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PS: factual data on spending and revenue for August if debt ceiling is not raised.

ProfJohn

ProfJohn

Lifer
These numbers are from Karl Rove in the Wall Street Journal. Say what you want about the guy, but I doubt he would lie about the numbers.

This gives us a rough approximation of what happens if we don't raise the debt limit:
The Bipartisan Policy Center, a Washington think tank, projects that the government will receive $172 billion in revenues between Aug. 3 and Aug. 31, but it is on the hook to spend $306 billion, leaving a shortfall of $134 billion.

The $172 billion in revenues collected over the rest of the month can pay the $29 billion interest charges on the national debt, Social Security benefits ($49 billion), Medicaid and Medicare ($50 billion), active duty military pay ($2.9 billion), Department of Defense vendors ($31.7 billion), IRS refunds ($3.9 billion), and about a quarter of the $12.8 billion in unemployment checks due that month.

There will, however, be no cash for highway construction, no checks for federal workers or retirees, no agriculture payments, no open national parks. Interest rates are also likely to rise if U.S. debt is downgraded, adding massively to the deficit and further damaging the economy. This would be a disaster with no political winners.
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So there it is in black and white.

We would have $143 billion to spend for the month of August. (after interest on the debt)

Anyone interested can read the rest of the Rove piece bellow.
http://online.wsj.com/article/SB10001424052702304911104576443863077227784.html?mod=opinion_newsreel
 
ProfJohn said:
These numbers are from Karl Rove in the Wall Street Journal. Say what you want about the guy, but I doubt he would lie about the numbers.

We would have $143 billion to spend for the month of August. (after interest on the debt)
Click to expand...

It is exceedingly dubious to think Karl Rove wouldn't lie about numbers, but they do seem reasonably accurate.

So you have reversed your stance that the debt ceiling shouldn't be raised? You were arguing earlier today that the Republicans are only willing to raise it as a compromise to Obama.
 
I think it will be raised.

The question is at what cost.

As Rove points out there is more than enough money to fund much of government. So not raising it would create a partial shut down and I think that hurts the Democrats more. The last thing the Democrats need is a partial shut down where life goes on for most Americans.

But Obama seems to think that he is holding the stronger hand. I guess he expects that he can scare seniors into calling their congressmen and the like. But at the end of the day he will be the one making decisions on who does and doesn't get paid.

Another option for the Republicans is to pass a bill that allows the government to roll over its up coming bond payments. Essentially raising the debt limit only to prevent a default and nothing else. Such a move would put the Democrats in a bad spot since their main argument about causing default would be off the table. Instead of arguing that default will happen they would instead have to argue about cuts in government programs and that is a much harder thing to sell to the American people.

And pushing a bill like that through the house would put the Democrats in a horrible situation. They would be the party that would cause the default if they didn't vote for it.

But in the long run this is all political theater. It's fun for us in the forum and gives us something to fight about. But it's a lousy way to run a government.
 
Your posts are so bad and proven painfully wrong again and again that, at this point, it's awesome entertainment watching you trip over yourself in every thread. Believing Karl Rove to be a reliable source of impartial information? I mean wow, comedy gold right there!
 
First said:
Your posts are so bad and proven painfully wrong again and again that, at this point, it's awesome entertainment watching you trip over yourself in every thread. Believing Karl Rove to be a reliable source of impartial information? I mean wow, comedy gold right there!
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If you have a better source then please provide it. Otherwise stop trolling.
 
What we need to do is take that $142b that we have and launch Operation Get The Fuck Out. It could be a two pronged initiative that starts with us closing 90% of the over 200 military bases we have around the world, removing ourselves from the Middle East, and then deporting all illegal immigrants and using the now-domestically-based military to close our southern border (no jobs lost!)

The savings over the succeeding months and years would be astronomical not just at the Federal level, but also at the state and local levels!
 
The $172 billion in revenues collected over the rest of the month can pay the $29 billion interest charges on the national debt, social security benefits ($49 billion), medicaid and medicare ($50 billion), active duty military pay ($2.9 billion), department of defense vendors ($31.7 billion), IRS refunds ($3.9 billion), and about a quarter of the $12.8 billion in unemployment checks due that month.
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$29 + $49 + $50 + $2.9 + $31.7 + $3.9 + $12.8 =










$179.3

Good fucking job!
 
Anyone else shocked that Pro-Jo predicted that whatever political development is about to happen would be advantageous for Republicans? He never does that.
 
drebo said:
Well, your quoted bit does day "about a quarter of $12.8 billion"...so...

Good fucking job!
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2381948975_57c358b541.jpg
 
Prof John + Karl Rove + WSJ = 🙄:biggrin::awe:


To pretend Rove knows what these numbers will be is dubious at best, to pretend Rove knows how the payments would/should/could be prioritized is commical. From what I understand it would probably take a team of legal experts to determine the prioritization of payments if it comes down to that.
 
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This all meaningless.

None of you know what is going to happen. No one in Washington or Wall Street knows either.

I say let's just end this grand experiment and see how the pieces look after the breakup.

This is what our fearless leader wanted....a fundamentally changed America.
 
ProfJohn said:
As Rove points out there is more than enough money to fund much of government.
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...so you had to post a new thread to inform us that it took Karl Rove in the Wall Street Journal to teach you that 172 / 302 > 0.5, and therefore you can claim we can fund "much" of the government. Nice work cherry picking a few programs to fund, what about the remaining 44% of government debts that will go unpaid? Which, if you subtract the debt portion, actually accounts for 52% of the government, for those counting at home.

Your incredibly short sighted analysis aside, it matters quite a bit if a deal doesn't get done.
 
Like I've said before, they need to repudiate that shit and balance the budget immediately. A stronger dollar/super-high interest rates, tax-payer off the hook for $16T, no more national interest to be paid, and no more borrowing. I don't know what could beat that.
 
ProfJohn said:
So there it is in black and white.
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Two issues that I mentioned in the other thread with the same topic.

1) Suppose you spent all your money and you can't borrow any more. Then suppose you want to roll over your debt from creditor A to creditor B. How do you pay off creditor A to begin that process? You don't have the cash to pay it off, you can't borrow from B in order to pay A. The goverment debt isn't transfered like a refinanced mortgage where B pays A for you. You are stuck. Unless you come up with over $100 billion extra to pay A and get the ball rolling. Thus in August we'd have $100 billion less than Rove used in his calculations.

2) If that happened, interest rates won't stay near zero. They'll skyrocket to Greece / Portugal / etc levels. The $2 billion in interest will rise monthly (dramatically). Meaning soon, you'll have nothing but enough money to pay interest and maybe a pet project here or there.
 
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dullard said:
Two issues that I mentioned in the other thread with the same topic.

1) Suppose you spent all your money and you can't borrow any more. Then suppose you want to roll over your debt from creditor A to creditor B. How do you pay off creditor A to begin that process? You don't have the cash to pay it off, you can't borrow from B in order to pay A. The goverment debt isn't transfered like a refinanced mortgage where B pays A for you. You are stuck. Unless you come up with over $100 million extra to pay A and get the ball rolling. Thus in August we'd have $100 million less than Rove used in his calculations.

2) If that happened, interest rates won't stay near zero. They'll skyrocket to Greece / Portugal / etc levels. The $2 billion in interest will rise monthly (dramatically). Meaning soon, you'll have nothing but enough money to pay interest and maybe a pet project here or there.
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The Treasury can use all sorts of accounting tricks to roll over debt. That is not an issue.

Hell, they only report official numbers once a day at 3pm exactly. As long as its all kosher by then they are good.
 
Deeko said:
...so you had to post a new thread to inform us that it took Karl Rove in the Wall Street Journal to teach you that 172 / 302 > 0.5, and therefore you can claim we can fund "much" of the government. Nice work cherry picking a few programs to fund, what about the remaining 44% of government debts that will go unpaid? Which, if you subtract the debt portion, actually accounts for 52% of the government, for those counting at home.

Your incredibly short sighted analysis aside, it matters quite a bit if a deal doesn't get done.
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I'd be fine with 1/2 of the gov't disappearing overnight. They can take away every single 'service' I use.. that will be my sacrifice
 
Doesn't matter.
Even if the Federal Govt pays SS and interest, if it doesn't meet payroll, the credit rating is toast. Entities that don't meet ALL of their financial obligations don't get to keep AAA credit ratings.
 
senseamp said:
Doesn't matter.
Even if the Federal Govt pays SS and interest, if it doesn't meet payroll, the credit rating is toast. Entities that don't meet ALL of their financial obligations don't get to keep AAA credit ratings.
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So?

Our bonds are sold at auction. The credit rating is meaningless. All that maters is what people are willing to pay for them.

It is unlikely that a change in our rating is going to cause them to sky rocket. Right now they are selling for less than 3% if people were really worried that we were going to default they would be going up already.
 
ProfJohn said:
So?

Our bonds are sold at auction. The credit rating is meaningless. All that maters is what people are willing to pay for them.

It is unlikely that a change in our rating is going to cause them to sky rocket. Right now they are selling for less than 3% if people were really worried that we were going to default they would be going up already.
Click to expand...

You could say same thing about the deficit. If deficit was so high that people were worried we couldn't pay our bills, interest rates would be higher. Yet deficit is top priority for GOP, over jobs.
 
ProfJohn said:
So?

Our bonds are sold at auction. The credit rating is meaningless. All that maters is what people are willing to pay for them.

It is unlikely that a change in our rating is going to cause them to sky rocket. Right now they are selling for less than 3% if people were really worried that we were going to default they would be going up already.
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That isn't even slightly true.

Without our AAA rating many absurdly large groups that invest in our bonds will no longer be able to, such as almost every mutual fund.

Losing our AAA rating will cause us to lose a very significant portion of "demand" while keeping the supply the same. That ain't good for us.
 
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