Should we have a debt ceiling?

myp · Dec 10, 2012

clax said:
Do the debt ceiling is to high. I agree

That is not what I said. I said the debt ceiling is pretty much pointless. The "$60000" in the analogy is the budget. The "$40000" is tax revenue. The ceiling plays not role in it- it just ends up being a burden and we go through the motions of bumping it up every time. If you want to reduce the debt, you have to start with budgets and revenue, not the ceiling.

myp · Dec 10, 2012

clax said:
Congress apparently, not budging = stale mate which = stagnation.

They don't wish to be stagnant (for the most part) though- there's a difference.

clax · Dec 10, 2012

myp said:
That is not what I said. I said the debt ceiling is pretty much pointless. The "$60000" in the analogy is the budget. The "$40000" is tax revenue. The ceiling plays not role in it- it just ends up being a burden and we go through the motions of bumping it up every time. If you want to reduce the debt, you have to start with budgets and revenue, not the ceiling.

It would if it was at "$40000" so it sounds like it should be lowered.

clax · Dec 10, 2012

myp said:
They don't wish to be stagnant (for the most part) though- there's a difference.

Yes they wish the other side to just give in to their demands, meanwhile the country suffers

myp · Dec 10, 2012

clax said:
It would if it was at "$40000" so it sounds like it should be lowered.

The debt ceiling doesn't matter either way! The budgets are set yearly and the debt ceiling is just an overall cap on all debt. But since we run deficits we hit the cap from time to time and then just move the cap higher.

clax · Dec 11, 2012

myp said:
The debt ceiling doesn't matter either way! The budgets are set yearly and the debt ceiling is just an overall cap on all debt. But since we run deficits we hit the cap from time to time and then just move the cap higher.

Stop moving it, that would make it mean something, but again Congress doesn't realize they work for us

myp · Dec 11, 2012

clax said:
Stop moving it, that would make it mean something, but again Congress doesn't realize they work for us

So what do we do when we hit it then? Stop issuing debt? Defaulting on the debt now to stop us from defaulting on it later makes no sense.

clax · Dec 11, 2012

myp said:
So what do we do when we hit it then? Stop issuing debt? Defaulting on the debt now to stop us from defaulting on it later makes no sense.

maybe stop borrowing so much out even better stop spending so much.

Really if you can't make your mortgage payments do you go buy a Ferrari? Seems simple to me

tecoyah · Dec 11, 2012

I see the debt ceiling as little more than a means to remind the children to do their chores. A good kid will follow the list on the fridge, a bad kid will ignore it.

We unfortunately have raised a bunch of Brats...so the chore list is kinda pointless.

myp · Dec 11, 2012

clax said:
maybe stop borrowing so much out even better stop spending so much.

Really if you can't make your mortgage payments do you go buy a Ferrari? Seems simple to me

Okay so you are saying that the budgets should be lower. You don't need the debt ceiling for that. That's my whole point.

myp · Dec 11, 2012

tecoyah said:
I see the debt ceiling as little more than a means to remind the children to do their chores. A good kid will follow the list on the fridge, a bad kid will ignore it.

We unfortunately have raised a bunch of Brats...so the chore list is kinda pointless.

It might even hurt if they actually throw us towards default. But either way, I think right now is actually a good time to rack up some debt given bond yields- I just wish it was debt for good things (infrastructure improvements, research, education, etc. that could have a long run net positive effect) and not for some of the waste that it currently goes towards.

clax · Dec 11, 2012

myp said:
Okay so you are saying that the budgets should be lower. You don't need the debt ceiling for that. That's my whole point.

Isn't the debt ceiling a proverbial ceiling on debt, meaning, a cap on how much debt we can take out. Similar to a limit on a credit card.

tecoyah · Dec 11, 2012

myp said:
It might even hurt if they actually throw us towards default. But either way, I think right now is actually a good time to rack up some debt given bond yields- I just wish it was debt for good things (infrastructure improvements, research, education, etc. that could have a long run net positive effect) and not for some of the waste that it currently goes towards.

Though I can see your point, I am wary of the future financial issue our entire world will likely deal with. Obviously, The debt ceiling has done nothing to prevent debt, and literally cannot do so...thus a rather pointless silliness. I also believe this country is in desperate need of an infrastructure upgrade...I am simply unsure we should borrow to do it, because of the risks going forward.

myp · Dec 11, 2012

clax said:
Isn't the debt ceiling a proverbial ceiling on debt, meaning, a cap on how much debt we can take out. Similar to a limit on a credit card.

Yes, but a budget is a budget. The money in the budget is still spent regardless of the debt ceiling which is why we have to keep raising it. There is currently no restriction on capping a budget in relation to where the country hits the debt ceiling.

myp · Dec 11, 2012

tecoyah said:
Though I can see your point, I am wary of the future financial issue our entire world will likely deal with. Obviously, The debt ceiling has done nothing to prevent debt, and literally cannot do so...thus a rather pointless silliness. I also believe this country is in desperate need of an infrastructure upgrade...I am simply unsure we should borrow to do it, because of the risks going forward.

The United States can currently borrow at the lowest rates it has EVER been able to borrow at. I feel fairly confident in saying that on the scale of world history, no institution has ever been able to borrow at these rates and this volume, including the United States in the past. Loans are VERY cheap for the US right now. If there was ever a time to spend on infrastructure, it is now.

I should add that I am actually quite fiscally conservative. I don't think fiscal stimulus is a good way to stimulate the economy or the best way to solve a number of problems that many look towards fiscal policy for. But I do think when it comes to certain projects in particular, the government has a role to play in increasing long term growth for the country. While I support spending on certain projects right now, I want to cut some other wasteful spending too and once we are in the clear with this recovery, I will want to cut even more of the wasteful spending. Of course wasteful and useful are subjective terms, but certain things have a lot of data to back up their efficacy.

clax · Dec 11, 2012

myp said:
Yes, but a budget is a budget. The money in the budget is still spent regardless of the debt ceiling which is why we have to keep raising it. There is currently no restriction on capping a budget in relation to where the country hits the debt ceiling.

The debt ceiling is a political device. if it want raised again then it would serve a purpose.

myp · Dec 11, 2012

clax said:
The debt ceiling is a political device. if it want raised again then it would serve a purpose.

It has to be raised if the budget calls on it to be raised. Of course spending could be cut, but then you don't need a ceiling in the first place. Spending and revenue affects the debt, not the ceiling. The ceiling is arbitrary. In a recovery like right now, we probably can't make huge cuts anyway, so it is okay to let the debt build. The ceiling just gets in the way. Not raising it and continuing to spend means we default now. But the whole purpose of the ceiling is to stop default- so that is counterproductive.

clax · Dec 11, 2012

myp said:
It has to be raised if the budget calls on it to be raised. Of course spending could be cut, but then you don't need a ceiling in the first place. Spending and revenue affects the debt, not the ceiling. The ceiling is arbitrary. In a recovery like right now, we probably can't make huge cuts anyway, so it is okay to let the debt build. The ceiling just gets in the way. Not raising it and continuing to spend means we default now. But the whole purpose of the ceiling is to stop default- so that is counterproductive.

Or budgets can be amended. They should never be set in stone

myp · Dec 11, 2012

clax said:
Or budgets can be amended. They should never be set in stone

Yes, budgets can be amended as I said. It comes down to budgets and revenue, not the debt ceiling.

I guess we are sort of getting to a chicken and the egg sort of thing, but when we keep increasing the debt ceiling, it becomes useless. In the current instance though, we might have no other choice.

andrew320 · Dec 20, 2012

What's sad is that President Barack Obama wants to have permanent control over the debt ceiling and raise it indefinitely. It's bad enough that the U.S. has a $16.4 trillion national debt, but a huge concern is the $121 trillion tidal wave coming within in the next two decades that will force the U.S. to only afford interest rate payments and some Social Security.

Although people like to cite a Congressional Budget Office (CBO) report that shows next year's budget will be under $1 trillion for the first time since 2008, the budget deficit will once again exceed the trillion dollar mark in 2012, while the national debt hits the $20 trillion mark!

Should we have a debt ceiling?

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