Next Debt Ceiling crisis: March 15?

[rudeguy]

https://www.cbo.gov/publication/49961

The debt limit—commonly referred to as the debt ceiling—is the maximum amount of debt that the Department of the Treasury can issue to the public and to other federal agencies. That amount is set by law and has been increased over the years in order to finance the government’s operations. Currently, there is no statutory limit on the issuance of new federal debt because the Temporary Debt Limit Extension Act (Public Law 113-83), enacted in February 2014, suspended the debt ceiling through March 15, 2015.

What Is the Current Situation?
The Temporary Debt Limit Extension Act specifies that the amount of borrowing that occurs while the limit is suspended be added to the previous debt limit of $17.212 trillion. Therefore, on March 16, the limit will be reset to reflect cumulative borrowing through the period of suspension. The amount of outstanding debt subject to limit has now risen to around $18.1 trillion. That amount is about twice the outstanding debt subject to limit at the end of fiscal year 2007.

If the current suspension is not extended or a higher debt limit not specified in law before March 16, 2015, beginning on that date the Treasury will have no room to borrow under standard operating procedures. Therefore, to avoid a breach of the ceiling, the Treasury would begin employing its well-established toolbox of so-called extraordinary measures to allow continued borrowing for a limited time. The Congressional Budget Office projects that those measures would probably be exhausted and the Treasury would probably run out of cash in October or November; however, the timing and magnitude of revenues and outlays over the next several months could vary noticeably from CBO’s projections, so the date on which those measures would be exhausted and the Treasury would run out of cash could occur earlier or later. At such time, the government would be unable to fully pay its obligations, a development that would lead to delays of payments for government activities, a default on the government’s debt obligations, or both.

We are already $18,100,000,000,000 in debt? Well I suppose that's only about $60k each. That's not so bad?

But then again, only 63% of us are working so its closer to $100k each. When is it enough? When do we fix this? Do we fix this?

 

[Genx87]

Well now we get to see if Republicans will raise the debt ceiling or stick to their guns and tank our economy. Ill actually tune in to Sean Hannity that day to watch the shitshow he presents.

 

[blake0812]

That's more than I make in a month D:

 

[fskimospy]

https://www.cbo.gov/publication/49961

We are already $18,100,000,000,000 in debt? Well I suppose that's only about $60k each. That's not so bad?

But then again, only 63% of us are working so its closer to $100k each. When is it enough? When do we fix this? Do we fix this?

Not really, you're counting intragovernmental debt, which is probably not a good idea. Furthermore, we owe the vast majority of the debt to ourselves.

 

[rudeguy]

Not really, you're counting intragovernmental debt, which is probably not a good idea. Furthermore, we owe the vast majority of the debt to ourselves.

Oh right.

Once again you know more than the CBO and everyone else who isn't a shill.

 

[Tsavo]

What's the point of a debt ceiling if they keep raising it?

 

[Moonbeam]

Oh right.

Once again you know more than the CBO and everyone else who isn't a shill.

Pretty much, and particularly if the CBO knows only what you think it knows.

 

[Spungo]

Not really, you're counting intragovernmental debt, which is probably not a good idea. Furthermore, we owe the vast majority of the debt to ourselves.

How is defaulting on social security (aka "ourselves") better than defaulting on foreign debt?

We should probably think about paying that money back. Old people get angry when you threaten the government pension they've been paying into for 40+ years.

 

[Moonbeam]

What's the point of a debt ceiling if they keep raising it?

Increasing the height of the ceiling raises the distance to one's understanding which is probably why you're confused.

 

[fskimospy]

How is defaulting on social security (aka "ourselves") better than defaulting on foreign debt?

We should probably think about paying that money back. Old people get angry when you threaten the government pension they've been paying into for 40+ years.

Because the nature of the debt is fundamentally different. Look at your own family for example: if you owe your wife $100 your family stands at a net balance of $0. (you have a $100 debt and she has a $100 claim on your debt) If you owe the bank $100, your family's net balance is -$100.

 

[fskimospy]

Oh right.

Once again you know more than the CBO and everyone else who isn't a shill.

The CBO knows the difference between intragovernmental holdings and debt held by the public just fine. In your link they are talking about the amount of debt subject to that particular statute, I was just trying to point out to you that you can't really include intragovernmental holdings in the same bucket as the debt held by the public.

 

[Spungo]

Because the nature of the debt is fundamentally different. Look at your own family for example: if you owe your wife $100 your family stands at a net balance of $0. (you have a $100 debt and she has a $100 claim on your debt) If you owe the bank $100, your family's net balance is -$100.

True, but giving $100 to my wife means I can't spend $100 on something like public education or building roads. The debt is still real.

 

[ivwshane]

What's the point of a debt ceiling if they keep raising it?

There is no point to it, that's why it should be removed.

Because expenditures are authorized by separate legislation, the debt ceiling does not directly limit government deficits. In effect, it can only restrain Treasury from paying for expenditures after the limit has been reached, but which have already been approved (in the budget) and appropriated.

http://en.m.wikipedia.org/wiki/United_States_debt_ceiling

 

[Tsavo]

There is no point to it, that's why it should be removed.



http://en.m.wikipedia.org/wiki/United_States_debt_ceiling

It was a rhetorical question.

 

[Vic]

The only crisis is political. The interest rates on this debt are less than the rate of inflation. Investors are literally paying the government to borrow their money.

 

[fskimospy]

True, but giving $100 to my wife means I can't spend $100 on something like public education or building roads. The debt is still real.

But then she has $100 extra dollars to spend on public education or building roads, making the net fiscal impact for your family $0.

 

[Spungo]

But then she has $100 extra dollars to spend on public education or building roads, making the net fiscal impact for your family $0.

But the $100 I'm giving to the wife is in the form of Social Security. Social Security does not build roads. It buys food and pays rent.

 

[fskimospy]

But the $100 I'm giving to the wife is in the form of Social Security. Social Security does not build roads. It buys food and pays rent.

I think you have lost sight of the example, which is that money we owe to ourselves does not make our nation poorer because in that case each payment is someone else's income.

 

[senseamp]

Going to enjoy watching the GOP Congress debt ceiling song and dance.
I bed they don't have the votes to raise it and Boehner will come begging to Nancy Pelosi again.

 

[Spungo]

I think you have lost sight of the example, which is that money we owe to ourselves does not make our nation poorer because in that case each payment is someone else's income.

Correct, the nation is not poorer when money needs to go from the left hand to the right hand. My point is that these debts still need to be paid. Social Security holds something like 5 trillion of the national debt. That money doesn't magically appear. When social security wants that money, we still need to raise taxes and cut other expenses to find the money. A trillion dollars that goes to paying back social security is a trillion dollars that cannot be used for infrastructure upgrades. It cannot be used for education. It cannot be used for healthcare. That money is owed to retired people, so they get the money. That's how debt works. The bond holders (social security) come first.

 

[Jhhnn]

The only crisis is political. The interest rates on this debt are less than the rate of inflation. Investors are literally paying the government to borrow their money.

Parking fees.

 

[Jhhnn]

I think you have lost sight of the example, which is that money we owe to ourselves does not make our nation poorer because in that case each payment is someone else's income.

True. It's also important to remember that nearly all US dollars are literally borrowed into existence then amplified thru fractional reserve lending.

In the Ownership Society, lending institutions were allowed to create much more debt than either people's incomes or the money supply could support. When it all fell down, they necessarily reined in lending, thus reducing the money supply even further, exactly when more was needed. The FRB could put money in the hands of bankers to lend with QE, but they can't really force 'em to lend or people to borrow, either. Deficit spending puts money into the hands of business & consumers, which is where it's needed the most.

The only reason that US debt obligations might not be met is posturing from Repubs whose main purpose in all this is to confuse their voter base & to raise interest rates on bond rollover held by the true Bush constituency.

 

[ivwshane]

Correct, the nation is not poorer when money needs to go from the left hand to the right hand. My point is that these debts still need to be paid. Social Security holds something like 5 trillion of the national debt. That money doesn't magically appear. When social security wants that money, we still need to raise taxes and cut other expenses to find the money. A trillion dollars that goes to paying back social security is a trillion dollars that cannot be used for infrastructure upgrades. It cannot be used for education. It cannot be used for healthcare. That money is owed to retired people, so they get the money. That's how debt works. The bond holders (social security) come first.

Social security is 5 trillion in the hole? I don't think so.

 

[Spungo]

Social security is 5 trillion in the hole? I don't think so.

It's actually "intragovernment holdings" that have 5 trillion. Social Security by itself holds 2.8 trillion in government debt.


The real one to watch is SSDI. The fund is on track to be insolvent by 2016 unless the government does something.
http://time.com/money/3660116/social-security-disability-obama-congress-defending/

 

[Genx87]

What's the point of a debt ceiling if they keep raising it?

Bingo