Quote:
Originally Posted by ralphie250
can someone please explain to me what the debt ceiliong is and what the problem is? seems like we have enough debt as it is
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The Federal Reserve Bank holds about 10% of the US national debt. The Federal Reserve Bank is separate from the US Treasury. But they are closely linked. the Federal Reserve bank is free to buy and sell US debt in the open market. If a holder of US debt wanted cash, the Federal Reserve could buy this debt. Normally when they do this US dollars or equivalents increase in circulation and it is often inflationary. The odds of a real default in US debt is zero. All current outstanding debt could be paid in US dollars.
In addition to the Fed holding debt, the Social Security Trust Fund holds about 20% of the US debt. Current social security payments to individuals are normally (currently with unemployment at 9%+ not the case) paid from current payroll taxes. The day of reckoning will come, but it won;t be 8/2/11.
The US Civil Service Retirement funds owns about 6% of the US debt. The US Military Retirement funds owns about 3%. The day of reckoning is not 8/2/11.
Other US citizens and institutions own about 33% of the national debt. In total Americans own about 72% of the US national debt. What does this mean - there will not be any type of catastrophic event occurring on 8/3/11.
The issue is not the debt. The issue is spending. The issue of an arbitrary debt ceiling is being used to force the discussion on controlling spending. Me personally and most Tea Party people do not believe increasing tax rates will have anything to do with fixing the real problem which is spending. In addition we believe that some are using the "debt crisis" as a strategy to increase tax rates without any intent on any spending cuts or controls.
Given the above from my point of view there is absolutely no reason to compromise on the question. I will not support any politician who does.