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Great - Now we Raise the Debt Ceiling?

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  • DAL
    replied
    Paulson Says Deficit Is America’s Biggest Challenge

    Former Treasury Secretary Henry M. Paulson Jr. described the deficit as “the biggest, most fundamental economic challenge” the U.S. government is currently facing, and older generations of Americans aren’t making enough sacrifices to address it.

    “I think as you look around the world, there are a number of Western democracies where the voters want benefits, but they don’t want to pay for them,” he said.

    The U.S. national debt has soared to over $14 trillion. The current Treasury Secretary, Timothy Geithner, recently warned Congress that the U.S. would reach its debt limit of $14.29 trillion in mid-May.

    “Default would cause a financial crisis potentially more severe than the crisis from which we are only now starting to recover,” Geithner wrote in his letter to lawmakers.

    The Congressional Budget Office projects the federal debt held by the public over the next ten years will climb to $18 trillion, or 77% of GDP.

    Paulson believes it’s possible to solve this problem by spreading sacrifices around society in a way in which it’s not too painful for any particular segment. He says the longer you wait, the more painful and tougher it will be on the next generation.

    “All of us would like to have our children and their grandchildren grow up with at least the level of prosperity that we had” Paulson said. “In the U.S., we seem to be very selfish because the older generation is not making the sacrifices. So this is about generational equity.”

    Public anger over the financial crisis has largely been directed towards Paulson and his former firm Goldman Sachs, once described by Rolling Stone as the “great vampire squid wrapped around the face of humanity.”

    Many contend that it was no coincidence Paulson was a principal architect of bailouts that used taxpayers’ money to rescue Wall Street’s investment banks. His failure to save Lehman Brothers, though, continues to attract the most criticism, particularly in light of government efforts to support AIG, which benefited his old firm.

    Victor Fung, the chairman of Li & Fung Group and moderator of yesterday’s discussion at Hong Kong University, wasted little time in questioning Paulson about his decisions during the height of the crisis.

    The only mistake he was willing to concede during his tenure were mistakes of communication. He said that he was never able to convince the public that they had prevented a disaster that never occurred. He remains convinced that the major decisions he made at the time were the right ones.

    Paulson says U.S. economic growth will be stronger in the second half of next year, but unemployment will be too high for a while. It will only dip down slowly and that will continue to be a problem for policymakers. The housing market that led the U.S. into the financial crisis is still “very, very fragile.”

    http://blogs.forbes.com/robertolsen/...est-challenge/

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  • DAL
    replied
    If U.S. politics look too unstable, foreigners will not merely stop buying our debt; they will stop investing in the U.S.

    Leave a comment:


  • SRT936
    replied
    Originally posted by BigPat View Post


    That is some serious historical revisionism there. Bush began his term with a budget surplus (which was achieved with much prodding from the GOP). It seems as though the GOP jettisoned their fiscal conservative principles entirely at the dawn of the new millennium. Bush and the GOP cut taxes without any spending cuts to ofset the revenue loss. They began two expensive wars, added a huge new Medicare entitlement, and spent money on all sorts of other programs without increasing revenue. This was prior to 2007. Most of our systemic debt problem predates Obama.
    As much as it pains me, I have to agree with most of this. Bush spent money like a drunken liberal. Obama, however, has taken the ball and is heading to the end-zone with a speed that Bush could only imagine.

    Leave a comment:


  • PoliceProspect
    replied
    Well that's good news... If Congress plays around with the debt ceiling like they did with the budget it could still have significant consequences.

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  • DAL
    replied
    Geithner confident Congress will raise debt limit

    WASHINGTON (AP) – Treasury Secretary Timothy Geithner (GYT'-nur) says Republicans are assuring the administration that they will pass an increase in the government's borrowing limit in time to prevent an unprecedented default on the nation's debt.

    Geithner tells NBC's "Meet the Press" that Republicans gave this assurance to President Barack Obama at a White House meeting last Wednesday.

    Geithner says Republican leaders told Obama that they recognized that they couldn't play around with the government's credit rating and he's confident Congress will act in time.

    Geithner has told congressional leaders that the U.S. will reach the current debt limit of $14.3 trillion no later than May 16. He has said he will have a few options he can use that would delay a possible government default until about July 8.

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  • That Guy
    replied
    Originally posted by 1042 Trooper View Post
    This won't even touch the debt. It will reduce by how much we go into deficit. It would be laughable if not so devastating in its effect
    Giving your pension back?

    Leave a comment:


  • DAL
    replied
    If you want to be theoretical, we could raise the debt ceiling and not issue any new debt.

    If we do default, it will be very hard to issue any new debt except at exorbitant interest rates.

    Leave a comment:


  • BigPat
    replied
    Originally posted by DAL View Post
    The national debt is more than $14.3 trillion. With a deficit of somewhere around $1.4 trillion per year, the possibility that we could enact a budget with a surplus, which is what is needed to pay down even a small amount of debt, is remote.
    I think it could be done, it happened a little more than a decade ago. The problem is that as soon as a surplus is achieved neither party can seem to reduce immediately eliminating the surplus with tax cuts and spending increases.

    Leave a comment:


  • BigPat
    replied
    Originally posted by JasperST View Post
    You still haven't learned to read. When did Pelosi take over?
    You ignore my points as usual. Your assertion that Bush and the GOP were fiscally responsible and that all of the deficits somehow began with Pelosi is laughable and completely false.

    BTW, instead of making your little snide remarks, maybe you should at least read up on the basic facts of the issues we are discussing. You are aware that Pelosi assumed duties as House Speaker in January 2007, right?

    Leave a comment:


  • eric_farang_bah
    replied
    Originally posted by DAL View Post
    The national debt is more than $14.3 trillion. With a deficit of somewhere around $1.4 trillion per year, the possibility that we could enact a budget with a surplus, which is what is needed to pay down even a small amount of debt, is remote.
    If we dont then we are going to be a third world country

    Leave a comment:


  • DAL
    replied
    The national debt is more than $14.3 trillion. With a deficit of somewhere around $1.4 trillion per year, the possibility that we could enact a budget with a surplus, which is what is needed to pay down even a small amount of debt, is remote.

    Leave a comment:


  • JasperST
    replied
    Originally posted by BigPat View Post


    That is some serious historical revisionism there. Bush began his term with a budget surplus (which was achieved with much prodding from the GOP). It seems as though the GOP jettisoned their fiscal conservative principles entirely at the dawn of the new millennium. Bush and the GOP cut taxes without any spending cuts to ofset the revenue loss. They began two expensive wars, added a huge new Medicare entitlement, and spent money on all sorts of other programs without increasing revenue. This was prior to 2007. Most of our systemic debt problem predates Obama.
    You still haven't learned to read. When did Pelosi take over?

    Leave a comment:


  • eric_farang_bah
    replied
    Originally posted by DAL View Post
    Do you have $10 trillion to spare?
    The debt ceiling is like a credit card and its spending limit. You dont have to pay the $10,000,000,000,000 off at once all you need is to pay off some then you can use that amont when needed. Like a family struggling to get by.

    Leave a comment:


  • BigPat
    replied
    Originally posted by JasperST View Post
    It's politics of course but not accurate to think of it as a tit for tat scenario. Fact is, the debt goes way up when Democrats control congress. Bush was doing OK until madam Pelosi and crew took over. The only anchor slowing them down at all is the Republicans control of the House.


    That is some serious historical revisionism there. Bush began his term with a budget surplus (which was achieved with much prodding from the GOP). It seems as though the GOP jettisoned their fiscal conservative principles entirely at the dawn of the new millennium. Bush and the GOP cut taxes without any spending cuts to ofset the revenue loss. They began two expensive wars, added a huge new Medicare entitlement, and spent money on all sorts of other programs without increasing revenue. This was prior to 2007. Most of our systemic debt problem predates Obama.
    Last edited by BigPat; 04-14-2011, 06:29 PM.

    Leave a comment:


  • BigPat
    replied
    Originally posted by 1042 Trooper View Post
    I think not. I say shut off the money and let the chips fall where they may. This is just one more Obama lie. First he votes against it, now he wants it.

    What a fool. Live with it, Barry.
    A default on the Government debt would almost instantaneously transform America from a superpower into a third world country, and it would most certainly tank our economy and most likely the world economy with it.

    Also I am not sure where the "lie" is, as Obama never promised that he would not allow the debt ceiling to be raised during his Presidency.

    Leave a comment:

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