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

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  • #76
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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
amwest
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
CAC1001
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
amwest
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 alot of the time. However their comunist party is alot 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
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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
Ryumast3r
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
Al68
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
336
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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
Al68
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
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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
Al68
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
336
14
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
Al68
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" [Broken] 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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