Can someone explain in simple terms this debt ceiling thing?

Calusa

What "bad" things will happen to American citizens if the agreement does not happen? Sorry for being lazy - I just don't want to get a headache reading the corporate-spun version from the media. Thanks.

Thoughts: maybe we should stop paying our debts for a year or two and get financial matters back on track .....?

Phishbohn

Hmmmm.... this has politics written all over it.

Coxster

Phishbohn wrote: »

Hmmmm.... this has politics written all over it.

We need a politics forum.

Mango Man

Phishbohn wrote: »

Hmmmm.... this has politics written all over it.

Do you mean politics, or Politics?

Calusa

Phishbohn wrote: »

Hmmmm.... this has politics written all over it.

Why? My question is not political in nature. If it doesn't fly here screw it.

pointerDixie214

Calusa's question is not political at all in nature. It's economical. The problem is that people are too stupid to differentiate between the two.

Calusa... it's all about solvency. Can't borrow more than we can produce. Allegedly.

The "allegedly" is where the politics come in. :grin

Coxster

pointerDixie214 wrote: »

Calusa's question is not political at all in nature. It's economical. The problem is that people are too stupid to differentiate between the two.

Calusa... it's all about solvency. Can't borrow more than we can produce. Allegedly.

The "allegedly" is where the politics come in. :grin

Did you mean "economics?" Economical - Giving good value or service in relation to the amount of money, time, or effort spent. And if you don't think politics and economics are all wrapped up in each other you ought to be real careful on playing the "stupid" card.

fins4me

Phishbohn wrote: »

Hmmmm.... this has politics written all over it.

There is not any room in there for another debt limit thread...

pupraiser

Coxster wrote: »

Did you mean "economics?" Economical - Giving good value or service in relation to the amount of money, time, or effort spent. And if you don't think politics and economics are all wrapped up in each other you ought to be real careful on playing the "stupid" card.

Right, for example. It's not very economical to drive to town to buy a cup a coffee.

DrK

Think credit card. We just realized we are maxed-out and the restaurant bill is coming. Either we call the credit card company and increase our credit limit so we can pay or start cleaning the dishes.

aniano

fins4me wrote: »

There is not any room in there for another debt limit thread...

We can raise the "debt limit thread" ceiling. But I demand a decrease in spinfreak-centered threads in Off Topic to compensate. I'm not budging on that.

pupraiser

DrK wrote: »

Think credit card. We just realized we are maxed-out and the restaurant bill is coming. Either we call the credit card company and increase our credit limit so we can pay or start cleaning the dishes.

If you've reached your CC limit, then you need to "start cleaning dishes" vs. going more into debt. Well, unless the dept ceiling is being raised so that someone will pay my mortgage.

Calusa

DrK wrote: »

Think credit card. We just realized we are maxed-out and the restaurant bill is coming. Either we call the credit card company and increase our credit limit so we can pay or start cleaning the dishes.

Thanks - this is the simplified version I was asking for. Anyone besides me think it's time for the government to start washing the dishes?

fins4me

aniano wrote: »

We can raise the "debt limit thread" ceiling. But I demand a decrease in spinfreak-centered threads in Off Topic to compensate. I'm not budging on that.

If we don't raise the limit,,, will we default on all of our Spin threads????

Coxster

pupraiser wrote: »

Right, for example. It's not very economical to drive to town to buy a cup a coffee.

But when you have to drive to town to get a newspaper, it is very economical to pick up a cup of coffee at the same stop.

Mango Man

Can't we just give them California and call it even?

fins4me

Anyway we could add Gainesville to the package???

td.

I was thinking New York and DC. If we gave China DC, you think we can get them to accept everyone that's physically there as of 8/1/11?

Calusa

Why doesn't the US just demand a renegotiation of our loan terms? Knock it down a big chunk. Lower the interest, get on a reduced payment plan. What would our lenders do? Deny us? then who are they gonna loan money to who actually pays them back? Long term thinking is what is needed here, not the typical band-aid fixes Washington so quickly resorts to.

Mark O.

How much of our debt is to people that owe us money?

Calusa

Yeah, make them pay on our debt, then cut 'em off the feed trough.

fish_stix

You can't renegotiate the "loan" terms. They're not loans. They consist of the Treasury notes and bonds which are bought up by investors, primarily U.S. investors, but also countries like China. They have a face value and an interest rate guaranteed by Uncle Sam. Ever heard of Savings Bonds? When they mature and you want to cash them in but Congress has spent all the frigging money on Obamacare and welfare for illegal immigrants and nonworking residents, and entitlement programs, then the country is in deep do-do. Who's going to get paid first? Social Security recipients or China? Don't go buying a new boat based on your S.S. check income!

spinfreak

aniano wrote: »

We can raise the "debt limit thread" ceiling. But I demand a decrease in spinfreak-centered threads in Off Topic to compensate. I'm not budging on that.

CaptTater

fins4me wrote: »

Anyway we could add Gainesville to the package???

If we give California to China and then top it off with the Gainesville liberals they'll have a population of 17 billion and debt of 7000000 trillion in no time.

Calusa

fish_stix wrote: »

You can't renegotiate the "loan" terms. They're not loans. They consist of the Treasury notes and bonds which are bought up by investors, primarily U.S. investors, but also countries like China. They have a face value and an interest rate guaranteed by Uncle Sam. Ever heard of Savings Bonds? When they mature and you want to cash them in but Congress has spent all the frigging money on Obamacare and welfare for illegal immigrants and nonworking residents, and entitlement programs, then the country is in deep do-do. Who's going to get paid first? Social Security recipients or China? Don't go buying a new boat based on your S.S. check income!

What if we default on those notes? What if the debt ceiling doesn't get raised? What will happen?

pointerDixie214

Coxster wrote: »

Did you mean "economics?" Economical - Giving good value or service in relation to the amount of money, time, or effort spent. And if you don't think politics and economics are all wrapped up in each other you ought to be real careful on playing the "stupid" card.

2. economical - of or relating to an economy, the system of production and management of material wealth; "economic growth"; "aspects of social, political, and economical life"
economic

And you are correct that POLITICAL and ECONOMICAL issues are "wrapped up in each other." But that doesn't mean they are one and the same and can't be discussed separately without the use of opinions.

Duckster

They will just print some more money. My vote feels like I am tossing a penny in a wishing well,so good luck that voting crap

cadman

Calusa wrote: »

What if we default on those notes? What if the debt ceiling doesn't get raised? What will happen?

We won't default.

The debt ceiling is an artificial limit on how much the U.S. can borrow or the limit on bonds we can sell. It started in 1917 as part of the entry into WW1. It is most often used as a tool for the out of power party to use to get their agenda moved forward. If you look at history, you will see that if there was a republican president the republicans had no issue raising the ceiling. If there was a democratic president then the democrats had no issue in raising it.

Some people confuse the debt ceiling with controlling spending, but they are wrong. They are and should be two separate items. The debt ceiling should not exist since it is just a political tool. But since we have leaders that are ball less corporate puppets who don't know how to make a decision for the good of the American people, we have to have a debt ceiling to remind them they have been spending too much money. I think Truman is the only President not to have raised the debt ceiling.

What will happen on Tuesday,if an agreement is not reached, is that either the President invokes the 14th Amendment and raises the ceiling by executive order or we pay the interest and social programs and a lot of vendors and government employees don't get a paycheck. Interest rates will probably take a sharp increase. If you think that will be good for the economy, think again. It could easily trigger another recession. Is it the end of the world? No, but it will hurt most on this forum.

the thing is, unless congress cuts spending, even if we don't raise the debt ceiling, we will still owe the same amount of money. It just won't be in bonds issued and sold. It will be unpaid bills. That is why the debt ceiling is an artificial limit. Not raising it doesn't stop the bills from accruing. It would be like using your credit card to pay the light bill. If you decide not to use your credit card to pay the bill one month it doesn't stop the bill from coming due. You either have to figure out how to reduce your expenses or increase your income.

aniano

cadman wrote: »

We won't default.

The debt ceiling is an artificial limit on how much the U.S. can borrow or the limit on bonds we can sell. It started in 1917 as part of the entry into WW1. It is most often used as a tool for the out of power party to use to get their agenda moved forward. If you look at history, you will see that if there was a republican president the republicans had no issue raising the ceiling. If there was a democratic president then the democrats had no issue in raising it.

Some people confuse the debt ceiling with controlling spending, but they are wrong. They are and should be two separate items. The debt ceiling should not exist since it is just a political tool. But since we have leaders that are ball less corporate puppets who don't know how to make a decision for the good of the American people, we have to have a debt ceiling to remind them they have been spending too much money. I think Truman is the only President not to have raised the debt ceiling.

What will happen on Tuesday,if an agreement is not reached, is that either the President invokes the 14th Amendment and raises the ceiling by executive order or we pay the interest and social programs and a lot of vendors and government employees don't get a paycheck. Interest rates will probably take a sharp increase. If you think that will be good for the economy, think again. It could easily trigger another recession. Is it the end of the world? No, but it will hurt most on this forum.

the thing is, unless congress cuts spending, even if we don't raise the debt ceiling, we will still owe the same amount of money. It just won't be in bonds issued and sold. It will be unpaid bills. That is why the debt ceiling is an artificial limit. Not raising it doesn't stop the bills from accruing. It would be like using your credit card to pay the light bill. If you decide not to use your credit card to pay the bill one month it doesn't stop the bill from coming due. You either have to figure out how to reduce your expenses or increase your income.

What he said.

aniano

spinfreak wrote: »

I'm just jealous of all the attention you get. :-)

Hickory Dog

What cadman said.