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Old 01-13-2011, 03:24 PM   #21
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While I believe the 71% number in a generally worded statement would be accurate, the devil is in the details. Start cutting back medicare, those people affected will howl, cut back social security, those people will complain. On and on with military cut backs, entitlements, etc. etc. That 71% number will crumble fast when it hits you individually. I'm sure I would be no different.
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Old 01-13-2011, 05:02 PM   #22
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There will be some spending cuts.... Taxes will be raised to pre-bush tax levels after 2012.
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Old 01-13-2011, 06:32 PM   #23
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There will be some spending cuts.... Taxes will be raised to pre-bush tax levels after 2012.
Election year - both candidates will probably say they should be extended another 2 years and evaluated after that.
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Old 01-13-2011, 07:30 PM   #24
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Here's a nice piece from Morgan Stanley:

Morgan Stanley - Global Economic Forum

Good stuff, very enlightening. Thanks for the link.
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Old 01-14-2011, 10:20 AM   #25
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Does this mean the only way I can improve my financial position is to take on more debt -ERD50
I know this is tongue in cheek but...1/3rd of last years federal budget was debt. Can't imagine what would happen if that stopped.
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Old 01-14-2011, 12:02 PM   #26
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I know this is tongue in cheek but...1/3rd of last years federal budget was debt. Can't imagine what would happen if that stopped.
So the answer is to go further in debt

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Old 01-14-2011, 04:56 PM   #27
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So the answer is to go further in debt

-ERD50
If you knew me, you'd know I'm not smart enough to come up with an answer. I just have to admit the obvious and prepare for it. Debt either matters or it doesn't. If it doesn't-enjoy all the easy growth, if it does-we currently owe $45,000 each(assuming they're telling us the truth about the 14 trillion), a sum far too great to ever be repaid. Let's not even start on future unfunded liabilities. Let's ride this for all it's worth and deal with the pain later.
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Old 01-14-2011, 05:32 PM   #28
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If you knew me, you'd know I'm not smart enough to come up with an answer. I just have to admit the obvious and prepare for it. Debt either matters or it doesn't. If it doesn't-enjoy all the easy growth, if it does-we currently owe $45,000 each(assuming they're telling us the truth about the 14 trillion), a sum far too great to ever be repaid. Let's not even start on future unfunded liabilities. Let's ride this for all it's worth and deal with the pain later.
Don't be such a pessimist. Dave Ramsey could have you pay off that $45K in 3 years.
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Old 01-17-2011, 02:10 PM   #29
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Don't be such a pessimist. Dave Ramsey could have you pay off that $45K in 3 years.
Always felt I was a realist. I'm a family of four so I actually owe $180K. I guess I could do that in 12 years. I just wonder if they're gonna need me to help all the unemployed people pay their debt off as well.
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Old 01-17-2011, 03:50 PM   #30
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I read something this weekend that said the last debt ceiling increase was during GWB... and it passed the Senate with all repubs voting for it and all dems voting against... including Senator Obama.....


I wonder how all the dems are supposed to vote for it this time with a clear conscience..... or how the repubs can vote against it... it should not matter who is in the White House... now, I can see how someone was for it back then and against it now as the debt has risen so high so quickly... but going the other way.... hmmmm...
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Old 01-17-2011, 03:58 PM   #31
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[snip]dems...[snip]repubs...[snip]conscience...
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Old 01-17-2011, 05:16 PM   #32
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I know....


I just want to see the speeches they make... I was for it before I was against it, but now I am for it again...
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Old 01-17-2011, 05:30 PM   #33
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I read something this weekend that said the last debt ceiling increase was during GWB... and it passed the Senate with all repubs voting for it and all dems voting against... including Senator Obama.....
Your source appears to be only half-right, TP. Congress has bumped it at least once since GWB was president.

From Geithner's January 6 letter to Congress, describing the consequences of not raising the debt ceiling:

Secretary Geithner Sends Debt Limit Letter to Congress
"...As you know, in February of 2010 Congress passed legislation to increase the debt limit to $14.29 trillion. As of this writing, the outstanding debt that is subject to the limit stands at $13.95 trillion, leaving approximately $335 billion of “headroom” beneath the current limit...."
After going through a few of the finger-in-the-dike options for buying a few weeks or months of extra time, the letter has some gloomy answers to the Op's question:
"...if Congress were to fail to act, the specific consequences would be as follows:
  • The Treasury would be forced to default on legal obligations of the United States, causing catastrophic damage to the economy, potentially much more harmful than the effects of the financial crisis of 2008 and 2009.
  • A default would impose a substantial tax on all Americans. Because Treasuries represent the benchmark borrowing rate for all other sectors, default would raise all borrowing costs. Interest rates for state and local government, corporate and consumer borrowing, including home mortgage interest, would all rise sharply. Equity prices and home values would decline, reducing retirement savings and hurting the economic security of all Americans, leading to reductions in spending and investment, which would cause job losses and business failures on a significant scale.
  • Default would have prolonged and far-reaching negative consequences on the safe-haven status of Treasuries and the dollar’s dominant role in the international financial system, causing further increases in interest rates and reducing the willingness of investors here and around the world to invest in the United States.
  • Payments on a broad range of benefits and other U.S. obligations would be discontinued, limited, or adversely affected, including:
    • U.S. military salaries and retirement benefits;
    • Social Security and Medicare benefits;
    • veterans’ benefits;
    • federal civil service salaries and retirement benefits;
    • individual and corporate tax refunds;
    • unemployment benefits to states;
    • defense vendor payments;
    • interest and principal payments on Treasury bonds and other securities;
    • student loan payments;
    • Medicaid payments to states; and
    • payments necessary to keep government facilities open.
For these reasons, any default on the legal debt obligations of the United States is unthinkable and must be avoided..."
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Old 01-17-2011, 06:04 PM   #34
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...From Geinther's January 6 letter to Congress, describing the consequences of not raising the debt ceiling:....
"

After going through a few of the finger-in-the-dike options for buying a few weeks or months of extra time, the letter has some gloomy answers to the Op's question:
"...if Congress were to fail to act, the specific consequences would be as follows:...<snip>

Awful Stuff...

For these reasons, any default on the legal debt obligations of the United States is unthinkable and must be avoided..."
Thanks Harry. That is some of the stuff that I wonder about. Could it really happen? There appear to be many in the GOP who want to take a pound of flesh from the Dems to raise the ceiling (i.e., cut programs progressives view as essential while cutting taxes for the rich or no deal). On the other hand some Dems are now talking about voting no on the ceiling or just abstain from voting yes to force the GOP to confront the problem on their own (re-live the 95 shutdown but worse?). Pretty serious stuff to play brinksmanship with.
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Old 01-17-2011, 06:16 PM   #35
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Pretty serious stuff to play brinksmanship with.
Yep. Especially when both sides have helped create the situation.

Although it can be argued that Geithner's gloomy letter has some democratic tilt, I don't believe there's any partisanship in this factual statement:
"...raising the debt limit is necessary to allow the Treasury to meet obligations of the United States that have been established, authorized, and appropriated by the Congress. It is important to emphasize that changing the debt limit does not alter or increase the obligations we have as a nation; it simply permits the Treasury to fund those obligations Congress has already established."
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Old 01-17-2011, 08:13 PM   #36
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Yep. Especially when both sides have helped create the situation.

Although it can be argued that Geithner's gloomy letter has some democratic tilt, I don't believe there's any partisanship in this factual statement:
"...raising the debt limit is necessary to allow the Treasury to meet obligations of the United States that have been established, authorized, and appropriated by the Congress. It is important to emphasize that changing the debt limit does not alter or increase the obligations we have as a nation; it simply permits the Treasury to fund those obligations Congress has already established."
While it is a factual statement, it alleviates Congress from ensuring that the gov't stops overspending.
So, whil it doesn't alter or increase the obligations as a nation, it most certainly permits Congress to continue overspending.
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Old 01-17-2011, 08:28 PM   #37
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Always felt I was a realist. I'm a family of four so I actually owe $180K. I guess I could do that in 12 years. I just wonder if they're gonna need me to help all the unemployed people pay their debt off as well.
Sounding smarter all the time.
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Old 01-17-2011, 08:52 PM   #38
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RE: "...raising the debt limit is necessary to allow the Treasury to meet obligations of the United States that have been established, authorized, and appropriated by the Congress. It is important to emphasize that changing the debt limit does not alter or increase the obligations we have as a nation; it simply permits the Treasury to fund those obligations Congress has already established."

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While it is a factual statement, it alleviates Congress from ensuring that the gov't stops overspending.
So, whil it doesn't alter or increase the obligations as a nation, it most certainly permits Congress to continue overspending.
Agreed. It's a little like if I found myself without enough money to fill my car to get to my job (back when I had one). I could make the case that someone should loan me the money, or else I lose my job and I'll be in even deeper. But if I don't have a rational plan to adjust my spending to match my income going forward, I will be out of gas next week too. Loaning me money now doesn't fix the problem, but it takes more money from the loaner.

-ERD50
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Old 01-17-2011, 09:05 PM   #39
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RE: "...raising the debt limit is necessary to allow the Treasury to meet obligations of the United States that have been established, authorized, and appropriated by the Congress. It is important to emphasize that changing the debt limit does not alter or increase the obligations we have as a nation; it simply permits the Treasury to fund those obligations Congress has already established."



Agreed. It's a little like if I found myself without enough money to fill my car to get to my job (back when I had one). I could make the case that someone should loan me the money, or else I lose my job and I'll be in even deeper. But if I don't have a rational plan to adjust my spending to match my income going forward, I will be out of gas next week too. Loaning me money now doesn't fix the problem, but it takes more money from the loaner.

-ERD50
That's exactly why we need to see some serious discussions about establishing some sort of plan and then locking that plan in place before the ceiling is raised again.
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Old 01-17-2011, 10:19 PM   #40
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That's exactly why we need to see some serious discussions about establishing some sort of plan and then locking that plan in place before the ceiling is raised again.
Nothing wrong with serious discussions, but we'll see.

The president gets at least three opportunities in the next few weeks to show his intentions.

The State of the Union address is next week, on the 25th.

The day before: President Obama invites frosh to reception - Marin Cogan and Jake Sherman - POLITICO.com

The administration releases a proposed FY 2012 budget sometime later in January or early February, as I recall.
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