Author Topic: Higher debt limit raised.  (Read 2297 times)

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Offline Kobuk

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Higher debt limit raised.
« on: August 03, 2011, 06:02:34 pm »
So like, What's everyone's opinions on how the President and Congress have raised the debt limit? The good (If any), the bad, and the ugly.  :P
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Offline Kay Alett

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Re: Higher debt limit raised.
« Reply #1 on: August 03, 2011, 06:10:24 pm »
I have no opinion, there isn't anything I'd be able to do about it. As long as I'm working and I get paid I'm happy.
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Offline Foxpup

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Re: Higher debt limit raised.
« Reply #2 on: August 03, 2011, 07:39:48 pm »
The U.S. government will never pay back its debt, but that's okay, because nobody expects it to. The government gets into debt by selling bonds to people to raise money. It pays back its bonds by selling more bonds to other people. As long as people keep buying bonds, it all works out perfectly.
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Offline Narei Mooncatt

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Re: Higher debt limit raised.
« Reply #3 on: August 03, 2011, 11:52:27 pm »
I think they could have kept it where it was. The people saying we would default on our debts if it wasn't raised (taxes too), were either wrong or using scare tactics. If nothing was done, we would have had a short shut down as they figured a new budget. One thing that wouldn't have stopped is the debt payments. I think cuts could have been made to balance the budget and pay debts without raising taxes. Like a lot of people say, the government needs to learn to live off what it takes in.

I also understand that something should be done to help reduce the deficit quicker than just balancing the budget. The only way to do that is to increase revenue. Note, that doesn't mean raise taxes. Being for the Fair Tax, I think there needs to be a complete restructuring of our tax system, but I digress. Before any tax rates are raised, we need to adress how they are used. I hear all the time how the feds take money out of one fund to pay another. There's a lot of mistrust because of this, and people think if taxes are raised, the money will be misused. So let's first address that. If the government can spend what they have responsibly and prove to the public that we can trust them, then I would be ok with some tax increases.
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Offline Acton

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Re: Higher debt limit raised.
« Reply #4 on: August 04, 2011, 01:28:47 am »
When I got my first credit card, my "debt ceiling" was $5000; then they rose to $7000 then $10,000the up to $19000 at the same time I sent and spent above my means. I was making $22.00 an hour. This job was going to go permanent, so I can always pay it back. When I got laid off and found a 17.00 temp job then more layoffs. My debt is in default now I have $22,000 in debt. I had to cut back and stop spending more I made. I am going the Dave Ramey route and slowly  recovering my life. 
The moral of the story is  deficit spending was not good for me, then how is good for our nation?

Offline Foxpup

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Re: Higher debt limit raised.
« Reply #5 on: August 04, 2011, 07:57:48 pm »
When I got my first credit card, my "debt ceiling" was $5000; then they rose to $7000 then $10,000the up to $19000 at the same time I sent and spent above my means. I was making $22.00 an hour. This job was going to go permanent, so I can always pay it back. When I got laid off and found a 17.00 temp job then more layoffs. My debt is in default now I have $22,000 in debt. I had to cut back and stop spending more I made. I am going the Dave Ramey route and slowly  recovering my life. 
The moral of the story is  deficit spending was not good for me, then how is good for our nation?

That's different. The U.S. Treasury is not defaulting on its Iridium American Express card. The government debt is in American dollars. These are the same American dollars that the government issues. Can you see where this is going? The government gets into debt by issuing bonds. Government bonds are "risk-free" loans because they are worth a specific amount of government-issued money (dollars), which the government is guaranteed to pay back, because it can make as much of its own money as it wants. If for some reason the government can't pay back the loan by issuing more bonds, it can just make some more money. Of course, the actual value of money is inversely proportional to how much of it there is, so if the government actually did pay its debt that way, there'd be hyperinflation on an epic scale. So it pays back old bonds with new ones, inflation is keep down, and everyone is happy.
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Offline redyoshi49q

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Re: Higher debt limit raised.
« Reply #6 on: August 04, 2011, 10:51:29 pm »
I think they could have kept it where it was. The people saying we would default on our debts if it wasn't raised (taxes too), were either wrong or using scare tactics. If nothing was done, we would have had a short shut down as they figured a new budget. One thing that wouldn't have stopped is the debt payments. I think cuts could have been made to balance the budget and pay debts without raising taxes. Like a lot of people say, the government needs to learn to live off what it takes in.

Could you clarify the italicized part, please?  From what I presently know (which is admittedly not extensive, and might not be accurate), not having a working budget implies that all payments, including debt payments, cease until a new budget is agreed upon (as without a budget, the available money, if any, is not allocated).  What makes debt payments distinct from other governmental expenses in this respect?  Or is there something else that I'm missing?

(*just confirmed his assumption on what a debt ceiling was from a Google search...*)


The U.S. government will never pay back its debt, but that's okay, because nobody expects it to. The government gets into debt by selling bonds to people to raise money. It pays back its bonds by selling more bonds to other people. As long as people keep buying bonds, it all works out perfectly.

That description makes US bonds sound disturbingly like a Ponzi scheme.  I could see the possible argument, though, that a (fiscally responsible) government with more working capital at the present could benefit the country's economy (and thus tax revenue) enough to pay back more than the borrowed amount through the extra revenue, even without accounting for inflation.


When I got my first credit card, my "debt ceiling" was $5000; then they rose to $7000 then $10,000the up to $19000 at the same time I sent and spent above my means. I was making $22.00 an hour. This job was going to go permanent, so I can always pay it back. When I got laid off and found a 17.00 temp job then more layoffs. My debt is in default now I have $22,000 in debt. I had to cut back and stop spending more I made. I am going the Dave Ramey route and slowly  recovering my life. 
The moral of the story is  deficit spending was not good for me, then how is good for our nation?

Dave Ramsey's videos were actually a required Senior level class in my high school, and I particularly enjoyed his lessons.  I hope they're working out reasonably well for you.
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Offline Foxpup

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Re: Higher debt limit raised.
« Reply #7 on: August 04, 2011, 11:34:36 pm »
The U.S. government will never pay back its debt, but that's okay, because nobody expects it to. The government gets into debt by selling bonds to people to raise money. It pays back its bonds by selling more bonds to other people. As long as people keep buying bonds, it all works out perfectly.

That description makes US bonds sound disturbingly like a Ponzi scheme.  I could see the possible argument, though, that a (fiscally responsible) government with more working capital at the present could benefit the country's economy (and thus tax revenue) enough to pay back more than the borrowed amount through the extra revenue, even without accounting for inflation.
Government bonds are disturbingly like a Ponzi scheme - while the government guarantees to pay back a particular number of dollars on the bond's maturity, there is no guarantee that those dollars will be worth as much as when the bond was issued. Even assuming they are, the person buying the bonds loses the interest they would earned by investing the money into something else. It's basically a tax on people who can't spot a bad investment.
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“Art doesn't work without pain. Art exists for compensating pain.” - Till Lindemann

“There's a fine line between sayings that make sense.” - Too Much Coffee Man

Offline Narei Mooncatt

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Re: Higher debt limit raised.
« Reply #8 on: August 05, 2011, 02:08:16 am »
I think they could have kept it where it was. The people saying we would default on our debts if it wasn't raised (taxes too), were either wrong or using scare tactics. If nothing was done, we would have had a short shut down as they figured a new budget. One thing that wouldn't have stopped is the debt payments. I think cuts could have been made to balance the budget and pay debts without raising taxes. Like a lot of people say, the government needs to learn to live off what it takes in.

Could you clarify the italicized part, please?  From what I presently know (which is admittedly not extensive, and might not be accurate), not having a working budget implies that all payments, including debt payments, cease until a new budget is agreed upon (as without a budget, the available money, if any, is not allocated).  What makes debt payments distinct from other governmental expenses in this respect?  Or is there something else that I'm missing?

(*just confirmed his assumption on what a debt ceiling was from a Google search...*)

If it's like some state government shutdowns for budget reasons (Minnesota just ended one), essentials still are taken care of. Since there is the constitutional amendment saying our debt can't be questioned, then an argument could be made that those debt payments would continue.

I did originally misspeak though. If we hit the debt ceiling, the government wouldn't face an actual shut down. It just means we couldn't borrow any more, which would lead to funding cuts. The only time we could face a full shut down is if the budget expired and a new one (or extension, as has been the case lately) isn't approved. That's where it's decided how whatever money we have is spent.
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Offline Avor

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Re: Higher debt limit raised.
« Reply #9 on: August 07, 2011, 07:16:23 pm »
This economic situation in America is a potentaly fatal one. abd unlesss something large nad drastic is done, the impending doom will only be delayed.

I don't mean to be jerk, but the cause of the problem is flawed American mentaly and values, and you all know it. The atitudes of entitlement and greed cause peope to do stupid things; like that people beleive it's a good idea to buy luxery item with money they don't have, or believe that the government should provide everything but not raise taxes.

Whatever the economic solution is, there is a war over hearts and miind that needs to be won.