Join Early Retirement Today
Closed Thread
 
Thread Tools Display Modes
Very good Ben Carlson article on the debt ceiling soap opera
Old 02-03-2023, 08:00 AM   #1
Full time employment: Posting here.
 
Join Date: Apr 2005
Posts: 807
Very good Ben Carlson article on the debt ceiling soap opera

Carson is always worth reading but I especially appreciate his clarity and historical perspective about this topic.

https://awealthofcommonsense.com/202...-debt-default/
kevink is offline  
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 02-03-2023, 09:58 AM   #2
Administrator
Gumby's Avatar
 
Join Date: Apr 2006
Posts: 22,971
MODERATOR NOTE: This could be a good thread if we keep politics out of it. Please do your part.
__________________
Living an analog life in the Digital Age.
Gumby is offline  
Old 02-03-2023, 10:04 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,007
Quote:
Originally Posted by kevink View Post
Carson is always worth reading but I especially appreciate his clarity and historical perspective about this topic.

https://awealthofcommonsense.com/202...-debt-default/
It’s appreciated if you a provide a summary or a quote so someone doesn’t have to click on a naked link to get a gist of any article. They can then decide whether they want to read more. The title itself was too brief.
__________________
Retired since summer 1999.
audreyh1 is online now  
Old 02-03-2023, 10:19 AM   #4
Thinks s/he gets paid by the post
 
Join Date: Aug 2014
Location: Red Rock Country
Posts: 1,915
Basically the article argues that the debt ceiling soap opera is unlikely to result in a default: in 2011, when we came close, and S&P downgraded US debt, there was some market (both stocks and bonds) volatility for a time but no apparent long term negative effects. Also, the article adds that folks have been worried about the debt forever but as long as our economy keeps growing, we're probably ok with increases in the national debt.
Ian S is online now  
Old 02-03-2023, 10:24 AM   #5
Thinks s/he gets paid by the post
 
Join Date: Aug 2014
Location: Red Rock Country
Posts: 1,915
I would add that the debt ceiling was originally a good idea in WW1 where it allowed the government to issue bonds up to the ceiling without having to get specific approval from Congress. It would appear to have outlived its usefulness and is just silly political theater nowadays.
Ian S is online now  
Very good Ben Carlson article on the debt ceiling soap opera
Old 02-04-2023, 06:28 AM   #6
Thinks s/he gets paid by the post
Markola's Avatar
 
Join Date: Nov 2013
Location: Twin Cities
Posts: 3,927
Very good Ben Carlson article on the debt ceiling soap opera

^^^^ Silly is right. It’s become a farcical cottage industry.

“The debt ceiling debate makes politicians feel important. They use it as a negotiating ploy to pass or block other legislation. It’s leverage.
Could we see some crazy politician take things too far at some point and force a default? It wouldn’t surprise me but that seems like a short-term problem that would be remedied fairly quickly once they see the problems it would cause.
Politicians want to get re-elected and wrecking the U.S. economy is not a great strategy for that.”

Everyone knows their roles, all the same old arguments and exactly how it will end after much hypocritical grandstanding and causing needless pain to federal workers and contractors but they will put us through it anyway.

As for investing in the face of it, the article makes a good case for ignoring it all.
Markola is offline  
Old 02-04-2023, 07:56 AM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,264
I think the country would be best off by just eliminating the debt ceiling. It's the functional equivalent of refusing to pay your credit card bill because you stupidly charged up more than your credit limit even though you have the financial capacity to pay. It's stupid.

Then we would avoid these stupid political theatrics from whatever party is out of power... and both sides of the aisle partake to some degree.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is online now  
Old 02-04-2023, 08:31 AM   #8
Thinks s/he gets paid by the post
 
Join Date: Oct 2019
Posts: 3,657
Quote:
Originally Posted by pb4uski View Post
I think the country would be best off by just eliminating the debt ceiling.

I think not, at least this way they have something argue about and at least think they are controlling it.
Time2 is offline  
Old 02-04-2023, 08:37 AM   #9
Moderator Emeritus
aja8888's Avatar
 
Join Date: Apr 2011
Location: Conroe, Texas
Posts: 18,645
Quote:
Originally Posted by pb4uski View Post

Then we would avoid these stupid political theatrics from whatever party is out of power... and both sides of the aisle partake to some degree.
PB, that's part of the Kabuki Theater performance!
__________________
*********Go Astros!*********
aja8888 is offline  
Old 02-04-2023, 08:39 AM   #10
Full time employment: Posting here.
Popeye's Avatar
 
Join Date: Sep 2016
Posts: 527
It’s all much ado about nothing. Neither side wants to remove the issue when they can use it as a wedge issue. And the media folks drum it up to beat on their favorite whipping boys. In the end it will pass without incident.
Popeye is offline  
Old 02-04-2023, 09:21 AM   #11
Full time employment: Posting here.
Beststash's Avatar
 
Join Date: Nov 2003
Posts: 578
Instead of using the debt ceiling as a political ploy the energy should be spent, I think, on dealing with some of the real issues. We have real problems when it comes to mandatory and military spending that have been ignored for decades.

Everyone likes tax cuts but no one likes spending cuts.

Through the years we have pushed the can down the road and ignored these real issues and I suspect that it will go similar to the debt ceiling fiasco - wait until the last moment to deal with these issues instead dealing with them in a reasonable manner (I know reasonable is subjective).

I personally think that the debt ceiling is one of those that can easily be resolved - eliminate it. If you spend the money you should pay the bill.
Beststash is offline  
Old 02-04-2023, 10:00 AM   #12
Full time employment: Posting here.
 
Join Date: May 2006
Posts: 858
In the short term this debt ceiling is nothing more than political theater. However in the long term there's a bigger issue. If one can print their own money any ceiling is just arbitrary. There's no checks and balances in absolute terms. I see the root problem is increase revenue will drive increase spending. It's just like people who live paycheck to paycheck. They'll spend whatever they got. While we tax people more and spend more, we rob the private sector of resources and the role of goverment expands to a socialist type goverment. Government is necessary but there has to be a balance and we need to find a sweet spot where it works best.
dmpi is offline  
Old 02-04-2023, 12:12 PM   #13
Thinks s/he gets paid by the post
 
Join Date: Feb 2007
Location: Upstate
Posts: 2,948
I'm not great at predictions but feel pretty confident that this thread will be shut down the debt ceiling will be increased.

"Eventually" the issue with excessive spending will be resolved. How it is resolved (e.g. inflation causing a reduced standard of living for us or our decedents) will likely be very unpleasant. When that (or something else equally unpleasant) happens is unknown.
copyright1997reloaded is offline  
Old 02-04-2023, 12:23 PM   #14
Thinks s/he gets paid by the post
Mr._Graybeard's Avatar
 
Join Date: Apr 2011
Posts: 2,962
Quote:
Originally Posted by copyright1997reloaded View Post
I'm not great at predictions but feel pretty confident that this thread will be shut down the debt ceiling will be increased.
+1 regarding the strikeout prediction. The partisan aspect of this issue is obvious for anyone following it. And yeah, it'll be increased eventually.
__________________
Tick tick tick tock goes the clock on the wall as we're dancing the evening away -- Tick Tock Polka
Mr._Graybeard is offline  
Old 02-04-2023, 12:45 PM   #15
Recycles dryer sheets
 
Join Date: Nov 2011
Posts: 182
With annual federal tax receipts over $4 trillion and annual federal debt service currently running around $400 billion (>10x debt service), it would seem that a default would only happen if there was an intentional decision to do so.
__________________
FIREd 2012 at Age 49
523HRR is offline  
Old 02-04-2023, 12:55 PM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,264
Quote:
Originally Posted by 523HRR View Post
With annual federal tax receipts over $4 trillion and annual federal debt service currently running around $400 billion (>10x debt service), it would seem that a default would only happen if there was an intentional decision to do so.
+1 ability to pay, both short term and long term, isn't really an issue at the current level of debt but ability to pay will decay over time as the debt grows if we continue to run such substantial deficits, but it is a ways away.

I don't think there are many that would disagree that the deficits need to be reduced substantially, but the rub is in the details because inevitably there will be losers in the process.

But the need to reduce deficits is not sufficient reason to f- with the creditworthiness of the US government and the economic calamity that any sustained default would cause. Both sides need to grow up and find another way to govern.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is online now  
Old 02-06-2023, 09:21 PM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Koolau's Avatar
 
Join Date: Jul 2008
Location: Leeward Oahu
Posts: 17,794
I'm no expert, I'm thinking the more recent permutations (IIRC beginning in 1974 plus the various "balanced budget acts" of the 80s and 90s) were designed to give legislators of both parties cover for not spending too much on goodies that are always demanded by constituents. Now those limitations have gotten in the way of spending to satisfy those same constituents. Times have changed though YMMV.
__________________
Ko'olau's Law -

Anything which can be used can be misused. Anything which can be misused will be.
Koolau is offline  
Old 02-07-2023, 03:21 PM   #18
Moderator
Walt34's Avatar
 
Join Date: Dec 2007
Location: Eastern WV Panhandle
Posts: 25,299
Quote:
Originally Posted by Beststash View Post
Through the years we have pushed the can down the road and ignored these real issues and I suspect that it will go similar to the debt ceiling fiasco - wait until the last moment to deal with these issues instead dealing with them in a reasonable manner (I know reasonable is subjective).
The whole thing reminds me of Winston Churchill's observation that "You can always trust the Americans to do the right thing. After they've exhausted all other possibilities".

Different scenario, same behavior.
__________________
When I was a kid I wanted to be older. This is not what I expected.
Walt34 is offline  
Very good Ben Carlson article on the debt ceiling soap opera
Old 06-03-2023, 08:40 AM   #19
Thinks s/he gets paid by the post
Markola's Avatar
 
Join Date: Nov 2013
Location: Twin Cities
Posts: 3,927
Very good Ben Carlson article on the debt ceiling soap opera

And that’s the end of the latest season of the game show, “The Debt Ceiling.”

This season’s cast couldn’t get the ratings traction of prior ones, not because they aren’t equally good dramatic actors, but because the audience has seen the game sooooo many times before, they know how it always ends, and there is just better TV to watch elsewhere. Unfortunately, this season had to compete with the finales of both Succession and Ted Lasso.

Hats off to the characters playing journalists who did their best, as always, to build maximum fear and a fever-pitched climax. I, for one, feel like The Debt Ceiling show has jumped the shark and the producers should probably just cancel it, as it is increasingly pointless and embarrassing for everyone involved. Hollywood gossip is, the production will take a break, make some personnel changes, then try to stage a comeback in 2025, but I probably won’t watch.
Markola is offline  
Old 06-03-2023, 09:10 AM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Koolau's Avatar
 
Join Date: Jul 2008
Location: Leeward Oahu
Posts: 17,794
Quote:
Originally Posted by Markola View Post
And that’s the end of the latest season of the game show, “The Debt Ceiling.”

This season’s cast couldn’t get the ratings traction of prior ones, not because they aren’t equally good dramatic actors, but because the audience has seen the game sooooo many times before, they know how it always ends, and there is just better TV to watch elsewhere. Unfortunately, this season had to compete with the finales of both Succession and Ted Lasso.

Hats off to the characters playing journalists who did their best, as always, to build maximum fear and a fever-pitched climax. I, for one, feel like The Debt Ceiling show has jumped the shark and the producers should probably just cancel it, as it is increasingly pointless and embarrassing for everyone involved. Hollywood gossip is, the production will take a break, make some personnel changes, then try to stage a comeback in 2025, but I probably won’t watch.
But, coming to a TV or Blog near you, the whole cast and crew will return for the next round of "IMPENDING DEBT CEILING." Watch for it!
__________________
Ko'olau's Law -

Anything which can be used can be misused. Anything which can be misused will be.
Koolau is offline  
Closed Thread


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Words of Wisdom William Bernstein_chat w/Ben Carlson targatom2019 FIRE and Money 34 04-08-2020 12:11 AM
Ben Smiteth; and Ben Raises Up The Smitten haha FIRE and Money 11 07-13-2013 07:56 AM
Phone Salesman Sings Opera ChemEng Other topics 1 10-23-2007 09:56 AM
Richard Carlson dead at 45 Khan Other topics 6 12-18-2006 05:35 AM

» Quick Links

 
All times are GMT -6. The time now is 11:19 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.