US Debt Limit

Term limits. 2 terms for president, 2 terms for senate, 3 terms for the house, and the supreme court justices are out after 15 years of service.

Take away revolving cash cow that is the re-election fund.
None of that changes the facts that folks vote for candidates who promise them stuff they can’t afford. The parties have long lists for every slot of folks who want to run. The faces would change but the reality wouldn’t.
 
In 2000-2001 the debt-to-GDP ratio was around 55%.
In response to the COVID-19 pandemic, the federal government increased its spending by $4.3 trillion,
sending the debt-to-GDP ratio well above 120%.
The debt-to-GDP ratio can be reduced in three ways:
1) Fiscal austerity (i.e., spending cuts, tax increases or both)
2) Negative real return on bonds (i.e., a nominal interest rate that is less than the inflation rate)
3) Economic growth (i.e., GDP growing faster than debt)

However, the debt limit must be increased to pay for last year's appropriation bills or the US defaults.
Analogous to spending wild with a credit card and then having to pay the bill.
There is an agreement finally.
McCarthy said the House will vote Wednesday, which would then send the bill to the Senate.
Once the bill reaches the Senate, where Democrats have the majority, the pace of action will largely depend on whether any senators try to hold up the bill, possibly with amendment votes. That could tie up the legislation for a few days.


The debt ceiling lifted until 2025....after the 2024 presidential election.

A cap on non-defense spending. Republicans want it for 10 years, they got 2 years.
The same level in 2024 and a 1% increase in 2025.

Democrats got expanded benefits for veterans, homeless people and young people aging out of foster care.
These would expire in 2030

Democrats get increases to funding for low-income students, money for loan forgiveness, cancer research, etc.

Republicans get $30 billion in unused COVID funds rescinded. This reduces the money that Biden had gotten for IRS agents to be able to go after tax cheats by about $10 billion.

Republicans get faster review time on environmental reviews of some energy projects.

Republicans get an increase in work requirements for food stamp recipients, to 54 by 2025,
but the provision expires, bringing the maximum age back down to age 49 five years later, in 2030.

The agreement will fully fund medical care for veterans at the levels included in Biden’s proposed 2024 budget, including a fund dedicated to veterans who have been exposed to toxic substances or environmental hazards.
 
Manchin also gets his pipeline.
I wonder if it could also be argued that natural gas is cleaner than coal burning so a win-win for both parties.
The text of the agreement:
Mountain Valley Pipeline will serve demonstrated natural gas demand in the Northeast, Mid-Atlantic, and
Southeast regions, will increase the reliability of natural gas supplies and the availability of natural gas at reasonable prices, will allow natural gas producers to access additional markets for their product,
and will reduce carbon emissions and facilitate the energy transition.
 
I wonder if it could also be argued that natural gas is cleaner than coal burning so a win-win for both parties.
The text of the agreement:
Mountain Valley Pipeline will serve demonstrated natural gas demand in the Northeast, Mid-Atlantic, and
Southeast regions, will increase the reliability of natural gas supplies and the availability of natural gas at reasonable prices, will allow natural gas producers to access additional markets for their product,
and will reduce carbon emissions and facilitate the energy transition.
Might cost support from Sanders and Warren in the Senate, but will be more than offset by support on the GOP side. Making sausage or maybe a turd sandwich if you ask Chip Roy. 🙂

 
Might cost support from Sanders and Warren in the Senate, but will be more than offset by support on the GOP side. Making sausage or maybe a turd sandwich if you ask Chip Roy.
I hope you are wrong on that, regarding Sanders and Warren. This needs to get done. Guys like Roy always view this as a zero sum game where one side wins and the other loses. In a good agreement, both sides have to feel like they got a little, but left a little on the table. That's progress, especially in the current political environment. Let's see if the votes match the words. Talking tough is easy for a politician to virtue signal to the base, but the votes count most. neither climate change or the deficit are going to be fixed with simple changes. But I don't want to find out if you can wreck an economy in short order.
 
I hope you are wrong on that, regarding Sanders and Warren. This needs to get done. Guys like Roy always view this as a zero sum game where one side wins and the other loses. In a good agreement, both sides have to feel like they got a little, but left a little on the table. That's progress, especially in the current political environment. Let's see if the votes match the words. Talking tough is easy for a politician to virtue signal to the base, but the votes count most. neither climate change or the deficit are going to be fixed with simple changes. But I don't want to find out if you can wreck an economy in short order.
 
Plenty of people seem willing to play rounds of play stupid games, win stupid prizes. Passed the House and all indications is it will pass the senate. Lots of earmarks for special groups, but it has to get done.
 
Crisis averted till at least 2025.😉

"While the debt limit would be reinstated at a higher level on Jan. 1, 2025, the Treasury would likely again be able to employ so-called extraordinary measures, or accounting maneuvers, to avoid the need for another debt limit increase until perhaps sometime that spring.

By that point, U.S. debt subject to limit, which includes Treasury securities owned by government trust funds as well as bonds held by the public, may top $35 trillion."
 
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The biggest obstacle seemed to be limits to growth in defense spending. 🤔
Now, on the revamping SS and Medicare, which have to be done to even dream of a balanced budget.
Kabuki theater. The hardliners got to vote no, but the bill still had plenty of votes to pass. ALL IS WELL!
 
I wonder if any of our congressmen ever read " The History of the Decline and Fall of the Roman Empire"
 
Kabuki theater. The hardliners got to vote no, but the bill still had plenty of votes to pass. ALL IS WELL!
In the tradition of hypocrisy, we see Steve Gaines vote No. Two weeks ago he had a nice speech on Twitter about how rural Montanas had to go long distances for health care and the high number of facility closures (very expensive facilities funded largely with Federal dollars). Welcome to the Real World Steve. Stuff costs money. Beg to the Federal government for more of it one day and then vote to cut off funding the next.

Screenshot 2023-06-02 at 2.29.03 PM.png
 

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