Tuesday, July 12, 2011

Debt Ceiling not about new debt...

It's frustrating to me that, apparently, 70% of Americans don't understand what the debt ceiling is about.  It is emphatically NOT about allowing ourselves to go into further debt.  It is not about spending more.  It is about allowing us to spend the money we have already "spent."  In other words, it's a question of whether or not we are going to pay what we already owe.  Those who oppose raising the debt ceiling are saying they want us not to send out the social security checks in August or pay our soldiers in August or pay the banks we've borrowed from in August.

The amount of debt America owes will not change one way or another either way.  Republicans and Democrats are trying to leverage this issue because everyone knows it has to happen.

11 comments:

Martin LaBar said...

My senator Demint doesn't seem to know it has to happen . ..

Angie Van De Merwe said...

A "Debt Ceiling" must mean something...why do we always end up increasing it? A balanced budget ammendment would "do us good".

I read an article about Norway's surpluses (Sweden is doing well, too)...and they do have social programs that would satisfy the paternalist....

I think I remember that Clinton "re-financed" our debt to make it look good under his administration, but increasing drastically after he was out of office. It reminded me of a "balloon mortgage"...There are always accounting tricks that can fool the public. So, I wonder if anyone in the "common population" really knows the whole truth!!!

Ken Schenck said...

I agree Angie that we should never have to raise the ceiling again. The reason we have to is because Congress and the President did not make enough budget cuts last year.

At some point, I'd like to figure out exactly what a balanced budget amendment would mean. Does it mean we can't ever borrow money? Is this the equivalent of a church that insists it must raise all the funds for a building project before it can start building or like needing to have all the money for a house so you don't have to take out a loan from the bank?

If so, then I oppose it.

Angie Van De Merwe said...

What about borrowing against investments....like when one has "collateral" to underwrite what is borrowed. It is speculative, but is counting on 'the market' to produce, which isn't the same as "stealing" from our assets to serve "public interests"!

It seems we are using both the market system and a paternalistic system to make up our budgets, which make for a politicized economy, instead of a realistic one!....and the politicalization of our budget is the growing paternalization of our government, making dependents of our citizens. We should be equipping our citizens with the means to produce, not to benefit from the government!!!

Angie Van De Merwe said...

It just seems like that the more "international" we have become, the more complex the issues also become..because people don't live on/in the "same page"...I think this is one of the reasons that Europe is having problems...even after tenatively resolving them to "unite"...how do you place a monetary value on some traditional/cultural value????That is one of the main problems, I think!!!

Angie Van De Merwe said...

And if you notice, the nations that are faring well, Norway and Sweden, are more secularized! Greece and France aren't prospering, nor is England...

The Church was known to be historically paternalistic/tribalistic...is there any correlation to Protestant nations and Catholic nations and their prosperity or lack thereof?

Craig Moore said...

Does the Schenck family borrow money to pay the money they have already spent? Do you take credit card advances to pay your other credit cards? America is broke, borrowing money to keep it afloat is what is considered a Ponzi Scheme. Obama's threats about not sending Social Security checks is a scare tactic. If he was serious about financial policy he would not have run up almost 4 trillion dollars growing government in last 2 1/2 years. As Churchhill said, "The problem with socialism is you eventually run out of other peoples money." Then I guess you borrow or print it as long as you can.

Ken Schenck said...

Craig, it's a matter of funding the budget that Congress already passed last year. I fully support the idea that next year's budget should turn the tide of debt significantly in the other direction, but the debt ceiling has to do with money Congress already committed to pay.

McConnell's suggestion that the President be given power to raise the debt ceiling with Congress voting against it is very revealing of the situation. It shows that the Republican leadership recognize it has to be raised. They just don't want constituencies who don't understand what it's about to be able to hold them accountable for it.

JohnM said...

I want Congress to do what it has to do now AND raise a stink about it. I want Congress and the President to come away from this with stink all over them.

Angie Van De Merwe said...

I suppose that tourism has often been used to promote prosperity abroad, as to cultural valued items! But, with the economic situation like it is, many won't be doing much travel....

And since economics drives politics, the political class should not use it to benefit themselves alone!!!

elbryanlibre said...

I think it's important to ask what is the source of the current deficit. Economic downturn? Wars? Loss of tax revenue? Stimulus measures?

If we no longer wanted to raise the debt limit what would we need to cut and could we do it through cuts alone or do we need to raise tax revenues?

What would we have had to do to avoid raising the debt ceiling this time? Would it have helped or hurt our economy in the short and long term?

Macroeconomics is difficult stuff.

Personally I think this debt ceiling debate is a manufactured crisis. Just raise it and move on to figuring out how to grow our economy and and get our debt under control in the future. Now is not the time to do it with a gun to the economy's head.