Gov't Shutdown Closes National Wildlife Refuges

[BigHornRam]

http://www.mediaite.com/tv/wallace-...ng-obamas-refusal-to-negotiate-unprecedented/

A little hard to follow for those that get their news from Jon Stewart. Everyone else should find it informative.

 

[noharleyyet]

Nemont, do you think Egypt is fulfilling their portion of treaty stipulations?

 

[Nemont]

Nemont, do you think Egypt is fulfilling their portion of treaty stipulations?

Do you want democracy in Egypt? The Muslim Bros. won the elections and formed a government. We had a treaty with the Egyptian government. Now we are dealing with the Generals instead who were not elected but are at least patrolling the border with Gaza.

I don't give a damn either way but the $1.3 Billion we give to Egypt is less than we waste on paperclips for the Pentagon. It is .0017% of the annual Medicare budget. Oh yeah if we walk out on Egypt the Saudi's have said they will back fill that money. Ever check out where most the 19 hijackers on 9/11 came from? So do you want a little leverage with Egypt or do you want the Saudi exporting more Wahabi brand of Islam. The Wahabist make the Muslim Bros look like passive sheep.

Nemont

 

[BigRack]

Does the debt limit change any spending? The money has already been spent and congress already approved EVERY dollar of that spending. The Republicans are not in line unless you believe running up the your credit card bill and then declaring bankruptcy is the way to conduct business.

Obama doesn't have the power to appropriate any money from the Federal Treasury, in addition our aid to Egypt is by treaty, so now you want the U.S. to renege on their treaty agreements and their debts.

The problem is spending and we spend just as much regardless which party is in power. There shouldn't be a debt limit in our laws. There should however be a requirement to live within our means. The debt limit doesn't do diddly about that.

Nemont

Actually, the money is not spent. If the debt ceiling is not raised, it will be make Congress have a real balanced budget.

Congress can decide to make a law and can also decide to not fund it.

 

[Nemont]

Actually, the money is not spent. If the debt ceiling is not raised, it will be make Congress have a real balanced budget.

Congress can decide to make a law and can also decide to not fund it.

Are you sure the money hasn't already been spent? This isn't the budget and appropriation process, this is borrowing money to pay for the bills that have already been through the budgeting and appropriation process. Congress has already spent money but now doesn't pay what it owes. They put on the credit card and now want to not pay the credit card bill.

Sure they can decide to not fund a law going forward, the debt ceiling isn't that fight, period. If the debt ceiling isn't raised what happens is the U.S. eventually defaults on the bonds it has been selling to finance it's budget. That not raising the debt limit does not reduce spending in fact it could lead to massive new expenditures when U.S. debt is no longer viewed as safe and the bond buyers force interest rates much higher.

Not raising the debt ceiling doesn't force anyone to balance a budget the two are totally separate.

Nemont

 

[BigRack]

Are you sure the money hasn't already been spent? This isn't the budget and appropriation process, this is borrowing money to pay for the bills that have already been through the budgeting and appropriation process. Congress has already said, let's spend the money but now doesn't want to fund it.

Sure they can decide to not fund a law going forward, the debt ceiling isn't that fight, period. If the debt ceiling isn't raised what happens is the U.S. eventually defaults on the bonds it has been selling to finance it's budget. That not raising the debt limit does not reduce spending in fact it could lead to massive new expenditures when U.S. debt is no longer viewed as safe and the bond buyers force interest rates much higher.

Not raising the debt ceiling doesn't force anyone to balance a budget.

Nemont

There will be no default. Our current tax receipts are ten times the interest on the debt.

Not raising the debt ceiling does force a balanced budget because it means the US can't borrow more money. That means they can only spend the tax receipts.

The tax receipts will first be used to pay the interest on the bonds, and the remaining will be used to pay other bills.

 

[Nemont]

There will be no default. Our current tax receipts are ten times the interest on the debt.

Not raising the debt ceiling does force a balanced budget because it means the US can't borrow more money. That means they can only spend the tax receipts.

The tax receipts will first be used to pay the interest on the bonds, and the remaining will be used to pay other bills.

You aren't living in reality. How do you propose to pay our troops if you are going to use tax receipts only to fund government? Do you expect troops to wait for tax money to roll in before they get paid?

I don't think you understand how governments pay their bills. Why does even North Dakota, sitting on a huge budget surplus have to use the bond markets to fund their state government?

Do you understand what happens when we have to roll over our bonds? Not raising the debt ceiling does nothing to the budget, period.

Nemont

 

[BigRack]

You aren't living in reality. How do you propose to pay our troops if you are going to use tax receipts only to fund government? Do you expect troops to wait for tax money to roll in before they get paid?

I don't think you understand how governments pay their bills. Why does even North Dakota, sitting on a huge budget surplus have to use the bond markets to fund their state government?

Do you understand what happens when we have to roll over our bonds? Not raising the debt ceiling does nothing to the budget, period.

Nemont

Please explain how our debt will increase if the debt ceiling is not raised.

The federal government has averaged $238 billion in monthly tax receipts in 2013 through July. $52.8 billion/month of federal budget expenditures are U.S. interest payments this year. We have plenty of tax receipts to pay the interest so there will be no default.

 

[Nemont]

Please explain how our debt will increase if the debt ceiling is not raised.

The federal government has averaged $238 billion in monthly tax receipts in 2013 through July. $52.8 billion/month of federal budget expenditures are U.S. interest payments this year. We have plenty of tax receipts to pay the interest so there will be no default.

Not sure your numbers are accurate: http://www.fms.treas.gov/mts/mts0813.pdf go to table 2 where is shows the off budget programs and total receipts.

When we roll over our short term bonds, the new buyers of the bonds will demand increased yields because we are no longer trust worthy or safe. That $52.8 billion is based on almost zero interest. Do the math if the buyers demand even 4% to purchase our debt.

How do you pay the troops in the field and all the other obligations are law? Or do you just abandon those currently deployed?

It doesn't matter if we average $238 Billion a month in tax receipts because almost all those dollars go to earmarked programs that hit the general fund coffers of the U.S. government. Go look at how much of those tax receipts go directly to Medicare, Social Security and other programs that are not general fund programs. Now subtract the current interest payments and do the math.

There isn't a enough current revenue to do what congress has already obligated itself to do. Unless you are suggesting not paying Social Security or Making Medicare payments. If that is what you want to do then beware that Republicans will lose the House Majority in 2014.

Nemont

 

[BigRack]

Not sure your numbers are accurate: http://www.fms.treas.gov/mts/mts0813.pdf

When we roll over our short term bonds, the new buyers of the bonds will demand increased yields because we are no longer trust worthy or safe. That $52.8 billion is based on almost zero interest. Do the math if the buyers demand even 4% to purchase our debt.

How do you pay the troops in the field and all the other obligations are law? Or do you just abandon those currently deployed?

It doesn't matter if we average $238 Billion a month in tax receipts because almost all those dollars go to earmarked programs that hit the general fund coffers of the U.S. government. Go look at how much of those tax receipts go directly to Medicare, Social Security and other programs that are not general fund programs. Now subtract the current interest payments and do the math.

There isn't a enough current revenue to do what congress has already obligated itself to do. Unless you are suggesting not paying Social Security or Making Medicare payments. If that is what you want to do then beware that Republicans will lose the House Majority in 2014.

Nemont

Why do you assume the interest rate would rise dramatically? Once people realize the US is going to manage their money now, they might not rise.

After the interest is paid, you pay the Social Security and Defense, and the rest gets paid if it is a priority.

You didn't answer my question of how the debt will increase if the debt ceiling is not raised.

The majority of people don't want the debt raised if there are no spending cuts. Go look up the poll on Bloomberg.

 

[Nemont]

Because I live in a world of reality and even the hint of a default without an actual default will raise interest rates our bonds will sell for.

Medicare and Social security are off budget programs that currently are not part of the Debt ceiling debate. That is the reason that our debt will continue to increase even after the debt ceiling is reached. The largest programs in our government are on auto pilot and there is no politician from any party that will allow Social Security checks not to go out on time or Medicare payments not to be made.

I never said anything about polls, spending cuts or what the majority wants or doesn't want. The debt ceiling has NOTHING to do with spending cuts going forward. The debt ceiling has to do with money already budgeted and appropriated that has been spent. I don't know why this is so hard for you to grasp.

I am all for spending cuts, tax reform, reforming entitlements and ending waste. The debt ceiling touches none of those. It is like trying to the Locomotive in the back of the train.

Nemont

 

[BigRack]

Because I live in a world of reality and even the hint of a default without an actual default will raise interest rates our bonds will sell for.

Medicare and Social security are off budget programs that currently are not part of the Debt ceiling debate. That is the reason that our debt will continue to increase even after the debt ceiling is reached. The largest programs in our government are on auto pilot and there is no politician from any party that will allow Social Security checks not to go out on time or Medicare payments not to be made.

I never said anything about polls, spending cuts or what the majority wants or doesn't want. The debt ceiling has NOTHING to do with spending cuts going forward. The debt ceiling has to do with money already budgeted and appropriated that has been spent. I don't know why this is so hard for you to grasp.

I am all for spending cuts, tax reform, reforming entitlements and ending waste. The debt ceiling touches none of those. It is like trying to the Locomotive in the back of the train.

Nemont

There will be no default.

There will be spending cuts because the Government can't borrow more money. There will be no increase in the debt. There will be a huge decrease in spending.
Budgeting and appropriating is not spending.

Our credit rating will increase because the US is finally not spending more than it takes in.

 

[Nemont]

There will be no default.

There will be spending cuts because the Government can't borrow more money. There will be no increase in the debt. There will be a huge decrease in spending.
Budgeting and appropriating is not spending.

Our credit rating will increase because the US is finally not spending more than it takes in.

Maybe on Mars but here on planet earth where things actually have to work themselves out, it will be ugly if that is the path they decide upon.

Explain how the outstanding bonds get redeemed when they come due if the treasury can't issue new bonds? You realize that the bondholders not only expect their interest but also the principle back, right?

So then we will have to figure out how to Finance our current $16 trillion debt at real interest rates and trying to pay for anything else. That is a stupid way to run a country and a very wreckless way to play chicken with the world economy.

http://cnsnews.com/news/article/ter...y-needed-pay-record-75t-maturing-debt-fy-2013

So please tell me, up there on Mars, how the current bondholders don't get hosed if all they get is their interest and not the principle when the bond is due to be redeemed? Who is going to buy bonds that can't be redeemed for full face value? What kind of premium will bond buyers demand when the U.S. is forced to return to the bond market after they shafted current bondholders? Who will trust this country to make it's word good?

Do you truly believe people will just let our government have their money without a clue when it will be paid back for a token of .074% ?

Back here on planet earth there isn't enough current tax receipts to cover the outstanding bond obligations without being able to refinance those bonds through new bond issues, So there will be a default the day that the bond redemption are higher than current revenues and the principle is lost. That is a default and it will happen.

Nemont

 

[BigRack]

Maybe on Mars but here on planet earth where things actually have to work themselves out, it will be ugly if that is the path they decide upon.

Explain how the outstanding bonds get redeemed when they come due if the treasury can't issue new bonds? You realize that the bondholders not only expect their interest but also the principle back, right?

So then we will have to figure out how to Finance our current $16 trillion debt at real interest rates and trying to pay for anything else. That is a stupid way to run a country and a very wreckless way to play chicken with the world economy.

http://cnsnews.com/news/article/ter...y-needed-pay-record-75t-maturing-debt-fy-2013

So please tell me, up there on Mars, how the current bondholders don't get hosed if all they get is their interest and not the principle when the bond is due to be redeemed? Who is going to buy bonds that can't be redeemed for full face value? What kind of premium will bond buyers demand when the U.S. is forced to return to the bond market after they shafted current bondholders? Who will trust this country to make it's word good?

Do you truly believe people will just let our government have their money without a clue when it will be paid back for a token of .074% ?

Back here on planet earth there isn't enough current tax receipts to cover the outstanding bond obligations without being able to refinance those bonds through new bond issues, So there will be a default the day that the bond redemption are higher than current revenues and the principle is lost. That is a default and it will happen.

Nemont

In the real world, they pay off the principal and interest with simultaneously issued bonds and tax receipts.

There is nothing stopping the US government from issuing new bonds. They just can't have the total outstanding bonds exceed the debt limit.

There will not be a default.

 

[BigRack]

BTW,

The interest rate on bonds went down after the US credit was downgraded.

 

[Nemont]

BTW,

The interest rate on bonds went down after the US credit was downgraded.

Big deal. What was the world economic situation when that downgrade happened? Money was flooding into U.S. debt back then because there was nowhere else to go. We were the least dirty shirt in the bag.

Try repeating that trick when we cannot issue to new bonds to redeem maturing bonds and the bondholders lose their principle.

Nemont

 

[Nemont]

In the real world, they pay off the principal and interest with simultaneously issued bonds and tax receipts.

There is nothing stopping the US government from issuing new bonds. They just can't have the total outstanding bonds exceed the debt limit.

.

That would be a neat trick to pull off, has never been done in history but good luck.

Nemont

 

[BigRack]

That would be a neat trick to pull off, has never been done in history but good luck.

Nemont

They issue debt to repay the old debt all of the time.

 

[BigRack]

Big deal. What was the world economic situation when that downgrade happened? Money was flooding into U.S. debt back then because there was nowhere else to go. We were the least dirty shirt in the bag.

Try repeating that trick when we cannot issue to new bonds to redeem maturing bonds and the bondholders lose their principle.

Nemont

We still our the least dirty shirt in the bag.

No bondholders will lose their principle.

Please prove that they would.

 

[smarandr]

From William Gale's (a highly respected economist) blog post on the Tax Vox blog.

It’s Groundhog Day Over the Debt Ceiling

If you recently heard the news that Congress is debating the merits of raising the debt ceiling, don’t think you have time-traveled back to 2011 or to 2012. In the absence of Congressional action, and barring some extraordinary measures, the debt ceiling is set to be breached sometime in the next several weeks, and the U.S. stands to gain nothing by not raising it.

The debt limit “debate” is not about limiting the size of government, entitlement reforms, or tax reform. The proof of that is that there are no major items like that on the table right now.

Instead, Republicans in Congress are yet again debating whether Congress should authorize the government to pay for spending—wait for it—that Congress has already authorized the government to undertake! Yes, it really is that silly of a situation.

It is also cowardly—if the Republicans don’t want the spending to occur, they should specify the spending cuts, not put the United States in a literally impossible position by saying “you must spend this amount of money, but you are not authorized to finance that spending via taxes or borrowing.” When other countries authorize spending, they typically proceed by implicitly authorizing the increase in borrowing needed to fund such spending. Of the advanced economies, only Denmark has a mechanism like our debt ceiling, and it has never been used as a negotiating tactic for spending cuts.

While it is difficult to predict the precise magnitude and composition of the economic effects of hitting the debt ceiling, it is clear that the effects will not be good ones. At the broadest level, creating a politically manufactured crisis that threatens the full faith and credit standing of government debt hardly seems like a smart or patriotic thing to do. In recent testimony to Congress, my Tax Policy Center colleague Donald Marron (of the Urban Institute) noted that not raising the debt ceiling (or even toying around with the idea) could raise interest costs, and create economic uncertainty thus hurting the ailing economy.

The U.S. recently suffered economic costs just by flirting with the idea of not raising the ceiling. The debt ceiling showdown of 2011 has been estimated to have cost taxpayers $1.3 billion for that fiscal year and $18.9 billion over 10 years.

Actually hitting the debt ceiling would result in either a default or reduction in spending. If the U.S. were to default on its debt, even for the short-term, the economy could suffer the negative consequences. As Donald Marron has pointed out, the United States defaulted on some Treasury bills in 1979, and this small technical default caused T-bill interest rates to increase by about 60 basis points and remain elevated for at least several months thereafter. The effect of a sustained debt ceiling breach on interest rates could be significantly larger this time around. And with debt equal to 70 percent of GDP now, the overall effects of interest hikes could be substantial. Moreover, an increase in government rates will raise other interest rates on other lending that is keyed to Treasuries.

Cutting more spending from this weak economy would not be a smart strategy. CBO recently estimated that repealing the sequester could create between 0.3 and 1.6 million jobs in the third quarter of 2014 as well as increase real GDP growth by 0.2-1.2 percent.

The political craven-ness of Republican resistance to raising the debt ceiling can be seen by the fact that, even if the recent Republican House of Representatives budget had been enacted, we would still have had to raise the debt ceiling, if not now, then in short order, because even their budget proposes a significant increase in government debt.

If Republican members of Congress seem to be willing to allow the government to hit the debt ceiling, it may be because Republican voters want them to. A recent Washington Post – ABC poll showed that 61 percent of Republicans survey would support “Congress not raising the debt limit and letting the government default on paying its bills and obligations.” This held even though 66 percent of the Republicans surveyed agreed that if the government “cannot borrow more money to fund its operations and pay its debts… it would cause serious harm to the U.S. economy.” This is, to put it mildly, an odd set of opinions to hold simultaneously.

While Republican Congressmen and voters seem willing to negotiate over the full faith and credit of the U.S. government, in the end, the debt ceiling should simply be raised to pay for spending that Congress has already authorized and not used as a tactic that could hurt the United States, with no apparent gains.