Whats the worst case scenario if we don't raise the debt limit?

Discussion in 'Politics' started by Havensdad, Jul 24, 2011.

  1. Havensdad

    Havensdad
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    The problem is this: the legislators do not have the backbone to do anything about it. But the problem is not the debt. We do not have to raise the debt ceiling at all...programs can be cut, and the budget balanced, without the debt ceiling being raised...
    Please note these adjustments...
    Everything below is in terms of trillions...

    2.57 Trillion Actual annual revenue of the Fed.
    -.44 trillion for defense
    -.25 trillion for other discretionary spending
    -.65 trillion for Social Security
    -.45 trillion for medicare
    -.25 trillion for medicaid
    -.28 trillion for other mandatory spending (including government employees)
    -.3 trillion for servicing our existing debt
    + .015 trillion additional revenue from tariff
    + .1 trillion additional revenue from closing tax loopholes


    = Surplus of 65 billion dollars, to pay down the debt.

    You might object, for philosophical and political reasons to DOING this, but it nevertheless CAN and SHOULD be done.


    Please, NO unsubstantiated posts. If you want to respond, please provide actual numbers, as I have done. No trolling, or arguing for the sake of getting the "last word." Real numbers only in this thread, please!
     
    #1 Havensdad, Jul 24, 2011
    Last edited by a moderator: Jul 24, 2011
  2. Havensdad

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    Don't guess anyone actually wants to debate this issue intellectually?
     
  3. InTheLight

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    I might adjust some of the numbers in your example, but for the most part I agree with you that the debt could be paid down if we decided we really wanted to do it. So no argument from me!
     
  4. billwald

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  5. InTheLight

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    From the article:

    In other words, if the federal government started taxing the wealthy and their corporations at the same rates in effect a half-century ago, the federal debt to investors would almost totally vanish over the next decade.

    LOL! The reality is that if taxes reverted to the rates of the 1960's the corporations and the wealthy would vanish--the corporations to India and Mexico and the wealthy to the Cayman Islands.
     
  6. Havensdad

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  7. Ed Edwards

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    This format prompts the use of sound bytes.
    Here is my answer to the O.P = opening post:

    Worse case scenario is:
    the Four Horsemen of the Apocalypse ride.
    See Revelation Chapter Six
     
  8. freeatlast

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    So tell us about those numbers. First the military if they suddenly come home where do they work? The answer is they don't and they would have to go on government assistance so the numbers are flawed.

    SS is a pay as you go and solvent until about 2030 with the 2.5 trillion in bonds and at that time the baby boomers will be dying off and the system will remain solvent. If you want to cut a pay as you go program then you need to lower the amount that is paid in or the government will just take the extra money and spend it. Another flawed set of numbers.

    Medicare does need to be revamped. Mostly in some of its services. Your numbers may be achievable but it would take some doing.

    Medicaid also could be looked at, but I am not sure it can be lowered that much. A better solution for Medicare and Medicaid is to raise the pay in from personal income to support the programs at the same time of getting rid of any fat.

    Government employees. yes i agree. There is too much government. One quick change could be doing away with the IRS administration as we see it today and have a flat tax no exemptions. There are many other areas as well from lower pay for some and more reasonable retirements and benefits as they have gotten out of hand in many areas.

    Servicing our debt. I am not sure what you mean. The debt grows because of deficits and so far your numbers will not fix that.

    Tariff could be considered if you wan to risk an increase of tariffs for our products going to other countries and possibly closing the door for American goods abroad making things worst.

    Tax loopholes. yes i agree they need to be dealt with but not as a separate issue. Doing away with the IRS and going to a flat tax for personal income and industry with no exemptions fixes that and most likely more then you have listed.

    So the debt is 14.5 plus trillion and too big to fix as your number cannot work.
     
  9. Havensdad

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    Uh, no. I did not say discharge them. I said bring them home. They would still be on duty. Put them on the border. The cuts in spending are logistical savings, not savings on soldiers pay. So NO ONE would have to go on government assistance.

    Number one, that is not true. SS is defunct. 2.5 trillion in bonds, from a government that cannot pay back foreign debt, is utterly worthless.

    Number two, the age to which people are living, has increased dramatically. It is going to be WORSE by 2030. SS is not solvent, as I have already shown. I have already posted an assessment, by the SSA THEMSELVES, that says they are NOT solvent.

    As far as the rest...who cares? The numbers are not flawed. The money has to be repaid. Stop putting the money in SS, and move it over to regular income. It has been done before, and can be done now.

    Thank you for conceding this.

    If you look, that is exactly what I suggested. Lower the coverage, increase contribution.

    While I agree with this, this cannot be an instant solution. Dumping all of these unemployed individuals on an already strained economy would not work. However, instituting pay cuts, LARGE ones, on any government employee making six figures or higher is doable. There are also a ton of other cuts that can be made.

    Also, by aggressively deporting illegals, we could open up jobs to tax paying Americans, which would greatly increase tax revenue.

    Not so. There is 300 billion in interest on the debt we already have, that must be paid every year. And my numbers CAN fix that.

    We have a trade deficit in the U.S. We import WAY more than we export. We could institute a Tariff, and it would not hurt us at all. If the other countries want to start a Tariff war with us, we would come out on top. They sell way more to us, than we sell to them. A tariff would also increaase the price of foreign goods, increasing the GDP.

    True, but this cannot be an immediate fix. We would have to do this over time.

    Actually, the only thing you have disputed (which I did not correct you on) is my SS numbers. And you didn't show that my numbers won't work...you have a POLITICAL objection to doing what I have stated.

    All you have shown, though, is that my numbers DO work! The debt is not too big to fix.
     
  10. freeatlast

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    Nope the fix you propose would kill the patient if the numbers you propose are reached and they cannot be reached. It is not possible to bring the troop home without a treaty or victory unless you want to wage war here. The debt is too high to fix and we will default in the near future.
     
  11. Havensdad

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    What war? The troops are trying to set up little democracies! Of COURSE we can bring the troops home! Who is going to attack our country, if all of our soldiers are home, active, and waiting for them? What you say is preposterously insane.

    The debt is not too high to fix. I laid out specific counterpoints to your arguments. I countered your points, with real facts and numbers. Please do the same (and stick to the OP), or stay out of this thread.
     
  12. freeatlast

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    What war?! Now I better understand why you think the debt can be fixed. :laugh:
     
  13. Havensdad

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    I am sorry...did congress declare war and I missed it? We have troops engaged in kingdom building overseas...an unconsitutional and pointless exercise, that is costing us hundreds of billions per year.

    I believe the debt can be fixed because, when you run the numbers, they clearly show that it can be; also, the remedies for the debt, are the same things that are needed to help the economy.
     
  14. Ed Edwards

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  15. freeatlast

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    Come on! this is not about some legal declaration. We are at war! I am sure every service person in the arena thinks we are and the parents and loved ones of who have lost their life or been injured think so. I think the makes it clear just how far off base you are in this topic. Any person who thinks we are not at war is wrong to be polite. Likewise any belief that they may hold about the debt being fixed is equally wrong. We will default in the near future. We are simply seeing a trial run today, but it will happen as no there is no sensible numbers to fix the debt. saving the leg just to watch the patient die is not sensible.
     
  16. Havensdad

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    No, "every service person" does not think we are. There is actually a large number of military folks who agree with me about bringing the troops home (some of which I am privileged to know personally), who have spent large amounts of time overseas.

    Tell me, who are we at "war" with? What are our targets? What are our goals? No, we are not "at war"...we are putting our troops in harms way, for a non-existent objective that could never be achieved anyway. And if you are right, and the economy is about to collapse, isn't it kind of impossible to leave them over there anyway? They will end up STRANDED overseas, without sufficient provision! So you logic is simply lacking on all points.

    As far as the rest, please show HOW the numbers don't work, or start your own thread. I have given specific counterpoints in my argumentation, and I am asking, in keeping with the OP, to do the same or leave the thread. If you continue to derail the OP of the thread, I will be forced to report you.
     
  17. poncho

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    Whats the worst case scenario if we don't raise the debt limit?

    The US dollar could plummet in exchange value and lose its role as world reserve currency. The US would no longer be able to pay its oil bill in its own currency, and as its balance of payments is heavily in the red, the US has no foreign currencies with which to pay its oil import bill. Or its manufactured goods import bill, or any other bill.

    We are talking about a crisis beyond anything the world has ever seen. Does anyone think that President Obama is going to just sit there while the power of the US collapses? He doesn’t have to do so. There are presidential directives and executive orders in place, put there by George W. Bush himself, that President Obama can invoke to declare a national emergency, suspend the debt ceiling limit, and continue to issue Treasury debt. This is exactly what would happen.

    The consequences would be that the power of the purse would transfer from Congress to the President. It would be the end of the power of Congress. Congress, Republicans and Democrats alike, have already given away to the President Congress’ Constitutional right to decide whether the country goes to war. Now Congress would lose its power over debt, taxes, and the budget itself.

    Republicans need to decide whether the advantage of delivering a blow against “leechdom” is worth such extreme risks.

    Some readers will say “this could never happen.” But Congress is already emasculating itself as a result of the Republicans’ intransigence over the debt ceiling increase. Republican Mitch McConnell and Democrat Harry Reid have come up with a proposal for a committee of Congress, called a Super Congress, that could fast-track legislation by prohibiting amendments. http://www.huffingtonpost.com/2011/07/23/super-congress-debt-ceiling_n_907887.html?icid=maing-grid7%7Cmain5%7Cdl1%7Csec1_lnk2%7C80603

    In other words, the few members of the Super Congress could bypass any citizen opposition that might still be represented in the ordinary old Congress. The more likely outcomes would be an end to the mortgage interest deduction and the deductions for retirement savings. Legislation to gut the social safety net could not be amended.

    A Congress that is willing to destroy its remaining power over a debt ceiling increase that is less than a Federal Reserve loan to one US bank is a Congress moved to folly by Republican intransigence.

    SOURCE

    War is not war until there is a formal declaration from the only entity that has the power to make the declaration. The United States congress. Otherwise we're just canon fodder the international banksters and corporitos throw at any nation that dare oppose their global empire. "If you aren't with us, you're with the terrorists" G. W. Bush. The "us" he is refering to is the corporate fascist state he and those like him belong to, not "we the people".
     
    #17 poncho, Jul 26, 2011
    Last edited by a moderator: Jul 26, 2011
  18. billwald

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    The Republican's purpose is to trash the economy of the working class so that they will win the next election. The economy of our owners will be fine.
     
  19. targus

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    billwald, freedom is a state of mind.

    You only have owners and masters if you give them that power.

    Join the rest of us in freedom.

    It is a wonderful experience.
     
  20. Havensdad

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    The Democrats purpose is just to buy the next election. If their clones don't get there free stuff, that there bosses have taken from others, they won't come out to vote...

    Get your own thread, Bill, or get on the OP please.
     

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