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

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    Debt Limit
In summary, the US debt has reached the $14.294 Trillion limit today and the credit card has been maxed out. Beyond the logistics of moving money around, the government may have to resort to tapping into federal pension funds to avoid defaulting on its debt. Trump has extensive experience dealing with bankruptcies, and suggests that social programs are a major contributor to the country's financial problems. The DoD budget for 2010 was $685B, and the federal deficit was $1653B. The DoD has a lot of hardware that Congressmen want built, and raising taxes slowly and instituting a long-term plan to reduce the deficit are both viable solutions.
  • #71
Does this mean that we can't borrow any more money from the Chinese so we can give it to the Pakistanis so they can buy more fighter jets from China?

HOOYAH!
 
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  • #72
You bring up a good point with long-lead time items. You also say "Instead of using destroyers or cruisers we could use smaller (but just as fast, since speed is a big part of it) ships to handle the job" and that goes directly into the issue of long-lead time items. Those are frigates, and we have about 20 of them left, the newest of which is 22 years old.

Why aren't they sinking pirates? Two reasons - one is that it's viewed in Washington as a law enforcement problem, which means its the Coast Guard's responsibility and they can't project power to the Horn of Africa. The other is that the CG/DDG/FFG ships are busy providing AAW capabilities to ships that cannot achieve air superiority - like Wasps. (And indeed, the FFG's are losing AAW capability as they go into their refits)

So there is already a mismatch between what we would like to do and what we have the assets to do. A consequence of decreasing defense spending is to open that gap wider. That's not an unreasonable solution - my concern is that there are people who are arguing that decreasing defense spending will not widen that gap and may even close it.
 
  • #73
Vanadium 50 said:
You bring up a good point with long-lead time items. You also say "Instead of using destroyers or cruisers we could use smaller (but just as fast, since speed is a big part of it) ships to handle the job" and that goes directly into the issue of long-lead time items. Those are frigates, and we have about 20 of them left, the newest of which is 22 years old.

Why aren't they sinking pirates? Two reasons - one is that it's viewed in Washington as a law enforcement problem, which means its the Coast Guard's responsibility and they can't project power to the Horn of Africa. The other is that the CG/DDG/FFG ships are busy providing AAW capabilities to ships that cannot achieve air superiority - like Wasps. (And indeed, the FFG's are losing AAW capability as they go into their refits)

So there is already a mismatch between what we would like to do and what we have the assets to do. A consequence of decreasing defense spending is to open that gap wider. That's not an unreasonable solution - my concern is that there are people who are arguing that decreasing defense spending will not widen that gap and may even close it.

Oh definitely. Cutting money to the navy would definitely have to be short-term -- only until we find money elsewhere that can be cut/saved/trimmed -- as we do need to refit our Navy with the equipment/ships/personnel/aircraft that will last us well into the future, instead of hanging on to old technology hoping it gets us through today.
 
  • #74
we could and possably will take our troops out of Japan without their country being invaded. They do have a military again and by some estimites a strong one.
www.cfr.org/japan/japan-its-military/p10439
Korea is a bit more tricky but SK also has a strong military and should/could defend it's self. We have bases in Guam and are building more and with a combonation of air force and Navy/Marines can project just fine in the SE asia. Plus if we need more bases in SE asia we also have the american somain islands where we could build bases. This would keep our projected power in the region and the tax dollars being spent in the US economy.
www.marinecorpstimes.com/news/2009/12/marine_guam_121309/
 
  • #75
I havn't looked into germany having a military but now being part of EU they should take care of them selves. Again our Air Force and Navy/Marines are within reach of Europe quickly enough to provide enough show of force/force in readiness. We don't need to use old WW2 stratigy with a modern military. I still have not seen/heard good evidence indicating that we need to police the world? The Kisinger interview was the closest and that was just speculation. If we do go to war with china it would hurt both countries more than help because we are so economicly ties together, the fear mongering is mainly just old "kill the commies" nonsense. Yes they do have the potential to grow into a military super power, but they havn't shown any push in that direction.
 
  • #76
I think the fear mongering is more like "kill the Yankees".

Wasn't it just a few short years ago the Chinese forced a US surveillance plane down, held the crew for weeks, dismantled and stole the technology in the plane?

Sorry, the Red Chinese may have a lot of economic ties to the west but they are an enemy by their own actions, not by our declarations.
 
  • #77
Antiphon said:
I think the fear mongering is more like "kill the Yankees".

Wasn't it just a few short years ago the Chinese forced a US surveillance plane down, held the crew for weeks, dismantled and stole the technology in the plane?

Sorry, the Red Chinese may have a lot of economic ties to the west but they are an enemy by their own actions, not by our declarations.

Enemy by their own actions, you mean because they protected their own sovergn air space and questioned spies flying over their country? Or because they collected all data they could about the technology being used to spy on them? I can't fault other countries or other peoples for wanting to protect what is theirs, or to protect their own privacy.
 
  • #78
amwest said:
Enemy by their own actions, you mean because they protected their own sovergn air space and questioned spies flying over their country? Or because they collected all data they could about the technology being used to spy on them? I can't fault other countries or other peoples for wanting to protect what is theirs, or to protect their own privacy.

The surveillance aircraft was being messed with by two fighter planes from a Chinese squadron known for acting cowboyish, and one of the planes clipped the surveillance aircraft and went down and crashed into the water. The other Chinese pilot then requested permission to shoot down the U.S. plane, but was denied, because that would have been an act of war.

The U.S. plane had a decision to make, either fly out to sea or turn and head for China. In the old Cold War days, especially back when China was completely closed off to the West, the plane would have probably headed out to sea. The pilot decided to head for China, but the Chinese denied him permission to land. He decided to ignore it and land anyway. Along the way, the crew was throwing a lot of equipment out of the plane.

From what I understand, this kind of thing is typical with many U.S. surveillance craft where they get bullied by the fighters of the country they are watching. Planes from the Soviet Union would do it a lot too for planes spying on them, also North Korean planes. It also happens at sea. There was that U.S. Navy surveillance ship that was getting bullied by Chinese ships. The Chinese tried to snag the sonar that the ship was towing, and the U.S. ship's sailors used water hoses to spray at the Chinese sailors.
 
  • #79
CAC1001 said:
The surveillance aircraft was being messed with by two fighter planes from a Chinese squadron known for acting cowboyish, and one of the planes clipped the surveillance aircraft and went down and crashed into the water. The other Chinese pilot then requested permission to shoot down the U.S. plane, but was denied, because that would have been an act of war.

The U.S. plane had a decision to make, either fly out to sea or turn and head for China. In the old Cold War days, especially back when China was completely closed off to the West, the plane would have probably headed out to sea. The pilot decided to head for China, but the Chinese denied him permission to land. He decided to ignore it and land anyway. Along the way, the crew was throwing a lot of equipment out of the plane.

From what I understand, this kind of thing is typical with many U.S. surveillance craft where they get bullied by the fighters of the country they are watching. Planes from the Soviet Union would do it a lot too for planes spying on them, also North Korean planes. It also happens at sea. There was that U.S. Navy surveillance ship that was getting bullied by Chinese ships. The Chinese tried to snag the sonar that the ship was towing, and the U.S. ship's sailors used water hoses to spray at the Chinese sailors.

Interesting, do you have an article you can point me to with this information? I'd like to read it, i was there (in Korea) for the stand off with chinese navy over the sonar. Yeah the chinese military wing are eagoists and bullies, and arn't liked by their neighbors a lot of the time. However their comunist party is a lot like the diachotomy party system here in the states, you've got the war mongers, the isolationists, and economists, fighting among themselves. Luckily(sort of) the economist part of the comunist party is the majority right now. They want to beat the world money wise not militarily.
 
  • #80
I'm just concerned that if the US defaults on its debt, what that will do to other economies in the world. There'd be unrest in the markets wouldn't there?
 
  • #81
Realistically, that's just it Stevie. The U.S. government can manipulate money using various means (currently they are borrowing the pensions of government workers) to pay off it's bills and debt, but that only lasts so long (estimates are august/september IIRC). Once that runs out, well... U.S. goes into default and all sorts of bad **** happens.

Even Paul Ryan's plan needs the debt limit to be raised, and his has been, imo, the most drastic thus far. Even if we cut practically everything that can realistically be cut, we still need to raise the debt limit.
 
  • #82
Ryumast3r said:
Realistically, that's just it Stevie. The U.S. government can manipulate money using various means (currently they are borrowing the pensions of government workers) to pay off it's bills and debt, but that only lasts so long (estimates are august/september IIRC). Once that runs out, well... U.S. goes into default and all sorts of bad **** happens.
That's simply not true. Default would only happen if the President prioritizes other spending ahead of servicing the debt.
Even Paul Ryan's plan needs the debt limit to be raised, and his has been, imo, the most drastic thus far. Even if we cut practically everything that can realistically be cut, we still need to raise the debt limit.
It is true that without raising the debt limit, government would have to cut spending more than the Ryan budget. Referring to that as drastic or unrealistic is just silly. How long are people going to fall for the claim that government spending can't be realistically limited to the ~19.5% of GDP it collects?
 
  • #83
That's simply not true. Default would only happen if the President prioritizes other spending ahead of servicing the debt.

No, there are legal obligations for spending that make what gets serviced out of the president's hand (or congress's, unless they pass laws). Senator Toomey introduced a Full Faith and Credit Act to prioritize the debt ahead of other legal obligations, but it hasn't passed to the best of my knowledge.

Even if we didn't default directly on bonds, a failure to meet the government's legal obligations will almost certainly have massive repercussions.
 
  • #84
ParticleGrl said:
No, there are legal obligations for spending that make what gets serviced out of the president's hand (or congress's, unless they pass laws).
Yes there are legal obligations for spending, but that doesn't make what I said untrue. The President has the legal authority, and obligation, to service the debt with or without a debt limit increase.
Senator Toomey introduced a Full Faith and Credit Act to prioritize the debt ahead of other legal obligations, but it hasn't passed to the best of my knowledge.
That law would tie the President's hands if enacted, forbidding him from defaulting on the debt, but the fact that he is not currently specifically forbidden from defaulting doesn't mean that he has to default.

And we seem to be forgetting that servicing the debt is a contractual obligation, not just a congressional appropriation. The recipients of the debt interest have a contract from the U.S. government requiring payment. Government legally owes the money, unlike most government spending.
 
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  • #85
And we seem to be forgetting that servicing the debt is a contractual obligation, not just a congressional appropriation. The recipients of the debt interest have a contract from the U.S. government requiring payment. Government legally owes the money, unlike most government spending.

Medicaid, medicare, and social security also are non-discretionary (government legally owing money), and as legally binding as bonds. The majority of government spending is a legal obligation- the law ties congresses hands, and it MUST be paid. Discretionary spending is about 1/3 or so.

If the debt ceiling isn't raised, the government will default on at least some of its legal obligations.
 
  • #86
ParticleGrl said:
Medicaid, medicare, and social security also are non-discretionary (government legally owing money), and as legally binding as bonds. The majority of government spending is a legal obligation- the law ties congresses hands, and it MUST be paid.
You are using the word "must" as if it applies to obligations that exist only by virtue of a law but not to obligations that exist by virtue of a law plus by virtue of a contractual obligation of government.

And non-discretionary does not mean "government legally owing money", it means the spending is required by current statute. That's a big difference. Congress cannot change what government contractually owes simply by passing a law, but it could (hypothetically) eliminate entitlements entirely, even SS, since recipients have no contract requiring payment.
If the debt ceiling isn't raised, the government will default on at least some of its legal obligations.
Yes, something won't get paid, not necessarily the debt. But the word "default" doesn't (technically) make sense wrt entitlements, since there is no legal contract to default on. And again, servicing the debt is a legal obligation in the same respect as entitlements (ie via statute), in addition to being a contractual legal obligation of government, unlike entitlements.
 
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  • #87
Yes, something won't get paid, not necessarily the debt. But the word "default" doesn't (technically) make sense wrt entitlements, since there is no legal contract to default on

The "legal contract" is the law as enacted. Consider it a contract between congress and itself, or between congress and the people, or whatever you have it. There is no legal difference between the treasury debt and social security/medicare/medicaid, etc. If the law isn't changed, and social security/medicare/medicaid aren't paid the government has defaulted on its legal obligations, by definition.

And non-discretionary does not mean "government legally owing money", it means the spending is required by current statute.

If you replace statute by its synonym "law" then your statement is obviously false. Spending is required by current law = government legally owes money. Unless you have some strange notion of what legally means.

That's a big difference. Congress cannot change what government contractually owes simply by passing a law

Of course it could. Enacting new law could restructure the debt in all kinds of ways.
 
  • #88
ParticleGrl said:
The "legal contract" is the law as enacted. Consider it a contract between congress and itself, or between congress and the people, or whatever you have it.
I can "consider it" anyway I want and it won't change the fact that that's not what the word "contract" means. A statute is not a contract.
There is no legal difference between the treasury debt and social security/medicare/medicaid, etc. If the law isn't changed, and social security/medicare/medicaid aren't paid the government has defaulted on its legal obligations, by definition.
Which is exactly why that's very different from the federal debt. If the debt is not honored as contracted, that's a default regardless of what laws congress passes. The debt is not government's "contract with itself", it's a real contract with real external entities.
If you replace statute by its synonym "law" then your statement is obviously false. Spending is required by current law = government legally owes money. Unless you have some strange notion of what legally means.
No, "required by law" does not equal "owed" to recipients.

In fact, the U.S. Supreme Court http://en.wikipedia.org/wiki/Flemming_v._Nestor" that there is no contractual obligation for government to pay anyone any SS benefits. This has been settled law for over half a century.

SS benefits are paid, or not, at whatever amount government chooses, at the whim of government. They are not owed to anyone.
 
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