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View Full Version : Raise the Debt Ceiling?



Gregg
4-11-11, 1:39pm
Sad to say, but there really isn't a choice here. If we don't do it the US will default and our credit will rank somewhere between that of Greece and my out-of-work BIL. That would be bad, but we DO have options. Just like an over extended homeowner we could sell the proverbial house and "downsize" into a smaller, leaner version of a country. Of course Rob's paycheck for working at the Grand Canyon may be drawn in yuan, but we COULD get out of debt.

I think part of the reason we don't sell off assets, other than the fact that its un-American, is because the interest on our debt is so cheap right now so the politicos can pretty easily justify adding to the pile. What gets lost in translation seems to be the simple fact that even cheap debt is still debt! For now dollars can be borrowed cheaply. Just like any other loan the best time to pay it off is before it gets expensive. The US is leveraged out on a 30 year ARM. It won't be long until the rate starts going up.

So what do you think, should we sell off some assets to get out of debt? Pay the debt down to maintain the most valuable asset of all: our credit rating? Should we sell the gold in the NY Fed, coal leases, Fannie Mae stock, the SPR, the Aleutian Islands? Maybe we call in some TARP loans and sell of a couple hundred military bases around the world. What would you do?

bae
4-11-11, 1:42pm
What is "the debt"?

How is it structured?

Who owns it?

What functions does "the debt" serve?

Zigzagman
4-11-11, 4:54pm
IMHO, this entire "spending crisis" debate is simply politics at it's finest. Debt is simply a cost and be a powerful tool if used properly. I think the biggest issue is where do we spend our money and for what purpose. We need to adjust our spending priorities and that is where politics comes into play.

First of all there is the yearly budget - projected receipts less than projected outlays = deficit which adds to the total debt. Because of our the US's incredible wealth the cost to service our debt is not a short term issue, simply a cost that the Princeton folks can deal with in many, many ways. In order to reduce our yearly deficit spending we need to either raise receipts by either taxation or duties or cut spending or both.

My preferences -

Military expendatures have risen 81% in the last decade, cut back over time to 2001 levels. That means stop the wars ASAP and reduce all unnecessary military spending. Weapons and soldiers do not produce anything of value for our society and have a tremendous cost in terms of lives and dollars.

I propose we begin by eliminating corporate welfare. Taking my money to spend it on something I don't like is bad enough. But taking it from me and giving it to rich people and big businesses is downright immoral. That's just what corporate welfare is.

Invest in America - Spend lots of long term dollars on our crumbling infrastructure. That provides real jobs that are local and are desperately needed.

Medicare for all - Healthcare costs are out of control and will continue to rise for the foreseeable future. No citizen should never have to worry about healthcare in this rich country.

Restructure our tax system - Our tax system is so complex that it is just crazy. Why - to be able to give special treatment to people/corporations. Time to re-invent the wheel and stop all of the loopholes.

That would be good start but those that make the rules don't do it based upon what is good for citizens. They are beholding to others and it is not your common man or woman. We did not get in this situation because of working men or women. It is all about access and power.

Remember as we see the debt ceiling debate begin to unfold - it is all about allocation of dollars. Class warfare at it's finest.

Peace

bae
4-11-11, 5:22pm
I could easily get behind Zig's proposal as a starting point. Ship it!

Dharma Bum
4-11-11, 6:25pm
As general principles go it's a good start, but...

Not sure what corporate welfare is and bridges to nowhere don't help in the long run, but my guess is we could come up with a reasonable plan. I doubt Washington will.

Midwest
4-11-11, 7:29pm
I'm for reducing the debt. How about we start by eliminating refunds greater than income taxes paid. Seriously, why should you receive a refund in excess of the income taxes you have paid in. Things like the earned income credit, etc. Also, the next politician to propose some nonsense like the first time homebuyer credit is out of office immediately.

Next would be reforming entitlement spending. Things like medicare, social security etc. I'm not for eliminating them, but we certainly need to balance the books on them.

I'm not sure how putting everyone on Medicare reduces the debt?

Also, could you define what you mean by "corporate welfare." Not agreeing or disagreeing, just seems kind of vague.

Zigzagman
4-11-11, 8:42pm
I'm for reducing the debt. How about we start by eliminating refunds greater than income taxes paid. Seriously, why should you receive a refund in excess of the income taxes you have paid in. Things like the earned income credit, etc.

Does that really happen? I'll admit that that seems strange! If so then that seems like a stupid idea.



Also, the next politician to propose some nonsense like the first time homebuyer credit is out of office immediately. That sounds like a Realtor lobby thing to me? Who else would think of this?



Next would be reforming entitlement spending. Things like medicare, social security etc. I'm not for eliminating them, but we certainly need to balance the books on them.Simple for SS - and not so difficult if we go to a Medicare for everyone healthcare concept - much like most of the industrialized nations on the planet. They seem to be doing quite well - imho. I would love to live in France, if I could afford it!

I'm not sure how putting everyone on Medicare reduces the debt?I personally consider it a matter of principle. There is not reason that we need to consider health a issue of debt. I personally think that as a citizen of the US of A that we have healthcare for all - regardless of income. A standardized healthcare system that give service to everyone in the country.
Nothing new - nothing radical - in fact I would argue that the US healthcare system stands out a unusual.



Also, could you define what you mean by "corporate welfare." Not agreeing or disagreeing, just seems kind of vague.From wiki - Corporate welfare is a term describing a government's bestowal of money grants, tax breaks, or other special favorable treatment on corporations (http://en.wikipedia.org/wiki/Corporation) or selected corporations. I think this would include the "Farm Bill". De-couple "milk money" at schools from the farm bill (and similar items) and re-think our commitment to corn-based ethanol as a method to reduce our importation of oil. It is simply highway robbery. Corporations also get government subsidies for their healthcare expenses. Simply a middle-man and not cost effective.

To put it simply - we live in a very wealthy country - our focus should be on our citizens, not corporations.

Peace

Gregg
4-12-11, 9:56am
We subsidize just about every consumable there is. Along the lines of eliminating "corporate welfare" I think we can eliminate most of those subsidies. As Zig mentioned, farm subsidies can go. None of the farmers I know want them; all they do is insure profitability for the Monsantos and ADMs of the world through a corn based system. We MIGHT be economically better off not subsidizing Big Oil by fighting resource wars. Even if we pull out and the price of oil spikes, it seems like the right thing to do. More controversial may be eliminating some left handed subsidies like the mortgage interest credit (homebuilders, realtors, mortgage bankers). People will determine what they want and will vote with their wallets and that, rather than lobbyists, can give direction to industry. Maybe its time to give real capitalism a shot.

I sill like the idea of selling off our foreign military bases. Give the first purchase option to the country where the base is, let them decide how to protect their shores. Its also a great way to consolidate our military and would raise a boat load of $$$. What's not to love?

BTW Zig, if you want to team up with Paul Ryan you guys might make a serious run (you could help him in Florida)! Just tread lightly on those pesky social issues. ;)

Midwest
4-12-11, 3:40pm
Zig - I am certainly open to the idea of eliminating certain subsidies and question the ethanol one myself. I often hear the term corporate welfare thrown about in the context of things like deductions and loss carryforwards which I don't agree are corporate welfare.

With regard to medicare, social security and more social programs, we currently pay 2.9% of our earned income for medicare. The new health care bill will actually increase that % on investment type income.

Round #'s, 3% of earnings in this country is going to fund medicare for those over 65 and it's not enough. That's insane. We should repeal medicare part D immediately (I'm aware that Bush put that in).

Given our government's complete and total ineptitude in managing social programs, the last thing I think we should do is add another one in a time of fiscal crisis.

It's amazing to me that given the growth in government in the last 10 years, our leaders have trouble cutting 100 billion when they need to cut a trillion.

I have some ideas on fixing healthcare, but that's another discussion.

Zigzagman
4-12-11, 5:20pm
We should repeal Medicare part D immediately

That is a no brainer. Medicare D is nothing more than profit-maximizing, unfunded piece of legislative trash that is designed for only one purpose - Pharma profits.

I would love to hear your ideas on fixing our healthcare system - start the topic and I'll participate!

As far as not trusting gooberment - I don't trust them at all but I trust for-profit healthcare even less. I say we must scrap the current system entirely and start fresh. All employer-purchased health insurance would be discontinued. Employers should be making cars and computers, not health policy. It does not take a "Texas Hippie" to figure out that our present system is nothing more than capitalist mandate to screw every citizen in the nation. I never even thought about healthcare until the last few years (60 this year) it is a shameful how we allow our system to work.

Peace and love from the "drought state" :D