Sept. 1987:

“Unfortunately, Congress consistently brings the Government to the edge of default before facing its responsibility. This brinkmanship threatens the holders of government bonds and those who rely on Social Security and veterans benefits. Interest rates would skyrocket, instability would occur in financial markets, and the Federal deficit would soar. The United States has a special responsibility to itself and the world to meet its obligations. It means we have a well-earned reputation for reliability and credibility—two things that set us apart from much of the world.”

Nothing to add.

Category: Credit, Politics

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

49 Responses to “QOTD: Reagan on the Debt Ceiling”

  1. maybe, one of these Daze, the ‘Cained Peep will come across the Idea of ‘Odious Debt’..
    ~~

    “…Murray Rothbard – an American – wrote in 1992:

    I propose … out-right debt repudiation. Consider this question: why should the poor, battered citizens of Russia or Poland or the other ex-Communist countries be bound by the debts contracted by their former Communist masters? In the Communist situation, the injustice is clear: that citizens struggling for freedom and for a free-market economy should be taxed to pay for debts contracted by the monstrous former ruling class. But this injustice only differs by degree from “normal” public debt. For, conversely, why should the Communist government of the Soviet Union have been bound by debts contracted by the Czarist government they hated and overthrew? And why should we, struggling American citizens of today, be bound by debts created by a … ruling elite who contracted these debts at our expense?

    ***

    Although largely forgotten by historians and by the public, repudiation of public debt is a solid part of the American tradition. The first wave of repudiation of state debt came during the 1840′s, after the panics of 1837 and 1839. Those panics were the consequence of a massive inflationary boom fueled by the Whig-run Second Bank of the United States. Riding the wave of inflationary credit, numerous state governments, largely those run by the Whigs, floated an enormous amount of debt, most of which went into wasteful public works (euphemistically called “internal improvements”), and into the creation of inflationary banks. Outstanding public debt by state governments rose from $26 million to $170 million during the decade of the 1830′s…”
    http://www.washingtonsblog.com/2011/07/economics-professor-well-have-never.html
    ~~
    http://search.yippy.com/search?query=Odious+Debt&tb=sitesearch-all&v%3Aproject=clusty

  2. Kort says:

    If you quote Reagan, then quote Obama, circa 2006, to at least paint the picture that all of these guys are charlatans:

    “The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘the buck stops here. Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.”

  3. Mr. Obvious says:

    Reagan would be skewered as a RINO by today’s wingnuts.

  4. rktbrkr says:

    Kort,
    Please link your o’b quote to your source, thanks. I think it’s Snopable.

  5. rktbrkr says:

    I think the House Tea Partiers are willing to blackmail the majority and inflict financial chaos on the country if they don’t get their way.If they push US to the point where our borrowing costs skyrocket they’ll be able to say “see we told you so”

  6. WH: Obama regrets vote against raising debt limit
    AP Online
    See all results for this publication

    Browse back issues of this publication by date
    April 11, 2011 | ERICA WERNERWASHINGTON (AP) — The White House said Monday that President Barack Obama regrets his vote as a senator in 2006 against raising the debt limit — the same kind of increase he’s now pressuring Congress to approve.

    Obama “thinks it was a mistake,” presidential spokesman Jay Carney told reporters. “He realizes now that raising the debt ceiling is so important to the health of this economy and the global economy that it is not a vote that, even when you are protesting an administration’s policies, you can play around with.”…”
    http://www.highbeam.com/doc/1A1-69cb0b912e2140788a7120b478f9bf0c.html?key=01-42160B517E1E1D3A410A5016076C527D7D0975087F702009730C0B32611D69291A234F7348375432355749286D14796B501C7D7F630F1A7D1F022E

    Obama: Not Always a Fan of Upping Debt Ceiling

    January 3, 2011 12:50 P.M. By Katrina Trinko
    While President Obama’s economic advisor Austin Goolsbee argued Sunday that a refusal by the Senate to increase the government’s debt ceiling (currently $14.3 trillion) would be “catastrophic” and a sign of “insanity,” that’s not the position the president has held in the past.

    Here are Obama’s thoughts on the debt limit in 2006, when he voted against increasing the ceiling:

    The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘the buck stops here. Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.

    In 2007 and in 2008, when the Senate voted to increase the limit by $850 billion and $800 billion respectively, Obama did not bother to vote. (He did vote for TARP, which increased the debt limit by $700 billion.)…”
    http://www.nationalreview.com/corner/256199/obama-not-always-fan-upping-debt-ceiling-katrina-trinko

    http://search.yippy.com/search?input-form=clusty-simple&v%3Asources=webplus&v%3Aproject=clusty&query=%E2%80%9CThe+fact+that+we+are+here+today+to+debate+raising+America%E2%80%99s+debt+limit+is+a+sign+of+leadership+failure.+It+is+a+sign+that+the+U.S.+Government+can%E2%80%99t+pay+its+own+bills.+It+is+a+sign+that+we+now+depend+on+ongoing+financial+assistance+from+foreign+countries+to+finance+our+Government%E2%80%99s+reckless+fiscal+policies.+%E2%80%A6+Increasing+America%E2%80%99s+debt+weakens+us+domestically+and+internationally.+Leadership+means+that+%E2%80%98the+buck+stops+here.+Instead%2C+Washington+is+shifting+the+burden+of+bad+choices+today+onto+the+backs+of+our+children+and+grandchildren.+America+has+a+debt+problem+and+a+failure+of+leadership.+Americans+deserve+better.%E2%80%9D

  7. FS says:

    Quoting Reagan is the last bastion of people making excuses for the spending spree, glut, abomination.

    He would have fought vigorously government getting so big, and clearly leaned the other way against what the prior Congress put in place.

    This government is too big not to fail. Cut spending. No more “revenue” for the idjits.

  8. FS says:

    And furthermore…..

    Our credit rating SHOULD be cut. Our government is out of control, our financial system is a wreck, and as a nation we have lost both our sense of honor, and our common sense.

    We are led by spoiled children who have depended on either the work ethic (dems) or gullibility (gop) of others.
    This is a nation clearly in decline, and raising the debt ceiling will make the crash even harder when it eventually comes.

  9. Low Budget Dave says:

    I think both quotes still stand together. America got into the debt problem for the simple reason that we are spending more than we take in. Obama and Reagan both were willing to raise taxes or to cut spending. Bill Clinton actually DID both.

    It is easy to point out the problem. Leadership comes when you are willing to point out the solution even if Congress is going to whine, moan, and dig through your garbage. That is why Reagan, Bush, Bush and Obama failed to balance the budget, where Clinton succeeded.

  10. VennData says:

    Anti-Tax Zealot Grover Norquist Is Fine With Letting the Bush Tax Cuts Expire

    http://nymag.com/daily/intel/2011/07/anti-tax_zealot_grover_norquis.html

  11. rootless says:

    @FS:

    So I see you are advocating a Greater Recession or a depression starting in the second half of 2011, using some Fox propaganda talking points as pseudo-reasoning.

    Right wing fanatics want the chaos and the collapse of society. It’s ironic, if they disguise this with slogans about “common sense” or “honor of the nation” etc. (BTW: I personally don’t subscribe to the ideological construct of “nation”, but I observe what others do with it.)

  12. Mr. Obvious says:

    @FS:

    He would have fought vigorously government getting so big, and clearly leaned the other way against what the prior Congress put in place.

    —–
    LOL. Not quite. Thanks for perpetuating the myth, though.

    Govt grew under Reagan
    National debt tripled.
    Oh, and he raised taxes….

  13. rootless says:

    @Low Budget Dave:

    America got into the debt problem for the simple reason that we are spending more than we take in. Obama and Reagan both were willing to raise taxes or to cut spending. Bill Clinton actually DID both.

    Clinton did this with a bubble economy in their expansionary phase as a backdrop. For about thirty years, private credit doubled about every ten years. It was private deficit spending, which largely made the economy growing, until this private credit bubble climaxed in 2007. So, Clinton got just lucky to a large degree. The Great Recession was the consequence of all the private credit expansion, which had to come to an end at some point. Economic conditions with which governments have to deal now have substantially changed compared to the Clinton administration.

    To not spend more than take in is easier said than done in a society that is based on an economy where debt is the lubricant of economic growth.

  14. FS says:

    @rootless

    Advocating a Greater Recession or Depression? Hardly.

    Accountability will lead to a better economy. Our entitlement spending is completely out of control and our incentives to work and succeed are getting fewer. Continuing the ponzi scheme is the hope of fools and/or the Gang of 6.

    I want the collapse of the society you are advocating for but that is going to come soon enough anyway. You’ve run out of other people’s money.

  15. inessence says:

    Goddamit, the damnocrats controlled the House, which originates all spending during Reagan presidency.

  16. theexpertisin says:

    I remember how Reagan was villified by Dems and the press during his ascendency to the highest office and during his entire term. Now he is quoted liberally (no pun) by our Democratic friends.

    If one reads Reagan’s words in their totality, it is improbable not to reach the conclusion that he would have thought the current Democratic leadership and minions to have direct lineage to the worst of socialist models he thought freedom’s greatest enemy.

    John F. Kennedy may have thought likewise.

  17. rootless says:

    @FS:

    Anyone who advocates to not raise the debt ceiling now and to enforce in this way massive government spending cuts of about 100 G$ a month starting in August, advocates a Greater Recession or a depression, whether he/she is aware of this or not.

    Have you ever thought where the money goes after it has been spent by the government? Have you ever thought about the immediate macroeconomic consequences, if this money is suddenly not spent by the government anymore? The 100 G$ are not shoveled in a pit and nowhere to be seen anymore. They are flowing back mostly in the private sector of the economy, either through the paychecks of government workers who buy things with it, or through transfer payments to people who buy things with it, or directly because the government buys things with it. Suddenly cutting government spending by such an amount would decrease the revenue of the private sector in the economy by essentially the same amount.

    100 G$ spending cuts a months accumulate to about 500 G$ until the end of the year. With a GDP of about 15 T$ a year, which makes about 6.25 T$ in five months, a spending cut of this dimension is equivalent to a 8% decrease in the GDP in only five months only due to the decrease in government expenditures. This doesn’t even take into consideration the possible self-reinforcement effects of such a strong GDP drop over such a short time period. How about an unemployment rate of 15, 20, or 25% and further drops in consumer spending due to this? And you claim you don’t advocate a Greater Recession or an economic depression? Anyone who says this, but who is supporting the demands of the Tea Party extremists at the same time, is either lying or economically clueless.

    But, actually, you say you want the collapse of society I supposedly were advocating. So tell me how would the society you are advocating look like instead. And please bring more than just some right wing buzzword that you have thrown at the audience so far.

  18. 873450 says:

    November 2002:

    “You know, Paul, Reagan proved deficits don’t matter, … We won the midterms. This is our due.”

    Vice President Dick Cheney dismissing Treasury Secretary Paul O’Neill’s warning about how a 2nd round of Bush tax cuts would explode that year’s projected $500 billion budget deficit (which excluded special appropriation war funding). One month later O’Neill was fired.

  19. theexpertisin says:

    Oh for the days of John F. Kennedy and Ronald Reagan. How we are shaming their good work and patriotism.

  20. Petey Wheatstraw says:

    inessence:

    So, I guess it was the Democrat-controlled House that is responsible for breaking the back of the USSR?

    FS:

    What, exactly, do you refer to when you say “entitlement spending?”

    With 14 million people out of work, and the “job creators” having already looted out treasury and shipped these jobs to our foreign competitors, your opinion that there is no incentive to work is asinine.

    You think we have a Ponzi scheme. We do not. (tell me how a Ponzi scheme would work under a legitimately managed fiat currency system in the first place). What we do have the wholesale theft of the treasury and future wealth of the US by corporate special interests.

    WTF do you mean by “other people’s money?” Do you think there is a dearth of wealth in the US? Do you think the banks have actually “earned” one red penny of their “wealth?” Whose goddamned money is it, anyway? Do you not understand that this is a matter of allocation, with your side being under-allocated and forced to leverage today’s bread with tomorrow’s labor (and you won’t even have a freekin’ job)?

  21. formerlawyer says:

    A default would make for a larger government. Don’t believe me?
    Read:
    http://www.project-syndicate.org/commentary/johnson22/English

    (and yes I know I posted this before – but sometimes – people need a clue by four)

  22. rktbrkr says:

    FS Says:
    July 21st, 2011 at 12:09 pm
    @rootless

    Advocating a Greater Recession or Depression? Hardly.

    Accountability will lead to a better economy. Our entitlement spending is completely out of control and our incentives to work and succeed are getting fewer.

    I see social security, unemployment, welfare & food stamps have made people lazy, they got alot lazier starting a few years ago, similar to the lazy spell starting around 1930. We need some tough love, workhouses to set the country right again. And bring down the high end of the marginal tax rates to incentivize them too!

  23. socaljoe says:

    More evidence that there is no substantive difference between republicans and democrats. Any apparent infighting is a diversion intended to make us believe we have a choice.

    The US is a welfare/warfare state financed by foreign creditors… none of the measures currently under consideration would change that.

    Change will not come until forced by our creditors.

  24. willid3 says:

    i am guessing that not increasing the debt limit would actually be worse than a 10% cut in GDP. since the Feds spends about 300 billion a month, and they have to cut that by 44% without the increase. that is what 132 billion per month, or about 1.5 trillion per year. even in a 14 trillion dollar economy that would be worse than what we just went through, as its a bigger decline in GDP. not sure, but is it bigger than what we went through in the great depression. and consider, those who think that it will fix the economy. it might just end capitalism as we have it now, forever, as that almost happened after the great depression. and i suspect that people were a lot more patient then, than now. and why would end it you ask? because they see no benefit in some thing that doesn’t benefit them. now it benefits the elite 1%, and companies. the rest of us, not so much

  25. inessence says:

    @PeatyWheaty…U.S.S.R. = a failed “social” experiment.

  26. Lukey says:

    I think anyone who believes Reagan, after 30 years and $10 trillion more in debt, with the government poised to subsume 30% of GDP, with approximately half the adult population exempted from income taxes, and fast approaching “debt trap” level total borrowings, would feel the same way now and side with the Democrats in this matter is seriously kidding themselves.

    This is the end game of “starve the beast.” We have outspent our productive capacity’s ability to fund. We either embrace the Euro-zone style tax and continue to spend mentality and head towards the inevitable low growth, high unemployment future that ends either in default or hyper-inflation or we stop the madness now, cut spending and get back to being America. There’s a reason we’re not growing and it isn’t that we tax too little…

  27. Petey Wheatstraw says:

    inessence Says:

    @PeatyWheaty…U.S.S.R. = a failed “social” experiment.
    __________

    That’s cool. I don’t think RR should have been given any credit for its collapse, either.

  28. Dan Z says:

    Was this cross-posted in freeper land? I’ve never seen so many supply-side talking points in once place.

    My question to the supply siders:

    When we already have the lowest tax rates in almost 100 years and companies are sitting on more cash than at any point in history without creating jobs, why would they suddenly have an incentive to create American jobs if we eliminate the deficit?

    When there are no jobs here, and all of the “entitlements” to help the unemployed are eliminated, what will happen next?

  29. Lukey says:

    Dan Z,

    Spending = taxes (current + deferred). So I don’t agree that we are so “untaxed” right now. Revenue is down but this implied future taxation, plus the Obamacare mandates and the NLRB as wholly owned subsidiary of the SEIU all combine to keep the corporations sitting on their cash.

    The reason we need to eliminate the deficit is because, at $1.5 trillion a year we’re fast approaching “failed nation” levels of debt. No one in their right mind would invest (long term) in this economy unless and until we turn away from these kinds of policy choices.

  30. formerlawyer says:

    @rktbrkr Says:
    July 21st, 2011 at 10:53 am
    Kort,
    Please link your o’b quote to your source, thanks. I think it’s Snopable.

    From the Congressional Record of the 109′th Congress March 16, 2006 by then Senator Obama:

    ” Mr. OBAMA. Mr. President, I rise today to talk about America’s debt problem.

    The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure . It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies.

    Over the past 5 years, our federal debt has increased by $3.5 trillion to $8.6 trillion. That is “trillion” with a “T.” That is money that we have borrowed from the Social Security trust fund, borrowed from China and Japan, borrowed from American taxpayers. And over the next 5 years, between now and 2011, the President’s budget will increase the debt by almost another $3.5 trillion.

    Numbers that large are sometimes hard to understand. Some people may wonder why they matter. Here is why: This year, the Federal Government will spend $220 billion on interest. That is more money to pay interest on our national debt than we’ll spend on Medicaid and the State Children’s Health Insurance Program. That is more money to pay interest on our debt this year than we will spend on education, homeland security, transportation, and veterans benefits combined. It is more money in one year than we are likely to spend to rebuild the devastated gulf coast in a way that honors the best of America.

    And the cost of our debt is one of the fastest growing expenses in the Federal budget. This rising debt is a hidden domestic enemy, robbing our cities and States of critical investments in infrastructure like bridges, ports, and levees; robbing our families and our children of critical investments in education and health care reform; robbing our seniors of the retirement and health security they have counted on.

    Every dollar we pay in interest is a dollar that is not going to investment in America’s priorities. Instead, interest payments are a significant tax on all Americans–a debt tax that Washington doesn’t want to talk about. If Washington were serious about honest tax relief in this country, we would see an effort to reduce our national debt by returning to responsible fiscal policies.

    But we are not doing that. Despite repeated efforts by Senators CONRAD and FEINGOLD, the Senate continues to reject a return to the commonsense Pay-go rules that used to apply. Previously, Pay-go rules applied both to increases in mandatory spending and to tax cuts. The Senate had to abide by the commonsense budgeting principle of balancing expenses and revenues. Unfortunately, the principle was abandoned, and now the demands of budget discipline apply only to spending.

    As a result, tax breaks have not been paid for by reductions in Federal spending, and thus the only way to pay for them has been to increase our deficit to historically high levels and borrow more and more money. Now we have to pay for those tax breaks plus the cost of borrowing for them. Instead of reducing the deficit, as some people claimed, the fiscal policies of this administration and its allies in Congress will add more than $600 million in debt for each of the next 5 years. That is why I will once again cosponsor the Pay-go amendment and continue to hope that my colleagues will return to a smart rule that has worked in the past and can work again.

    Our debt also matters internationally. My friend, the ranking member of the Senate Budget Committee, likes to remind us that it took 42 Presidents 224 years to run up only $1 trillion of foreign-held debt . This administration did more than that in just 5 years. Now, there is nothing wrong with borrowing from foreign countries. But we must remember that the more we depend on foreign nations to lend us money, the more our economic security is tied to the whims of foreign leaders whose interests might not be aligned with ours.

    Increasing America’s debt weakens us domestically and internationally. Leadership means that “the buck stops here.” Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership . Americans deserve better.
    I therefore intend to oppose the effort to increase America’s debt limit .”

    See:
    http://thomas.loc.gov/cgi-bin/query/F?r109:1:./temp/~r1093T1g2Q:e0:

  31. formerlawyer says:

    Sorry, just an additional note – Senator Obama voted for the increase in the Statutory limit.

  32. 873450 says:

    When there are no jobs here, and all of the “entitlements” to help the unemployed are eliminated, what will happen next?

    Pitch Forks

  33. formerlawyer says:

    Oops sorry – the Joint HR was No 47, to raise the debt limit- which Senator Obama did vote against in 2006 – my apologies.

  34. river says:

    Sorry, I am a somewhat conservative person, but facts are facts . . . the conservatives and the oligarchs in our banking system with whom they are aligned absolutely destroyed our economy. The Democrats are definitely not without fault, but it seems that the vast majority of conservative minded folks are just bat-shit crazy anymore. Listening to them, Obama caused all of this mess that we are in yet I am pretty sure the request for 700 billion dollars for the banks came under Bush. I am pretty sure that Bush was also in charge when the housing bubble blew. And I am pretty sure bush was in charge when we invaded Iraq and Afghanistan, and enacted Medicare Part D. Yet it is all Obama’s fault?

    Conservatives need to own up to the fact that a good deal of the problems that we are now experience are the result of conservatives getting their way . . . if a majority of them don’t own up to that fact, if they can’t own up to this simple fact, then this country is absolutely doomed. People will be saying that the USA was a failed social experiment, not just the USSR.

  35. buddhabucks says:

    Obama now vs. Obama then.

    When your roof leaks, you fix it when the sun shines, not when it’s raining. In 2007 it may have been cloudy, but a good time to fix the roof ( fix the budget deficit). Today it’s raining on the economy, a good time to plan the roof repair, maybe even buy the needed material, but not a good time to fix the roof, as Obama now states.

  36. inessence says:

    @river…you don’t get it, paint a turd blue (dems), or red (repubs) it is still a turd. It is the political system that is rotten…they all crave the power and that power comes from spending other peoples money.

  37. DeDude says:

    Back when Obama talked about balancing the budget we were not trying to fight our way out of 9% unemployment and the aftermath of a huge financial crisis and recession. To suggest that his words back then should represent his opinion now is moronic. Off course we should have different policies for different situation. Do anybody here keep the exact same attitude towards investments and discretionary spending regardless of whether they have just lost their job or they have just won the lottery?

    I think y’all are expecting a little to much of FS. I don’t think he does macro-economics or “plan” – all he does is pinkie down tea parties.

  38. DeDude says:

    Lukey @ 2:07;

    Yes we are stuck in low growth and the reason is quite simple. Look at the definition of GDP and tell me how GDP could increase. Yes by increases in any or all of its 4 components.

    GDP = Private Consumption + Government Consumption + Investment + Trade Surplus

    Trade surpluses: there is not much we can do except a little on the margin by manipulating our exchange rate.

    Investments: No modern business will invest until they get enough increase in costumers to use up excess capacity. So until consumption goes up forget investments.

    Government and Private consumption: I am lumping them together because the economy does not care if the consumption is in the private or government sector – the issue is to increase the speed of productive money (new bridge or new bedroom doesn’t matter). Although we are not anywhere near the 200% of GDP in government debt that Japan is living perfectly well with; the political will to increase US government consumption is not there (just keeping them from doing a “UK” and shooting the economy in the leg with spending cuts is going to be difficult). Private consumption which is 70% of GDP will not get any better until we cancel the private debt (allowing individuals to go bankrupt the same way businesses can) or seriously increase the income of consumer class (low income) people by a $2-3 increase in the minimum wage. Again try getting that past the current political class considering that it would bankrupt large numbers of banksters and drastically reduce the slice of the pie that is currently going to the rent-seekers.

    So yes we are stuck in very low economic growth until a substantial % of the voting population manage to understand the implications of a simple formula like A = B+C+D+E. Considering the state of our educational system and our corporate press – I say: “SH!T W R DOOMED”.

  39. willid3 says:

    and we know why consumers aren’t in the mood to buy. there is that jobs problem (but we have been there before and got out it before). this time we added the collapse of incomes. which happened before the mini depression hit. ad we added lots of consumer debt too. but what is also a problem is that unlike before, it was a credit bubble, which means there was inflated demand, based on credit. well it will be a while before there is much in way of need now, with the issues around to much consumer debt, to little income, and the lack of jobs, all we keep the consumer on side line. and we have no chance of making exports boom. every other country in the world is trying to do that. and they actually have national planning on their side. we don’t and won’t. we can’t over come the difference in incomes, without destroying the local economy and standard of living (paying 3rd world wages will get 3rd world standard of living).

  40. willid3 says:

    oh and don’t forget we pay the most for health care (at twice the amount per person of the 2nd highest) and we get less for it.

  41. CitizenWhy says:

    Who will benefit from a default?

    The Tea party types have been promising an economic disaster so they could sell gold. Now they want to deliver on that promise.

    Surely there are some billionaires who have a plan to benefit, perhaps by buying up – dirt cheap – assets they don’t already own.

  42. river says:

    “@river…you don’t get it, paint a turd blue (dems), or red (repubs) it is still a turd. It is the political system that is rotten…they all crave the power and that power comes from spending other peoples money.”

    What you say is maybe true, yet one side of this rotten political system is willing, nay, yearns to destroy the system for some goal I am not quite sure what it is, consequences be damned. I am a little perturbed by this because me and my family are one of the consequences.

    And this they want to do after having had the presidency for eight years and got pretty much everything they wanted?

    Sorry, I got to call a spade a spade, and the Republican party is basically gone insane, and I can’t friggen stand it anymore.

  43. As a Canadian observer, I have always considered the Debt Ceiling serves as a typical American checks and balances measure. It allows Congress an opportunity to take a second look at the Fed’l Govt’s financial standing from time to time to deal to with two quite important issues:

    a) recalibrate after considering one or more grossly miscalculated budgets
    b) financial strong-arming of a President (no names mentioned!) who abuse the system by allowing the operating of the country’s business in the utter absence of an approved Budget(s)

    The USA is clearly on an unsustainable course that will lead to critical sovereign rating downgrades in less than ten years. The previous version of My Debt Meter graph gives a rosy picture of the Federal Gov’t maintaining Debt & Deficit ratios below 100% & 4% for the next three decades. It was based on the defeated Obama Jan/2011 Budget sans the Bush-era tax cuts.

    But if the House of Representatives is stalwart in its position of “no more taxes”, these fundamental ratios jump to 123% & 5.9% by 2021! That is when I believe the Treasuries Crisis will occur unless status quo is mitigated.

    Debt Meter chart: http://trendlines.ca/free/economics/DebtMeterUSA/DebtMeterUSA.htm

  44. DeDude says:

    Considering that Japan has been working itself up to 200% still with no sign of a crisis, I am not sure I could agree that 90 % (including Social Security debt) now or even 123% by 2021 would be able to precipitate any kind of crisis.

  45. Fair comment, DeDude, the key difference is Japan’s Federal debt is practically all domestically funded.

  46. Lukey says:

    Seriously…Japan? We’re holding them up as some sort of “debt load role model?” Aren’t they working on their second “lost” decade?

    Dedude, you want investment? You want exports? Get the President to stop bashing businesses and their owners! Call of the SEIU dogs on the NLRB! Get spending under control so the wealthy will stop assuming their taxes are going up (a bunch)! Start cutting away at the regulatory morass so smaller businesses can grow!

    There’s demand – unfortunately the bulk of it is overseas. Right now the way this Administration is running economic policy, small businesses can’t (or don’t want to) grow and big businesses find it more lucrative to expand off shore. At these spending levels, the idea that we need government to spend even more to juice the economy seems contradictory to me. High levels of government spending is part of the problem, not the solution!!!

  47. rootless says:

    @Lukey:

    There’s demand – unfortunately the bulk of it is overseas. Right now the way this Administration is running economic policy, small businesses can’t (or don’t want to) grow and big businesses find it more lucrative to expand off shore. At these spending levels, the idea that we need government to spend even more to juice the economy seems contradictory to me. High levels of government spending is part of the problem, not the solution!!!

    Please could you lay out the causal chain through which cutting of government spending now will increase demand in the economy, which, you say it yourself, is lacking, currently?

    If people advocate austerity, because they think government debt levels are too high and those levels have to be brought down now, it is one thing. What really makes me furious is that this advocating austerity comes with the perpetuated lie that it will increase economic growth.

  48. DeDude says:

    @Freddy: I don’t see why the fact that more of the Japanese debt is domestic is relevant. In either case the issue is whether the holders of the debt can get “scared” to sell it (or refuse to purchase more). In our case there is actually a strong argument that the foreign debtors are less likely to flee our bonds. China and Japan are the main foreign holders (combined 2 trillion of the 14 trillion). They have to hold on to their dollars to keep the exchange rate steady (or they will lose money and export by shift in exchange rate). Furthermore, they do not have a lot of realistic or safe alternatives to the US treasuries. Our domestic creditors have a lot more alternatives and none of those will be a “shoot yourself in the foot” alternative.

    @Lukey; Japan is not a “role model” but an example that debt loads of 200% GDP can be tolerated without eminent collapse of creditor panic. This is important to point out when chicken little’s scream about the consequences if US increase its 90% GDP national debt. You know this liberal thing of checking out fact and reality and looking around to see if these unsubstantiated claims of catastrophic events are true. Same problem with rest of your rants. Reality has long ago proven that those are false moronic right wing talking points. The reason businesses are not expanding is a lack of costumers (if you can be bothered getting it straight from the horses mouth). Not that facts are stopping any of the idiots touting the right wing talking points, because their opinions are not based on facts. I guess that is the reason you don’t deal with any of the facts, arguments or interpretations that I lay out above. You right wingers simply ignore inconvenient facts and then invent new ones that are more convenient to your conclusions.