Congress Asked to Lift Debt Ceiling... again..

[motivez]

Paulson Tells Congress the Current Debt Ceiling Will Be Hit on Oct. 1

WASHINGTON (AP) -- Treasury Secretary Henry Paulson told Congress on Wednesday that the federal government will hit the current debt ceiling on Oct. 1.

He urged quick action to increase the limit, saying it was essential to protect the "full faith and credit" of the country, especially at a time of financial market turmoil.

The current debt limit is $8.965 trillion. Unless Congress votes to raise that ceiling, the country would be unable to borrow more money to keep the government operating and to pay debt obligations coming due. The United States has never defaulted on a debt payment but the decision on whether to raise the debt ceiling often sparks a prolonged political battle in Congress.

In his letter to congressional leaders, Paulson said that according to data now available, the Treasury expects to hit the current debt ceiling on Oct. 1 -- the first day of the new federal budget year. However, that projection does not take into account maneuvers the government often has to employ of withdrawing investments from certain trust funds to create room for extra borrowing until Congress finally approves a debt increase.

"The full faith and credit of the United States, to which we all remain committed, is a national asset and a cornerstone of the global financial system," Paulson said in his letter. "In light of current developments in financial markets, which would be exacerbated by uncertainty in the Treasuries market, I urge the Senate to pass the legislation reported by the Finance Committee to increase the debt limit as soon as possible."

The Senate Finance Committee earlier this month approved increasing the limit on the national debt to $9.82 trillion. That boost of $850 billion would be the fifth increase in the government's borrowing limit since President Bush took office in 2001.

The national debt is the total accumulation of annual budget deficits, which must be financed with borrowed money.

Democrats blame Bush's tax cuts and the war in Iraq for pushing the debt to record levels. Republicans defend the tax cuts, saying the deficit is now on a downward trajectory in part because of the economic stimulus provided by the tax cuts.

The House approved an increase in the debt limit in May when it adopted the annual congressional budget resolution, but the full Senate has yet to act to raise the limit.

Congress Asked to Lift Debt Ceiling: Financial News - Yahoo! Finance

So what do you guys think about this? I mean, obviously defaulting on the debt payments would be bad for our image, but can someone lay out the practical consequences of such an action?

Would people really stop loaning money to us or something? I can't imagine that happening..

Do you think they should do it? Or refuse to until we get the national debt more under control?

[SoFlaJDM]

the party of fiscal responsibility is now the Democrats... thanks!!!

[Publius]

Originally Posted by SoFlaJDM

the party of fiscal responsibility is now the Democrats... thanks!!!

both parties are extremely fiscally irresponsible, actually. They just want to spend the money in different places.

[SoFlaJDM]

where do dems want to spend 2 bil/week?

[Publius]

Originally Posted by SoFlaJDM

where do dems want to spend 2 bil/week?

Government run health care, social security, etc...

[6SpeedTA95]

There's not really much consequence to raising the debt ceiling, it means exactly as originally implied they are allowed to take out more debt.

Debt ceiling is really irrelevant, what needs to be looked at it is the debt to GDP ratio. There's a lot of debate as to what's healthy and what's not but the fact is no matter how you slice it now the debt is TOO high. But they either raise the debt ceiling or government cuts back a several hundred billion right out of the next budget to make up for the deficit. I'd really be ok with that but it'd piss a lot of people off because government services and social programs would be the hardest hit.

[7th Ninjai]

Originally Posted by SoFlaJDM

the party of fiscal responsibility is now the Democrats... thanks!!!

Democrats: Tax and Spend and continue to raise taxes

Republicans: Spend and Defer while continuing to lower taxes

Both suck.

[SoFlaJDM]

dems want to spend 2 bil a week on healthcare/ss

[Publius]

Originally Posted by SoFlaJDM

dems want to spend 2 bil a week on healthcare/ss

you do realize that the Social Security budget is the largest chunk of Federal spending currently in existence anywhere in the world, right? In 2004 the U.S. government paid out just shy of $500 billion in SS benefits, or just shy of $10 billion a week.

[SoFlaJDM]

Originally Posted by Publius

you do realize that the Social Security budget is the largest chunk of Federal spending currently in existence anywhere in the world, right? In 2004 the U.S. government paid out just shy of $500 billion in SS benefits, or just shy of $10 billion a week.

you're comparing apples to oranges... we're talking about an unnecessary war here... this program (SS) has been around since the early 1900's

so you're saying bush is twice as bad because he has SS and the needless war?

[Publius]

Originally Posted by SoFlaJDM

you're comparing apples to oranges... we're talking about an unnecessary war here... this program (SS) has been around since the early 1900's

so you're saying bush is twice as bad because he has SS and the needless war?

you asked me what the Democrats want to spend $2 billion a week on. I showed you what they want to spend $10 billion or more a week on (considering that they want more gov't involvement in healthcare).

Just because something has been around for a long time doesn't make it right or good, btw. Slavery had been around in the U.S. since the 1500s, didn't make it right or good.

[SoFlaJDM]

Originally Posted by Publius

you asked me what the Democrats want to spend $2 billion a week on. I showed you what they want to spend $10 billion or more a week on (considering that they want more gov't involvement in healthcare).

no, you showed me what is CURRENTLY being spent

that means bush is fiscally irresponsible in your eyes not only for the mismanaged war, but also for the 10bil a week he spends on SS

[WickedLou9]

It's nothing new unfortuantely. Seems like they do it every year. With inflation and considering that the debt ceiling is not indexed, it sorta makes sense that they would have to revise it upwards every year, atleast equal to inflation.

[SoFlaJDM]

the dollar losing value isn't helping the situation either

[Publius]

Originally Posted by SoFlaJDM

no, you showed me what is CURRENTLY being spent

The Democrats control the purse strings. They want to retain or increase Social Security and increase U.S. government involvement in (and thus expenditure on) health care. Simple reason dictates that the cost of such programs will not decrease as the programs are expanded. Thus, the Democrats want to spend $10 billion or more a week on them.

Get your head out of the sand and realize that the two parties are extremely similar in their operating procedures. They both want to spend money, just not on the same things. Republicans want to spend it on war and nation-building, Democrats want to spend it on socialist programs.

[SoFlaJDM]

Originally Posted by Publius

The Democrats control the purse strings.

you gave me the '04 numbers... did dems control anything in '04?

[Publius]

Originally Posted by SoFlaJDM

that means bush is fiscally irresponsible in your eyes not only for the mismanaged war, but also for the 10bil a week he spends on SS

Do you read anything I post that isn't a direct response to you? It's a serious question, because if you did then you'd realize that I think Bush is a horrible president worthy of impeachment.

[SoFlaJDM]

Originally Posted by Publius

They both want to spend money, just not on the same things. Republicans want to spend it on war and nation-building, Democrats want to spend it on socialist programs.

i'll take my chances with the non violent option

[Publius]

Originally Posted by SoFlaJDM

you gave me the '04 numbers... did dems control anything in '04?

Yes, I'm sure that spending on Social Security has decreased by almost $8 billion a week in the last three years.

[SoFlaJDM]

Originally Posted by Publius

Do you read anything I post that isn't a direct response to you? It's a serious question, because if you did then you'd realize that I think Bush is a horrible president worthy of impeachment.

i know how you feel about bush... that wasn't the issue