Would you raise the interest rate on your own mortgage or credit card?

[Toro]

Kindly refrain from being a dick.

Actually the prior downgrade had a lot more to do with spending than raising the debt ceiling. As demonstrated when the debt ceiling was raised, the credit downgrade remained in place.

It had to do with the political disfunction that increased the odds an interest payment would not be made on time. Ergo, it had more to do with debt ceiling.

That brings up an interesting question. How are the "odds" determined given that it didn't happen? Statisticians do tons of analysis of probabilities for accidents and credit risk. But that is on a huge population of individuals. How can odds be done on a single country/govt?

Same way. But all probabilities about future human behavior are at least partly subjective because the future is not entirely knowable.

 

[kaz]

I called you on them and then you started lying and name calling

I re-read the entire thread because my policy is that if people want to discuss, then I discuss. If they insult, then I have fun.

We were disagreeing whether spending was topical or not, I thought it was and couldn't understand how you thought it wasn't, you thought it wasn't and couldn't understand how it was. We both said that clearly, but I saw no name calling or insults either way. Here is the first actual insult I came across.

If you want to lie about the Dems and make misogynistic comments about women start your own thread.

As for accusing me of being a liar. Prove that.

 

[Toro]

Sure they do, but that doesn't mean it's the best way to proceed.

Why not, it's US dollars that we used to buy Chinese products?

Are you saying that the free market consumer shouldn't buy goods from where they want to?

Are you saying that we shouldn't recirculate US dollars back into the US economy?

What do you think your really talking about?

Or have you just not actually bothered to learn how the funds flow and what it means?

actually...the fact that you actually think it is all "China" pretty much shows me how little you know.

Truth is....you obviously have no idea about what the debt is all about...the debt limit....and how we borrow.

FYI....China is a very small portion of it.....not even worthy of discussion.

China owns $1.277 trillion worth of Treasury debt, accounting for just under 11% of all Treasury debt outstanding. China is the largest foreign own of US Treasury debt.

http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt

 

[itfitzme]

I learn so much by taking something specific that someone says and researching it. Invariably, the likes of KAZ turn out to be completely wrong. How is it that they can be so completely wrong when it is so simple to just go look it up?

I will tell you how. They experience their world, not through their eyes and ears, but through their feelings. They organize it according to "I like it/don't like it". So, when they like the conclusion that they reach, they believe it must be true because it is what they like. It is the hallmark of stupidity.

No wonder Wall Street sucks, I'm an MBA in finance who spent most of my career in the financial services industry. At GE and in New York.

Still waiting for your explanation how we can't pay debt when tax revenue is greater than debt payments by a large margin.

Go ask the Treasury Department. I posted the link. It seems to be that, in fact, the revenue minus the statutory obligations isn't enough to cover the debt payments.

I have to believe the Treasury Department when they say so.

Here, I pulled it forward.

Well, apparently you are full of shit.

Introduction: 6 Consequences if the Debt Ceiling Isn't Raised - US News & World Report

“Congress has until around August 2 to raise the legal limit on debt, or the United States will risk going into default, according to the U.S. Treasury Department”

http://www.nytimes.com/2013/09/26/bu...ober.html?_r=0

“The Treasury has handed Congress an urgent deadline: Oct. 17.” “On that day, unless Congress were to raise the debt ceiling, the Treasury would have only $30 billion cash on hand, putting the United States on the precipice of an unprecedented default, the department said on Wednesday.”

Debt Limit
http://www.treasury.gov/initiatives/pages/debtlimit.aspx

“Failing to increase the debt limit would have catastrophic economic consequences. It would cause the government to default on its legal obligations – an unprecedented event in American history. That would precipitate another financial crisis and threaten the jobs and savings of everyday Americans – putting the United States right back in a deep economic hole, just as the country is recovering from the recent recession. “

That's what I got.

 

[kaz]

Dude, your simply wrong. The government has specific obligations that it must pay by law. After those are paid, it doesn't have any more money. It can't pay the t-bill interest first. It's the law.

You don't know what your talking about. You have no reference to back up your bullshit.

The Treasury Department says you are full of shit.

Obligations. Yes, we promised welfare and the law is that we pay it.

You lose again, it's in the Constitution that we have to pay our debts. So that takes priority. Are you going to cut out all my points like you did last time and say I didn't respond to the points when I did, and you just cut them out of the quote?

What the fuck are you talking about? You surely realize that you make yourself look stupid. You can't make other people not see your stupid by pretending you don't understand. Reality doesn't work that way.

So, your saying the Treasury Department is wrong? They do the accounting for a living. I am pretty sure they are the authority.

Really, what the fuck do you think you are talking about?

The 14th amendment requires the federal government to pay it's debts. Here's reuters, a pretty left wing outfit on the topic.

Analysis & Opinion | Reuters

It doesn't matter that the "law" requires welfare programs like social security be paid, the Constitution trumps the law.

Stop saying the "treasury says" and back it up. If tax revenue > debt payments, how are we gong to default?

 

[kaz]

Kindly refrain from projecting your own shortcomings onto others.

The previous failure to raise the debt ceiling resulted in the US credit rating being downgraded. Credit ratings are directly tied to borrowing interest rates. Higher ratings mean lower interest rates and vice versa.

Kindly refrain from being a dick.

Actually the prior downgrade had a lot more to do with spending than raising the debt ceiling. As demonstrated when the debt ceiling was raised, the credit downgrade remained in place.

It had to do with the political disfunction that increased the odds an interest payment would not be made on time. Ergo, it had more to do with debt ceiling.

Which would not be an issue if it were not for our spending levels. And if you read their statement on the downgrade, their main points were deficit spending and total debt as a percent of GDP, which are not addressed by raising the ceiling.

 

[itfitzme]

Obligations. Yes, we promised welfare and the law is that we pay it.

You lose again, it's in the Constitution that we have to pay our debts. So that takes priority. Are you going to cut out all my points like you did last time and say I didn't respond to the points when I did, and you just cut them out of the quote?

What the fuck are you talking about? You surely realize that you make yourself look stupid. You can't make other people not see your stupid by pretending you don't understand. Reality doesn't work that way.

So, your saying the Treasury Department is wrong? They do the accounting for a living. I am pretty sure they are the authority.

Really, what the fuck do you think you are talking about?

The 14th amendment requires the federal government to pay it's debts. Here's reuters, a pretty left wing outfit on the topic.

Analysis & Opinion | Reuters

It doesn't matter that the "law" requires welfare programs like social security be paid, the Constitution trumps the law.

Stop saying the "treasury says" and back it up. If tax revenue > debt payments, how are we gong to default?

Well, you should get right on telling the Treasury Department because they seem to have a different opinion. And seeing as they are the ones that do the accounting and make the payments, their opinion is the one that counts. And, I did back it up. Like a said, shoving your head up your ass doesn't make things go away.

But, seeing as you had your head up your ass, here is the link;

http://www.treasury.gov/initiatives/pages/debtlimit.aspx

And the Treasury Department says,

"Failing to increase the debt limit would have catastrophic economic consequences. It would cause the government to default on its legal obligations – an unprecedented event in American history. That would precipitate another financial crisis and threaten the jobs and savings of everyday Americans – putting the United States right back in a deep economic hole, just as the country is recovering from the recent recession. "

Your opinion doesn't.

 

[kaz]

I learn so much by taking something specific that someone says and researching it. Invariably, the likes of KAZ turn out to be completely wrong. How is it that they can be so completely wrong when it is so simple to just go look it up?

I will tell you how. They experience their world, not through their eyes and ears, but through their feelings. They organize it according to "I like it/don't like it". So, when they like the conclusion that they reach, they believe it must be true because it is what they like. It is the hallmark of stupidity.

No wonder Wall Street sucks, I'm an MBA in finance who spent most of my career in the financial services industry. At GE and in New York.

Still waiting for your explanation how we can't pay debt when tax revenue is greater than debt payments by a large margin.

Go ask the Treasury Department. I posted the link. It seems to be that, in fact, the revenue minus the statutory obligations isn't enough to cover the debt payments.

I have to believe the Treasury Department when they say so.

Here, I pulled it forward.

Well, apparently you are full of shit.

Introduction: 6 Consequences if the Debt Ceiling Isn't Raised - US News & World Report

“Congress has until around August 2 to raise the legal limit on debt, or the United States will risk going into default, according to the U.S. Treasury Department”

http://www.nytimes.com/2013/09/26/bu...ober.html?_r=0

“The Treasury has handed Congress an urgent deadline: Oct. 17.” “On that day, unless Congress were to raise the debt ceiling, the Treasury would have only $30 billion cash on hand, putting the United States on the precipice of an unprecedented default, the department said on Wednesday.”

Debt Limit
Debt Limit

“Failing to increase the debt limit would have catastrophic economic consequences. It would cause the government to default on its legal obligations – an unprecedented event in American history. That would precipitate another financial crisis and threaten the jobs and savings of everyday Americans – putting the United States right back in a deep economic hole, just as the country is recovering from the recent recession. “

That's what I got.

All that does is repeat their assertion. I am asking when the Constitution requires the Federal government to pay it's debts and tax revenue is greater than debt payments, how can we possibly default? Unless the do it on purpose.

I am also pointing out the massive conflict of interest the Treasury department has since they get the money we borrow to spend.

 

[Quantum Windbag]

Would you raise the interest rate on your own mortgage or credit card?

Sounds like a really stupid question because no one wants to pay more than they have to when it comes to borrowing money, right?

But if the Debt Ceiling is not raised the credit rating of the USA could be downgraded again and that will mean that the interest rate that We the People will have to pay will go up.

Since it is going to be us taxpayers who are paying that interest does it make any sense at all to increase the rate that we are going to have to pay?

Damn, you have an incredible knack for saying things that make stupid look like Einstein.

What are you talking about?

The answers are

1) No one would raise the interest rate on their mortgage or credit card.

2) Right.

3) This is apparently true, that not raising the debt ceiling will result in
a) the US gov't defaulting on it's obligations.
b) The markets demanding a higher rate on t-bills.

4) No.

So, it appears that you are the one that makes stupid look like Einstein. Especially given that a) you said nothing of substance and b) your wrong about what you didn't manage to say.

Are those the answers?

1. There are actually situations where a higher interest rate is the right choice.
2. There have been multiple time in history when the debt ceiling wasn't raised that did not result in a decrease in the credit rating. In fact, the only decrease we ever had was the result of not dealing with long term debt, not for not raising the debt ceiling.
3. Not being able to borrow money does not mean that the US government will not be able to pay its bills. The government gets money every single day, it will still have more than enough to pay off the only thing that really matters, and over half of non defense related employees will still get a paycheck.
4. Our interest rate is going to go up even if we raise the debt ceiling, everyone knows that.

Do you want to join the official "Make stupid look like Einstein" club? All you have to do is repeat your idiotic babbling.

 

[itfitzme]

No wonder Wall Street sucks, I'm an MBA in finance who spent most of my career in the financial services industry. At GE and in New York.

Still waiting for your explanation how we can't pay debt when tax revenue is greater than debt payments by a large margin.

Go ask the Treasury Department. I posted the link. It seems to be that, in fact, the revenue minus the statutory obligations isn't enough to cover the debt payments.

I have to believe the Treasury Department when they say so.

Here, I pulled it forward.

Well, apparently you are full of shit.

Introduction: 6 Consequences if the Debt Ceiling Isn't Raised - US News & World Report

“Congress has until around August 2 to raise the legal limit on debt, or the United States will risk going into default, according to the U.S. Treasury Department”

http://www.nytimes.com/2013/09/26/bu...ober.html?_r=0

“The Treasury has handed Congress an urgent deadline: Oct. 17.” “On that day, unless Congress were to raise the debt ceiling, the Treasury would have only $30 billion cash on hand, putting the United States on the precipice of an unprecedented default, the department said on Wednesday.”

Debt Limit
Debt Limit

“Failing to increase the debt limit would have catastrophic economic consequences. It would cause the government to default on its legal obligations – an unprecedented event in American history. That would precipitate another financial crisis and threaten the jobs and savings of everyday Americans – putting the United States right back in a deep economic hole, just as the country is recovering from the recent recession. “

That's what I got.

All that does is repeat their assertion. I am asking when the Constitution requires the Federal government to pay it's debts and tax revenue is greater than debt payments, how can we possibly default? Unless the do it on purpose.

I am also pointing out the massive conflict of interest the Treasury department has since they get the money we borrow to spend.

So, where did you get your law degree from? And your MBA?

 

[Quantum Windbag]

Not immediately, but the score will recover quickly enough for those that maintain their lifestyle. The only exception would be for those with few years of credit history.

He's using it as an analogy for the government though, and two points he keeps ignoring which have been made to him are:

1) Not raising the debt ceiling doesn't mean we would default at all. Liberals like to pretend that if the limit isn't raised then we would not pay debt. Actually, government could still spend all the revenue (taxes) coming in, and that is more than ample to pay all our debt payments and more. All they can't do is spend more money than they take in.

2) When they downgraded our debt, and we reached a deal and raised the spending limit, our debt remained downgraded. They even said we're spending ourselves stupid in their justification.

I also pointed out that raising the cap isn't just about interest rates, we are also just spending too much money and raising the cap allows them to just keep spending. It isn't just to pay interest payments.

Basically he wants to ignore the entire discussion other than those points self serving to his argument.

The OP was directed at the wisdom of risking a further downgrade to the US credit rating.

There is a very real cost to the American taxpayers from the previous downgrade;

United States federal government credit-rating downgrade - Wikipedia, the free encyclopedia

However, based on historical information from Bloomberg the cost to insure U.S. debts against default has risen from an average of around 25 basis points in 2007 to a range from 55 to 75 basis points in 2011. A higher cost of insurance is typically associated with increased risk of default.

So the topic on the table remains is it a good idea to do something that will cost taxpayers more money than necessary? Given how bent out of shape the right is when it comes to "spending" surely this kind of reckless action that will incur more "spending" than necessary falls under the heading of "waste".

It is therefore hypocritical to accuse the government of "spending" and "waste" when it was directly incurred by the unconstitutional actions of the right themselves.

No, the OP was directed at a delusion. If it was really directed at risking another downgrade it would be pointing to the cause of the first downgrade, not using the downgrade to justify the original trigger of the downgrade.

 

[itfitzme]

Damn, you have an incredible knack for saying things that make stupid look like Einstein.

What are you talking about?

The answers are

1) No one would raise the interest rate on their mortgage or credit card.

2) Right.

3) This is apparently true, that not raising the debt ceiling will result in
a) the US gov't defaulting on it's obligations.
b) The markets demanding a higher rate on t-bills.

4) No.

So, it appears that you are the one that makes stupid look like Einstein. Especially given that a) you said nothing of substance and b) your wrong about what you didn't manage to say.

Are those the answers?

1. There are actually situations where a higher interest rate is the right choice.
2. There have been multiple time in history when the debt ceiling wasn't raised that did not result in a decrease in the credit rating. In fact, the only decrease we ever had was the result of not dealing with long term debt, not for not raising the debt ceiling.
3. Not being able to borrow money does not mean that the US government will not be able to pay its bills. The government gets money every single day, it will still have more than enough to pay off the only thing that really matters, and over half of non defense related employees will still get a paycheck.
4. Our interest rate is going to go up even if we raise the debt ceiling, everyone knows that.

Do you want to join the official "Make stupid look like Einstein" club? All you have to do is repeat your idiotic babbling.

Your point being what? That the credit rating is guaranteed to remain in place and that the interest cannot possibly be raised? Currently, it does appear that the markets will respond by downgrading the US credit and raising the interest rate. Seeing as you don't speak for the markets, your personal opinion doesn't mean much.

The government may get money every day but that doesn't mean it will meet it's debt obligations. If you bother to go look it up, the Treasury Department has made it perfectly clear that it must pay the non-discretionary obligations first and will not have sufficient funds to make payment of the full debt obligations.

So, seeing as the Treasury Department is the one that pays the bills, I do think that their opinion takes precedence over yours. See how that works, "Einstein"?


Along with the previously presented information, I find;

"If Congress fails to increase the debt limit, the government would have to stop, limit, or delay
payments on a broad range of legal obligations, including Social Security and Medicare benefits,
military salaries, interest on the national debt, tax refunds, and many other commitments."

If you have other information, then present it. Because as far as I can tell, the Treasury Department would be the final authority on it.

 

[Toro]

Kindly refrain from being a dick.

Actually the prior downgrade had a lot more to do with spending than raising the debt ceiling. As demonstrated when the debt ceiling was raised, the credit downgrade remained in place.

It had to do with the political disfunction that increased the odds an interest payment would not be made on time. Ergo, it had more to do with debt ceiling.

Which would not be an issue if it were not for our spending levels. And if you read their statement on the downgrade, their main points were deficit spending and total debt as a percent of GDP, which are not addressed by raising the ceiling.

The issue for the ratings agencies is the deficit, not spending levels per se. If taxes were higher, deficits would be lower and the ratings agencies. For example, Germany has much higher taxes than America and has a higher rating. And the ratings agencies don't buy this nonsense that increasing taxes doesn't decrease the deficit. Saying that it is only spending and not taxes at all demonstrates the political disfunction S&P cited.

 

[Derideo_Te]

I called you on them and then you started lying and name calling

I re-read the entire thread because my policy is that if people want to discuss, then I discuss. If they insult, then I have fun.

We were disagreeing whether spending was topical or not, I thought it was and couldn't understand how you thought it wasn't, you thought it wasn't and couldn't understand how it was. We both said that clearly, but I saw no name calling or insults either way. Here is the first actual insult I came across.

If you want to lie about the Dems and make misogynistic comments about women start your own thread.

As for accusing me of being a liar. Prove that.

Your own words;

If your wife is blowing out the limit on your card, you may not want to increase the limit because her uncontrolled spending is a bigger issue then the interest. The Democratic Party is your wife.

That your rules are that only posts that agree with your leftist drivel is your problem.

dude, now you're just being a dick.

But you're just being thick.

Kindly refrain from being a dick.

/Ignore List/Add a Member to Your List...
kaz [Okay] *click*

 

[kaz]

Go ask the Treasury Department. I posted the link. It seems to be that, in fact, the revenue minus the statutory obligations isn't enough to cover the debt payments.

I have to believe the Treasury Department when they say so.

Here, I pulled it forward.



That's what I got.

All that does is repeat their assertion. I am asking when the Constitution requires the Federal government to pay it's debts and tax revenue is greater than debt payments, how can we possibly default? Unless the do it on purpose.

I am also pointing out the massive conflict of interest the Treasury department has since they get the money we borrow to spend.

So, where did you get your law degree from? And your MBA?

MBA in finance from the University of Michigan.

BS in Mathematics from the University of Maryland

The math degree helped me with the analysis that if debt payments are Constitutionally required and that tax revenue > debt payments, we can't possibly default on our debt. Granted it required some complicated mathematical functions to make that call...

 

[kaz]

I called you on them and then you started lying and name calling

I re-read the entire thread because my policy is that if people want to discuss, then I discuss. If they insult, then I have fun.

We were disagreeing whether spending was topical or not, I thought it was and couldn't understand how you thought it wasn't, you thought it wasn't and couldn't understand how it was. We both said that clearly, but I saw no name calling or insults either way. Here is the first actual insult I came across.



As for accusing me of being a liar. Prove that.

Your own words;

dude, now you're just being a dick.

But you're just being thick.

Kindly refrain from being a dick.

/Ignore List/Add a Member to Your List...
kaz [Okay] *click*

The insults you just posted were actually after your insult. I didn't say I didn't call you names, I said I did it after you did. You're the liar.

As for ignore, don't give a rats ass either way. One less vacuous liberal. Wow, earth shattering. Not.

 

[Quantum Windbag]

Kindly refrain from projecting your own shortcomings onto others.

The previous failure to raise the debt ceiling resulted in the US credit rating being downgraded. Credit ratings are directly tied to borrowing interest rates. Higher ratings mean lower interest rates and vice versa.

Kindly refrain from being a dick.

Actually the prior downgrade had a lot more to do with spending than raising the debt ceiling. As demonstrated when the debt ceiling was raised, the credit downgrade remained in place.

It had to do with the political disfunction that increased the odds an interest payment would not be made on time. Ergo, it had more to do with debt ceiling.

That isn't what S&P said. Or, if it is, they are blaming the lack of will power to implement the type of policies recommended by Simpson-Bowles and the long term debt a lot more than they are the debt ceiling.

The political brinksmanship of recent months highlights what we see as America's governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. Despite this year's wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently. Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures. It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability.

The outlook on the long-term rating is negative. We could lower the long-term rating to 'AA' within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.

S&P | United States of America Long-Term Rating Lowered To 'AA+' Due To Political Risks, Rising Debt Burden; Outlook Negative | Americas

 

[itfitzme]

http://www.treasury.gov/initiatives/Documents/Debt Limit Myth v Fact FINAL.pdf

"Suggestions that Congress could somehow evade responsibility for raising the debt limit by
passing legislation to “prioritize” payments on the national debt above other legal obligations of
the United States are simply not true. This would not prevent default, since it would seek to
protect only principal and interest payments and not other legal obligations of the United States
from non-payment. Adopting a policy that payments to investors should take precedence over
other U.S. legal obligations would merely be default by another name, since the world would
recognize it as a failure by the United States to stand behind its commitments. It would therefore
bring about the same catastrophic economic consequences"

Curious.

 

[Quantum Windbag]

So the solution to your maxed out credit card is to raise the limit of debt you can accumulate?

There's no reason to default on anything

It's true. We can't afford a dime of new debt, regardless of how fast the economy grows.

"liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate... it will purge the rottenness out of the system."

Of course we can afford more debt regardless of how fast the economy grows.

What matters is not the absolute debt but the debt relative to output. If the debt is growing at 4% and nominal GDP is increasing at 6%, then the financial condition of the country is improving. An increase in the debt may not be the optimal outcome but we can certainly afford it if its growing less fast than the nominal output of the economy.

The one thing everyone who is not named Krugman agrees upon is that our current debt is unsustainable, even Krugman agreed with it when Bush was president. We might be able to pretend we can handle the debt, but we cannot, and we need to start making plans based on the reality that we cannot, even if those plans mean increasing the debt now.

 

[itfitzme]

All that does is repeat their assertion. I am asking when the Constitution requires the Federal government to pay it's debts and tax revenue is greater than debt payments, how can we possibly default? Unless the do it on purpose.

I am also pointing out the massive conflict of interest the Treasury department has since they get the money we borrow to spend.

So, where did you get your law degree from? And your MBA?

MBA in finance from the University of Michigan.

BS in Mathematics from the University of Maryland

The math degree helped me with the analysis that if debt payments are Constitutionally required and that tax revenue > debt payments, we can't possibly default on our debt. Granted it required some complicated mathematical functions to make that call...

Wow, just goes to show us that a degree doesn't guarantee anything. (except to increase arrogance.) Oh, and no law degree. So presenting your suppositions on constitutional law doesn't help much.