Friday Tragedy: The US Debt Limit Explained

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.

-Senator Obama, 2006


Friday Tragedy: The US Debt Limit Explained


Submitted by Tyler Durden on 01/27/2012 18:19 -0500



Ordinarily this space would be reserved for Friday humor, but unfortunately, this is nothing short of a tragedy, especially since as of today the US debt target is $16.394 trillion, a number which will be breached before the end of the year, and possibly before the presidential election in November. As a reminder, in 2011, the US economy grew by 1.7%. It almost, but not quite, offset the growth of US debt held by the public, which grew at a brisk 11.3% pace in the past year...

first of all, it's saturday.

second of all, a nation's finances work much different than a family's finances.

finally, let's look at which policies lead to the explosion of debt:



coincides with the implementation of tickle down economics, once reagan told the uber-wealthy they didn't have to pay their fair share.

as a result, we see the uber-wealthy getting even more uber-wealthy.



it shouldn't take a fucking einstein to figure this out.

now go ahead, cry "class warfare" because i pointed out facts.

Originally Posted by UncleBuck

first of all, it's saturday.

second of all, a nation's finances work much different than a family's finances.

finally, let's look at which policies lead to the explosion of debt:



coincides with the implementation of tickle down economics, once reagan told the uber-wealthy they didn't have to pay their fair share.

as a result, we see the uber-wealthy getting even more uber-wealthy.



it shouldn't take a fucking einstein to figure this out.

now go ahead, cry "class warfare" because i pointed out facts.

well, I don't disagree with you, but our 'leaders' should be able to realize, if the wealthy aren't paying their share and tax receipts are decreasing, they should control their spending instead of letting it get higher every year. Its all the politicians, not just Obama, and Reagan probably did start it. I was just going off the contradiction of Obama's speech in 2006, I guess hes learned a lot since then since being a naive freshman senator? Maybe he didn't have enough experience for the job he took on contrasting his 2006 stance to today (stark opposite)

It also couldn't be the fact computers and mass communication were taking off faster than ever before? We're now quickly reaching the limits of silicon and coincidently, the economy is going to hell. The 1% are losing money at much higher rates too... Naw, let's blame the dude who thought we were under control of our E.T. masters.

Technocracy is the political theory of how technology, from the plow to computers has driven production much faster than it can be utilized. All our automation and instant communication has stagnated growth. You can't produce more than people have the means to consume. Even if there's a demand. The ones in charge realized this. Which is why employment is so low too. Potential output far exceeds employment needs.

Originally Posted by squarepush3r

well, I don't disagree with you, but our 'leaders' should be able to realize, if the wealthy aren't paying their share and tax receipts are decreasing, they should control their spending instead of letting it get higher every year. Its all the politicians, not just Obama, and Reagan probably did start it. I was just going off the contradiction of Obama's speech in 2006, I guess hes learned a lot since then since being a naive freshman senator? Maybe he didn't have enough experience for the job he took on contrasting his 2006 stance to today (stark opposite)

the vote on the debt ceiling is mainly a political vote. i believe obama did vote to raise the debt ceiling as a senator one of the next two times it was held, and i also believe that his opposition was to the wars in iraq and afghanistan being counted as "emergency funding" and not really being counted to the debt. i believe he changed his vote when they changed the way the war was paid for.

i disagree with you on your conclusion that because we had one fuck up, we should fuck up again to fix it. we fucked up when we let an exponential amount of the wealth go to the top, we should not try to fix it by fucking up and putting an effective tax increase on the middle class by cutting services that they are more dependent on now that we stagnated their wages via our original fuck up.

i would much prefer we cut wasteful spending like unnecessary wars and tax cuts that do not create jobs and add to the deficit. cut oil subsidies for companies that make record profits, pay no taxes, and pass the end cost onto the consumer. i am even for reforming the big ones like SS and medicare via means testing and other ways.

based on your latest started threads, i am guessing you just want to bash obama though, and my words are wasted.

Originally Posted by UncleBuck

the vote on the debt ceiling is mainly a political vote. i believe obama did vote to raise the debt ceiling as a senator one of the next two times it was held, and i also believe that his opposition was to the wars in iraq and afghanistan being counted as "emergency funding" and not really being counted to the debt. i believe he changed his vote when they changed the way the war was paid for.

i disagree with you on your conclusion that because we had one fuck up, we should fuck up again to fix it. we fucked up when we let an exponential amount of the wealth go to the top, we should not try to fix it by fucking up and putting an effective tax increase on the middle class by cutting services that they are more dependent on now that we stagnated their wages via our original fuck up.

i would much prefer we cut wasteful spending like unnecessary wars and tax cuts that do not create jobs and add to the deficit. cut oil subsidies for companies that make record profits, pay no taxes, and pass the end cost onto the consumer. i am even for reforming the big ones like SS and medicare via means testing and other ways.

based on your latest started threads, i am guessing you just want to bash obama though, and my words are wasted.

no, I am listening. I figured the best way to counter you and Dan who were constantly criticizing Ron Paul, was to put you on the defensive by pointing out problems with the current administration. Also, I am not putting a how or why on the debt came to be, but it does exist. Every year since like 1980, the total deficit has gone up like crazy. The interest on our debt alone will be about $225 Billion, as seen on the US Debt Clock here
http://usdebtclock.org/

What I don't think you realize, is you say you want to protect the services that the middle class need so you justify spending each year, but by continuing this debt there will be only 1 answer to come which will be bankruptcy, what do you think will happen to the services to the poor and middle class once we are bankrupt? Hint, the dollar will collapse and your paper won't be worth anything and well have a 3rd world country.

Its just a runaway train and people are addicted to this debt, don't realize the consequences will be much higher in the future, and not only that will be passed on to the next generation.

Most of all the financial problems in this country can be solved by nailing the fuck out of the rich. Let them pay 50-70% in taxes, I am sure most people would still gladly trade places. Class warfare has been going on forever, right along with wealth distribution, the rich just want to trick you into thinking it's them giving it to us, not the other way around.

Originally Posted by squarepush3r

I figured the best way to counter you and Dan who were constantly criticizing Ron Paul, was to put you on the defensive by pointing out problems with the current administration.

That's called redirection. That doesn't excuse Paul for anything. Paul is one of the largest supporters of the rich. Obama, like all candidates including RP are going to make a ton of promises they will never keep in order to be elected, because people NEED to be fed a ton of BS in this country. On top of that, inevitably they will all be privy to more information once elected into office.

Obama has not lived up to a lot of things, and in many respects it pisses me off. But I am not about to vote somebody like RP or Mittens in over Obama just because he hasn't followed through with everything. If you think it's bad that he hasn't done that, elect RP and wait to see what he DOESN'T do because to be honest, it's going to be about everything he's banked on.

Originally Posted by squarepush3r

What I don't think you realize, is you say you want to protect the services that the middle class need so you justify spending each year, but by continuing this debt there will be only 1 answer to come which will be bankruptcy, what do you think will happen to the services to the poor and middle class once we are bankrupt? Hint, the dollar will collapse and your paper won't be worth anything and well have a 3rd world country.

Its just a runaway train

the services the middle class benefit from did not cause the explosion of debt. SS and medicare were in effect well before the debt started to balloon. so was unemployment insurance and other components of the social safety net.

if that graph started ballooning upwards upon implementation and expansion of the social safety net, i would buy your take on things. as it is, that graph blows up when you add in "free market" "supply side" "trickle down" "reaganomics"...whaever you want to call it. coincidentally, the rich get richer at an exponential pace (as happened before the great depression).

i just think you are a bit misguided in thinking that the only way to deal with this problem is to kill what did not cause it.

Agreed raising the debt ceiling is a political vote, fostered by the post-bush republican house, since the tea party has become increasing influential. But tbh why do we need to be borrowing? WHY DO WE HAVE DEBT? Thats a question, and people are afraid to cut any money in the national budget. Instead of slashing costs, obama tried to stimulate the economy, By borrowing more money, to create more money for the people ie stimulating job creation so everybody would be employed. But how effective can it be, Obama has increased the debt more then any other president. On a one on one basis, W. spent 4.858 trillion in his two terms (1.66 billion a day). Whereas Obama has spent 3.445 trillion in his first two years (5 billion a day). Thats the contrast and the result of stimulus plans and bailing out mismanaged companies has resulted in 2.5 million jobs, but also a loss of 2 million jobs. Furthermore the jobs created are state sevices, bus drivers and what not. Obama inherited this problem by W. but we see democrats saying obama hasn't solved the problem but has added at a much slower pace then W. Is completely out, adding to the debt at almost 4 times faster than W.

The debt limit can be raised as much as we want, it won't make a difference, our actual debt is the problem not this debt limit political crap. Its time for us to realise we cant afford to keep spending.