[POL] National Debt ceiling debate

[cartman]

http://money.cnn.com/2006/03/03/news...reut/index.htm

It will be interesting to see if anything happens with this, or if it all just becomes a bunch of grandstanding from each side. The Senate has to approve an increase in the debt ceiling, otherwise the Treasury can't borrow any extra money.

$8.18 trillion is a lot of money to be owing out there. But since this is an election year, I don't see anyone voting to reduce services to their constituents.

[Bubba Wheels]

From now on I vote strictly Libertarian.

[sabotai]

The words "I told you so" are so very appropriate at this time.

[Crapshoot]

Debt by itself is not an issue, as long as servicing the debt isn't a problem - (which it isn't now for the US, and which it is not likely to be in the near future) - this is much ado about nothing.

[Glengoyne]

Originally Posted by sabotai

The words "I told you so" are so very appropriate at this time.

Depends on what you were telling people.

[st.cronin]

Originally Posted by Crapshoot

Debt by itself is not an issue, as long as servicing the debt isn't a problem - (which it isn't now for the US, and which it is not likely to be in the near future) - this is much ado about nothing.

I think for corporations and nations a little debt is actually quite a good thing.

[IwasHere]

Funny are'nt these the same people that just passed a Federal Law telling people what their minimum monthly payments to their credit card companies have to be.


Look for this to be a rider on some P.C. Flag raising bill.

[IwasHere]

SOB.... After reading that article there is not one single mention of the WAR?

After that Bullshit War package the Republicans passed, that wasn't part of their yearly budget, they have to include the money we are spending on Bush's war somewhere.

Surely the money we are spending on the WAR would be included in this 8.18 trillion dollars? This Blank check we are writing to fight Terrorism is killing us domestically.

[Bubba Wheels]

Originally Posted by IwasHere

SOB.... After reading that article there is not one single mention of the WAR?

After that Bullshit War package the Republicans passed, that wasn't part of their yearly budget, they have to include the money we are spending on Bush's war somewhere.

Surely the money we are spending on the WAR would be included in this 8.18 trillion dollars? This Blank check we are writing to fight Terrorism is killing us domestically.

Well, of course, when your the World's Policeman you incur certain 'obligations and responsibilities." Remember that when interest rates go through the roof over the deficits.

[flere-imsaho]

Generally, I think it's political grandstanding in an election year. It's certainly happened before (with regard to budgetary issues, not necessarily the debt ceiling per se ). Each side can take a risk that they'll be the ones to "look good" after it's over and gain some momentum going into November.

However, one of these days (and it could be this time), enough Congresscritters could actually get serious, make it a big issue, and make some pretty major changes (i.e. cutting massive parts of the budget to avoid raising the debt ceiling).

Anyway:

Possibility of a "showdown" followed by a last-minute "fix": 90%
Possibility of something substantive actually getting done: 10%

[IwasHere]

Originally Posted by flere-imsaho

Possibility of something substantive actually getting done: 10%

Way to high if you ask me. I would like to see it happen, but I am not going to hold my breath.

[cartman]

Originally Posted by Crapshoot

Debt by itself is not an issue, as long as servicing the debt isn't a problem - (which it isn't now for the US, and which it is not likely to be in the near future) - this is much ado about nothing.

I do agree with you that our ability to service the debt at this time is not an issue.

But there is a flip side to this, and it is the availability of funds to buy our debt instruments. In the past, the vast majority of government debt instruments have been bought by US concerns, either individuals or businesses. But the a combination of the amount of sheer debt and lowering amounts of savings have introduced many more foreign buyers. It is to the point now where a large amount of all money saved worldwide goes into buying US debt instruments (I need to find the link that supports this statement).

That doesn't leave us with a lot of room for growth in the total amount of debt. To attract fewer free funds, the interest rates will have to go up to be able to gather these free dollars to buy US debt instruments. Another potential fly in the ointment is if OPEC goes ahead with their plan to move part of the oil pricing from Dollars to Euros. A lot of emerging/unstable economies bought up US debt instruments as a way of tempering oil prices. But if Euros also become an option, there is a great risk of a significant amount of this capital to be moved from dollars to Euros.

So there is more to the puzzle than just our ability to pay the current amount of debt.

[flere-imsaho]

Originally Posted by IwasHere

Way to high if you ask me. I would like to see it happen, but I am not going to hold my breath.

I'm an optimist.

[SFL Cat]

Originally Posted by cartman

IBut there is a flip side to this, and it is the availability of funds to buy our debt instruments. In the past, the vast majority of government debt instruments have been bought by US concerns, either individuals or businesses. But the a combination of the amount of sheer debt and lowering amounts of savings have introduced many more foreign buyers. It is to the point now where a large amount of all money saved worldwide goes into buying US debt instruments

Actually, I seem to recall that this scenario has pretty much always been the case and that it has always caused concern among certain segments of the populace here. In the late 80s and early 90s, the big player was Japan. There was concern then because not only were they buying our debt, they were also buying up a lot of "hard" assets on U.S. soil too -- i.e. companies and real estate.