What's the worse case scenario if we don't raise the debt limit?

[InTheLight]

No, my friend, it is not. The payment on the debt we have already taken, is only 200 billion per year.

This is so far off based, it's laughable. You really think we are only paying back holders of T-Bills, T-Notes, T-Bonds, Savings Bonds, etc. a paltry $200 Billion a year? C'mon.

Please post a reference.

 

[Havensdad]

This is so far off based, it's laughable. You really think we are only paying back holders of T-Bills, T-Notes, T-Bonds, Savings Bonds, etc. a paltry $200 Billion a year? C'mon.

Please post a reference.

http://www.washingtonpost.com/wp-srv/special/politics/budget-2010/

Our TOTAL deficit every year is less than 1.5 trillion!

According to this chart, we could cut defense spending to 450 billion (bring the troops home, and station some on the border, IMHO), cut other discretionary spending in half, cut off Social Security and Medicare to those who make over 200k per year, or have a net worth of over 1 million dollars, turn MEDICAID over to the states, and cut other mandatory spending by 10 percent, along with a 10 percent tariff on all imported goods, and deportation of illegal aliens (freeing up jobs), we could EASILY balance the budget, and set our country on the right track.

But it will never happen, because people are too concerned with their own political agendas. But we do NOT have to raise the debt ceiling.

 

[InTheLight]

http://www.washingtonpost.com/wp-srv/special/politics/budget-2010/

Our TOTAL deficit every year is less than 1.5 trillion!

According to this chart, we could cut defense spending to 450 billion (bring the troops home, and station some on the border, IMHO), cut other discretionary spending in half, cut off Social Security and Medicare to those who make over 200k per year, or have a net worth of over 1 million dollars, turn MEDICAID over to the states, and cut other mandatory spending by 10 percent, along with a 10 percent tariff on all imported goods, and deportation of illegal aliens (freeing up jobs), we could EASILY balance the budget, and set our country on the right track.

But it will never happen, because people are too concerned with their own political agendas. But we do NOT have to raise the debt ceiling.

I think you've got your terms mixed up. The budget deficit is not our national debt. Our national debt is the sum total of all of our accumulated budget deficits.

Yes, under your scenario we could balance the budget.

 

[Havensdad]

I think you've got your terms mixed up. The budget deficit is not our national debt. Our national debt is the sum total of all of our accumulated budget deficits.

Yes, under your scenario we could balance the budget.

No sir, I do not have my terms mixed up. We are not required to pay back the sum total of our national debt in a single year. We are only required to "service" that debt. The cost of this, at current interest rates, is about 250 billion annually. That means if only 300 billion of the 2011 budget is set aside for the deficit, we can "service" it, plus begin to pay it down.

Glad you see that it is possible to balance the budget. Now, spread the word.

 

[Skandelon]

No sir, I do not have my terms mixed up. We are not required to pay back the sum total of our national debt in a single year. We are only required to "service" that debt. The cost of this, at current interest rates, is about 250 billion annually. That means if only 300 billion of the 2011 budget is set aside for the deficit, we can "service" it, plus begin to pay it down.

Glad you see that it is possible to balance the budget. Now, spread the word.

:thumbs:

Well stated. And balancing is the first step! The next step is downsizing, just as it would be with our personal finances, right?

 

[Havensdad]

:thumbs:

Well stated. And balancing is the first step! The next step is downsizing, just as it would be with our personal finances, right?

Correct. There are a ton of programs that can be cut altogether.

 

[InTheLight]

No sir, I do not have my terms mixed up. We are not required to pay back the sum total of our national debt in a single year. We are only required to "service" that debt. The cost of this, at current interest rates, is about 250 billion annually. That means if only 300 billion of the 2011 budget is set aside for the deficit, we can "service" it, plus begin to pay it down.

Glad you see that it is possible to balance the budget. Now, spread the word.

Actually, the interest on the debt is more like $400 Billion a year, but I take your point.

http://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm

(Chart shows $385 Billion interest paid but that only covers 9 months out of 12 months)


As to debt payments we are paying back about 5.25 Trillion in those 9 months, but we borrowed 5.9 Trillion in that same nine month period, thus increasing our debt by 650 Billion.

http://www.treasurydirect.gov/govt/reports/pd/feddebt/feddebt_jun11.pdf

 

[Skandelon]

Correct. There are a ton of programs that can be cut altogether.

So, are there any politicians you know of who understand this and are willing to do it?

 

[freeatlast]

No, my friend, it is not. The payment on the debt we have already taken, is only 200 billion per year. You are confusing the amount of money we are still borrowing, with our payments on our present debts.

Yes, it is possible to balance the budget.

No you are incorrect. Here is a link to what we are spending and what we are taking in. Do the math and you will see you are incorrect. What you are talking about is the interest paid on the debt not the debt and not the deficit. There is no way to fix the current problem as we are borrowing to pay the debt, pay the deficit and pay the interest in the debt all the while nothing is getting lower. We are borrowing over 4 billion a day above what we take in just to keep the budget afloat and that adds up to 1.5 trillion a year so cutting 200 billion is only 50 days of breaking even and does not touch paying off the debt. To balance the budget we would have to cut 4 billion a day from it and that is not going to happen. We have went too far.
http://www.usdebtclock.org/

 

[InTheLight]

No you are incorrect. Here is a link to what we are spending and what we are taking in. Do the math and you will see you are incorrect. What you are talking about is the interest paid on the debt not the debt and not the deficit. There is no way to fix the current problem as we are borrowing to pay the debt, pay the deficit and pay the interest in the debt all the while nothing is getting lower.

We are borrowing to finance the budget. How we disburse that money is a decision we make. Debt is being rolled over--example, we may pay off $6 trillion in debt this year but we turn around and borrow $6.2 trillion more, thus increasing the debt.

We could pay down the debt to zero in 30 or 40 years or so if we so choose, but why? We really just need to get it under control.

 

[freeatlast]

We are borrowing to finance the budget. How we disburse that money is a decision we make. Debt is being rolled over--example, we may pay off $6 trillion in debt this year but we turn around and borrow $6.2 trillion more, thus increasing the debt.

We could pay down the debt to zero in 30 or 40 years or so if we so choose, but why? We really just need to get it under control.

So many keep saying this can be fixed, but none has run the numbers. So show us all how this can be paid down with real numbers. 300 million people and less then half pay personal taxes. because the rest are either retired, to young, not working, or working under the table.
So give some real numbers as to how to pay down a 14.5 trillion debt that is growing at the rate of over 1.5 trillion a year.
or if you cannot do that then just give some real numbers and show us how to stop adding to the debt. That is about 1.5 to 2 trillion a year.

 

[InTheLight]

So many keep saying this can be fixed, but none has run the numbers. So show us all how this can be paid down with real numbers. 300 million people and less then half pay personal taxes. because the rest are either retired, to young, not working, or working under the table.

The gross number of taxpayers is irrelevant, the amount of tax revenues is the number we are concerned with. That number is $2.6 trillion.

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=200

So give some real numbers as to how to pay down a 14.5 trillion debt that is growing at the rate of over 1.5 trillion a year.
or if you cannot do that then just give some real numbers and show us how to stop adding to the debt. That is about 1.5 to 2 trillion a year.

Your number of "1.5 Trillion added per year" happened in one year only, fiscal year 2010. Previous years increases under Bush were more along the line of 500-600 billion. So your base rate is flawed.

http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo5.htm


Start with the U.S. public debt at $14.5 Trillion and make some assumptions.

Let's cut spending so that our budget is more in line with what it was 10 years ago, or about 2.1 trillion dollars. Since tax receipts are 2.6 trillion for this year let's take that 'leftover' 500 billion dollars and pay down the principal on the debt. Assume the interest rate on the debt an average of 3.5% (which is much higher than it's been in recent history.)

http://www.treasurydirect.gov/govt/rates/pd/avg/avg.htm

Also assume the GDP is growing at 2.5% (much lower than recent historical rates in the 90's or 00's.) Let's assume that tax revenues would grow by this same 2.5% a year. This is actually a very low estimate if you look at CBO estimates here:

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=200

These are very simplistic calculations, very conservative in nature, but plug all these numbers into a spreadsheet and you have the debt zeroed out by 2044.

I've done a spreadsheet like this but I don't know how to post it to BB.

 

[poncho]

I want your opinion on what you think the worse that could happen if Congress can't reach a compromise and raise the debt ceiling?

Is it just a Government shut down like we had in the 90s, or will this be worse? Why?

Imho the "debt ceiling" debate is just political theater. Why? Because no matter what congress may or may not do about it makes no difference at this point. We're inslovent.

The fundamental problem is that the US' ability to generate wealth is far from compensating its increasing debt, and "paying debts by borrowing more is not a solution" source

 

[freeatlast]

The gross number of taxpayers is irrelevant, the amount of tax revenues is the number we are concerned with. That number is $2.6 trillion.

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=200




Your number of "1.5 Trillion added per year" happened in one year only, fiscal year 2010. Previous years increases under Bush were more along the line of 500-600 billion. So your base rate is flawed.

http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo5.htm


Start with the U.S. public debt at $14.5 Trillion and make some assumptions.

Let's cut spending so that our budget is more in line with what it was 10 years ago, or about 2.1 trillion dollars. Since tax receipts are 2.6 trillion for this year let's take that 'leftover' 500 billion dollars and pay down the principal on the debt. Assume the interest rate on the debt an average of 3.5% (which is much higher than it's been in recent history.)

http://www.treasurydirect.gov/govt/rates/pd/avg/avg.htm

Also assume the GDP is growing at 2.5% (much lower than recent historical rates in the 90's or 00's.) Let's assume that tax revenues would grow by this same 2.5% a year. This is actually a very low estimate if you look at CBO estimates here:

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=200

These are very simplistic calculations, very conservative in nature, but plug all these numbers into a spreadsheet and you have the debt zeroed out by 2044.

I've done a spreadsheet like this but I don't know how to post it to BB.

We are adding to the debt at a rate over 1.5 trillion a year. Borrowing over 4 billion a day for 365 days is 1.5 trillion. In fact we are beyond those numbers this year.
Over the 12 months ending January 31, 2011 the Treasury borrowed a total of $1.8 trillion, or approximately $5 billion per day
http://www.cnsnews.com/news/article/federal-gov-t-hit-debt-ceiling-march-14

 

[freeatlast]

Imho the "debt ceiling" debate is just political theater. Why? Because no matter what congress may or may not do about it makes no difference at this point. We're inslovent.

:thumbs:and it will be brought to light and our house will come down in the near future.

 

[Havensdad]

No you are incorrect. Here is a link to what we are spending and what we are taking in. Do the math and you will see you are incorrect. What you are talking about is the interest paid on the debt not the debt and not the deficit. There is no way to fix the current problem as we are borrowing to pay the debt, pay the deficit and pay the interest in the debt all the while nothing is getting lower. We are borrowing over 4 billion a day above what we take in just to keep the budget afloat and that adds up to 1.5 trillion a year so cutting 200 billion is only 50 days of breaking even and does not touch paying off the debt. To balance the budget we would have to cut 4 billion a day from it and that is not going to happen. We have went too far.
http://www.usdebtclock.org/

No, YOU are incorrect. I have done the math. We are borrowing to pay the debt, but we do not have to. All but about 300 billion of that borrowing, is to pay for social welfare programs, defense, etc. It is NOT borrowed to pay on the existing debt. All we have to do is live within our means, which, in this case, means to cut our Federal Budget expenditures to about 2.1 trillion per year, which leaves 500 billion or so to service, and pay down, our existing debt.

It can be done.

 

[Havensdad]

We are adding to the debt at a rate over 1.5 trillion a year. Borrowing over 4 billion a day for 365 days is 1.5 trillion. In fact we are beyond those numbers this year.
Over the 12 months ending January 31, 2011 the Treasury borrowed a total of $1.8 trillion, or approximately $5 billion per day
http://www.cnsnews.com/news/article/federal-gov-t-hit-debt-ceiling-march-14

You are missing the point. We are choosing to borrow 1.5 trillion per year. We do not HAVE to. All we have to do, is spend less. Servicing the debt we already owe only costs 300 billion annually.

 

[freeatlast]

You are missing the point. We are choosing to borrow 1.5 trillion per year. We do not HAVE to. All we have to do, is spend less. Servicing the debt we already owe only costs 300 billion annually.

I keep hering this. If you know this to be true then how about giving us an exact way to fix this with real numbers.

 

[mandym]

All this debt ceiling talk reminds me of the y2k scare. And I am sure it will come and go just the same

 

[Havensdad]

I keep hering this. If you know this to be true then how about giving us an exact way to fix this with real numbers.

Please read my earlier post. I did this already. I am not going to break down every program, A: because its not necessary to show that the concept is plausible, and B: Because that would be a full time job. And I am not getting paid for that.