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This Whole Debt Limit Thing

Who has been the most unreasonable on this whole debt limit thing?

  • Congressional Democrats

    Votes: 11 6.2%

  • Congressional Republicans

    Votes: 139 78.1%

  • Obama

    Votes: 10 5.6%

  • They have all been equally unreasonable.

    Votes: 18 10.1%
  • Total voters
    178
  • Poll closed .
http://blog.heritage.org/2011/07/21...f-americans-support-cut-cap-and-balance-plan/

CNN Poll: Two-Thirds of Americans Support ‘Cut, Cap and Balance’ Plan

… snip …

Sixty-three percent of Democrats and 65 percent of independents said they would approve of such a plan.

… snip …

Opposition to the Gang of Six plan also transcends party lines, according to the CNN poll: 60 percent of Democrats, 65 percent of Independents, and 70 percent of Republicans oppose the plan.
Click to expand...
 
The poll is .. oh, 6 days old.

Looking directly at the poll (and not the Heritage.)

First problem:

As you may know, there is a limit to the amount of money the government can owe that is
sometimes called the "debt ceiling." The Secretary of the Treasury says that the government will
not have enough money to pay all of its debts and keep all existing government programs running
unless Congress raises the debt ceiling by August 2nd. How closely have you been following the
discussions between Barack Obama and the Republican and Democratic leaders of Congress on the
debt ceiling -- very closely, somewhat closely, not too closely, or not closely at all?
July 18-20
2011
Very closely 23%
Somewhat closely 47%
Not too closely 19%
Not closely at all 11%
No opinion
Click to expand...

Note that.

In those discussions, several budget plans have been proposed that would reduce the amount the government owes by trillions of dollars over the next ten years. If you had to choose, would you rather see Congress and President Obama agree to a budget plan that only includes cuts in government spending, or a budget plan that includes a combination of spending cuts and tax increases on higher-income Americans and some businesses?
July 18-20
2011
Only spending cuts 34%
Spending cuts and tax increases 64%
Click to expand...

Bolding mine.


Based on what you have read or heard about the discussions between Congress and Barack Obama on the debt ceiling, do you think Obama has or has not acted responsibly?
July 18-20
Yes, has acted responsibly 52%
No, has not 46%
No opinion 2%
Click to expand...

Message in danger there..

Based on what you have read or heard about the discussions between Congress and Barack Obama on the debt ceiling, do you think the Republicans in Congress have or have not acted responsibly?
July 18-20 2011
Yes, have acted responsibly 33%
No, have not 63%
No opinion 3%
Click to expand...

Man it's like they didnt' want to mention this stuff..

See, Heritage takes the next two entries, that deal with what I said elsewhere: They *sound* good. But really aren't.

I will BaC/Heritage that much credit. Numbers are overwhelming positive for a balanced budget amendment.
 
BeAChooser said:
http://blog.heritage.org/2011/07/21...f-americans-support-cut-cap-and-balance-plan/
Two-Thirds of Americans Support ‘Cut, Cap and Balance’ Plan
Click to expand...
Click to expand...

No. Nice try though. It has to do with the way the question is worded, and especially what what left out of the question. Here's how the question was worded:
In another proposal, Congress would raise the debt ceiling only if a balanced budget amendment were passed by both houses of Congress and substantial spending cuts and caps on future spending were approved. Would you favor or oppose this proposal?
Click to expand...

The same poll BTW shows that majorities actually oppose any cuts in any of the following spending:
Subsidies to farmers
Pensions and benefits for retired government workers
Defense spending
Medicaid
Medicare
Social Security

The question didn't mention that "Cut, Cap and Balance" would mean deep cuts in all of these programs and would require two-thirds supermajorities to raise taxes.
 
Cain said:
My understanding is that a lot of people have no idea what exactly would happen if the debt ceiling is not raised. Read an article a week ago saying that computers make something like 3 million (or billion) payments each day, and you couldn't stop them if you tried. The elite consensus seems to be that the result would be disaster.
Click to expand...

Yes, elite politicians of both parties have a vested interest in creating panic in order to get bad bills passed. Investors and economists are less unbalanced in their views. A credit rating decline WILL happen despite any bill. We may push it off for a few years.

I would agree that not raising the debt ceiling would result in a very substantial (~40%) immediate shortfall in funding for current project. Still plenty to pay Interest, SocSec, critical Mil funding, most critical government functions. Funding of gov pensions plans would go unfunded and many gov funded projects would halt. Sadly Geithner (the guy who decides) has been demagoguing the issue to create panic.

Bad - yes, not good for the economy in the short run, but not a disaster.
What is a clear unvarnished disaster is to keep ratcheting up the national debt.

Note the S&P suggested a few weeks ago there is a >50% change of a rating decrease in any case, and that the most acceptable plan would require cutting $4T from the 10 year budget (whether by receipts or cuts). Jim Grant has been preaching that a ratings decline was in the cards since 1999 [see James Grant's Interest Rate Observer]. This isn't some recent phenomena.


I know the media TOTALLY has a left-wing communist bias, which makes leaves me wondering how the Republicans are getting away with their antics? Today Obama attempted to move the issue along by warning seniors and military that their checks might not arrive. (Threaten the most influential and respected groups in the country, I can't really blame him).
Click to expand...

You are just seeing "sausage making". Both sides are demagoguing the issue. Both sides have been up to "antics". Which side you see at fault is a neye-of-the-beholder matter. If you can't understand the opposition's position IS a mater of principle - then you are just part of the political polarization problem.

Many Reps were voted into office based on a pledge of fiscal responsibility - lower spending and no new taxes. How exactly do you think they should vote if they are representing their constituents ? Don't you think representing your constituent's wishes is principled ? "More of the same" is not an option, unless you want an immediate credit rating decline.


It's just ridiculous that Republicans are playing chicken with our country. This is just opportunism, not principle. They've been negotiating like the worst soon-to-be-ex on the planet.
Click to expand...

Too partisan. How about the whitehouse panic mongering too ? It appears that Obama wasn't negotiating in good faith with Boehner - that derailed the process and caused delay - played chicken. How about the whitehouse calls about private jet loopholes and class warfare - childish pandering. Less intent to create a viable budget than to whip up partisan venom.



Maybe the obvious escapes you - but the US debt is far too high and growing fast. We must address the deficit. Moody's and S&P did NOT just say we need more debt - they want to see a substantial (~$4T) and realistic debt & deficit reduction policy. Not some "pay the bll in the out years" budget. In the political process you can only do that by coupling spending resolutions with cuts. By coupling debt increases with LT spending cuts or increased taxes. So we have a politically very hard problem - we need to decrease spending and/or increase receipts, taxes A LOT. This is exactly what the process looks like. It's not good vs evil, it's more taxes vs more spending cuts - and it unsurprisingly gores someone's ox either way.

We need to address medical cost (medicare ,medicaid and the new obamacare). Anything else means we will eventually default or destroy the currency. Taxes to cover this would rise (including state & local taxes) to well over 50% of GDP ! That's confiscatory. At that rate we're talking black market, organized crime, emigrations. Google "brain drain England" for an example of where this leads.

So we could marginally increase receipts (taxes) today, but every marginal tax dollar taken results in lower growth. It's not a good plan at the moment, and not a sustainable approach to the structural problem. If the economy is happy in a few years that would be a good time to increase receipts - marginally.

The hard truth is that we have voted ourselves a very expensive government services - [Social Security, Medicare/caid, healthcare social services, very expensive military and mil projects, duplicate uncoordinated Fed & State & local programs, substantial fraud in Gov spending, loads of crony capitalism], but we can't pay for these given the population demographics and the decline in growth. We also can't realistically grow our way out of this - the whitehouse budget from FY2010 are for a very unrealistic 4% GDP growth as far as the eye can see, yet they show massive debt increases and ever higher taxes. Much worth with a realistic 2.3% GDP growth.

The hard choice is - shall we decrease the Mil & Social spending to realistic levels, and make other programs more efficient/effective now OR should we let the currency crash a few years down the road. We can't afford what is on the books. We can tax a little more - but it's not without a cost of decreased growth, and we can't tax enough to solve the problem LT.

People retiring ~65-67yo can expect to live a little over 20yrs, but it's unrealistic to pay SocSec and Medicare on that large fraction of the population for that amount of time. We need to increase that age and/or create a policy to encourage ppl to not retire (for example exempt oldsters from most SS&income taxes). The Mil budget is insane IMO - we need defense not offense and nation-building. Cut Mil spending in half over a decade.
 
stevea said:
So we could marginally increase receipts (taxes) today, but every marginal tax dollar taken results in lower growth. It's not a good plan at the moment, and not a sustainable approach to the structural problem. If the economy is happy in a few years that would be a good time to increase receipts - marginally.
Click to expand...

The people at the top income levels are absolutely swimming in cash. The problem is at the other end of the scale. Working class people have been absolutely screwed by this economic downturn. But for some reason, you still cling to the mantra that raising taxes even a minimal amount on the rich bastards would slow economic growth.

Start with some of the most blatant abuses. The loophole that allows hedge fund managers to pay long term capital gains rates on their multi million dollar fees. The estate tax rate that was lowered just a couple years ago as a gift to trust fund babies. And while we are at it, kick up the long term capital gains tax rates to assure that Warren Buffet pays at least the same tax rate as his secretary. Lets bring some more revenue into the system from the people that have not been at all affected by this economic downturn.

Cutting social programs will do more damage to the economy than raising taxes on the wealthy. Take away unemployment checks and more families default on their mortgages. Lay off government workers and you add them to the unemployment line. The private sector still isn't doing much hiring.

In a rational world, the debt would not be our primary worry right now. We would be working on an economic stimulus package to get the economy back on track. The job that was started in 2009 and interrupted in 2010 by GOP filibusters in the Senate. The obstruction now is from the Tea Party dominated House.
 
I think the GOP is planning to crash this thing, and then somehow to blame it all on Obama, and hope that the slime they are covering themselves with will keep it from sticking to on them.

I really believe that their PLANNED end game is default.
 
BenBurch said:
I think the GOP is planning to crash this thing, and then somehow to blame it all on Obama, and hope that the slime they are covering themselves with will keep it from sticking to on them.

I really believe that their PLANNED end game is default.
Click to expand...

I've heard others say almost the exact opposite. The President does not want an agreement to be reached and then will blame it on the republicans.
 
Well, I predict that S&P will downgrade the Tbills from AA status, that the WILL do it by 12-31-2011. I'm rather uninterested in who tries to blame who for this, the "usual suspects" rule applies nicely.

Anyone who has an actual interest in the issues would do well to just read the S&P report. It spells out clearly that the problem is a spending problem, not a revenue problem.
 
Revenue doesn't balance spending when it is sufficient? That is news to me and news to everybody at the University of Chicago I studied economics with, MHaze.

Spending with no revenue is deficit. Deficit without assets is debt. Revenue exceeding spending is surplus. Surplus beyond debt is assets. Elementary. They teach this in High School.
 
mhaze said:
Anyone who has an actual interest in the issues would do well to just read the S&P report. It spells out clearly that the problem is a spending problem, not a revenue problem.
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Can you point out where the report spells that out? Here are some excepts that seem to disagree with your assessment of it.

Here they say that they take no position on the mix of spending and revenue:

Standard & Poor’s takes no position on the mix of spending and revenue measures the Congress and the Administration might conclude are appropriate. But for any plan to be credible, we believe that it would need to secure support from a cross-section of leaders in both political parties.​

Here they actually criticize the compromise that led to not allowing the tax breaks to expire for the rich, saying that it reduces the likelihood that Congress will allow the tax breaks to expire any time in the near future:

Revenue [in the President’s new proposal] would be increased via both tax reform and allowing the 2001 and 2003 income and estate tax cuts to expire in 2012 as currently scheduled—though only for high-income households. We note that the President advocated the latter proposal last year before agreeing with Republicans to extend the cuts beyond their previously scheduled 2011 expiration. The compromise agreed upon in December likely provides short-term support for the economic recovery, but we believe it also weakens the U.S.’s fiscal outlook and, in our view, reduces the likelihood that Congress will allow these tax cuts to expire in the near future.​

-Bri
 
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mhaze said:
Well, I predict that S&P will downgrade the Tbills from AA status, that the WILL do it by 12-31-2011. I'm rather uninterested in who tries to blame who for this, the "usual suspects" rule applies nicely.

Anyone who has an actual interest in the issues would do well to just read the S&P report. It spells out clearly that the problem is a spending problem, not a revenue problem.
Click to expand...

That's an impossible assertion. If we can't pay for the spending we are doing, then obviously the problem is both. You can increase revenue, decrease spending, or both.

If one don't believe the spending is not worth it, one would define it as a spending problem. If one does believe the spending is worth it, one would define it as a revenue problem. Or a combination of both. There isn't a way that math could make that call.
 
tyr_13 said:
That's an impossible assertion. If we can't pay for the spending we are doing, then obviously the problem is both. You can increase revenue, decrease spending, or both.

If one don't believe the spending is not worth it, one would define it as a spending problem. If one does believe the spending is worth it, one would define it as a revenue problem. Or a combination of both. There isn't a way that math could make that call.
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NO WAY?

Well, historically regardless of tax rates and collection policy, our collected revenue streams have always bounced around within fairly narrow bounds - 17-19% of GNP. That's because this is a classic problem of predicting outcomes in a dynamic environment with (although liberal elitists don't believe this) EQUALLY INTELLIGENT ADVERSARIES.

From this we certainly can say that an effort to move tax collections to 22%, 24% or 26% of GNP will almost certainly fail. 2010, we spent 23% of GDP. Highest collections ever, 1944 at 20.9%.

So I think you are wrong in assuming

If one don't believe the spending is not worth it, one would define it as a spending problem. If one does believe the spending is worth it, one would define it as a revenue problem.

That would be a true statement within the bounds of reasonably anticipated historical collections. But we are outside those bounds already and headed for worse.

Any business manager that tried to call this a revenue problem would be fired.
 
eeyore1954 said:
I've heard others say almost the exact opposite. The President does not want an agreement to be reached and then will blame it on the republicans.
Click to expand...

The President started with the position of “let’s raise the debt limit and have the budget negotiations when it’s time to pass a budget” It was Republicans who insisted that the budget negotiations take place now or they would tank the economy by not raising the debt ceiling.
 
BenBurch said:
And that is the lie they will attempt to retail.

Clearly, as of last night's address, the President has made public the terms he will accept.
Click to expand...

I am wondering exactly what cuts the President is offering. Is it anything other than pie in the sky cuts to be offered in the future. Politicians always love to make cuts in spending in the future.
To be honest I really don't know the specifics of what the President is offering. Does anyone?
 
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