the legislative standoff. If a shutdown were to occur, "citizens couldn't get their checks, veterans couldn't get their benefits, military payments would stop," the veteran New York lawmaker said. Congress early in 2010 raised the US debt ceiling to nearly $14.3 trillion -- very near the current US debt of some $13.9 trillion dollars. The government will run out of money in about two months' time, according to the US Treasury Department, unless Congress votes to raise the federal debt ceiling. But while Democrats, along with most Republicans, agree on the need to avoid having the United States default on its debt, which likely would likely trigger a massive economic meltdown, some conservatives remain firmly against increasing ceiling. They insist instead of that it is time for massive spending cuts and belt-tightening, and say that raising the debt ceiling further only forestalls needed austerity moves. Illinois Senator Richard Durbin said a similar curtailment of government services today could "precipitate an economic crisis, driving up interest rates on mortgages, loans, businesses, families across America." Durbin called it a "political tactic could kill our economic recovery and drive unemployment even higher." Democrats noted that the last similar such standoff which led in 1995 to a brief government shutdown that was limited in scope, proved politically costly for Republicans after the public sided en masse with Democratic President Bill Clinton. © AFP [Posters' Comment: Only an opium-smoking FOOL would think that when you've maxed out your credit cards, and can no longer make minimum payments, that raising the limits on the credit is a good idea. Either that, or you're a socialist ass-hat, who thinks "There will be no more money when the U.S. dollar has no value, until that time we can keep printing more." And yes, that IS from LF's answer to Ben Bernanke, go65, our disfunctional, delusional socialist of the forum.]
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#1. To: Capitalist Eric, go65 (#0)
This is actually really simple. If we don't extend the debt ceiling, the government can only spend what it receives in taxes. How much is that? Over $2 TRILLION, which is what the government spent in 2002!!! 2002. Not 1982. Not 1892. 2002. Spending would have to be prioritized. The top priority would be paying the interest on the debt so we don't default. This demonstrates how crazy spending has gotten. It has to end NOW.
Fall back to the Articles of Confederation. No one's heeded the Constitution anyway, from Lincoln on. State rule. Our experiment in Federalism was a failure.
How much would tax revenues decline by if the government went into default or tried to slash $1.3 trillion in spending in April? You always ignore that part.
Since January 3, 2011, Republicans have controlled the power of the purse.
Why do you use the credit card scenario? The USA did not max out its credit limit. The USA, unlike Joe Blow, can print more money at will to cover any expenses. There are risks to printing money as there are risks to borrowing so much that the cost of borrowing goes up. Or the USA can increase the tax rate to what it was under Clinton or even that commie Reagan (Reagan must have been a commie to have tax rates higher than Bush did). But nothing like the credit card being maxed out analogy will happen or is even applicable. I remember when the Republican party was once the party of people who understood economics. This credit card analogy is dumbed down for the new stupider, education is evil, GOP.
"Keep Your Goddamn Government Hands Off My Medicare!" - Various Tea Party signs.
Republicans thought they could just ask the credit card company to raise the credit limit and grow its way out of debt.
Merchants have no country. The mere spot they stand on does not constitute so strong an attachment as that from which they draw their gains. Thomas Jefferson
Sounds like a good idea to me.
You always ignore that part. Only an opium-smoking FOOL would think that when you've maxed out your credit cards, and can no longer make minimum payments, that raising the limits on the credit is a good idea. Either that, or you're a socialist ass-hat, who thinks "There will be no more money when the U.S. dollar has no value, until that time we can keep printing more." And yes, that IS from LF's answer to Ben Bernanke, go65, our disfunctional, delusional socialist of the forum.
"There will be no more money when the U.S. dollar has no value, until that time we can keep printing more." -- go65, LF's answer to Ben Bernanke --
Yeah, empty the prisons, open the borders, push disables vets in military and VA hospitals into the street, and send the military home. Right?
Since January 3, 2011, Republicans have controlled the power of the purse.
Yeah, right. The prisons won't be emptied, and the borders are wide open anyway. I know first hand what happens when the Feds shut down. Mrs. Quanzaa worked for the VA the last time it happened and trust me, it won't stop happening. All that will happen is the non-essential Affirmative Action desk clerks and other miscellaneous worthless deadbeat paper shuffling personnel (of which there are 25 to one compared to the real workers like doctors & nurses) will be sent home on unpaid leave, for which they'll be reimbursed when they do come back to "work". So, like always, the worthless will get a free vacation while the real workers will take up their slack.
You always ignore that part. You're not listening. The government does NOT have to go into default. Default means you can't pay interest on the debt you owe. The government takes in over $2 trillion a year. Interest on the debt will be about $400 billion this year. That leaves over $1.6 trillion to take care of everything else. If we keep borrowing money, that interest payment will be $800 billion when Obama leaves office, presuming that interest rates don't rise. If interest rates do rise, we WILL go into default at that point or completely destroy the country with a German-style hyperinflation. What comes after that won't be pretty.
Look, we're talked about taxes before. Since WWII, average tax revenues have been 18% of GDP. Spending was 20% of GDP. During the last year of the Clinton administration, tax revenues were 19% of GDP and federal spending was 19% of GDP. Today, tax revenues are 17.6% of the GDP and federal spending is a whopping 25% of GDP. The government has a spending problem. The best way to recovery is cold turkey. It is not possible to collect 25% of GDP in taxes (plus another 20% at the state and local level). We don't live in a closed world. Capital will flee the country overnight if we try to do that. We have to cut spending. It's the only answer.
They don't have to do this all at once. If the GOP weren't a bunch of neutered wimps, they would go to Obama with the cuts needed to balance the budget today and tell him that they aren't going to raise the debt ceiling. After Obama pisses and moans, the GOP should go to the American people with a COMPROMISE -- cut half of the annual deficit today, raise the debt ceiling to cover the rest until October (the start of the new fiscal year), and pass a balanced budget for 2011.
ping posts 10, 11, 12
Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery. -- Winston Churchill
#2. To: Capitalist Eric (#0)
The government will run out of money in about two months' time
#3. To: jwpegler (#1)
How much is that? Over $2 TRILLION, which is what the government spent in 2002!!!
#4. To: Capitalist Eric, go65, jwpegler, hondo68, (#1)
Only an opium-smoking FOOL would think that when you've maxed out your credit cards, and can no longer make minimum payments, that raising the limits on the credit is a good idea.
#5. To: Capitalist Eric (#0)
Only an opium-smoking FOOL would think that when you've maxed out your credit cards, and can no longer make minimum payments, that raising the limits on the credit is a good idea.
#6. To: Capitalist Eric (#0)
a shutdown of the federal government.
#7. To: go65 (#3)
How much would tax revenues decline by if the government went into default or tried to slash $1.3 trillion in spending in April?
#8. To: Happy Quanzaa (#6)
(Edited)
Sounds like a good idea to me.
#9. To: go65 (#8)
empty the prisons, open the borders, push disables vets in military and VA hospitals into the street
#10. To: go65 (#3)
(Edited)
How much would tax revenues decline by if the government went into default?
"Everything that can be invented has been invented."-- Charles Duell, Commissioner of US Patent Office, 1899
#11. To: go65 (#3)
(Edited)
How much would tax revenues decline by if the government... tried to slash $1.3 trillion in spending in April?
"Everything that can be invented has been invented."-- Charles Duell, Commissioner of US Patent Office, 1899
#12. To: go65 (#3)
(Edited)
"Everything that can be invented has been invented."-- Charles Duell, Commissioner of US Patent Office, 1899
#13. To: All, Happy Quanzaa, capitalist eric (#12)
(Edited)
"Everything that can be invented has been invented."-- Charles Duell, Commissioner of US Patent Office, 1899
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