debt ceiling
 

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

Yes we do have enough debt, in fact way too much. By federal law the national debt cannot exceed a specific amount. For years, rather than reducing the deficit the lawmakers have increased the debt ceiling. We are at the point where the percent of our economy needed to service the debt our government has is an unbearable burden. So here we are, sooner or later the deficit must be reduced either by increasing federal revenues (taxes) or by reducing federal spending. Neither is popular.

I wonder why we even have it if they raise it every time it's needed.

---------- Post added at 12:15 PM ---------- Previous post was at 12:06 PM ----------

I find it funny that raising taxes is offered as some kind of solution to the debt problem. However, Washington spends more than it takes in every year. It's pointless to raise taxes, the only way to get the debt problem under control is to reduce spending.

if you reduce spedning it will cause job loss????? right??

from this week's economist:

America's debt: Shame on them | The Economist

paul krugman's editorial about the loons on the right:

http://www.nytimes.com/2011/07/15/op...WT.mc_ev=click

this is an excellent overview from the financial times:

US debt crunch: A nation taken to the limit - FT.com

so the debt cieling is what we call bullshit.
can you say: bullshit?

but wait---there's more: a steaming core of ultra-concentrated bullshit within the bullshit that is named grover norquist.

who the fuck elected grover norquist to anything?
his pressure group is at the center of the right's intrasigence in the face of reason, which most folk agree includes tax increases----except for the lunatic right and ideological hatchet men like norquist.

but read the articles above for yourself.

This "Debt ceiling" debacle is one of the best evidences of an uninformed electorate and a media that has to play nice with stupidity in order to be "balanced."

The debt ceiling is not about creating new spending. It is about paying for the budget that has already passed. That no one on the media is pointing this out is ridiculous. One party essentially authorized spending but now is refusing to authorize the means to pay for that.

Finally, "the percent of our economy needed to service the debt our government has is an unbearable burden" is absolutely not true. US debt and its interest are still fairly small, and it would take either many more years of increased deficits, or some nutjobs wanting to default on the debt, for things to get that way.

Here's an example. I know people who live check to check. Not because they don't make enough money, but because that's how they operate. If they make $600 or $2000 the check will be totally gone come next week.

That's how our government operates, but not only do they spend this weeks check, they spend next weeks and next weeks. Increasing income(taxes) does not address the mentality of always spending more than you have. Increasing taxes will have no affect on the national debt until there is a major change in Washington in regards to how they spend our money.

Giving more crack to a crack addict won't solve the addiction. Taxes aren't the solution to the debt problem until the spending problem is solved.

there's nothing serious about this without military spending on the table.
there's nothing serious about all this blah blah blah spending bad business with afghanistan and iraq still happening and their cost largely off the books.
there's nothing serious about this without some attempt to dismantle the lunatic "war on terror" and do something about the grotesque levels of largely unaccounted-for spending on expanding the american surveillance sector.

there is, in fact, nothing serious about this debt cieling nonsense at all.

what is serious is the systemic crisis that this form of capitalist organization is undergoing.
what is serious is the levels of unemployment that are abroad in the land.
the state has a significant role to play in managing crisis.

but the ideological right is so mired in a backwater economic ideology and so beholden to nutcases like grover norquist that none of those problems matter.

all that matters to the right is angling to get back into power. they want to create a crisis and then try to pin it on the obama administration.

except no-one is fooled.

I'm with you on all those points.

There's also plenty of blame to go around for both sides.

i understand all of the above to a point.

1. how do you decrease the deficit?

2. once the deficit is at a marginal area, how do you keep it there??

3. who/why (let it) is it so bad?

at this point, i think it's pretty clear who is responsible for this debt ceiling canard and the manufactured "crisis" surrounding it---if it's not, then read any of the articles i posted earlier. krugman's is maybe the funniest--the financial times the best overview--the economist merely points out the obvious irresponsibility and duplicity of the republicans in it. there's a lot of blame to go around to the extent that people swallowed neo-liberal idiocy---but look at krugman's piece, which provides a nice little capsule history of the instrumental use the right made of supply-side/neo-liberalism---the right here includes moderate republicans like clinton of course---and points out that it has only become an absolute doctrine with the obama administration and the panic the right faced because it had to answer for its own record.

it's also clear that the republicans, as they have lurched further to the right in an attempt to differentiate themselves from themselves, have found their new and improved version of the same old brand held hostage by the ideological fringe, including norquist---and that these people are willing to risk an entirely unnecessary default in order to gain some imaginary tactical advantage rooted in upholding some worthless ideological purity for the hard right set.

these are different people than the tea partiers---more the power people who've lurked in the background and who are, bit by bit, **finally** getting outed.

---------- Post added at 08:33 PM ---------- Previous post was at 08:26 PM ----------


=====================

ralphie---this quick overview may help get oriented:

US debt ceiling: Why is America facing a borrowing crisis? | Business | guardian.co.uk

Equating the government's budget to a household budget is pants-on-head retarded

I was trying to illustrate how we cannot tax our way out of debt. It's irrelevant when you have people who will spend more than they take in every time.

If we increased revenues to the US government by something crazy like 30% next year, do you really think they wouldn't spend that money on more government? There's no evidence at all they would try to pay down the debt with it.

Until the spending is under control, throwing more money at the problem by taxation should be off the table. It just doesn't make sense.

I really don't think it's as easy as stating that it's one problem (taxation) or the other (spending). Really? It all simply comes down to balancing budgets.

America has a serious spending problem, so cuts are badly needed.

America has a relatively low tax environment, so raising taxes makes sense.

It's not difficult, though I will admit the household budget is oversimplifying it. Running deficits often make sense. And while I know that both sides of the aisle are to blame for many things, I want to put out there again that during G. W. Bush's presidency, there was a great opportunity for balanced budgets if not reduced deficits.

Cutting taxes whilst funding wars is financially irresponsible. Clinton worked towards balanced budgets. Obama probably would have too if the shit didn't hit the fan.

The problem on both sides of the aisle right now is not taking the situation seriously enough. Like roachboy said: military spending, hidden costs, and the war on terror need to be addressed here. Follow the money.

If you're going to cut, cut across the board. Cut deeper where the benefits are questionable; cut shallower where you know it will hit the average Joe.

America will get nowhere fast without both raising taxes and cutting spending. If the equation is too heavily on the side of cutting, it's going to have devastating long-term consequences on the nation to the tune of falling behind in the world. I don't think anyone wants that.

Except a look at the numbers tells you that they could cut just about everything and STILL not be able to pay it down without increased tax revenue. It can't just be spending cuts

The first thing that needs to be discussed is that there is a difference between short term and long term. Short term, cutting spending will hurt the economy. Government debt is only really ever a problem when it starts crowding out private investment (that is, the government takes up all the money available to be borrowed out there). We are at a point far from that. Even with all the uncertainty of the debt ceiling fiasco 30 year treasury bill still have just about the lowest interest rates on earth.

Debt only becomes a problem if it is unsustainable long term. The reason regular people can't just keep refinancing our debts forever is because we eventually die, so we don't want to leave something like that behind. But the government has no such problem. It doesn't have to eliminate debt, just keep it low enough that interest payments in refinancing aren't too much of a burden. And right now, interest payment refinancing isn't that much of a burden. Long term it might be.

But there is a budget that can keep spending high in the recession and then balance it long term.

The reason we don't have such an ideal compromise is actually relatively simple:

- Long term deficit reduction requires touching some sacred cows, namely the military and medicare.

- Electoral cycle politics means that short term recessions caused by drastic cuts in spending greatly help the party out of the office. I guarantee some of these deficit hawks will change their tune once a republican is back in office. Of course, this isn't republican specific. Presidential elections, more than anything else, are about the economy. No matter how eloquent Reagan, Obama, Clinton, etc are, they all were elected by poor economic conditions. Republicans right now are betting on economic disarray, just like democrats will often do when republicans are in office.

I haven't seen any numbers that show taxation can even touch the national debt. If you took the entire net worth of US billionaires it would be about 1.3 trillion. That would put a small dent in the debt and that's not even taxes that's taking everything they have.

The budget deficits every year exceeds 1 trillion dollars. That's a trillion dollars to the already 14.5 trillion dollar national debt every year. Show me evidence this can be touched realistically by taxation. I don't see it.

Taxation shouldn't even be on the table until the politicians can hit their yearly budget. Then you can come back to me and argue there should be more taxes to pay down the debt.

the "no new taxes" stance is a big reason we're in this mess. Taxes are at historical lows and the country is suffering for it.

At this point, it's not about the debt; it's about the deficit. Handling the debt is clearly a long-term issue, though it's difficult (impossible?) for politicians to act on matters beyond the next election.

The Republican party supports a $2.4tn package of spending cuts, but is not backing the tax rises.








ok then, what are the republicans imposing? it was a good article thanks roachboy.
so why dont we (the government) make all the banks and companies that we bailed out pay the money back??

Obama sure likes to raise the debt limit when he's in power, but in 2006 he voted against raising the debt ceiling because it would add to much to the national deficit. I lolled.

It's all a political game, sure. The GOP approved raising the debt ceiling every year Bush was in office, but now it's the BIGGEST ISSUE EVER.

Isn't that the GOP plan, make the problems so bad, that simple fixes don't work anymore?

Clinton did a good job with spending, and tax rates. Then Bush 'won' and his supporters were saying "The government is taking in too much money, give it back". And they did, to the rich. And we found out that trickle down economics failed again, and raised prices on homes and gold as the rich were looking for different investment opportunities and ways to hold onto the money.

We should have had to raise taxes and increase gas taxes in order to start the two wars. Make 'the current generation suffer' for making the decision to go to war. Once the war is done, then taxes can come back down.

The Busts Keep Getting Bigger: Why? by Paul Krugman and Robin Wells | The New York Review of Books

the main driver of this crisis of capitalism---it's proximate cause---was the real estate bubble/derivatives trade. the condition of possibility for that-->deregulation of the financial sector. the condition of possibility for that--->the neo-liberal delerium. this review provides a little history of that delerium and its consequence--->crisis after crisis in the banking sector triggered by greed and incompetence (these without exaggeration) followed by massive bailouts using taxpayer funds followed by....nothing. no re-regulation. no lessons learned. more of the same.

welcome to plutocracy.

there are problems, but the "debt ceiling" aint one of them.

HERE HERE! Cure the disease, don't just prescribe more medicine for the symptoms!

Meanwhile, Wall Street is saying "why is this even open for discussion? Fucking do it already!" Stocks are stagnant or falling, bonds are dipping and the financial markets are preparing for a worst case scenario. Because if it doesn't get done, the global economy is going to go haywire.

Capital flows to markets with stability. It's not difficult. Deficits make sense when they provide stability. The problem isn't merely that America posts deficits; it's that it doesn't post surpluses enough when the time is ripe. Clinton did it. G. W. Bush felt that tax cuts and wars were more important.

Too many Americans are already struggling. Cutting deeply into badly needed programs is only going to make things worse. Economies are built from the ground up: when the lower and middle classes crumble, there is nothing for the wealthy to make money off of, and so they go and make money elsewhere. Spoiler: i.e. overseas

thinking that the concepts of home budgets and goverment budgets aren't pretty close to the same is pants-on-head retarded.

does your household budget fund thousands of projects and pay millions of people?

Business understand this simple concept and they are far more complex than home budgets. They manage to produce profits. I'm not even asking the government to make a profit, just maybe break even one year would be a huge step in the right direction.

my household budget funds a dozen projects and pays two people. see? concept is the same.

If you're making the comparison, and I dont think it is valid, the average american family's debt is more than 20% of their income (correction - over 125%), if you consider mortgage, credit card debt, car loans, student loans, etc.

Seriously, though: equating household budgets to federal budgets is akin to equating military budgets to house league hockey budgets (or little league baseball budgets, for you Americans).

Just get this shit done before you fuck us all over, government. I understand you're going to do a last minute compromise which will take years of litigation to unfuck. In the meantime, give businesses some certainty and predictability so the economy can continue its tenuous path to recovery.

why? are we americans so dense and mathematically challenged as to not understand numbers greater than our annual income or mortgage payment?

It's not just about the numbers. That's the point.

Why not say addressing the federal budget is like solving 1 - 1 = 0?

I mean, duh, right?

Regardless of your opinion, big business prove it can be done on a macro level. Saying the national budget can't be balanced because it's too complex isn't being realistic.

DC the comparison I was originally making was that taxes aren't the solution until the spending is under control. The example was that there are households that will over spend their incomes whether it's $600 or $6,000 a week and end up borrowing. You can see it with big shot sports stars and movie starts that amazingly go broke with what most of us would considering nearly unlimited money. Yet some people can hit there budget at only $600, it's a mentality.

It's a spending problem and increasing taxes to solve the problem is just going to do further harm to the economy at this point. Show me you can hit just one budget and then maybe I'll consider increasing taxes as a valid argument.

I never said it couldn't be balanced because it's too complex. I'm saying that the various comparisons people throw out equating the federal budget to a personal credit card or family budget are vastly oversimplifying the thousands of complexities involved in the federal budget. It's not as simple as A+B=C

It's not that the national budget can't be balanced; it's that it shouldn't, based on the consequences that would occur should it be made to balance.

The role of government isn't to make a profit. Continuing to insist that government should look to business as a model for balancing budgets serves little to address the issue and mostly is a distraction.

Governments are not businesses. If the American federal government were run like businesses, they'd do things like eliminate the majority of the military budget and outsource it to China and India. They'd let the poor starve because of no return on investment. They'd let China have fundamental influence on executive decisions because they are the biggest shareholder.

Or we could just simplify things and simply say: the government should always balance the budget. Okay, but this would require making important decisions such as raising taxes (something akin to Canada's tax rate, as we do have legislation regulating balanced budgets) and decimating the military budget to put it on par with other developed nations. Those two would be the first steps because they are clearly the biggest anomalies in America when compared to other developed nations: an astoundingly low tax rate, and a ridiculously bloated military budget.

Where to start? Anyone want to throw out some numbers?

Any idea what reducing the military budget by 90% would have on job numbers?

You know what's so sad about the left. The opportunity was ripe for the taking to get us out of the wars and slash a ton of the military budget. They had the presidency, the house, the senate, and they totally wasted their chance.

I was actually looking forward to these things happening when Obama won, but nope jokes on us stupid American's for trusting this guy.

yes it is. the ONLY reason people make it sound like some astronomically complex economical issue is to blow smoke up the ass of the rest of the populace.

You aren't alone in this disappointment. I was hoping Obama was going to do more to clean up the mess.

---------- Post added at 03:05 PM ---------- Previous post was at 03:02 PM ----------

Lay it out for us then. Two points, one solution, 50 words or less.

1) know how much you have to spend

2) don't go over that.

3) if you're going to go over that, cut how much you need.

This is unclear.

Does point 1 mean knowing how much is required to spend to fulfill desired services/programs?

Does point 2 simply mean set a budget that will cover these services/programs?

Does point 3 mean reallocating until you get the desired budget goal?

This could mean either a surplus or a deficit, right?

I'm always kinda worried when I think about cutting the military budget. Will that create a lot of unemployed and pissed off people who're trained in weaponry?

Feel free to ignore me. This is sort of a hijack. (Now get your hands up! bang bang!)

Most liberals would agree with you

right on track, you are. if there's a surplus afterwards, then you send out rebates. If there's a deficit, you cut spending next year by at least that much.

This is unclear.

Point 1 suggests that you can set any goal for what is required to spend to acquire desired services/programs, regardless of previous surplus/deficit.

Points 2 and 3 follow after point 1, not previous budget performance.

you could cut 10 to 20% of the military budget and not affect the number of soldiers or armament. personal experience.

my squadron had us strip, sand, and repaint all the baseboards in our barracks 2 months before the new budget was to be submitted, for the sole purpose of making sure they didn't lose that money for next year. grand total spent was 250k. they had us move in to brand new barracks 6 months afterwards so they could demolish the ones we were living in.

---------- Post added at 02:33 PM ---------- Previous post was at 02:31 PM ----------

it's only unclear if you wish it to be. the government/you have a known set of programs and services you have to pay for. if you don't, then you already are in hot water and need to re-evaluate how you run your budget.

I disagree. I see it as being objectively unclear. There is no mention in your three-step process of surpluses or deficits.

If you don't what?

[quote=Baraka_Guru;2915940]I disagree. I see it as being objectively unclear. There is no mention in your three-step process of surpluses or deficits. [QUOTE]because there shouldn't be.

know what you need to spend

But it wasn't even implied. That's why it's unclear. You're leaving much to guesswork or open options, like a blank cheque.

But if you know what you need to spend, is that fine?

Are we still cool with either deficits or surpluses based on need?

the drain on social resources that is the military budget--particularly if you put aside the charlatanry and count the (republican) wars is enormous. so is the entirely unnecessary surveillance system that had metastized since 2001, largely unco-ordinated and unaccountable to anyone which was detailed in the washington post over the winter. what makes these areas difficult to cut is basically that they are the conservative patronage system par excellence. military spending was the backbone of reagan's military keynesianism, which was the reality behind all that supply-side bullshit.

until the right is willing to stop protecting the grotesque levels of expenditure on the military and put it on the table, there is nothing whatsoever serious about anything said about fiscal responsibility or debt or anything else.

all it's about is republicans trying to focus cuts on systems that they assume will damage the democrats and not themselves.

plutocratic faction fighting as usual.


btw dk doesn't understand that a state is not a giant human being. that says nothing about the nature of the state. at all. the only contact that position has with the empirical world is by way of dk himself, who i assume exists empirically and empirically cannot get his head around the fact that the state is not a giant human being.

i left nothing open. you see that because you operate on the premise of 'if it's not specifically prohibited, then it's available'. I don't and you should know this. I operate on the premise of 'if its not specifically approved, then it's not available'. this limits the government the way it's supposed to be like the founders intended.

this eliminates deficits and any surplus can be dealt back to the people like it should be.

---------- Post added at 03:58 PM ---------- Previous post was at 03:57 PM ----------

what the hell are you talking about?

Here is my proposal, which should easily be confirmed/approved by you:

1) Set the 2012 budget at $3.729 trillion.

2) Set outlays to total $3.729 trillion.

3) N/A.

Any questions?

---------- Post added at 05:10 PM ---------- Previous post was at 05:03 PM ----------

This was not even implied, and, besides, it's a non-sequitur.

---------- Post added at 05:27 PM ---------- Previous post was at 05:10 PM ----------

The Republicans don't seem very interested in balancing budgets or posting surpluses. No Republican president has posted a surplus since Eisenhower.

Over the last 50 years, the Republicans have added astoundingly more debt than the Democrats have, so I guess you can look at these Obama years as playing a bit of catch-up. I think he still has a little way to go though.

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.

why is the problem spending?

ok... now im really confused.

how can you cut spending without cutting jobs? isnt that the problem? how do you know wich jobs to cut?
if you cut 10-20% of the military funding then what part are you cutting out?

if you cut 10 positions in one company then arent you really hurting roughly 35 people??

You know what, you're right. The problem is that pesky debt ceiling. Debt isn't bad because it shows government is spending to their maximum capacity plus some. The ceiling just gets in the way of government doing it's job.

Maybe we should just get rid of budgets too. Just give the government a blank check to spend borrow and inflate the currency as much as they what. Then we can have all the wars and social programs we all love and deserve. We should just surrendered all our income and assets to government so they can spend it the way it's supposed to be spent.

Clearly we aren't spending enough money and the ceiling is just getting in the way of this.

why is spending a problem is isolation from all other problems? we are talking here about that special world particular to tea party ideology. i'd just like an answer.

We can just as easily say the problem is low taxes. Is that any more useful?

that violates the boundaries of the special world inhabited by the special people who support the tea party, so it's unlikely that will register as a statement, bg. experience tells me that only questions pitched toward the special world of tea party-ness register with the special people who support the tea party.

The Tea Party is still a thing? I haven't heard much about it in a while. I thought maybe their anger petered out and they crawled back to their suburban manors.

In 1979, Congressional Democrats and Republicans got into a pissing match and the debt ceiling ended up being the political football de jour. Then, as now, economic experts warned of serious consequences for not increasing the debt limit. Only a few hours from default Congress finally agreed to raise the debt limit to $830 billion.

The result of this childish game was thousands of late payments for Treasury bill holders, resulting in approximately $120 million worth being paid out weeks, even months late, and the whole ordeal undermined confidence and likely cost quite a bit in investments. Worse still, according to experts of the time, the United States would have defaulted resulting in a lowered rating from AAA to B+.

Consider that instead of looking at an $830 billion debt, we're currently looking at a $14.3 trillion debt, a severely unbalanced budget, conservative groups screaming bloody murder for more tax cuts (that is, revenue cuts in a time of severe financial need for revenue), and the tax cuts and wars that are in large part responsible for the level of financial distress we're in have no end in sight. If you were responsible for the United States' credit rating, what would you be thinking now that political posturing is leading the country on a collision course toward default?

If the debt ceiling isn't raised, it will be the fault of conservative and neconservative policy, but that won't matter because the country will collapse. It will be a major historical footnote, perhaps a pitiful moment in human history reflected back on to talk about how stupid politics can lead to the end of great civilizations. We'll be spoken of the way people now speak of Rome or Greece, lamenting the loss of a great society that destroyed itself.

o no, those heroic individuals of the tea party carry on in their reality-independent space. but they're losing traction. the washington post feels their pain:

The GOP’s fuzzy math - The Washington Post

At least the right feigns interest in reducing the deficit, but I'm beginning to wonder if the the left even considers the deficit a problem at all.

The left actually has reduced it in the recent past.

Have you read anything about it?

depends on what you see as the role of the state in modern capitalism, really. for the neo-liberal set, which has been persuaded (against all historical reality) that the state is somehow The Problem, the question of debt looks one way because their political assumptions prevent them from seeing any productive uses---resource reallocation becomes a form of punishing the john galts for their individual gumption and all that. in reality that other people know about, the state can operate as a steering mechanism that directs resources to help enable goals that are understood as politically desirable. in that general framework, debt is not the same kind of problem. in some situations---like that of crisis---it can be necessary to accumulate a quite considerable amount in order to provide resources for capitalist activity to use in order to address basic problems. or to expend considerable resources in addressing system-level problems. but the neo-liberal set can't get their minds around that because their theory of the state is both incoherent, historically false and not amenable to argument because it's an a priori.

so things grind to a halt around surreal differends. that's what we're seeing.

this is a pretty basic divergence between neo-liberalism and more sane conceptions of what capitalism is and how it operates.

where conservatives like to squander their money is on weapons systems, a massive and useless surveillance apparatus, on the expansion of prison systems and the accompanying concentration camp model fobbed off as ok because of some dickensian notion that exploitation has a moral uplift to it.

where conservatives don't like to spend money is on political objectives that involve job creation or wage increases or creating a more humane society.

So it's the wars and this police state grid that's being set up. It's a shame the left didn't stop this military industrial complex in it's tracks, but their inaction shows me that they are in full support of it. Baraka, their lack of action to end the wars shows me they have no concern for the wars or the deficit. It's painfully obvious. They didn't even strike out, they never even stepped up to the plate when it was their turn. So when they tell me I need to pay more taxes to fund their programs and fix the deficit, it's just falling on deaf ears.

I wish we could just end these debacles so we can get back to real debate about what the role of government should be in our lives. Until then it seems there's no point really, and rightfully so, as I would much rather see the war money be spent on infrastructure and even the welfare state than slaughtering brown skinned people across the middle east.

i agree that it is kind of hard to have what should be the sort of debates that happen all the time in a democracy---even one like the american---because there are these horrific systems like the military patronage system/national security state in place. and i think the american political system genuinely suffers for them.

as for this left you keep mentioning--who are they? you can't possible mean the democratic party of the past 70-odd years, can you? there are a couple people in congress who are close to social democrats--sanders in particular--but that's it. fear of the left, fear of communism, has long driven american politics to the right. at the moment, there are extreme and moderate conservatives. obama is a clinton style centrist without the same feel for communications strategy. there isn't even an organized left at the national level in the states. nothing like it. the closest there's been since vietnam is the anti-war movement that was organized using email trees by move on against the iraq war. when move on decided to play ball with the democratic party, the movement disappeared. it was a classic anti-war movement too---people were mobilized because of what they opposed--but there was no discussion, and no mechanism for discussion, about what people were for.

the national security state system is difficult to revolt against---witness what's happening in egypt. there too you have a movement that was largely held together by what they were against---what's remarkable about egypt now is that there is a process--diffuse and largely off-camera---of working out what people who opposed mubarak might be for. they are way way ahead of the united state in that. not even on the same map.

and you're right---in the main the democrats have supported the national security state. but they haven't done so in the way the republicans have. and that is what distinguishes them. the democrats represent a different faction of the dominant class order---there are actual disagreements about what constitutes a coherent approach to government and what coherent relations there can be between state and private sector. but they are, in the main, not even social democrats.

i know some of the main people who have tried to organize and finance a left opposition within the democratic party. where are they? they haven't been able to move from the grassroots level to the national political level. why is that? there's a host of reasons, one of which is they know what's happened to the democratic party and are trying to figure out ways to organize that do not entail a separation between base and party structure like happened with the democrats, for which the people are essentially only important to the extent they turn out at the polls. same as the republicans.

this is what plutocracy looks like. it's all around you. it's rigid and stupid and ugly. it doesnt have to be this way but people in positions of power lack the imagination to make this system any different and the people themselves are not engaged politically. so the plutocracy does as it likes and takes polls in order to fob themselves off as reflecting the will of some largely imaginary polity. it's a soft authoritarian system afflicted with an ideological crisis of quite significant proportions and there's no way out of it that's obvious from here. no way out until the shit really hits the fan and in order to prevent the far right lunatics from taking power something will get floated as an alternative.

People die. Governments don't. People experience huge fluctuations in their incomes, governments don't. Finally, and most importantly, the government is big enough to have a huge impact on the economy, people aren't.


Which is to say that:
As long as interest payments don't become too much of a burden, governments can infinitely refinance their debt, while people pay their's down to avoid leaving debt to their kids. Governments, or at least the US government, doesn't have to fear a massive reduction in revenues the same way people, and, to some extent, poorer countries, have to, which leads the latter to defaults. Finally, sudden spending cuts hurt the economy in the short term, in turn affecting the revenues again. People can treat spending and revenue as separate. Whatever the government does with spending affects their revenues.

this is the case.

GOP leaders must free themselves from the Tea Party’s grip - The Washington Post

When spending is greater than the money coming in the result is negative. Spending is directly controlled. The money coming in is indirectly controlled. The most direct way to avoid a negative result is to properly manage spending.

I think that a failure in cutting the Tea Party loose will only outline the level of desperation among the GOP.

The most inefficient jobs should be cut. Money should be directed to jobs that have the greatest benefit. Those jobs are normally going to be private sector jobs, not 100% of the time but most of the time.

When a job becomes obsolete it should be cut.
If there is a less expensive way to get the same result the job should be cut.
If there is not enough money to pay for all existing jobs, rank the jobs and cut the lowest ranking jobs first (ranking does not mean cutting teachers and keeping administrators - it is very possible to rank a teaching job higher than an administrative job)
Etc.
Etc.

Perhaps nothing. Perhaps the military can improve efficiency by 10-20%. For example perhaps the Air Force could utilize flight simulators more in training, get better results, and lower training costs.

Every day in every sector of government people should be asking the question, what can we do better at lower cost? I am not satisfied that people in government, including the military do that, are you?

No. It depends on what happens with the savings from the cuts. If the government cuts 10 positions and the private sectors is then able to hire 20, seems like a win to me.

---------- Post added at 03:49 PM ---------- Previous post was at 03:37 PM ----------

As I stated tax policy indirectly affects revenue collected by the government.

The above statement is critical, if you don't agree anything that follows is pointless. And we need clarify why you either disagree or what the impact is.

Just food for thought before responding if you choose to - tax policy has consequences. People will change their behavior based on tax policy. I think you said you owned a cat - what if...we impose a $10,000 tax on cat ownership and then imposed excessive regulatory reporting on cat owners regarding their cat(s). Before the tax and increased regulation cat ownerships is X. What is X after the tax and increased regulation. Obviously it will be less than X. Also what will some people do to avoid the tax, like perhaps not honestly reporting ownership? Etc. Etc. Etc. Then you start to get special interests, perhaps farmers who say they need cats to control rodents get an exception to the tax. Or perhaps Wickens claim a religious exception. Then the actual taxes collected are less than what was budgeted, so what do they do, raise the tax per cat on those who actually pay - the cycle continues...:rolleyes:

---------- Post added at 03:53 PM ---------- Previous post was at 03:49 PM ----------

I don't. Deficit spending is not inherently bad. Occasionally it is just a cash-flow issue. If properly managed deficit spending and debt can actually be beneficial. The problem in Washington is the inability of politicians to control spending. They have no discipline, therefore discipline has to be imposed on them through debt caps and ultimately a balanced budget amendment.

---------- Post added at 04:03 PM ---------- Previous post was at 03:53 PM ----------

I remember some posts where people held the position that the Tea Party was done after the 2010 elections and would have no future impact, did you hold that view?

Regardless of the Tea Party, people should act according to their own beliefs. Everyone in the Tea Party was clear on their views that we believe that we are T axed E nough A lready. It should not be a surprise that the TEA Party people are against tax increases. The ones that got elected won because they all said that they would go to Washington and work to control spending. I only have one vote, and my one vote will go to those who are true to Tea Party principles on taxes and spending. If the mainstream GOP, liberals, or whoever doesn't like it, so be it.

If there is any desperation it is because others did not take the Tea Party serious. Obama knew the day would come when the debt ceiling would need to be raised years ago, yet he did nothing. Why? why didn't he address the issue when he had a super majority? Why didn't he address the issue during the lame duck session after the 2010 election? Yet you actually think the Tea Party is the problem? The Tea Party in not in control of the Senate, yet they have passed nothing. They don't control the WH, yet there is no specific plan from the WH. The Tea Party is actually only a small portion of the House - are you and others giving the Tea Party too much credit for controlling the agenda on this issue?

Your cataxtrophic scenario aside, I suppose all of this is about the disparity between what the American people want and what the American people are willing to pay for.

You mentioned the ramifications of changing tax policy, which is a legitimate concern (in spite of your silly kitty example). However, there are also the ramifications of dismantling what has become fundamental aspects of American policy.

There is a difference between not being able to cut spending by a certain level and not wanting to cut spending—based on perceived consequences.

What if they just went ahead and balanced the budget for 2012? Would America maintain its opinion of itself as the best nation in the world?

---------- Post added at 12:14 PM ---------- Previous post was at 12:11 PM ----------

My opinion of the Tea Party is that they hold influence disproportionate to whose views they represent. Angry fringe groups can get like that. Obstructionism isn't a new concept.

Generally, I agree. More specifically there are some American people who want other American people to give them a free ride. Again I have no problem "paying" for the basic needs of all children, elderly and the truly disabled.

If it is a failed system, it needs to be fixed. Measuring negative ramifications of dismantling fundamental aspects of American policy brings into question the original intent of those fundamental aspects of American policy. I suspect there is and was never any real agreement on the intent of some of those fundamental aspects, i.e. Medicare, liberals and conservatives don't agree on what the intent was and is for this program.

The "kitty" example is not as silly as it appears. It has been about 7 years since I left California, but when I was there the cost to formally set up a small business (corporation, partnership, LLC) was close to $5,000 in fees, taxes and minimal admin costs. In addition it was about $2,000-$3,000 just to maintain the entity annually -revenues or not - profits or not. That was just the state costs, just for the entity! So, in my example substitute small business for "kitty" and you may see the analogy in a new light. And some people in California still wonder why there was a mass business exodus out of the state. Businesses that had the option, moved to lower the costs, there were many other excessive costs in addition to what I describe here. The point is that people respond to tax policy.

I suspect if people even believe that the folk in Washington were going to balance the budget, that we would see a spike in economic activity like we have never seen. The level of uncertainty from Washington has trillions of dollars on hold. Even with Obama-care alone, the 2,000 page bill will most likely have hundreds of thousands of pages of new regulations. Only the foolish, or those with no choice will make long-term decisions until the impact of these regulations is fully known. Then of course you would see the government actually collecting more revenue. think about it, they could actually spend more and reduce the debt.

I am not angry. I have not even been to a Tea Party rally or anything like that in over a year. I have not written any letters, called into any radio shows, or done anything like that (other than post my political views here). Most Tea Party people live normal lives and don't have time to be "angry".

That's probably the best short answer I've ever heard on the subject.

in baseball games the team that scores the larger number of runs wins.
when a smaller number of runs is scored, the result is negative.

the control over the number of runs our team scores is direct.
our control over the number of runs the other team scores is indirect.

we have decided to cut the number of pitches we throw.
to do this, we will now stop play altogether at the point we have scored the larger number of runs.
the other team may continue to play, but we do not care.
we declare the game over. so it is over.

this is our innovative new strategy for controlling negative outcomes.


kittens.

roachboy, can they do that?

controlling negative outcomes is good a priori.
it does not matter what the reality of baseball games are.
now hush.
we know best.

Well, let's stop dancing around the issue. Both the right and the left have to realize that neither one of them should get their way. There is only one real and meaningful solution to the U.S. budget problem, and that's austerity.

Namely, deep cuts to development and entitlements (mainly welfare and social spending), the significant raising of taxes across the board (weighted highest towards the wealthiest), and adding user fees (mainly to transportation and other essential services).

Only then will we know whether anyone is serious.

But no. It's either a longer-term deficit reduction program (too gradual) or a one-sided focus on spending cuts (not enough).

but there is an ongoing economic crisis. unemployment is unacceptably high. corporations and banks are holding onto capital, so there's no investment to speak of and no lending. historically speaking, austerity moves in a crisis situation have exacerbated the crisis situation. that cannot be wished away.

there's a perfectly reasonable argument that the current debt levels are entirely manageable and the debt ceiling "problem" nothing but a rightwing canard the function of which is to provide the demographic with another way to draw a ring around itself and nothing more....the problem from that viewpoint, really, is that obama is entirely too willing to play ball with people he should simply roll over, ignore, and force to into defending their ideology and it's 40 record of failure.

obama really should be far more of a social democrat than he is. i think a lot of us who voted for him projected someone well to the left of what we got.

Well, public debt expressed as a % of GDP (you know, a measure indicating a nation's ability to manage debt), America's debt load is at or just below the world average.

This is why a longer-term deficit reduction program is sensible vs. extreme measures. There is no need for extreme measures. There is merely a need for a plan.

Spending is an issue, yes. But following (and during, ostensibly) a period of excessive spending and tax cuts, you've got to look at the big picture.

it really makes no sense to continue paying attention to supply-side/neo-liberal orthodoxy about the state, given the fiasco that it's been implemented. i mean unless you're in the top 1% in terms of income. then you've made out. of course. class war--that's what neo-liberalism is about. class war in an ideological framework that gets the usual lumpen-bourgeois elements to carry shit for it. even a moderately keynesian approach would be a vast improvement. what are the socially and economically desirable outcomes that we, collectively, should be working toward? we want to address unemployment? make a job policy--make a state investment strategy--hell, it's worked in every other industrialized country and often very well. one easy place to start is to raise taxes on the fuel that allows global supply chains to operate and force a fragmentation/re-regionalization of production. who gives a fuck if investors take a short-term haircut? they'll get over it and likely will make out better in the longer run by increasing demand for products in general because more people will have jobs. and let unions organize---not the same kind as the red-baiting history of the united states allowed for, but allow trade-union pluralism and the language of dissent that brings with it.

it's not that hard.

[[ended abruptly due to ambient conditions....]]

in a democratic context---you know, an actual democracy--because what people decide is meaningful (so they have power) it would not be possible for a failed economic ideology like neo-liberalism to continue to be taken seriously simply because it is possible for people to dissociate the ideology from the consequences of its having been dominant for 40 years. it would not be possible to have destructive, reactionary political worldviews continue to be circulated simply because people have the resources to buy channels that repeat and reinforce it. because decisions taken would be meaningful, because people would have power, comparisons of framework to effect would be routine. and information would have to be relatively undistorted. the persistence in the face of history and reason of dissociative supply-side nonsense is a symptom of our collective powerlessness. that people invest in it without being able to do anything but repeat it's premises is an indication of powerlessness. because nothing is at stake in what we the people think. we have no power. but we rattle on endlessly as if we did.

much of the contemporary forms of disempowerment are expressed in and are expressions of the capitalist organization of labor.

but to know that you'd have to think labor mattered, that the organization of work mattered as more than an abstraction that's factored in when the captains of imaginary industry get all hayeky and pretend think about the history of price. the material organization of work---the division of intellectual labor--is a basic expression of power relations in a capitalist context. most are part of an intellectual proletariat, subjected to fragmented, stupid information and given ridiculous interpretive frameworks fit to it. largely as a management tool.

it continues to amaze me that people who believe in fantasies like free markets and like to blab about individual freedom (freedom in the sense that involves no power) support an economic theory that not only produces class warfare that most of them are victims of, but worse advocates the removal or limitation of mechanisms that make private sector actors accountable to a public. it's an ideology of self-dispowerment, the stuff of slaves, in nietzsche's sense.

i gotta go.

Rachel Maddow did a great segment on the debt ceiling last night. The crux of her argument was simple: this "crisis" is 100% artificially created byt the GOP, entirely for political reasons. This "crisis" goes away with a simple "yes" vote to raise the ceiling. It could happen in minutes. But instead, you have the "rejectionist caucus" (ie the Tea Party) who will vote no regardless of the harm it will cause. They'd rather see the country blow up than back down from their black and white world view.

It's not about spending or taxation, it's about rich white men digging in their heels to play political games, regardless of the fact that the end game could be disaster

Want to know what the main reason is for the drastic increase in deficits? It is not "obamacare." It is not TARP. It is not a myriad of new programs.

It is mostly because revenues have dropped precipitously because of the crisis, and because the government has has to spend a lot more on the safety net.

This is not correct. A team does not have direct control over the runs they score or the runs the other team scores. The easiest way to illustrate this is that a defensive team can simply purposefully walk batters to allow runs to score. the Offensive team has no direct control over that.

---------- Post added at 03:21 PM ---------- Previous post was at 03:18 PM ----------

Clarify you position. Do you agree or disagree that spending is directly controlled and that revenues are indirectly controlled?

I should know better to engage you on this, but in any case, you wildly overstate how much control government has over spending.

You can't fine tune or drastically change spending on entitlements, for example.

Nevermind, of course, the fact that the current republican talking point is more about short term economic slowdown to help with next year's election than any sincere commitment to fiscal balance.

Let's.

The idea of a debt ceiling is not even serious. Just because we have a debt ceiling or just because we restrict borrowing that does not mean that the nation stops incurring debt.

Think about the importance of that statement for a moment. When you do, it is easy to realize that this whole raising the debt ceiling issue is a manufactured one.

The simple answer is this:

The President of the US has the Constitutional obligation to pay the bills incurred by Congress. I did not use the words, option, privilege, right, I used the word obligation. In my view the President has no choice but to pay the nations bills, even if he has to print more currency to do it.

---------- Post added at 03:33 PM ---------- Previous post was at 03:28 PM ----------

I said the same thing. Republicans are using this issue to push spending cuts and to implement spending controls. This has been the Tea Party agenda from the beginning. Nice to see MSNBC hosts getting up to speed.

Obama and almost every sitting Democrat in office today voted against the last debt ceiling increase, saying it was irresponsible. What did she say about that? .....sounds of crickets chirping....:rolleyes:

---------- Post added at 03:37 PM ---------- Previous post was at 03:33 PM ----------

Yes, we know I see things in "black and white" and that most of you here don't. Trust me, I do understand the nature of what Washington has created and that the structure of many of the programs implemented over the past few hundred years are some what on automatic pilot. But, these things are correctable they can be controlled. We have options and choices.

Many of us admit that the debt ceiling thing is political. Now if only the Republicans would just get out of the way.

I can't recall which economic crisis was going on at the time Bush was pushing to increase the debt ceiling. Can you remind me? :rolleyes:

No. Obama stated that 8/2/11 was some kind of "drop dead" date. Obama stated that he was not going to fulfill his Constitutional obligation unless Congress acted. The only way Obama operates is through artificial crises. If Republicans are in his way, it is by his choice.

It wasn't a crisis. It has never been a crisis. It won't be a crisis under the next administration. I doubt it would have been a crisis if Hilery Clinton or McCain won and was in the WH. The debt ceiling thing has always been a formality, once the votes are there, others have the opportunity to make their protest votes and speeches against the priorities set by the opposing party. It is amazing that polling results suggest that Republicans are responsible for this 8/2/11 all or the world ends proposition.

How many times has Obama saved us from the "brink"? I am sure he will do it again before 8/2/11. I have lost count.

No what?

So Obama isn't letting the Republicans agree to raise the debt ceiling? Can you explain this to me? I'm not exactly well versed in the process.

I'm talking about the global economic crisis, ace.

Again, please inform me on why it's so difficult for the Republicans to agree to a formality. What is Obama doing to destroy them politically? Please explain this to me.

It is not the Republicans that are in the way of handling the debt ceiling issue.

This issue is and has been known since Obama took office. Not addressing the issue until now has been his choice. It is his responsibility to make sure the country's bills get paid. He has to work with Congress to get that done. It is his responsibility to submit and get budgets approved, which he has failed to do. His party currently controls the WH and the Senate. They have the power to set the agenda. They have not. As I recall there has not been a simple up/down vote in either chamber regarding raising the ceiling. I bet if there was, starting in the Senate, it would have passed.

You can not expect people against the raising the debt ceiling to vote to increase the debt ceiling. However, a leader can make it happen. Obama has not.

If you want me to tell you what I would do, I hesitate because it really serves no purpose. It is clear to me that as a leader Obama is failing on this issue. He can not blame anyone but himself. In addition to this failing, my position also is that the whole crisis is a manufactured one. So, not only is he failing, but he is failing in a situation he manufactured.

The US is going to pay its bills. If we don't Obama should be impeached. There is no reason for the US not to pay its bills.

What follows is a pure ad-hominem rant and has no value to anyone other than allowing me to blow off some frustration...

Our Treasury Secretary could not even figure out how to pay his own taxes, yet he is in charge of the nations' finances. What a joke. If this guy can't figure out how to move money around to pay our bills he should resign. About three years ago, my business had a credit line frozen. We had business credit that went from a 6% rate to a 21% rate virtually overnight. We had declining revenue, and we had clients who either became slow to pay or unable to pay what they owed. I still had people to pay, bills to pay, taxes to pay, etc...know what, I figured out a way to do it. Geitner has been seeing this coming for a couple of years now, what a joke. It is too bad Obama is surrounded by academics and bureaucrats rather than people who have run businesses.

I bet if the debt ceiling issue was put to a vote as a single issue, it would pass. What most Republicans will not vote for is a tax increase. What some Republicans are saying is that they want spending controls and cuts tied to the debt ceiling increase to get their vote - this issue could have been easily managed, but it was not.

ace is merely repeating the tea party talking points.

there is no crisis.

ok well maybe there is but it's all obama's fault.

we should instituted more of the same bullshit economic policy based on bullshit economic theory that created this mess in the first place.

the dismal record of neo-liberal ideology in producing anything beyond increased class disparities is the fault of a recalcitrant reality that, as we all know, always has a liberal bias.

so what is required is the elimination of reality and a wholesale imposition of the same bullshit, but in a more orthodox form.

now it's all get on our knees and repeat the gospel of milton freidman.
1. blah blah blah.
2. blah blah blah.
3. blah blah blah.

the important thing is to be on your knees.


simply repeating over and over the same premises and the same arguments is not participating in a discussion.

and since we are not an politically bankrupt conservative party which is saddled with a lunatic fringe solely because it made a political calculation that, with the help of good ole faux news, building an astroturf movement called the tea party would help people forget that the republicans now are the same republicans responsible for the debacle of the bush administration, there's no reason for any of us to accept that ace is in a position to stipulate any of the conditions of any discussion that happens here.

ace makes some good points on a fundamental level. What's disagreeable is his opinions of the situation.

It being Obama's failure should Republicans turn down a sensible plan is a difficult thing to swallow. Especially considering ace calls it a situation of Obama's own device and that Obama is single-handedly responsible for it, as an individual. A tough thing to swallow.

Of course, I doubt ace would admit Obama's plan is anywhere close to sensible. Tax increases are absolutely out of the question. It's either low taxes or no deal. The lone wolf Obama is dropping the ball.

So what is all this "Gang of Six" noise I'm hearing about?

this seems a reasonably good synopsis as of this morning. from the financial times:

US debt deal elusive amid political puzzle - FT.com

so far as ace's repetitions are concerned...he lines up words in a sequence that makes sense structurally. by which i mean there are sentences that makes sense. but there's really nothing about this neo-liberal worldview that is coherent beyond the confines of econ 101. it's been a disaster as a guide for policy. it has no descriptive component---so it cannot take account of anything remotely like the social-historical world. we do not live in these simple-minded hydraulic models or amongst these metaphysical constructions like "real wealth" which is always Other than wealth created by anything...we live in a historical situation the magnitude of which is in significant measure a result of neo-liberal "thinking"---sooner or later we need to be done with it.

have to start somewhere.

Correctable in the long term? Sure.

Correctable in the short term, as in the next couple of years?

There is a reason why spending is described as "discretionary" vs "mandatory."

Sure, we could slash pensions of everyone receiving pensions in half right now, but that would likely create a number of legal challenges, on top of a massive drop in revenues, that would likely only exacerbate the problem.

More of this "neo-liberal" vagueness. Are Tea Party people "neo-liberals"? Are we responsible for the current state of affairs? For example, did the Tea Party pass and then extend the Bush tax cuts? Or was it some other people that got us in this mess? Are the Tea Party people the same as these other people? Are Tea Party people simply Republicans? What about the times when Republicans were not in power? Do non-Republican bear some responsibility? Are Republicans the same as non-Republicans? Are these non-Republicans Democrats? Are Democrats neo-liberals too? Perhaps you can tell me, other than you, who is not a neo-liberal? Give me one current name! If you do I will never bring this issue up again, promise!

---------- Post added at 09:28 PM ---------- Previous post was at 09:14 PM ----------

O.k., here is what I would do and why, if I believed I needed the debt limit increased.

First, establish negotiation leverage. I tell Congress starting in January with the State of the Union Address. Pass a clean debt ceiling increase bill. Without that clean bill, there will be no discussions regarding spending cuts, budgets, taxes or anything else.

Second, use the leverage. Regularly talk to the American people stating that the consequences of failing to increase the debt limit is unreasonable and that the best course of action is to address spending, taxes and budgets without the threat of a government shut-down or default. Polls show most people agree.

Third, introduce the legislation I want passed in both the House and Senate. Get something specific on the table.

Fourth, hold Congress accountable. If the legislation is held up, make Congress explain it to the American people.

Fifth, after passage of the debt limit increase move on to other issues....

Will you join me in a movement to initiate a special tax on cat owners. I understand that about 10% of American households own a cat, and if these folks can afford a cat, I am certain that they can actually afford to help real live people, especially the children. Why should cats live in luxury, while some people are actually dieing of old age. It is not fair. We clearly need to spread it around a bit, don't you agree?

---------- Post added at 09:40 PM ---------- Previous post was at 09:28 PM ----------

Sorry, I don't know what that reason is. Are you my wife posting in the other room? She often tells me when spending is "mandatory" and I often disagree, but I almost always keep that to myself. Something to do with that old saying about if momma ain't happy...:) - but the point is just because some people won't like it cut doesn't make it "mandatory".

That is why I say this is manufactured. Congress created these obligations and therefore we are obligated to make good on our promises. The US will not default. It is the President's obligation to pay our bills. The debt ceiling is truly meaningless. On one hand they commit to making payments and on the other they commit to restrict their ability to actually make the payments. Isn't that some kind of an oxymoron, or is it a system created by morons? Either way, the President's responsibilities are clear.