No. of Recommendations: 33
I see that one of the Republican members of congress, realizing, rightly, that Republicans have no leverage at all in the up coming "fiscal cliff" and Bush Tax cut extension negotiations, thinks that they can and should use the debt ceiling to get leverage.

http://www.huffingtonpost.com/2012/11/30/louie-gohmert-debt-...

Obama has sort of been saying he's not going to be negotiating on the debt ceiling. But I think he has to be more clear about it, so that Republicans don't waste the nation's time even trying to go there.

He should call a press conference specifically for this purpose, and, after prefacing his remarks with a brief reminder about how the debt ceiling has always been automatically raised as necessary up until just recently, and why it has been automatic, he should say the following: "I am willing to have exactly one kind of discussion over the debt ceiling, and that is whether congress wants to retain the power to raise it when raising it become necessary to continue paying the bills already incurred by this nation, or wants to give that power to me. I will not recognize as a valid topic of discussion whether we will raise the ceiling. If Republicans in the House of Representatives are willing to put a gun to the head of the American economy and pull the trigger by refusing to raise the debt ceiling, so be it. Come 2014, the American people will have an opportunity to decide whether that is sort of behavior they like in their elected members of congress, or whether they'd prefer to have representatives who do not behave this way. Thank you."

Gordon66
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I see that one of the Republican members of congress, realizing, rightly, that Republicans have no leverage at all in the up coming "fiscal cliff" and Bush Tax cut extension negotiations,

I could be wrong, but I believe the big part of the argument over the Bush Tax cuts expiration is the "wealthy taxes". But if you set the ceiling at $250,000 (some DEms are suggesting $1,000,000) the gain in taxes collected would be between $66 and $80 billion per year.

Since it is such a small amount, I say go for it and look at the lower middle class items line by line ....

But .... that aint gonna happen

Bears
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Since it is such a small amount, I say go for it and look at the lower middle class items line by line ....

I completely agree. In fact, I'd go farther. I think ALL the Bush Tax cuts should expire, although the expiration should be very gradual for households below the $250k threshold.

The Bush Tax cuts were suppose to spur growth. They didn't. They were supposed to pay for themselves. They didn't.

Why was there a 10 year sunset to begin with? So they'd go away if they didn't spur growth or pay for themselves.

They should go away.

Gordon66
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No. of Recommendations: 4
Why was there a 10 year sunset to begin with? So they'd go away if they didn't spur growth or pay for themselves.

Actually, the 10-year sunset was to avoid consideration of long-term impacts on the federal deficit as required under the Byrd rule.

Basically the 10-year sunset acknowledges that the Bush Tax cuts were never really intended to pay for themselves.
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Actually, the 10-year sunset was to avoid consideration of long-term impacts on the federal deficit as required under the Byrd rule.

Basically the 10-year sunset acknowledges that the Bush Tax cuts were never really intended to pay for themselves.


That is another valid interpretation. However, I recall at the time debate over whether they cuts would pay for themselves. I believe the 10 year sunset was also a mechanism to get some skeptics on board.

Gordon66
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No. of Recommendations: 33
Obama has sort of been saying he's not going to be negotiating on the debt ceiling. But I think he has to be more clear about it, so that Republicans don't waste the nation's time even trying to go there.

Matthew Yglesias is Slate's business and economics correspondent.

"This is a little lost in the dust of the fiscal cliff negotiations, but the White House's opening bid contains as a sub-theme a really smart idea on the debt ceiling.

The debt ceiling, to recall, was for a long time a kind of traditional venue for partisan grandstanding in American politics. And there's nothing wrong with a little grandstanding. There's always a theatrical element to politics, and this was just a part of the way things are done in America. There was even a West Wing scene about it:


The Geithner proposal is to turn the debt ceiling back into a grandstanding game by flipping the order of operations. When the president goes above the ceiling, Congress will have the right to pass a resolution of disapproval. Then the president can veto the resolution. In theory, Congress can override that veto with a two-thirds supermajority, but in the real world that'll never happen. Congress gets its chance at symbolic opposition, and there's no risk to the economy. It's a great idea.

On Twitter last time, Tim Carney was trying to say that this would be an abrogation of congressional responsibility and a huge increase in executive power, but that's nonsense.

Every dollar the federal government spends is spent according to laws Congress has passed. Every dollar of tax revenue that comes in does so because of taxes Congress has enacted. The Treasury Department's borrowing of money to make up the gap between Congress' spending and Congress' taxing isn't any additional authority to spend or do anything. It's the very model of Congress making laws and the executive implementing them."

my bold

http://www.slate.com/blogs/moneybox/2012/11/30/obama_s_debt_...
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How can I raise the debt ceiling at my house and get away with it?

Why is government different and why do we want to continue with this kind of irresponsible example?

Free stuff, I get it, but it IS time to GROW UP and live within our means and not our ability to defer the debt endlessly for some other generation to deal with. We already have done that and look where it got us?

$500 billion dollars a year in "current" interest payments alone. That is like 2 wars a year for life and beyond.

Not right and not fair.

99
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No. of Recommendations: 66
How can I raise the debt ceiling at my house and get away with it?

Demonstrate to the bank that you have an income stream which is increasing. They will fall all over themselves to lend you more ... as bond holders are now doing with Treasuries (notice the low rates that they're willingly snapping up?)

Why is government different and why do we want to continue with this kind of irresponsible example?

Because government IS different. People who tell you it's just like a business are simply wrong. It's not like a business. No business invests in things for which a payout is not assured. What business pays to educate 8-year olds? What business says "Yes, make my production processes more expensive so my workers can be safer?" What business puts 50 billion dollars into developing rocket ships, or atomic weapons, or jet engines, or exotic vaccines without some assurance of payoff?

Free stuff, I get it, but it IS time to GROW UP and live within our means and not our ability to defer the debt endlessly for some other generation to deal with. We already have done that and look where it got us?

If by "where it got us" you mean "the richest most powerful country in the world", then yes, look where it got us.
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No business invests in things for which a payout is not assured.

Almost every successful business does this, either at the start of that business (making something new where demand is uncertain) or improving an existing product that may or may not be in demand.

What business says "Yes, make my production processes more expensive so my workers can be safer?"

IBM, Northrup Grumman, General Dynamics, GE, Rubbermade, and many others. Safe workers pay for production costs quite often and it's a risk/reward assessment in every business that has manufacturing. I know it's chic to say that all big corporations will kill workers if it increases profit but it just isn't accurate. I developed a system for a major chemical company that was solely for the safety of their workers and they weren't doing it just to comply with regulations. They were already compliant but management saw that they had too many accidents in a specific aspect of the purification process. They sent out a RFP that my company was awarded and they spent roughly 15 million dollars on the system which has now been adopted (in various forms) by almost all chemical manufacturers.

What business puts 50 billion dollars into developing rocket ships, or atomic weapons, or jet engines, or exotic vaccines without some assurance of payoff?

SpaceX, almost any pharma company, almost any technology company, almost any chemical company, almost any producer of military equipment (aircraft, tanks, etc.) and really, pretty much any company that wants to get ahead.

Government does some wonderful things but business takes risks all the time or they wouldn't stay successful. I'm pretty sure you already know that but I figured I'd respond just for the practice.

Calabogie
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The Bush tax cuts were made temporary so that they could be passed as a reconciliation bill requiring only 51 votes. The Republicans weren't sure they could get the 60 votes required to get a regular bill through the Senate. There were no hidden messages.
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They will fall all over themselves to lend you more ... as bond holders are now doing with Treasuries (notice the low rates that they're willingly snapping up?)

Let us look into the falling over bit more in detail.

Unlike you and I or any other business government finance is driven by other factors.

1) China and Japan buying US Treasuries is not necessarily because they believed in our great credit but also wanted to keep financing US so that we can afford to buy their stuff.

2) Also, we cannot ask some of our family member to print money that we can spend. Like governments all over the world can use central bank. Of course there is a limit at which point this printing stops working. There is a genuine concern that we are closer to that breaking point.

3) If there is such a great demand for treasuries, then why is FED manipulating the interest rate and driving them to zero?

4) Lastly, USD being world reserve currency and a currency heavily used in world trade also played a great role.

I believe the above had played a bigger role rather than the credit worthiness for the current interest rates. That doesn't mean we are not credit unworthy, like some nut-wingers claim. But it could be 30 year rate of 5, 6, 7, 8, 9.

I think the debt ceiling is silly, and only serves grand-standing. We should change the debt ceiling to a more flexible term, something like as % of GDP or % of tax revenues.
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"I think the debt ceiling is silly, and only serves grand-standing. We should change the debt ceiling to a more flexible term, something like as % of GDP or % of tax revenues. "

Would you say 100% of GDP is about right? What about 150% or 200%?
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Would you say 100% of GDP is about right? What about 150% or 200%?

I don't know. The current system of artifical number is silly and it just allows grand-standing of congress and meaningless posturing, achieves really nothing.


Just to correct what I posted, I actually meant to say the increase in debt limit to be tied to those numbers. Rather than absolute debt levels.
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Free stuff, I get it, but it IS time to GROW UP and live within our means and not our ability to defer the debt endlessly for some other generation to deal with. We already have done that and look where it got us?

Goofy"If by "where it got us" you mean "the richest most powerful country in the world", then yes, look where it got us. "


Goofy, we did not get to be the richest most powerful county because we can push debt onto future generations.

We are a rich powerful country thanks to an system that allowed people like Steve Jobs and millions of other people (over hundreds of years)
to start businesses and prosper.
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