Moody's offers different view on debt limit

[Linc]

Repub ratings on women's issue is another point Reince priebus noted that needs help..
The Repub Congressman who mentally abused a FEMALE ranger..
If you haven't noticed a different tone to women than men from the GOP, .........

What about her being a woman would make Republicans uneasy?

 

[Master PO]

Actually most of the government has very strict accounting practices and are subject to good audits. It's hard to steal a pencil from some agencies.

The only exception is the military, which has never been audited and doesn't even produce books that are GAAP quality. I repeat, the DOD has never been audited and they produce such bad books and records, they currently can't be audited. So we don't even have a handle on the amount the military wastes. It's essentially a rogue agency spending money without any accountability.

Before we cut a dime from useful programs we should require the DoD to provide a GAAP accounting, and we can start cutting there.

so even though the military does have waste, we all know this,...... but it is a constitutional entity, and social programs are not, the military needs to be cut, and no social programs.

i say we cut them both.

 

[Linc]

Have you seen REINCE PRIEBUS lately?
Is Ted Cruz in on the economic talks with his buddies in the Senate?

Actually most of the government has very strict accounting practices and are subject to good audits. It's hard to steal a pencil from some agencies.

The only exception is the military, which has never been audited and doesn't even produce books that are GAAP quality. I repeat, the DOD has never been audited and they produce such bad books and records, they currently can't be audited. So we don't even have a handle on the amount the military wastes. It's essentially a rogue agency spending money without any accountability.

Before we cut a dime from useful programs we should require the DoD to provide a GAAP accounting, and we can start cutting there.

 

[Objective Voice]

Lets back up.

The US finances it's private debt through TNotes, TBonds, TBills etc... Some of those come due every month. That means that we need to sell some percentage of our old debt every month in addition to any new debt. Now, the Treasury paid off 7.5Trillion in maturing debt in 2013, and was forced to issue 8.3 trillion in new debt.

Roll Over Plan: Treasury Needed to Pay Off Record $7.5T in Maturing Debt in FY 2013, Issued $8.3T New Debt; Increased Net Debt $777B | CNS News
(from a right wing news source even)

And here's the interest
Government - Interest Expense on the Debt Outstanding

We're in a situation now, where half of the debt is being serviced every year. This currently costs us 400 Billion per year or 7% of the US budget. Failing to raise the debt limit will increase the price of TNotes, TBills, and TBonds. This will immediately increase the cost to finance about half of the debt. Thus instead of 400 Billion per year, we're looking at 600-800 Billion per year to finance our debt. This is money effectively taken out of the US economy which would take an additional 2% or so out of the GDP.

So now it's 2014. We have a bunch of problems. The US economy is now in a steep recession meaning revenues are say 400Billion lower than 2013. Furthermore, the debt costs another 300Billion more to finance. That's like taking 700 Billion out of our current budget. At this point, the drag of government debt will make it impossible to ever grow or cut our way to a balanced budget.

At this point we'll have to inflate our way out of our debt, basically giving all of us a huge haircut. We will have effectively foreclosed on ourselves.

I've been saying for quite some time now to friends, family and co-workers - pretty much anyone who would listen - that the primary way our government has been raising revenue to pay its debt lately hasn't been through collecting income taxes. It's been through the short-term sell of Treasury bonds. The crazy thing is we really don't have much of a choice right now.

Both sides of the political divide are right. We do have a spending problem. But we also have a revenue problem. Those who only want to see one side of the equation are missing the big picture. We're not collecting enough in federal income taxes to meet all of our financial obligations, and even if we cut government spending to the bare bones it still wouldn't be enough. The Treasury does need to collect more revenue. Selling Treasuries has been a stop-gap measure, but it can't last for long. Sooner or later, we'll have to make a significant change to our economic policies to bring in more revenue while trimming federal expenditures. Otherwise, not even the public will be able to carry the debt. Will it mean some programs get sliced? Yes. Some departments get merged or terminated? That should be part of the plan, yes. Will it mean higher taxes? Yes, but you can't put that burden squarely on the wealth-class any more than you can continue expecting the middle-class to pay a higher ratio of their already dwindling net income that's already far and above what the wealth-class doesn't pay. Something's got to give!

I've never advocated for the "Robin Hood approach" to solving our debt and deficit problem - take from the rich to give to the poor. What I have said was that the wealth-class can afford to pay alittle bit more in taxes to pay down the debt and reduce the deficit - a 3.5-5% marginal tax rate increase won't kill them. Corporations could also afford to pay higher wages so that the bedrock of our economy can get going - consumption! Unless you put more disposable income into the hands of employees, our economy which is based on consumption and debt can't thrive. It's stalled right now because we have too much debt and not enough full-time employees paying into the Treasury. So, to make up for the lose the Treasury is using the only stop-gap measure it has in its treasure chest - the sell of short-term Treasuries.

 

[the_recruit]

Moody's is correct. Refusing to raise the debt limit does not guarantee a default. They are not one and the same.

 

[mac]

Repub ratings on women's issue is another point Reince priebus noted that needs help..

That's a perception change.

The Repub Congressman who mentally abused a FEMALE ranger..

That's a rediculous point given all the unabashed disrespect Democrats show to women. It's not like this Republican waived his weiner at her.

If you haven't noticed a different tone to women than men from the GOP, .........

I haven't. In fact I've seen more than a few women appointed to very senior positions under GOP administrations. Care to elaborate on this "tone"?

 

[Objective Voice]

Moody's is correct. Refusing to raise the debt limit does not guarantee a default. They are not one and the same.

No, it's doesn't. But what refusing to raise the debt ceiling (limit) will do is bring uncertainty to the markets. Again, we have to keep in mind what the debt ceiling truly does - allows the U.S. Treasury to borrow money, as needed, to pay its current debt (credit) obligations because it hasn't raised enough revenue to cover the expenditures. It's not about borrowing more money to pay for things Congress wants to appropriate or has appropriated most recently, i.e., within the last 2-5 years. It's about having the ability to pay for those things Congress has already said it would pay for and payments are now starting to come due.

Now, I get what Spkr Boehner is saying here (even if it slips by most people including those who claim to know more about government finances than I do). Boehner has stated he would not bring a clean debt limit bill before the House unless it came with a condition not to "reprioritize debt". What he's really saying is "Treasury Sec, you can't keep putting off payments further down the line. Pay the debt the government owes." Problem: NOT ENOUGH REVENUE TO COVER THE COST in the short-term! This is why both the President and conservative Republicans have been seeking a long-term budget solution. Of course, we'll never get there if Republicans aren't willing to give on raising revenue (tax increases or the elimination of some hefty tax credits beloved by the wealth-class) and Democrats aren't willing to reform some entitlement programs.

If this country is ever going to resolve it's financial problems, BOTH SIDES NEED TO GIVE! And in the event that they don't, we, the people need to get smarter which means learning more about the issues from more than just from our own partisan points of view and vote for candidates who will seek more from within the middle-ground.

Third Party candidate anyone?