Debt ceiling drama already here (deal allegedly reached)

Can I assume your take on the matter is there are not enough resources to support all of us therefore a culling is in order? A culling of our own creation none the less.

 

IMO you are expanding my pt into something it’s not. I am simply saying that in pretty much any context it is a mistake to assess financial position by simply looking at liabilities. Hard stop

 

OK thanks for the explanation and I stand corrected. The liabilities must be looked at especially when those liabilities come with a price tag the Federal Government cannot afford.

 

Yes, Regrettably. I really hate to be negative, but as someone transitioning to the last quarter of life here is what I forsee.

I enjoy reading / studying / viewing, science and Academics information.

The reason for this I suppose is that I put little stock in supernatural explanations or forces.

The scientific method, documentation and repeated results are hard to argue with IMO, with my personal proviso, that the disciple of science is hardly sacrosanct, in fact, the beauty of it is it is subject to change based on improvements in equipment technology and experimentation.

Ok enough on that - bottom line:
My studies in Geology, Astronomy, Biology,
Climate, Oceanography, Atmosphere, Fossil Record, Archeology, History and of course Human Behavior, suggests our species is in a race for survival that is unparalleled for Homo Sapiens since the last great ice age and the episode called the Younger Dryas.

The number of threats to homo sapien longevity and continuity by natural forces and how to protect ourselves from those threats should be the primary focus of every current Gov't, Nation, Tribe or City State.

Of course that is hardly the case, my perception is that the Science is talking and the Citizens are not listening enough to force Govt and Cultural change to respond to what the science is telling us.

So yes, I not only think, but expect, our species to experience a catastrophic population and demographic change and I think it's coming faster than many expect.

I'm not talking about Extinction, but a shattering situation that will forever change the current arc of human civilization.

 

I can understand that opinion and the reasoning behind it. The question is how far will we go? To be honest I don't foresee a feudal system anywhere in the future but the future for our progeny will most definitely change based on fiscal insanity. Hard times are ahead the question is how hard those times will be.

 

It's frightening to consider and frankly I feel guilt for contributing to this disaster.

How far will it go? You know the answer - what do the historical accounts tell us about the limits iof human barbarity?

Therin lies your answer.

I guess we shall see if survival outweighs tribalism and racism when the smoke clears.

Who knows. Maybe, just maybe we could emerge the better for it. We are a peculiar lot, us humans, sometimes extreme adversiry readjusts our priorities for the better.

One can hope.

 

That emergency plan is already there and to suggest the Republicans have recently put this plan in place is misleading.

How much faith do you have in Janet Yellen?
From the article: emphasis mine

Treasury Secretary Janet L. Yellen said Friday said that the Treasury Department will begin "extraordinary measures" next week to ensure the federal government is able to meet its payment obligations but that it cannot guarantee the United States will make it beyond early June without defaulting. White House press secretary Karine Jean-Pierre reiterated Friday that the administration will not negotiate over the debt ceiling.
​

The Debt Ceiling: An Explainer

Use of Extraordinary Measures
When the debt limit is reached, the Treasury Secretary is authorized to use a number of extraordinary measures to create some headroom under the limit and continue operations while avoiding a default on the debt. Those measures include reducing cash balances held by the Treasury, temporarily suspending investment of federal employee retirement contributions, and disinvesting securities held by federal employee retirement accounts. Those measures can buy additional time for Congress to act and have been used routinely in recent years. The amount of time that can be provided by these measures depends on the rate of incoming revenues and outgoing spending. Therefore, it can vary significantly, particularly if extraordinary measures are exhausted near the date of significant federal spending payments or deadlines for tax payments.

These measures are reversed after the debt ceiling is increased, but a debt ceiling impasse does impose some costs on the Treasury. The General Accounting Office has found that investors are reluctant to purchase securities that mature around the time of a potential debt ceiling crisis, reducing demand for Treasury debt and increasing the interest rates Treasury must pay to attract investors. Because Treasury bonds are seen as the safest investment in the world, they are also used in many private-sector transactions, and a debt ceiling crisis affects other financial markets and increases the costs to some investors.

Debt Prioritization: Another Form of Default
Some in Congress have suggested that Treasury act to further delay default when the debt ceiling is reached by prioritizing its payments so that it pays interest due on the national debt while delaying other payments until cash is available or the debt ceiling is increased. However, Treasury has indicated that it does not have the technical capacity to take such action. Further, many in financial markets would see this as another form of default since Treasury, while continuing to pay interest on the debt, would be failing to honor other financial commitments required by law. Such action by the Treasury would also raise constitutional separation of powers concerns as Treasury would be selecting which spending commitments enacted by Congress to honor. Even self-funded programs with large trust fund balances, such as Social Security, are not protected, as Treasury would not be able to issue new debt to raise the cash needed to redeem the bonds held in the trust funds to pay scheduled benefits.​

 

The debt limit isn’t the avenue to adjust spending. That’s the budget. The debt limit is for the GOP uninformed rank and file so that republicans can pass budgets with deficits when in power and then turn the knife on democrats when out of power. It’s a show. And you should be insulted.

 

Jeez, stare at that for a minute...we've been sold out folks.

 

This argument has been going on since the 1960s if not longer. I am still not convinced that we are in a financial crises

 

We are obviously not currently in a “crisis”. Or at least markets don’t think we are.

A forced debt default by a deadbeat congress would be a pretty good way to manufacture a crisis. In their so-called “prioritization plan” think they will cancel their own salaries/healthcare? LOLNO. Actually a select few might because they have funding from ideological billionaires backing their chaos. For some of the hardliners, U.S. govt default *is* the plan.

 

The debt ceiling argument is so stupid, especially when the threat of actual default is real.

First, we are not in a financial crisis by any definition. Debt as a per cent of GDP, the relevant metric, is was below historical highs. And US bonds remain in high demand at low returns, showing that the market believes in the dollar.

Ironically, or maybe not, since this maneuver is propagated that wish to destroy this nation, destroying the full faith and credit of the United States would be the most damaging thing that could happen, and, among other things, jump up interest rates on existing debt and actually put us into crisis, making overall debt substantially greater.

And they don’t think we’re in crisis. The wouldn’t cut taxes so many times if they did, and hobble IRS enforcement. The just want to cut Social Security and Medicare and preserve the exploited underclass, long a goal of the Koch billions crowd, who need a dining reservation at Hawthorn with Julian Slowik.

 

The emergency plan republicans are proposing is a way to pick and choose what expenditures are made once all other measures (like the ones Treasury are starting now) are exhausting. It isn’t clear that the treasury has the legal means to choose one expenditure over the other. More importantly I have read that it is currently mechanically impossible to pick and choose what expenditures to pay. The federal payment systems are behemoth and automatic.

Republicans are trying to find a way to avoid the most severe political blowback while intentionally defaulting on obligations. Even if they do find a way the repercussions will severe and likely throw the economy into a recession. You would be giving the economy a 1 trillion dollar + haircut. Plus most work by federal independent contractors would stop - infrastucture, etc. Presumably stuff like farm bill payments etc.

The question is why do republicans care about the debt ceiling only when a democrat is president? I don’t recall them shutting the government down with Trump and his trillion dollar deficits?

 

Any time they can tank the economy and increase suffering without political accountability, they will. In the age old question of whether a particular Republican policy position is motivated by ignorance or evil, this goes into the evil category, even if supported by widespread ignorance

 

I think it is like a kids and stove analogy. Each year the Republican kids get younger and more immature. This batch doesn't really have a grasp of what will happen as the idiots rule the roost and McCarthy is beholden now to the nutjobs. This will be a disaster for the country and republicans but the ones that will cause this don’t really care and come from districts that don’t seem to care.

In another post you said we were below are historic lows in terms of debt to gdp. If that is still true, it’s barely true. It increased to something like 120% in WW2. It is now squarely over 100%. It’s not like anything specific happens at that point. Japan is approaching 300% and many European countries are higher than ours. But as it grows higher it gives us less flexibility with interest rates, puts long term pressure on our currency and reserve status, and makes us more vulnerable to the next major economic crisis.

 

The market tells us otherwise. Reinhardt and Roghoff tried to undermine it mathematically and show it at 90%, and somehow a mathematical error crept in. Funny how that happens. Properly measured, we are nowhere close to WWII debt. But if a concern, raise taxes.

 

Donald Trump added 39% to the debt and raised the debt ceiling 3 times in 4 years… the GOP had no issues. But now.

US Treasury buys time for Biden and GOP on debt limit deal

WASHINGTON (AP) — The countdown toward a possible U.S. government default began Thursday with Treasury implementing accounting measures as a stopgap, while frictions between President Joe Biden and House Republicans raise alarms about whether the U.S. can sidestep a potential economic crisis.

The Treasury Department said in a letter to congressional leaders it has started taking “extraordinary measures” as the government has run up against its legal borrowing capacity of $31.381 trillion. An artificially imposed cap, the debt ceiling has been increased roughly 80 times since the 1960s.

“I respectfully urge Congress to act promptly to protect the full faith and credit of the United States,” Treasury Secretary Janet Yellen wrote in the letter.


Markets so far remain relatively calm, given that the government can temporarily rely on accounting tweaks to stay open and any threats to the economy would be several months away. Even many worried analysts assume there will be a deal.

 

That's because the GOP wants to enrich themselves as much as the other party.

 

Then explain for the rest of us following along at home