Divided Government

[Jon Miller]

multiple debt downgrades by rating agencies say different.

That was due to the Republicans refusing to agree to pay the governments bills (raise the debt ceiling). It was not due to the amount of debt, which is high but not dangerously high at the moment.

JM
(What is concerning is the future liabilities. However, refusing the pay the governments bills does nothing to improve the issue of future liabilities...)

[PLATO]

It sounds more like they're the voice of $$$$$$$, as well as extremists because with those small districts it's easy to carve out safe seats where the only serious challenge is a primary.

The people can change this anytime they wish. Voting in State elections has much more influence on National offices than many people consider. Americans have no one to blame but themselves if they don't like the Congress.

[PLATO]

That was due to the Republicans refusing to agree to pay the governments bills (raise the debt ceiling). It was not due to the amount of debt, which is high but not dangerously high at the moment.

JM
(What is concerning is the future liabilities. However, refusing the pay the governments bills does nothing to improve the issue of future liabilities...)

Not exactly factually correct. Rating agencies did take into account the debt and more importantly the escalating rate of the debt rising.

[Jon Miller]

Compare to other nations... and look at the point where they downgraded us.

JM
(Of course, I would argue that the downgrade was potentially meaningless since investors still want 'safe' assets and still see the US debt as 'safe'. I doubt they will continue to see US debt as 'safe' if we default...)

[giblets]

Just think how the problem will be compounded if the fed stops keeping bond rates artificially low. If bond rates rose to 7% or 8% right now then we would have a serious issue with solvency very quickly.

This is not to mention the fact that the world will not keep throwing money into U.S. Bonds. With $16 trillion invested already, how much more can there be?

In a scenario where interest rates rose we would also have economic recovery and this would make balancing the budget a lot easier.

[Jon Miller]

There is actually a high demand for US bonds and other 'safe' assets.

I have seen economists argue that the US and other 'safe' countries should be putting out more government debt.

JM

[DinoDoc]

That was due to the Republicans refusing to agree to pay the governments bills (raise the debt ceiling).

That's not what the agencies said given their stated concerns with the rising debt burden of the US government and the inability or unwillingness of the government to deal with the issue in a meaningful way.

which is high but not dangerously high at the moment.

If current policies are left in place, it's on pace to be double US GDP within your lifetime and interest payments on that debt are on track to be greater than the US Defense budget within a decade.

[Jon Miller]

at the moment

JM

[Jon Miller]

at the moment

JM

[PLATO]

In a scenario where interest rates rose we would also have economic recovery and this would make balancing the budget a lot easier.

Not necessarily. If it wasn't for quanitative easing, I would agree with you. If the Fed stops now, bond rates rise tomorrow. The question these becomes...how much can the Fed's balance sheet take before we all start feeling the pressure from that?

[DinoDoc]

at the moment

JM

Clearly a reason not to deal with the issue now and let it grow into more of a problem when dealing with it will only be harder.

[PLATO]

at the moment

JM

Do you know something the rest of us don't?

[Jon Miller]

Why should we refuse to pay our bills because at some future time we may not be able to pay our bills?

If the time comes when we can not pay our bills, then we can not pay our bills. To do so when we can pay our bills is insanity.

It is like saying 'at some point I may die'. And so you kill yourself, because you believe that in 10-50 years you will die.

insanity

JM

[Jon Miller]

Why should we refuse to pay our bills because at some future time we may not be able to pay our bills?

If the time comes when we can not pay our bills, then we can not pay our bills. To do so when we can pay our bills is insanity.

It is like saying 'at some point I may die'. And so you kill yourself, because you believe that in 10-50 years you will die.

insanity

JM

[DinoDoc]

Why should we refuse to pay our bills because at some future time we may not be able to pay our bills?

Not raising the debt ceiling doesn't mean the US defaults on its debt as it pulls in enough in taxes to pay interest on the debt and the majority of its other functions. So your hysterics on this point are a little odd. The fight was a failed attempt by the GOP to gain the leverage needed to cut the size of government.