Are we there yet? YES! - US Debt Limit is Reached

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Main Question or Discussion Point

We've waited for months and now the day has arrived. The US debt has reached the $14.294 Trillion limit today. The US credit card has been maxed out!

http://online.wsj.com/article/SB10001424052748703421204576325583050561022.html

Beyond the logistics of moving money around - now what? Will our Congressional leaders begin to address the runaway spending? Will the President propose additional taxes? Will the Supreme Court be called upon for a reasonable solution?
 

Answers and Replies

  • #2
drankin
Maybe China will give us a new credit card that we can max out to pay the interest on the first one.

Social programs have raped our economy. How long can we prolong the inevitable crash?
 
  • #3
Pengwuino
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Should have gone Capital One.
 
  • #4
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Should have gone Capital One.
I think AMEX would be better yet - the bill is due in 30 days.
 
  • #5
Astronuc
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The government can't legally borrow anymore, so it is staving off default by tapping into federal pension funds.


http://marketplace.publicradio.org/display/web/2011/05/16/om-us-hit-debt-limit-today/ [Broken]
 
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  • #6
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The government can't legally borrow anymore, so it is staving off default by tapping into federal pension funds.

http://marketplace.publicradio.org/display/web/2011/05/16/om-us-hit-debt-limit-today/ [Broken]
Maybe we SHOULD talk about the logistics of moving money around?

Try funding a private company with union pension funds until a working capital loan or bridge financing comes through and see what happens.:frown:
 
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  • #7
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Maybe we SHOULD talk about the logistics of moving money around?

Try funding a private company with union pension funds until a working capital loan or bridge financing comes through and see what happens.:frown:
we should elect Trump. he has extensive experience with bankruptcies.
 
  • #8
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Social programs The Armed Forces have raped our economy. How long can we prolong the inevitable crash?
Fixed that for you.
 
  • #9
drankin
  • #10
Vanadium 50
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Fixed that for you.
DoD budget for 2010: $685B.
Federal deficit (strictly speaking, the addition to the debt) for 2010: $1653B.

I don't expect you to like those numbers, but that's what they are.

Here's another number: total discretionary spending - $1378B.

I don't expect you to like that number either.
 
  • #11
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DoD budget for 2010: $685B.
Federal deficit (strictly speaking, the addition to the debt) for 2010: $1653B.

I don't expect you to like those numbers, but that's what they are.

Here's another number: total discretionary spending - $1378B.

I don't expect you to like that number either.
I don't like any of the numbers. The fact remains that much of our defense spending comes from protecting foreign first-world countries who could easily pay for their own defense. Instead, they get to spend money on things like universal health care because they don't need to maintain a military, or as large of a military. That's our biggest form of foreign aid, and it isn't explicitly listed as "foreign aid."

The DoD makes up as much of the discretionary spending as the rest of all of the other discretionary spending categories combined. Surely there is plenty of room to cut there. Lets start with all of the hardware that the Pentagon says we don't need, but congressmen want built anyway because it's constructed in their districts.

Another point is we don't need to get the deficit down to zero immediately. There's nothing wrong with instituting a long-term plan to get it there in a decade or two. Slowly cutting back spending while slowly raising taxes will get us there eventually, and by doing it slowly, we avoid much of the pain involved in drastic measures.
 
  • #12
Drakkith
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Fixed that for you.
I like it before the change better. Especially considering that social programs have twice the cost that the defense budget has.
 
  • #13
Drakkith
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I don't like any of the numbers. The fact remains that much of our defense spending comes from protecting foreign first-world countries who could easily pay for their own defense. Instead, they get to spend money on things like universal health care because they don't need to maintain a military, or as large of a military. That's our biggest form of foreign aid, and it isn't explicitly listed as "foreign aid."

The DoD makes up as much of the discretionary spending as the rest of all of the other discretionary spending categories combined. Surely there is plenty of room to cut there. Lets start with all of the hardware that the Pentagon says we don't need, but congressmen want built anyway because it's constructed in their districts.

Another point is we don't need to get the deficit down to zero immediately. There's nothing wrong with instituting a long-term plan to get it there in a decade or two. Slowly cutting back spending while slowly raising taxes will get us there eventually, and by doing it slowly, we avoid much of the pain involved in drastic measures.
I agree with your bottom paragraph, but I hate that the DoD budget is "discretionary" and doesn't get compared to high cost things like many of the social programs.
 
  • #14
drankin
The difference between social and military spending, IMO, is that military spending includes a large degree of manufacturing, design, and tech development as well as simple grunt work. It pays for real work, whether towards technology or just a soldier busting his ***. Whereas social spending to a large degree is on things that require humans to collect without any reciprocal contribution. Not that there shouldn't be some of that as a social responsibility but I think it's "off-the-leash".
 
  • #15
Pengwuino
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I don't like any of the numbers. The fact remains that much of our defense spending comes from protecting foreign first-world countries who could easily pay for their own defense. Instead, they get to spend money on things like universal health care because they don't need to maintain a military, or as large of a military. That's our biggest form of foreign aid, and it isn't explicitly listed as "foreign aid."
So that's one thing I've wondered lately. Exactly how much do we spend on foreign bases in industrialized nations? And is there good reason now beyond as a staging point for conflicts in the middle east or various other conflict zones nearby?
 
  • #16
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Is my financial aid in the future in jeopardy? Because I can't afford to go to school without government aid...
 
  • #17
drankin
Is my financial aid in the future in jeopardy? Because I can't afford to go to school without government aid...
Are you serious?
 
  • #18
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Are you serious?
What about that implies I'm joking?

I really don't know what this means, but education is often on the chopping block when people start talking about cutting spending. Or are you being snobbish that I need financial aid?
 
  • #19
Ryumast3r
^Considering that President Obama has made it clear that he thinks education is a priority, I don't think education funding will be the largest thing on the chopping block.

However, the President has also stated that everything (and he said EVERYTHING) must be looked at, including education, highways, defense, etc. Hopefully people will consider everything, and not just what doesn't really affect them/their families.
 
  • #20
drankin
What about that implies I'm joking?

I really don't know what this means, but education is often on the chopping block when people start talking about cutting spending. Or are you being snobbish that I need financial aid?
No, but if you really want the education, work yourself through college. I did. Millions have. To say you CAN'T without federal aid is ridiculous to me. Complete BS. The actual grants offered hardly pay for tuition by themselves anyhow. The loans aren't actually from the fed, just guaranteed.

How can I be snobbish if I freakin worked my rear off to get my education? Kids nowadays...
 
  • #21
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I think he is referring to the GI Bill. I would have a much harder time attending school without it myself. I grew up extremely poor and would have not otherwise had the opportunity to attend college if not for my military service. I am quite sure that I "worked myself though college" a few times. If they cut the GI Bill funding, wow, just wow. I guess that is further incentive for me to hurry it along, though I doubt it will ever come to that (at least before I am finished).
 
  • #22
drankin
I think he is referring to the GI Bill. I would have a much harder time attending school without it myself. I grew up extremely poor and would have not otherwise had the opportunity to attend college if not for my military service. I am quite sure that I "worked myself though college" a few times. If they cut the GI Bill funding, wow, just wow. I guess that is further incentive for me to hurry it along, though I doubt it will ever come to that (at least before I am finished).
To me this falls into the military spending side of things. A young individual working towards something and having earned it in the first place. As opposed to social spending to where "working" is not a requirement.
 
  • #23
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No, but if you really want the education, work yourself through college. I did. Millions have. To say you CAN'T without federal aid is ridiculous to me. Complete BS. The actual grants offered hardly pay for tuition by themselves anyhow. The loans aren't actually from the fed, just guaranteed.

How can I be snobbish if I freakin worked my rear off to get my education? Kids nowadays...
When did you attend college? Keep in mind that tuition has been growing substantially faster than inflation for quite awhile now. It was much easier to work your way through college a few decades ago than now.

I worked a full time job while in college, and still graduated with a ton of debt (all federally subsidized). State college tuitions are likely to grow rapidly as we further reduce funding to them.
 
  • #24
drankin
When did you attend college? Keep in mind that tuition has been growing substantially faster than inflation for quite awhile now. It was much easier to work your way through college a few decades ago than now.

I worked a full time job while in college, and still graduated with a ton of debt (all federally subsidized). State college tuitions are likely to grow rapidly as we further reduce funding to them.
Granted. But, you did what you had to do to make it happen. You worked a full time, probably minimum wage job and I'm sure it was tough going. To solely expect the Fed to finance your secondary education just because you breathe is an attitude that will not benefit the individual nor society IMO. And that isn't necessarily what was said but in the limited way we can express ourselves via text, the idea got my spidy senses irritated. :)
 
  • #25
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Another point is we don't need to get the deficit down to zero immediately. There's nothing wrong with instituting a long-term plan to get it there in a decade or two. Slowly cutting back spending while slowly raising taxes will get us there eventually, and by doing it slowly, we avoid much of the pain involved in drastic measures.
Well, let's work the numbers. Income tax is $0.9T, total spending is $3.5T, the deficit is $1.6T, the debt is $14T. To balance the budget today with an equal mix of spending cuts and tax increases will require a 38% cut in spending (and therefore a 38% increase in taxes). I'm not necessarily advocating the same number for both, but this lets us quantify the necessary changes as a single number.

Now, let's assume we "linearly" balance the budget over the next 20 years; i.e. FY2022 will have a budget that has half of today's deficit, and no deficit at all in FY2032. So in 2032 we will have a debt of $30T, and interest on that debt will be $0.4T rather than $0.2T. That means the 38% number becomes 49%.
 

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