DescentBB

callmeslick wrote:um, a quick check of commonly available data shows that we went through two postwar recessions. Sometimes memory is a tricky thing. Government policy, sensible tax laws and a public willing to embrace both education and personal sacrifice fed the dynamism.

Here's a look at seven myths that the Obama administration is pushing on the American people:

1) Not increasing the debt ceiling means the U.S. government will default on its debt. This is probably the biggest lie that almost all other claims arise from. Default occurs if the government stops paying interest on the money that it owes. Not increasing the debt ceiling only means that the government can't borrow more money and that spending is limited to the revenue the government brings in. And, with interest payments on the debt making up less than a ninth of revenue, there is no reason for any risk of insolvency.

Time after time, congress and the president have failed to agree on a debt ceiling increase and still there has been no default. Examples include: December 1973, March 1979, November 1983, December 1985, August 1987, November 1995, December 1995 to January 1996, and September 2007.

Indeed, this really shouldn't even be a point of debate. The 14th Amendment to the Constitution requires that the debt payments come first before any other spending.

2) Until the debt ceiling is raised, uncertainty over the payment of U.S. debts will create chaos in financial markets. Given that the Constitution mandates U.S. debts be paid before any other spending and that sufficient money will be available to cover our interest payments, the only uncertainty arises from Obama's actions. Will he try not to pay the interest? Even a delay of a day in paying this interest will create a default. Court action could eventually force Obama to follow the Constitution but a default would have already occurred. But there is a simple way to end this uncertainty: have the president declare now that he will indeed follow the Constitution and make those payments.

Failure to increase the debt ceiling clearly doesn't mean default. During one three week period at the end of 1996 and the beginning of 1996, some of the government shutdown when a similar battle over the debt ceiling occurred, but there was no default. President Clinton used the revenues that were coming in to pay the interest on the debt.

3) Obama doesn't know if there is money to send off Social Security checks on August 3. The president knows very well how much revenue will be available to send out checks on August 3. Indeed, enough money will be available to not only pay the interest, but to also cover all Social Security, Medicare, Medicaid and children's health insurance, defense, federal law enforcement and immigration, all veterans benefits, Response to natural disasters. Terrifying elderly people who are dependent on their Social Security checks may make good politics, but it is unconscionable. Yet, these scare tactics aren't really very surprising. The Democrats behaved no differently when they ran television ads bizarrely depicting Rep. Paul Ryan (R-Wis.) as pushing an old lady in a wheel chair off a cliff.

4) Mortgage interest rates will rise dramatically if the debt ceiling isn't increased. Not true. Indeed, the opposite is more likely, for not raising the debt ceiling stops the government borrowing more money. Less borrowing by the government could lower mortgage rates as there would be more lending available for potential homeowners. The interest rate paid by the government might go down for a second reason. Just as banks charge individuals a lower interest rate for those who have less debt compared to their incomes, the same is true for governments.

5) Time is Running Out on Debt Deal, and it must be done immediately. Despite Obama’s insistence that a deal be completed by July 15 and Geithner’s claim that a deal had to be reached by July 22, as already noted, there have been many times over the last few decades where negotiations have extended past when the debt limit has been reached. The longest delay lasted three weeks. Besides claiming that there will be a default, no explanation has been offered for why the debate is any different this time.

Possibly all these claims of urgency are part of some grand strategy to scare people, but that strategy depends on voters not knowing what is necessary for a default to occur.

6) If government spending is cut, there will be a depression. Obama promised that a "temporary" increase in government spending would "stimulate" the economy, but he is now telling us that we can't cut that "temporary" increase -- that we are stuck with it.

If Obama's program -- including a 28 percent spending hike since 2008 and more than $4 trillion in deficits -- worked so well, why has our unemployment rate risen more than elsewhere? The European Union, Canada, South America, Japan, and Australia have all had smaller increases in unemployment compared to the U.S. after Obama's "stimulus." We have also had these shutdowns before and the numbers don’t show any negative impact on unemployment or GDP. Figures for the longest shutdowns during the fourth quarter of 1995 and the first quarter of 1996 are available here.

7) The value of the dollar will plummet. Again, the supposed collapse occurs when we default. But there won't be any default. In addition, less government borrowing means lower future taxes, thus making the U.S. a more attractive place to invest. More foreign investment will actually cause the dollar to rise.

It is time for President Obama and his administration to stop scaring people. Cutting government spending back to its 2007 level won't be the end of the world. After all, during the 2008 presidential campaign, Obama himself repeatedly promised “a net spending cut."

flip wrote:...
EDIT: I'd be interested in collaborating on a common letter we could all send if anyone else is.

Sergeant Thorne wrote:Small point of curiosity... what gives them the farmland?

Yes, we will, when the first large bond issue is due for redemption

Time after time, congress and the president have failed to agree on a debt ceiling increase and still there has been no default. Examples include: December 1973, March 1979, November 1983, December 1985, August 1987, November 1995, December 1995 to January 1996, and September 2007.

What is the debt limit?

The debt limit is a cap that Congress sets on the total amount of money the federal government can borrow. The first debt limit was set in 1917 when Treasury, on behalf of the federal government, was borrowing to finance the First World War. Up until this time, Treasury had to obtain the permission of Congress each time it wanted to issue different types of debt instruments. The 1917 legislation gave the department greater discretion to issue bonds on behalf of the federal government without needing to obtain the permission of Congress each time it chose to do so.

But to maintain some degree of oversight, Congress placed limits on the total amount the Treasury could borrow without requiring additional authorization from Congress. This debt limit exists to this day.

So what will happen if we don’t raise the debt limit?

First, to maintain interest and principal payments on our debt in the absence of an increase to the debt limit would require drastic and immediate cuts in federal government spending that would hurt the U.S. economy and our country in general. To make sure we do not hit the debt limit, the federal government would need to cut a substantial amount from all spending. This could result in large job losses as public spending would fall sharply on everything from construction projects to social programs to government-sponsored research and development.

This would happen because government-funded programs would have to be cut dramatically, government-funded projects would halt mid-stream, and numerous other drastic cuts would lead to a swift reduction in overall economic activity. All of this would occur during a period in which unemployment remains at historically high levels.

Second, failure to raise the debt limit even if we continue making interest and principal payments on our debt could hurt confidence that investors have in the federal government. Investors might lose faith in the federal government’s ability to come together on other important issues, such as dealing with the deficit and charting a path to a balanced budget. This could lead to significantly higher interest rates, the cost of which would be borne by all taxpayers as well as businesses and consumers—all of whom would also face higher borrowing costs as confidence in the United States eroded.

Spidey wrote:That’s not what I heard on The News Hour the other day…in fact the government does have the capital to pay the interest on all of its dept, it just won’t be able to pay for everything else. Choices must be made.

The Chinese don’t like that idea tho…

I happen to trust the News Hour…

callmeslick wrote:[Removed by mod]

if you realize what you are suggesting.

Which is, this form of 'belt tightening' will adversely affect those least able to cope with it.

And yet, through all this belt tightening, I can still write off private jets, get generous subsidies for owning forest land in certain areas, making money through inheritance or collecting dividends and paying historically low taxes.

It seems heartening that the nation is appearing to wake up, slowly, to what is being threatened.

The road to hell is paved with good intentions

callmeslick wrote:

Spidey wrote:That’s not what I heard on The News Hour the other day…in fact the government does have the capital to pay the interest on all of its dept, it just won’t be able to pay for everything else. Choices must be made.

The Chinese don’t like that idea tho…

I happen to trust the News Hour…

viewed over time, yes, but with no borrowing authority, the government has to go solely on incoming revenue, which is at a sort of lowish point on the annual cycle of such things. That, along with a major bond issue coming due too quickly, means that we can and actually will default. I suppose you could scrape the money together if you lose ALL spending, such as supporting all overseas troops, down to shipment of supplies or medical evacuations. "Choices have to be made"? No, this is merely a game designed to force the complete elimination of Social Security, Medicare, Medicade and food and housing subsidies for the poor. Which, coincidentally, has been the stated aim of the Koch Bros(financiers of the Tea Party coalition) for years. Is that the sort of nation you wish to stand for, and live in?

Spidey wrote:Slick…let me make something perfectly clear…you have no idea what kind of country I wish to live in…so you can skip the melodramatics.

Luke 10 wrote:But a certain Samaritan, as he traveled, came where he was. When he saw him, he was moved with compassion, came to him, and bound up his wounds, pouring on oil and wine. He set him on his own animal, and brought him to an inn, and took care of him. On the next day, when he departed, he took out two denarii, and gave them to the host, and said to him, 'Take care of him. Whatever you spend beyond that, I will repay you when I return.

callmeslick wrote:You can either demand that the wealthy make amends for the fact that they've had it real good for a couple decades

callmeslick wrote:


spell it out for me, then. See below for details, and get creative as you wish. But first....


1. Curtail benefits to seniors and disabled people (SS)
2. Throw millions out of work that depend on Medicare reimbursement and other government/private
cooperative programs.
3. Curtail medical benefits to the elderly, poor children and other disabled or indigent persons
4. very possibly cause grave danger to the troops overseas
5. All the while allowing the wealthy to grow richer without personal cost(oh, and that 35% tax rate is a joke.
I paid as little as 9% some years on a multi-six-figure gross. And, the 94% rate cited was only for income
OVER a certain point.....200k at the time, which would equate to like 3 million today).

.

Top Gun wrote:As awesome a technological achievement as they are, consider that the B-2 Stealth Bomber cost $1 billion each to build.

Top Gun wrote:Was woodchip advocating giving them a few weeks off? It sounded much more like he felt they were an unnecessary expense in general. And given what we see major corporations get away with even with EPA regulations, I'm left wondering exactly how we'd be better off without them.

Heretic wrote:So you think that over 50% is spent in defense Obama's 2012 budget request of $3.729 trillion and Obama asking for only $670.9 billion for the DoD including monies for Overseas Contingency Operations. That's a far cry from 1.8645 trillion. Why don't these numbers support the 50% your saying? Is it because the people are so stupid they don't look into the details and just take in the lies put forth by both parties.

woodchip wrote:Woodchip was advocating not paying them in order for SS and Medicare payments to be made.

CUDA wrote:Do you really think that if the EPA is shut down for a few days or even a few weeks that smog is going to increase at all???
or that people will suddenly start driving cars that pollute more? or factories will disconnect all the environmental equipment that was installed? or people will start dumping nuclear waste into the rivers??

CUDA wrote:I exercise my faith more by works, because the Bible tells me "faith without works is Dead" and the only way to explain that properly is to tell you some of what I've done personally.

Spidey wrote:In my world…the “social safety net” wouldn’t act more like a trap.....etc

woodchip wrote:1. War on drugs. 7 billion a year for what?

2. Environmental Protection agency. Budget about 10 billion a year

3. Dept. of Homeland Security. Budget fiscal year 2011 56 billion a year

4. Bureau of Land Mgt. Budget 1.3 billion

woodchip wrote:

Top Gun wrote:Was woodchip advocating giving them a few weeks off? It sounded much more like he felt they were an unnecessary expense in general. And given what we see major corporations get away with even with EPA regulations, I'm left wondering exactly how we'd be better off without them.

Woodchip was advocating not paying them in order for SS and Medicare payments to be made.

Top Gun wrote:...did you miss the part where I specified that defense spending comprises more than 50% of our national budget? If you added up the budget of every single entity in that rather-meaningless list you comprised, it'd still only be a fraction of the defense budget. Of course we should take a long hard look at defense, considering what a major percentage (many would argue ridiculously so) it eats up, and therefore how much corresponding potential excess it has that can be trimmed.

But this is all neither here nor there. Picking and choosing random departments to slash budget from isn't going to help at all in the long run.

callmeslick wrote:
2. Environmental Protection agency. Budget about 10 billion a year

so, allowing folks to pollute your air, drinking water and other resources is just hunky-dory with you?
I'll pass, as I've seen very well the accomplishments. At 10 billion, a bargain.

callmeslick wrote: 3. Dept. of Homeland Security. Budget fiscal year 2011 56 billion a year

you realize this includes FEMA, who, even right-wing governors absolutely depend on for coordination and assistance in disasters? Further, isn't domestic security the most pressing of ALL defense needs?

callmeslick wrote: 4. Bureau of Land Mgt. Budget 1.3 billion

once again, a bargain. We are blessed, as Americans to have so much land that belongs to the People, not to individuals. Enjoy it, and pay for it.

As you point out, you just proposed slashing a whopping 75 billion dollars. In other words, less than 2% of the budget, and in doing so, leaving us defenseless against wholesale plundering of public lands and rape of the environment in the bargain. Without borrowing power, the shortfall would be closer to 30% of the budget, so you might want to rethink the stupidity about the masses I am supposed to be preaching to. You would appear to either be as dumb as a stump, or think that I am.