News Should Obama invoke the 14th Amendment and bypass Congress?

[WhoWee]

Same here [Democratic rep]

I was just talking with a customer who bought into Bachmann's position that we can toy with this. He thinks we should just let the whole economy collapse and start from scratch [he said those words!].

My question to folks like this is, "What's the hurry?". It may all come crashing down one day but it's nuts to allow this when we still have a chance to get this under control. And we almost certainly will get this under control. The real scaremongering out there is the claim that we can't fix this, not the claims about what happens if we don't pay the bills.

This goes back to my observation that many tea partiers are actually out to destroy the country. They want to bring it all down. They don't want the America that we know and love. They want something else.

Or perhaps they dream of a return to the "Happy Days" before we lived with a welfare state mentality?

 

[Ivan Seeking]

Or perhaps they dream of a return to the "Happy Days" before we lived with a welfare state mentality?

That is nothing but delusional thinking. We created the welfare system because of the misery that existed without it.

The tea party dream is nothing but illusion and wishful thinking. They dream of a time that never existed.

If you want the good ole days, like the 50s and 60s, then you are asking for a 91% top marginal tax rate.

 

[WhoWee]

That is nothing but delusional thinking. We created the welfare system because of the misery that existed without it.

The tea party dream is nothing but illusion and wishful thinking. They dream of a time that never existed.

And you think this is a credible assessment?
"This goes back to my observation that many tea partiers are actually out to destroy the country. They want to bring it all down. They don't want the America that we know and love. They want something else. "

Perhaps I need to re-post the Cloward-Piven links regarding collapse of the system? Instead - why don't we let the "experts" on this topic speak for us - label as opinion please?
http://www.commondreams.org/view/2010/03/26-3

 

[Jimmy Snyder]

Why?

I noticed during the debate that the reasons for rejecting were problems that do not need to be fixed within the next few hours. For instance reduced spending is extremely important, but we can fix that next week. Raising revenues can be done during September. However, raising the debt limit had to be done right away. Anyone voting against that has, by definition, their priorities in the wrong order.

 

[turbo]

I noticed during the debate that the reasons for rejecting were problems that do not need to be fixed within the next few hours. For instance reduced spending is extremely important, but we can fix that next week. Raising revenues can be done during September. However, raising the debt limit had to be done right away. Anyone voting against that has, by definition, their priorities in the wrong order.

Even more twisted, IMO, is the linkage made by the right-wingers between entitlements and the debt-limit. The debt limit should have been increased without fuss, just as it has been over and over. If the tea party wants to reduce spending, they should act like adults and cut spending.

Attacking SS is irresponsible and potentially life-threatening to many seniors. SS is solvent for at least the next 25 years, and it can be made self-sustaining indefinitely by merely lifting the the cap on earnings so that higher wage earners pay a little more. If Congress would do that SOON, the increase could be minimized, since the Treasury bonds pay interest. If Congress wants to wait until SS is in real trouble before acting, then the fix could be painful. We desperately need some adults in DC!

 

[WhoWee]

Attacking SS is irresponsible and potentially life-threatening to many seniors. SS is solvent for at least the next 25 years, and it can be made self-sustaining indefinitely by merely lifting the the cap on earnings so that higher wage earners pay a little more. If Congress would do that SOON, the increase could be minimized, since the Treasury bonds pay interest. If Congress wants to wait until SS is in real trouble before acting, then the fix could be painful. We desperately need some adults in DC!

Spending the Social Security funds and leaving worthless paper behind isn't irresponsible? We need to quit making promises that we can't keep and expanding eligibility at the expense of the intended beneficiaries- IMO.

 

[mheslep]

I noticed during the debate that the reasons for rejecting were problems that do not need to be fixed within the next few hours. For instance reduced spending is extremely important, but we can fix that next week. Raising revenues can be done during September. However, raising the debt limit had to be done right away. Anyone voting against that has, by definition, their priorities in the wrong order.

After observing the debate and the positions taken by the various parties I would say that i) neither this Senate or this President will agree to any additional cuts whatsoever absent the force of some kind of partial or total shut off of funds; there will be no cuts absent those conditions. Indeed, in his speech today just prior the debt limit vote the Senate leader Reed inexplicably called for *more* highway funding. ii) There are no hard revenue proposals from any party that would dent the deficit. iii) It was not clear to me at all that raising the debt limit *had* to be done right away with current revenues. Perhaps so, but I haven't seen the case made, and it has to be very good case given i) and ii). What or how did you observe differently?

 

[turbo]

Spending the Social Security funds and leaving worthless paper behind isn't irresponsible? We need to quit making promises that we can't keep and expanding eligibility at the expense of the intended beneficiaries- IMO.

Please back up your assertion that interest-bearing Treasury bills are "worthless". That's the kind of foolish talk that the tea-party has been tossing around.

 

[Jimmy Snyder]

After observing the debate and the positions taken by the various parties I would say that i) neither this Senate or this President will agree to any additional cuts whatsoever absent the force of some kind of partial or total shut off of funds; there will be no cuts absent those conditions. Indeed, in his speech today just prior the debt limit vote the Senate leader Reed inexplicably called for *more* highway funding. ii) There are no hard revenue proposals from any party that would dent the deficit.

Then the debt limit doesn't work as intended. Let's get rid of it.

iii) It was not clear to me at all that raising the debt limit *had* to be done right away with current revenues. Perhaps so, but I haven't seen the case made, and it has to be very good case given i) and ii). What or how did you observe differently?

It had to be done right away because S&P said they would lower the US credit rating otherwise. In brinkmanship, the idea is to stop before you careen off the cliff. When you do, there will alway be someone who says "Why did you stop? We still had time." If that is your point, then you are correct, there were still a few hours left.

 

[mheslep]

Meanwhile US Debt is http://www.usdebtclock.org/" as of now, still churning along at $4.1B per day, closing on the US gross product of $14,819B. The debt should pass the GDP before the year is out.

 

[WhoWee]

Please back up your assertion that interest-bearing Treasury bills are "worthless". That's the kind of foolish talk that the tea-party has been tossing around.

Did the President tell the country (last week) he didn't know if beneficiaries would receive their checks tomorrow? Did Dodd-Frank anticipate a credit downgrade of US debt? What is the plan to re-pay Social Security funds in the "out years" when cash flows out is greater than cash flows in? Last, has Quantitative Easing increased the value of US Treasuries in the long term?

We have over $15Trillion in debt authorized with a plan to exceed $20Trillion (with the "cuts") - what additional information do you need?

 

[WhoWee]

Has anyone noticed the DOW is down 200 points since the debt deal passed?

 

[mheslep]

Then the debt limit doesn't work as intended. Let's get rid of it.

Possibly so.

It had to be done right away because S&P said they would lower the US credit rating otherwise.

Which the President could have easily forestalled by stating categorically the US has ample revenue to pay the debt interest and will do so in any event. Some senators proposed legislation to that effect. Also S&P made several statements, including that http://www.standardandpoors.com/servlet/BlobServer?blobheadername3=MDT-Type&blobcol=urldata&blobtable=MungoBlobs&blobheadervalue2=inline%3B+filename%3DUnitedStatesofAmerica_AAAA_7_14_11.pdf&blobheadername2=Content-Disposition&blobheadervalue1=application%2Fpdf&blobkey=id&blobheadername1=content-type&blobwhere=1243932109521&blobheadervalue3=UTF-8" , and for that case no Presidential statement of purpose alone is going to avoid such a downgrade.

In brinkmanship, the idea is to stop before you careen off the cliff...

Yeah I got it. I'm in disagreement with you about what constitutes the cliff.

 

[turbo]

Did the President tell the country (last week) he didn't know if beneficiaries would receive their checks tomorrow? Did Dodd-Frank anticipate a credit downgrade of US debt? What is the plan to re-pay Social Security funds in the "out years" when cash flows out is greater than cash flows in? Last, has Quantitative Easing increased the value of US Treasuries in the long term?

We have over $15Trillion in debt authorized with a plan to exceed $20Trillion (with the "cuts") - what additional information do you need?

You're dodging the question. Are treasury bonds "worthless"? If so, why do investors buy them as they diversify their holdings?

 

[Hurkyl]

If you want the good ole days, like the 50s and 60s, then you are asking for a 91% top marginal tax rate.

Because, y'know, we are just recovering from waging years of total war in the wake of a great depression.

 

[WhoWee]

You're dodging the question. Are treasury bonds "worthless"? If so, why do investors buy them as they diversify their holdings?

I'm going to over-simplify to make a point. Assume the Government owes $20Trillion in US Treasuries - $10 Trillion to itself and $10 Trillion to investors, but can only pay a return to half of the creditors. Do you think the Government will prioritize the return to the investors that MIGHT buy more debt - perhaps another $10Trillion?

You might also consider this:
http://www.feg.com/research/market_review.php?nID=145&issue=2011_06
"The unintended consequences of a default and/or credit downgrade are unknown. Would some investors, due to investment policies, sell Treasuries if they are no longer rated AAA? Given the complexity in the financial markets and the proliferation of derivatives, how would derivative instruments tied to U.S. Treasuries be priced? What would be the other secondary and tertiary consequences? What asset strategies would hold up the best in the event of a default? Typically cash and long maturity Treasuries perform best in a crisis. But would one want to own Treasuries during a default? "

I haven't avoided the question - the answer is complex.

 

[turbo]

I haven't avoided the question - the answer is complex.

You have avoided the question, and are parroting the claim by the right that the SS trust is "worthless IOUs", which is ridiculous. Supporting that claim with unsupported hypotheticals re: default does not make the "worthless IOUs" claim true. If it were true, then all the people that use T-bills to diversify their holdings are idiots and only the tea-partiers and radical right are smart. I don't buy that. Nobody should.

 

[WhoWee]

You have avoided the question, and are parroting the claim by the right that the SS trust is "worthless IOUs", which is ridiculous. Supporting that claim with unsupported hypotheticals re: default does not make the "worthless IOUs" claim true. If it were true, then all the people that use T-bills to diversify their holdings are idiots and only the tea-partiers and radical right are smart. I don't buy that. Nobody should.

With interest rates already near 0% - what is the purpose of Quantitative Easing - other than to take Treasuries out of circulation? Don't forget these Treasuries were swapped for (yes worthless) freshly printed cash.

Is it possible this was intended to make the Treasuries still held by investors more valuable?


http://georgewashington2.blogspot.com/2011/07/quantitative-easing-rounds-1-and-2-hurt.html

 

[turbo]

Never mind. You are never going to admit that you are wrong, and I'm not going to keep pointing out the obvious. I for one am really glad that the GOP never managed to privatize SS. The Bush recession would have been even more disastrous that way.

 

[mheslep]

... I for one am really glad that the GOP never managed to privatize SS. The [STRIKE]Bush [/STRIKE]recession

would have had no effect on the 2005 proposed social security privatization/reform. [my strike]