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mugtang

Debt ceiling

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3 minutes ago, bornontheblue said:

I don't oppose raising the debt limit, I just don't think it would be a complete catastrophe if we don't. In fact there could be economic benefits. 

Ok let’s say your numbers of 60-75% of govt spending is covered by revenues currently hard to gauge with the ongoing pandemic so let’s split the difference and call it 68%.  Fiscal 2021 fiscal outlays were 6.8T.  Biden proposed a budget of 6.011T for fiscal 2022.  Let’s assume that’s the number we go with.  So if we hit the debt limit and are forced to immediately cut 32% of government spending that removes 1.93T of spending from the economy.  That’s 8.5% of annual GDP.  Instantly removing that much spending (I understand it isn’t overnight but over the course of a year) will cause significant economic harm and cause a severe recession, possibly a depression.  Which will lead to more cuts and tax revenues fall off, which will lead to a really nasty feedback loop. If we want to reduce government spending I don’t have an issue with that, in fact we probably should. However it needs to be tapered down over time, like you would when getting an addict off of a highly addictive drug.  Shocking the system isn’t the way to go about it. 

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14 minutes ago, Akkula said:

The people who really don't want a default are the  billionaire types and big banks.  So bad for their portfolios.

Demand for goods and services will not suddenly go away but wall street will have a tough day.   Why do you think people with fixed mortgages and salaries should sell out to protect wall street?  

"Progressives" know this but Republicans and Corporate democrats want to give away the farm. 

God help me but y’all really need to listen to Akkula here. This is the stand off going on right now. The GOP doesn’t come into it.

tom hardy GIF by Maudit

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21 minutes ago, Akkula said:

The people who really don't want a default are the  billionaire types and big banks.  So bad for their portfolios.

Demand for goods and services will not suddenly go away but wall street will have a tough day.   Why do you think people with fixed mortgages and salaries should sell out to protect wall street?  

"Progressives" know this but Republicans and Corporate democrats want to give away the farm. 

How people twist this into a political issue is astounding.  This is the rich vs the rest of us.  Always has been.

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One thing to remember in all of this...

This is not about spending, and it's not about debt. This is about abortion and guns. Oh, and now masks and what people can teach in schools and universities re: race.

Never forget that. All of this wrangling is about getting or keeping a majority to pass laws to control discourse, bodies and the public square. 

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22 minutes ago, mugtang said:

Ok let’s say your numbers of 60-75% of govt spending is covered by revenues currently hard to gauge with the ongoing pandemic so let’s split the difference and call it 68%.  Fiscal 2021 fiscal outlays were 6.8T.  Biden proposed a budget of 6.011T for fiscal 2022.  Let’s assume that’s the number we go with.  So if we hit the debt limit and are forced to immediately cut 32% of government spending that removes 1.93T of spending from the economy.  That’s 8.5% of annual GDP.  Instantly removing that much spending (I understand it isn’t overnight but over the course of a year) will cause significant economic harm and cause a severe recession, possibly a depression.  Which will lead to more cuts and tax revenues fall off, which will lead to a really nasty feedback loop. If we want to reduce government spending I don’t have an issue with that, in fact we probably should. However it needs to be tapered down over time, like you would when getting an addict off of a highly addictive drug.  Shocking the system isn’t the way to go about it. 

This is where you are wrong. The government does not create new wealth to add to the economy to be spent. The government takes wealth away from others to spend it in a way they desire. Money will still get spent , just the government would have less of an influence on how it gets spent. 

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37 minutes ago, Akkula said:

The people who really don't want a default are the  billionaire types and big banks.  So bad for their portfolios.

Demand for goods and services will not suddenly go away but wall street will have a tough day.   Why do you think people with fixed mortgages and salaries should sell out to protect wall street?  

"Progressives" know this but Republicans and Corporate democrats want to give away the farm. 

Because most of us have 401ks which do not have a guarantee backing them and are tied to the performance of various bond & stock markets :shrug:

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22 minutes ago, smltwnrckr said:

One thing to remember in all of this...

This is not about spending, and it's not about debt. This is about abortion and guns. Oh, and now masks and what people can teach in schools and universities re: race.

Never forget that. All of this wrangling is about getting or keeping a majority to pass laws to control discourse, bodies and the public square. 

eric-cartman-boo-wendy.gif

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5 minutes ago, bornontheblue said:

This is where you are wrong. The government does not create new wealth to add to the economy to be spent. The government takes wealth away from others to spend it in a way they desire. Money will still get spent , just the government would have less of an influence on how it gets spent. 

Government spending is a significant driver of economic growth.  If the government can’t pay 30% of its bills there will be substantial economic harm. We’re talking about aid states depend on, social security payments, Medicare payments, defense spending etc.  Let’s say we cut grandmas check by 30%. All of those seniors are going to have 30% less money to spend.  We will have to cut the salaries of 4.4 million people by 30%, same thing. You’re talking about reducing the income of 60 million+ people by 30% and you don’t think that won’t have devastating consequences for the economy? Not to mention the cancelled contracts, loss of faith in US credit and the dollar. 

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12 minutes ago, mugtang said:

Government spending is a significant driver of economic growth.  If the government can’t pay 30% of its bills there will be substantial economic harm. We’re talking about aid states depend on, social security payments, Medicare payments, defense spending etc.  Let’s say we cut grandmas check by 30%. All of those seniors are going to have 30% less money to spend.  We will have to cut the salaries of 4.4 million people by 30%, same thing. You’re talking about reducing the income of 60 million+ people by 30% and you don’t think that won’t have devastating consequences for the economy? Not to mention the cancelled contracts, loss of faith in US credit and the dollar. 

Is it really a fair assumption to say that 100% of grandma's income is SS benefits? I know a lot of people suck at retirement savings, but I'd like to assume the majority have other sources of income.

Not saying your whole point falls apart, but the whole "Grandma is gonna lose 30% of her money" seems a bit dishonest.

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11 minutes ago, misplacedcowboy said:

Is it really a fair assumption to say that 100% of grandma's income is SS benefits? I know a lot of people suck at retirement savings, but I'd like to assume the majority have other sources of income.

Not saying your whole point falls apart, but the whole "Grandma is gonna lose 30% of her money" seems a bit dishonest.

You’re right, I looked it up.  About 20% of seniors solely rely on Social Security income.  But the others supplement their incomes with defined benefit (pension) and defined contribution (401k) plans. And those are all invested in real estate, stocks & bonds. In fact many of those bonds are US treasuries. So the point still stands that those people will suffer significantly from a default.

https://www.forbes.com/sites/andrewbiggs/2020/01/27/factcheck-do-40-of-retirees-rely-on-social-security-for-their-entire-income/amp/

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8 minutes ago, misplacedcowboy said:

Is it really a fair assumption to say that 100% of grandma's income is SS benefits? I know a lot of people suck at retirement savings, but I'd like to assume the majority have other sources of income.

Not saying your whole point falls apart, but the whole "Grandma is gonna lose 30% of her money" seems a bit dishonest.

https://www.internationalinvestment.net/news/4011535/half-americans-usd100-retirement-savings

The number of Americans struggling to balance between managing their finances and retirement savings is on the rise. Despite planning, nearly 50% of Americans have less than $100,000 saved for their retirement, according to the LearnBonds report.

https://learnbonds.com/news/almost-50-of-americans-have-less-than-100k-in-retirement-savings/

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24 minutes ago, mugtang said:

Government spending is a significant driver of economic growth.  If the government can’t pay 30% of its bills there will be substantial economic harm. We’re talking about aid states depend on, social security payments, Medicare payments, defense spending etc.  Let’s say we cut grandmas check by 30%. All of those seniors are going to have 30% less money to spend.  We will have to cut the salaries of 4.4 million people by 30%, same thing. You’re talking about reducing the income of 60 million+ people by 30% and you don’t think that won’t have devastating consequences for the economy? Not to mention the cancelled contracts, loss of faith in US credit and the dollar. 

Yeah but Grandmas check won't be cut 30%. Unnecessary bloat from government agencies nobody cares about and benefit very few will get cut. 

This is a very teachable moment here. Government does not create wealth to build the economy, government takes and redistributes wealth as it sees fit. If the government had to suddenly stop borrowing money there would not all of a sudden be less wealth in the economy. 

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6 minutes ago, mugtang said:

You’re right, I looked it up.  About 20% of seniors solely rely on Social Security income.  But the others supplement their incomes with defined benefit (pension) and defined contribution (401k) plans. And those are all invested in real estate, stocks & bonds. In fact many of those bonds are US treasuries. So the point still stands that those people will suffer significantly from a default. 

US treasuries would probably have a rally if the debt ceiling was met and not raised. The supply would be cut , and demand would be constant raising the value of them above face amount. All these grandmas with US treasuries in their portfolios would see a nice gain. 

 

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2 minutes ago, bornontheblue said:

Yeah but Grandmas check won't be cut 30%. Unnecessary bloat from government agencies nobody cares about and benefit very few will get cut. 

This is a very teachable moment here. Government does not create wealth to build the economy, government takes and redistributes wealth as it sees fit. If the government had to suddenly stop borrowing money there would not all of a sudden be less wealth in the economy. 

Deep thoughts, Nostradumbass.  Tell that to all those wealthy people who whole assets tied in some way to US Treasuries.  That wasn't REAL wealth....just paper wealth created out of thin air by the FED.  :Clapping:  

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4 minutes ago, bornontheblue said:

Yeah but Grandmas check won't be cut 30%. Unnecessary bloat from government agencies nobody cares about and benefit very few will get cut. 

This is a very teachable moment here. Government does not create wealth to build the economy, government takes and redistributes wealth as it sees fit. If the government had to suddenly stop borrowing money there would not all of a sudden be less wealth in the economy. 

I guess we will just have to agree to disagree on this subject. 

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Just now, Akkula said:

Deep thoughts, Nostradumbass.  Tell that to all those wealthy people who whole assets tied in some way to US Treasuries.  That wasn't REAL wealth....just paper wealth created out of thin air by the FED.  :Clapping:  

Nobody has their whole investment portfolio tied to us Treasuries, well maybe a dumbass like you would do that. 

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35 minutes ago, thelawlorfaithful said:

Yeah! Screw those newfound Democratic voters in the suburbs.

I am sure all those people in the burbs are too stupid to look at the news to see that McConnell and the Republicans are the ones withholding their votes to force a default.  

Republicans are like someone running around with a gun to their own heads being like..."You better stop me or I will shoot the hostage!!"

Democrats need to just shrug and say...."Okay."  "Let me know when you fold like a cheap card table."

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Just now, mugtang said:

I guess we will just have to agree to disagree on this subject. 

They will raise the debt limit. Both sides are just delaying it to the very end to try and extract any political gain they can from it. 

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