How should the debt ceiling crisis be handled? What should the Congress and President do to avert what will happen on August 2nd if we default? Who should blink first? Or should neither side give in, keep the ceiling, tax levels, etc. as they are and screw the result? Do you have an alternative that neither side has proposed? Speak up!
For Kindle and with free ePub version. Only $9.49 Great reading.
Here is what Gary Shapiro CEO of the Consumer Electronics Association (CEA) said: Dvorak's writing sings with insight and clarity. Whether or not you agree with John's views, he will get you thinking and is never boring. These essays are worth the read!
Subscribe to Main Blog feed here:
Subscribe to Comments too (below):
Bad Behavior has blocked 4459 access attempts in the last 7 days.
The debt ceiling is there for a reason. What’s the point of a debt ceiling if you just raise it every time you get near it. If the rest of American society has to learn to live within a budget, the government can too.
What does anyone do when their spending is unsustainable and they are in massive debt? Cut unnecessary expenditure, bring them home.
#2…it’s hard to compare “anyone” with the Fed…but generally you cut unnecessary spending (nice lunches, fancy beer, etc) and look at ways to supplement your income (side projects, mowing lawns, etc).
Problem is, there’s a faction in the House who refuses to consider all the options. They could get a foot and give an inch, but no. They could then get a yard and give an inch, but no.
This entire circus is a farce. The GOP has been a sack of hypocritical lying pandering race-baiting class-sniping divide-and-conquer disingenuos evil liars. I still haven’t forgiven them for killing the Presidential line-item veto.
Just inflate out of it, like in the 1930s(+)
#4, your kidding right? The neolibs have been in full class warfare mode for the last few months. Trying increase taxes on employers does not work, and will drive us even further into Obama’s depression.
About tax increases, In the last 2 years spending has increased 25%, now our dear leader can’t cut 2% of that? Come on get real. We do not have an income problem, we have a spending problem. When you have an individual who can’t control their spending the last thing you do is give them more money. If you do, they will just spend it, and come begging for more. If the republicans cave, here that is exactly what will happen, you can take that to the bank.
Once the government proves it can live within its means, then, and only then will I even consider tax increases, and even then, its going to have to be fair. If one person gets a 1% tax increase, everyone does.
A sure sign that a poll is worthless is when one of the possible answers is: “What’s the debt ceiling?”
Well the actually fact is having a dept ceiling is a dumb ass thing to start with.
All federal spending is approved by congress and all revenue collections are also approved by the same congress.
If they don’t want to fund government spending through borrowing they can either spend less or collect more revenue when they pass the annual spending bills.
The fact is when they approved the tax cuts in 12/10 and then passed the budget (I think in March 2011). They already agreed to borrower 40 cents of each dollar they planned on spending.
All of this now is just bull shit. And if they crash the economy because they refuse to do what they already agreed to do (borrower the money) they should all be arrested for treason.
Good write up on the current status, no surprise:
http://economist.com/node/18928600
This is what should be done:
http://robertreich.org/post/7539909777
Robert Reich for president.
Another huge problem is the likes of #1 and #2 convince other sheeple that the US and the interdependent world economy is as complex as a family of four.
@#8 Problem is that current public opinion/need , current Congress and current economic situation were not imagined by previous Congresses. We are paying now for bad decision of the past and fortunately there is debt ceiling to stop us from continuing the same.
My opinion is that we are missing the fact that there are 2 fundamental problems that led to this debt and issue of debt ceiling… Those need to be solved FIRST and in this order:
1) Size of the Government as percentage of GDP. This represents the load economy must support. Present size is unbearable. This must be legislated and limited. Most urgently it needs to be immediately cut. To get to typical historical level of latter part of 20th Century – cut by at least 30%. To eliminate any partisanship – cut across the board. Every office, every department, every niche – 30%. Hence Rep’ method of cutting spending only is the only option and it must be done first (and on the larger scale than most Rep’s propose).
2) Once size of Government is cut to the level that economy can take than and only than we can compare how big the revenue is and how big the budget is and finally create balanced budget legislation so that we are never back at this point again. Than we can barter at who and how much to tax. When Government size is first limited and budget forced to be balanced. Only than we can talk who and how to tax.
Debt ceiling in all of this? Perfect tool to get it done. Politicians would never do it without being forced. Not lifting debt ceiling would force them to make these fundamental changes and in the process solve the debt issue as well.
In fact I will go further and say this whole process is bullshit. Passing a 10 or 15 year plan that any future congress can alter anyway they want is a waist of time.
The Federal budget runs 10/1 to 9/30 each year. We are back pissing and moaning about if we are going to fund the rest of the 2011 budget (raising the dept ceiling) and what we are going to do years from now.
The focus now should be what are the spending levels and revenue collections are going to be for 2012. Period.
If they did that then they would be looking at what needs to be looked at: what spending needs to be now and what modifications to the tax system need to be made now.
Both Social Security and Medicare have dedicated taxes and reserves so they are solvent today. They both need long term alterations so they can remain that way however they have very little to do with “todays” budgets.
These can’t be repeated enough:
#8: “debt ceiling is a dumb ass thing to start with. All federal spending is approved by congress and all revenue collections are also approved by the same congress. (…) they approved the [unpaid for] tax cuts in 12/10 and then passed the budget (…) They already agreed to borrow 40 cents of each dollar they planned on spending.”
#10: “the US and the interdependent world economy is as complex as a family of four” — Any reasonable person would think this was obviously not the case, right?
To recap: CONGRESS ordered the money spent, and after it’s allocated/ spent, now wants to say “nah… we changed our minds, ha ha, it’s the President’s problem.” It’s politics at its worse.
You know why the US is powerful? Among other things, because the dollar is seen as a stable currency. People around the world BELIEVE in the USA and the dollar. We here do too, except the “USA! USA! Number One!” mentality has been eroded to emptiness. People still chant it, but many have been led to believe that “USA! USA!” does not mean the government. Guess who did that? The party that does not really believe in “We the people”. The party that believes not in a Democracy but in a Republic, because, after all, they think they know better then “the other people”.
What happens when people stop believing in the US Dollar? Oil prices may not be tied to the US dollar anymore, which would be bad. Also, a lot of that money stashed under mattresses right now flows back into the economy (because it’s now becoming worth less, so people will want to exchange it for other things). More dollars are around, the dollar is worth less, the prices of things go up.
You think it’s bad the Fed gives away money to financial institutions? That money is at least given away with some strings attached. If more money flows in with no strings attached, things will snowball into much worse conditions.
P.S. It’s “Democratic”, not “Democrat”.
# 9 – sorry I disagree completely on “using” the dept ceiling for anything. Both sides threatening to potentially cause a world wide depression if they don’t get 100% of what they want is 100% failure.
One of congresses primary jobs is to negotiate and pass a federal budget. The key word in the statement is negotiate. Each congress person should fight for what they believe their constitutes want and in the end make the best compromise they can.
If they don’t want to borrower money then they either need to pass less spending or more revenue collections, or both.
What ever they do with spending and revenue collections they should not default to some across the board plan. It is their job to evaluate what spending is the highest priority (again through negotiations).
It’s as easy as 1 2 3. There’s 3 wars out there somewhere. Stop it. Take that to the bank.
#8 “All of this now is just bull shit. And if they crash the economy because they refuse to do what they already agreed to do (borrower the money) they should all be arrested for treason.”
Exactly right!
The GOPs moral outrage would be less laughable if they weren’t exploiting a procedural move ENTIRELY by choice.
Interest on the national debt is much less than the revenue being collected, so there is no need for a default, unless the President orders the Treasury Secretary not to pay the interest on the national debt.
#6 “If one person gets a 1% tax increase, everyone does.”
You’re going to have to explain that one.
“Trying increase taxes on employers does not work, and will drive us even further into Obama’s depression.”
No it won’t. Corporations are sitting on record cash because they don’t see consumer demand coming back. If everyone was putting a lot of their revenues into expansion then a corporate tax increase would discourage the expansion. That just isn’t happening, so I don’t see an increase have much of an effect at all.
Corporations are sitting on cash precisely because they are worried about the new taxes and regulations.
All I can do is watch and wait and worry. When the US goes down, everyone goes down.
“Both sides..”
Not so much. This is a specific situation that ONLY happens when there is a sitting Democrat in the WH and a big anti-tax themed GOP success in the House.
Nobody else is juvenile enough to think that this plays to their advantage.
“One of congresses primary jobs is to negotiate and pass a federal budget.”
That’s true. The budget is a huge deal: months and months. We are seeing something else.
This debt ceiling nonsense is a GOP attempt to renegotiate the deal using used-carsalesman tactics. Got to make the deal today, right buddy?
Wrong. The GOP are effectively changing the rules to suit their position, and using time pressure to do so. Obama has to call them on it.
The so-called debt ceiling is just made up number that they keep changing for the past 10+ years. It’s meaningless. This number is so large it has no real meaning anymore.
And how is it we got into this mess? People keep pointing to China as our creditors, but don’t they still have starving children in China? Which was the mantra my parents told me when i didn’t wanna eat my Lima Beans.
How exactly do we owe China Gazillions? Is it out right loans with the Chinese government (Communists?) or is it with the businesses in China that make all the iPods and tablet PCs we use? Is it the trade deficit? I’ve been hearing about that since the Reagan administration.
How is it we are in so much debt just because we keep buying products made overseas? If people are indeed buying these products, how does that make our government go in debt?
Is there a simple computer animated video i can find on you tube that make sense of all this bullshit?
There is no debt ceiling, the congress likes to do meaningless events so they can pretend things are out of their hands.
As for whether our borrowing is an issue; all countries and peoples buy our bonds. If they thought we were untrustworthy (Greece) or close to defaulting (Ireland) we’d have no sales below 10% interest.
Stopping the deficits has to be more taxes and cost reductions in all sections of government, including defense and social security. I’m tired of the arguments, none of them want to man up and actually do their jobs.
Hardship radicalises an electorate.
Just remember, in washington a DECREASE on an INCREASE is considered a CUT. So when everyone runs around saying they are ‘cutting’ expenditures, they arent cutting things like you and i do…
It’s difficult to read all these comments without calling people out on their misuse of simple words such as “waist – waste” and “than – then.” It makes it a chore to slog through the comments when I see such desecration of the English language.
The poll is BS since it doesn’t say what the “Democrat method” or “Republican method” are.
It is abundantly clear that we need to both cut spending and raise taxes. The latter could easily be accomplished by simply going back to pre-Bush tax rates and regulations. The cuts of course are more difficult, but we could start by pulling out of the Middle East!
Oh, and smartalix, the Supreme Court canned the line item veto, 6 to 3. And I’m glad they did. If Congress can’t keep adding unrelated bull shit to the bills they send to the White House, they deserve to be vetoed in whole. They can try again without the BS. I’ve got all day…
#19 Another plausible reason why they are sitting on cash is because nobody is buying anything. We seem to have a classic chicken and egg situation here.
One way to make a chicken is government spending. The classic and favored way is to start a war. Another other is to invest in infrastructure. The third way is to give money to the 5% of richest of the rich. I like option 2.
In # 4 smartalix said: The GOP has been a sack of hypocritical lying pandering race-baiting class-sniping divide-and-conquer disingenuous evil liars. I still haven’t forgiven them for killing the Presidential line-item veto.”
I pretty much agree.
Our politicians are equipped with the morals of gutter cats.
A presidential line item veto has to be changed into a review committee process because it is necessary for getting rid of pork provisions which poison all these bills with stuff that is unrelated to the intent of a bill.
From passing something reasonable, our elected officials hold their noses and pass whatever bloated corpse get rolled out unless its just too toxic.
The president should be bothered with that stuff and neither should we.
The problem with republics is the same as with monarchies. After a while, the noble intentions at the start are as dead as the noble individuals which founded the kingdom or the republic. (The methods of creation for either are equally bloody.)
If we want a representative government, we’ll have to create it.
The first thing we do is change from an elected to a selected form of government.
Pick names out an eligible citizen pool and they’re stuck with doing the job for one, and only one, four year term.
There is no such thing as a career in politics. (The only thing worse than getting stuck with somebody who didn’t want the job is getting stuck with some idiot who did.)
Eligibility requirements are:
• were you born here or are you a naturalized citizen?
• are you a permanent resident in a village, town or city within our borders?
• are you above the age of 25?
• are you healthy enough? (you dont</b) suffer from any clinical health issue(s) or mental impairment(s) which would prevent you from fulfilling your duties?)
• have you never served on the government before?
• have you never been found guilty of a violent crime?
• have you never been found to be clinically insane?
Answer yes to all of these questions, you’re eligible for selection.
Don’t want to be bothered?
Go live elsewhere!
That would get rid of all PACs, K Street lobbyists, a lot of graft, waste and expense that we’re all paying for.
YOU KNOW: Its always good to do the smallest tiniest itsy bitsy teeniest bit of reading before one ventures into the market place of ideas. Wiki is always a excellent first step:
http://en.wikipedia.org/wiki/United_States_public_debt
Liars, dopes, shills and the simply ignorant can be identified after a 15 minute read. Sadly, only the ignorant will improve themselves.
Education—what a concept. It can happen after graduation if you are willing to READ. Course, you can always go in the wrong direction thinking that reading/education/intelligence is pointing out spelling errors.
And the accelerating death spiral only continues. Where are the jobs? Thats right, the jobs are gone. Gone. GONE. GONE BABY GONE!
How can we adapt to the new reality when we never accepted the old reality?? Is there some kind of “vow” I can sign to show just how stupid I am?
Silly Hoomans.