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My View on the "Debt" Ceiling

JayGatsby

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Picture this....

You have a decent paying job and a nice family with 2 kids and a wife. You just bought a new house which was $500,000 and a car for $30,000. You also can afford to use a credit card to buy things like groceries and clothes for your kids, and your wife is able to also. You are never late on your payments, and the bank lets you borrow money at low rates; you have great credit. So one day one of your coworkers is talking about finances with you and all of the sudden he says "Wow! You are 600,000 dollars in debt!!!! That's ridiculous!". You try to explain that you pay interest payments on time, and you have good credit, yet your friend is so stubborn he starts to tell everyone you work with that you are $600,000 in debt. Everyone starts to call you irresponsible and a huge spender, and it is getting out of control. So your wife gets worried and cuts you off from your bank account somehow and says we can't be so far in debt lets just stop spending all together. So now you are late on your payments and your rates start to go up and your credit is shot because every one claimed you were "too far in "debt"" and they refused to let you borrow more when things like your car breaks down, or your kid gets hurt, or you need to repair your dishwasher.

Why should we not be allowed to borrow more if we need to in rough times, the world uses us as their bank, the US is trusted and we have very good credit?


Note: I know this analogy isn't perfect, but my point is who here actually supports not raising the debt limit?
 

Lutherf

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If the debt was getting paid down regularly it wouldn't be a problem but the government debt is NEVER getting paid down and we're still adding to it.

In your scenario what would happen is that if the debt never got paid off then one day mom and dad are going to be dead and the kids would be left with the debt. With the government.......SAME SCENARIO!
 

rjay

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If the Conservatives want to make a stand the time to do it is when the vote comes to spend the money not when the vote comes to make pay back the debt.

Don't vote to spend the money and then refuse to pay the debt.

I thought that as a generalization Republicans would frown upon being a deadbeat, as opposed to making it party policy.
 

sangha

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If the debt was getting paid down regularly it wouldn't be a problem but the government debt is NEVER getting paid down and we're still adding to it.

There's nothing wrong with increasing debt if it's accompanied by increasing revenue.

As businesses grow, their debt often does the same


In your scenario what would happen is that if the debt never got paid off then one day mom and dad are going to be dead and the kids would be left with the debt. With the government.......SAME SCENARIO!

The thing, the mom and dad in this case is the govt, and it's not about to "die"

And if it does, we'll have bigger problems than the debt we owe
 

Lutherf

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There's nothing wrong with increasing debt if it's accompanied by increasing revenue.

As businesses grow, their debt often does the same




The thing, the mom and dad in this case is the govt, and it's not about to "die"

And if it does, we'll have bigger problems than the debt we owe

Since 2009 growth in GDP has increased by 2-2.5% each year while debt has increased between 8-12%. Now, historically, we collect roughly 18% of GDP in taxes so at 2.5% growth that amounts to debt increasing roughly 18 times faster than our ability to pay it off. That's a problem.
 

sangha

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Since 2009 growth in GDP has increased by 2-2.5% each year while debt has increased between 8-12%. Now, historically, we collect roughly 18% of GDP in taxes so at 2.5% growth that amounts to debt increasing roughly 18 times faster than our ability to pay it off. That's a problem.

That's only a problem if those conditions were to continue.

However, your use of averages are misleading. What is important are the trends which show the increase in debt slowing down, deficits decreasing and revenue increasing.
 

calm

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Let's pretend that the economic problems in North America could be managed if only people would accept a lower wage.

Are we to believe that if we accept a dollar per hour decrease that the rest of the world will not simply lower their wages by a buck and a half in order to compete?

Lets say that I purchased a home as an investment while working for 20 bucks per hour.

If everybody in North America begins to work for 10 bucks per hour, who will afford to buy my home at the price I paid for it while I was working for 20 bucks per hour and not 10?

Calm
 

head of joaquin

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Since 2009 growth in GDP has increased by 2-2.5% each year while debt has increased between 8-12%. Now, historically, we collect roughly 18% of GDP in taxes so at 2.5% growth that amounts to debt increasing roughly 18 times faster than our ability to pay it off. That's a problem.

Hmm, I wonder what macroeconomic event happened in 2008 that might explain the increased debt?
 

the_recruit

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Your analogy actually misses the real absurdity of the the debt ceiling crisis. A better analogy is ordering a big meal and then deciding afterwards whether you want to pay the bill or not. There shouldn't even be a vote on the debt ceiling - it's redundant. Congress already decides how much and what programs to fund in a completely separate bill. If Congress wishes to spend less, then do so in the goddamn appropriation bill!

The whole idea ****s common sense right in her tender little ass.
 

EdwinWillers

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Picture this....

You have a decent paying job and a nice family with 2 kids and a wife. You just bought a new house which was $500,000 and a car for $30,000. You also can afford to use a credit card to buy things like groceries and clothes for your kids, and your wife is able to also. You are never late on your payments, and the bank lets you borrow money at low rates; you have great credit. So one day one of your coworkers is talking about finances with you and all of the sudden he says "Wow! You are 600,000 dollars in debt!!!! That's ridiculous!". You try to explain that you pay interest payments on time, and you have good credit, yet your friend is so stubborn he starts to tell everyone you work with that you are $600,000 in debt. Everyone starts to call you irresponsible and a huge spender, and it is getting out of control. So your wife gets worried and cuts you off from your bank account somehow and says we can't be so far in debt lets just stop spending all together. So now you are late on your payments and your rates start to go up and your credit is shot because every one claimed you were "too far in "debt"" and they refused to let you borrow more when things like your car breaks down, or your kid gets hurt, or you need to repair your dishwasher.

Why should we not be allowed to borrow more if we need to in rough times, the world uses us as their bank, the US is trusted and we have very good credit?

Note: I know this analogy isn't perfect, but my point is who here actually supports not raising the debt limit?
Not only is it not "perfect" - it completely misses the point.

Ok, so...
You borrow money from others to buy a house.
You borrow money from others to buy a car.
You borrow money from others to buy groceries.
You borrow money from others to buy clothes.

You pay others for the privilege of borrowing money to buy a house.
You pay others for the privilege of borrowing money to buy a car.
You pay others for the privilege of borrowing money to buy groceries.
You pay others for the privilege of borrowing money to buy clothes.

Only you don't own the house - your creditors do.
Only you don't own your car - your creditors do.
Only you didn't buy your groceries - your creditors did.
Only you didn't buy your clothes - your creditors did.

Your creditors are funding your entire lifestyle, not you.

Now you find yourself in "rough times" and can't pay your creditors.
Now you need to borrow money from your creditors... to pay your creditors.

...and you feel you have some sort of "right" to their money?
...because you now find yourself in "rough times???"
 

ARealConservative

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Horrible analogy

Here is a better one:

A husband and wife have been fighting over finances for along time. They simply can’t agree on what to do. The husband wants to drastically cut the spending, as 600k in debt is going to affect their kids and grandkids. She refuses to slow her spending. We will grow our way out of the problem, she insists, ignoring how the total debt has only went up the entire time they have been fighting.

He feels he needs to do something as what he perceives as a problem is only getting bigger, but she refuses to see it as a problem.

He can continue to ignore the issue and allow her to not adjust her spending to be in line with their income

He can cut the cards

He can file for a divorce.

I vote option 3
 

EdwinWillers

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Your analogy actually misses the real absurdity of the the debt ceiling crisis. A better analogy is ordering a big meal and then deciding afterwards whether you want to pay the bill or not. There shouldn't even be a vote on the debt ceiling - it's redundant. Congress already decides how much and what programs to fund in a completely separate bill. If Congress wishes to spend less, then do so in the goddamn appropriation bill!

The whole idea ****s common sense right in her tender little ass.
What a crock of disturbingly disingenuous BS.

Let's correct your analogy with a basic fact - The decision is not whether to pay for it or not. You've already paid for it and consumed it. The decision is whether or not to pay those from whom you borrowed the money to pay for the meal you just ate.

But that's not the real issue either - because responsible people SHOULD pay their debts. The real issue is borrowing money in the first place; the real issue is getting yourself into a cycle of ever-increasing spending and borrowing to fund that spending.

The issue is the interest we must pay for the privilege of grossly negligent, irresponsible spending that only escalates year after year - to the point that the portion of our budget that goes to paying the interest on all our irresponsible spending is exponentially approaching the amount of money we receive in annual revenues.

The ISSUE is stopping the irresponsible spending and borrowing BEFORE we reach the point that the interest we pay for the privilege of borrowing money for our irresponsible spending becomes 100% of our annual budget.

(Just downright amazing how willfully and irresponsibly ignorant the left is on this issue).
 

ARealConservative

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Your analogy actually misses the real absurdity of the the debt ceiling crisis. A better analogy is ordering a big meal and then deciding afterwards whether you want to pay the bill or not. There shouldn't even be a vote on the debt ceiling - it's redundant. Congress already decides how much and what programs to fund in a completely separate bill. If Congress wishes to spend less, then do so in the goddamn appropriation bill!

The whole idea ****s common sense right in her tender little ass.

the better analogy is ordering a meal knowing you can't pay for it, and expect your unborn child to pay for it.
 

Woodman909

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Picture this....

You have a decent paying job and a nice family with 2 kids and a wife. You just bought a new house which was $500,000 and a car for $30,000. You also can afford to use a credit card to buy things like groceries and clothes for your kids, and your wife is able to also. You are never late on your payments, and the bank lets you borrow money at low rates; you have great credit. So one day one of your coworkers is talking about finances with you and all of the sudden he says "Wow! You are 600,000 dollars in debt!!!! That's ridiculous!". You try to explain that you pay interest payments on time, and you have good credit, yet your friend is so stubborn he starts to tell everyone you work with that you are $600,000 in debt. Everyone starts to call you irresponsible and a huge spender, and it is getting out of control. So your wife gets worried and cuts you off from your bank account somehow and says we can't be so far in debt lets just stop spending all together. So now you are late on your payments and your rates start to go up and your credit is shot because every one claimed you were "too far in "debt"" and they refused to let you borrow more when things like your car breaks down, or your kid gets hurt, or you need to repair your dishwasher.

Why should we not be allowed to borrow more if we need to in rough times, the world uses us as their bank, the US is trusted and we have very good credit?


Note: I know this analogy isn't perfect, but my point is who here actually supports not raising the debt limit?

Your scenario is invalid. The person you describe is not consistently spending more that he is making. He is managing his debt realistically and will eventually eliminate it. The Federal government on the other hand consistently spends more than it brings in. Raising the debt limit gives it incentive to spend even more and go deeper into the hole. Apples and oranges.
 

Kushinator

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agree.

we know we spend more then we get. so it is absurd to claim otherwise as you are doing.

We do spend more than we take in. That does not mean the country cannot afford deficits. To make such a claim is absurd! According to you and your ideology, we should have had hyperinflation, a dollar crisis, another bubble, etc....

Yet here we are, sitting @ 2% real growth (4% nominal).
 

ARealConservative

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We do spend more than we take in. That does not mean the country cannot afford deficits. To make such a claim is absurd! According to you and your ideology, we should have had hyperinflation, a dollar crisis, another bubble, etc....

Yet here we are, sitting @ 2% real growth (4% nominal).

When you buy something on credit it is generally because you can’t afford to buy it outright.

I never claimed we can’t afford deficits, as that doesn’t even make sense. We can afford them, until we reach the point we can’t.

If you are buying using deficit spending, you aren’t paying for it. Someone else is, and you are promising to pay them later. So the only thing I see ridiculous is your feigned indignation of my accurate analogy
 

CalGun

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FAIL - you are right its not perfect - and the simple failure I'd suggest you back away from is what the friends say but what the credit card company says when they demand payment and you don't have any money. DO you have a printing press you can go to and create money, and then sell the old debt you have to a new creditor that's willing to buy because the old creditor is worried about getting paid? Over and over again - when does the music stop?

What happens to your family of 4 when the music stops?


Picture this....

You have a decent paying job and a nice family with 2 kids and a wife. You just bought a new house which was $500,000 and a car for $30,000. You also can afford to use a credit card to buy things like groceries and clothes for your kids, and your wife is able to also. You are never late on your payments, and the bank lets you borrow money at low rates; you have great credit. So one day one of your coworkers is talking about finances with you and all of the sudden he says "Wow! You are 600,000 dollars in debt!!!! That's ridiculous!". You try to explain that you pay interest payments on time, and you have good credit, yet your friend is so stubborn he starts to tell everyone you work with that you are $600,000 in debt. Everyone starts to call you irresponsible and a huge spender, and it is getting out of control. So your wife gets worried and cuts you off from your bank account somehow and says we can't be so far in debt lets just stop spending all together. So now you are late on your payments and your rates start to go up and your credit is shot because every one claimed you were "too far in "debt"" and they refused to let you borrow more when things like your car breaks down, or your kid gets hurt, or you need to repair your dishwasher.

Why should we not be allowed to borrow more if we need to in rough times, the world uses us as their bank, the US is trusted and we have very good credit?


Note: I know this analogy isn't perfect, but my point is who here actually supports not raising the debt limit?
 

EdwinWillers

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We do spend more than we take in. That does not mean the country cannot afford deficits. To make such a claim is absurd! According to you and your ideology, we should have had hyperinflation, a dollar crisis, another bubble, etc....

Yet here we are, sitting @ 2% real growth (4% nominal).
"Afford" is a relative term and one utterly dependent on a snapshot in time. Have we defaulted yet? No. But as you admit, we *are* spending more than we take in. Moreover, the disparity between what we spend and what we take in is increasing. It's getting worse. Now to suggest that it's absurd that we can't "afford" deficits is itself absurd inasmuch as it doesn't address the exponentially increasing debt we're assuming. Moreover, to suggest as your premise does, that just because we don't [yet] have hyperinflation or a dollar crisis, does not for an instant mean we're not running headlong into that direction.
 

Kushinator

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So the only thing I see ridiculous is your feigned indignation of my accurate analogy

Comparing the finances of a household with a government will always get you in trouble. Especially when the use of the word "afford" is applied in each situation. The government can afford to do whatever it wants (from a financial standpoint). Not that i am saying it should.
 

EdwinWillers

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Comparing the finances of a household with a government will always get you in trouble. Especially when the use of the word "afford" is applied in each situation. The government can afford to do whatever it wants (from a financial standpoint). Not that i am saying it should.
...only that's not correct. Yes, it can "afford" to do more than a household might, but can it do so totally unrestrained, and that without any downstream consequences? No, of course not.
 

Kushinator

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"Afford" is a relative term and one utterly dependent on a snapshot in time. Have we defaulted yet? No. But as you admit, we *are* spending more than we take in. Moreover, the disparity between what we spend and what we take in is increasing. It's getting worse.

Not true.


Now to suggest that it's absurd that we can't "afford" deficits is itself absurd inasmuch as it doesn't address the exponentially increasing debt we're assuming.

Deficits do not automatically entail the bold.
 

Kushinator

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...only that's not correct. Yes, it can "afford" to do more than a household might, but can it do so totally unrestrained, and that without any downstream consequences? No, of course not.

I never stated that government actions do bare any consequences. The idea that a monetary sovereign nation is subject to the same financial restrictions for that of a household needs to go away.
 

EdwinWillers

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