You want to use something with a probability of zero as leverage? That's pretty terrible leverage. There are things we can do to stave off default in the short term, Treasury says we can make it till about July.
If you are arguing for 'fiscal sanity' you are doing the exact opposite of it. What's funny is that if you want to use the threat of default and a global economic meltdown as leverage, you have to be willing to do it to make a credible threat. Even a credible threat will likely have dire effects on global financial markets at it undermines the credibility of US securities.
Argue for lower spending all you want, but this is the absolute most insanely stupid way to go about it. Once again, incredibly irresponsible. Those who want to do it are not fit to govern, because they are incompetent.
Its like when the taxes were going to increase, the republicans used it as leverage to keep the taxes the same on all income levels, Obama would of course sign it, not willing to make himself look bad by risking that taxes increase on all americans.
Its the same thing here, attach something tangible to the debt ceiling increase, he'll have to sign it, he won't want to risk anything.
The republicans will do this, just watch.
Oh I know they're going to do that, what I'm saying is that it's irresponsible governance.
Unofficial Liabilities
Based on the CBOs data, I calculate a fiscal gap of $202 trillion, which is more than 15 times the official debt. This gargantuan discrepancy between our official debt and our actual net indebtedness isnt surprising. It reflects what economists call the labeling problem. Congress has been very careful over the years to label most of its liabilities unofficial to keep them off the books and far in the future.
For example, our Social Security FICA contributions are called taxes and our future Social Security benefits are called transfer payments. The government could equally well have labeled our contributions loans and called our future benefits repayment of these loans less an old age tax, with the old age tax making up for any difference between the benefits promised and principal plus interest on the contributions.
The fiscal gap isnt affected by fiscal labeling. Its the only theoretically correct measure of our long-run fiscal condition because it considers all spending, no matter how labeled, and incorporates long-term and short-term policy.
$4 Trillion Bill
How can the fiscal gap be so enormous?
Simple. We have 78 million baby boomers who, when fully retired, will collect benefits from Social Security, Medicare, and Medicaid that, on average, exceed per-capita GDP. The annual costs of these entitlements will total about $4 trillion in todays dollars. Yes, our economy will be bigger in 20 years, but not big enough to handle this size load year after year.
This is what happens when you run a massive Ponzi scheme for six decades straight, taking ever larger resources from the young and giving them to the old while promising the young their eventual turn at passing the generational buck.
We won't default.
But the debt ceiling may have a powerful influence on the next budget. By limiting the debt ceiling you limited the budget.
Fern
http://www.msnbc.msn.com/id/42536397/
There's more at the link. Boehner's big talk is worrisome. Those poll numbers are more worrisome. That's why I post this. Let's all be aware of what playing around with the debt ceiling means.
The debt ceiling does not threaten anyone. It is spending that is threatening.
Hell of a post/link.
I still remember the one time I voted for the Colorado State Lottery.
I voted for what I thought was a watered down bill, that no one would vote for. If passed all the funds would go to the State Wildlife Commision.
It passed, and I was dumb-struck.
Even today, Colorado's Lottery proceeds go directly to the State Wildlife Commision.
-John