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(Some Guy)   Timothy Geithner advocates lifting the debt limit to infinity. Congress immediately springs into action, begins researching how to overspend it   (scrapetv.com ) divider line
    More: Unlikely, Treasury Secretary Timothy Geithner, debt limit, congresses, Heavily Indebted Poor Countries, Geithner advocates  
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1089 clicks; posted to Politics » on 21 Nov 2012 at 8:17 AM (4 years ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-11-21 08:15:51 AM  
To infinity and beyond!
 
2012-11-21 08:20:31 AM  
In before Ron Paul!
 
2012-11-21 08:22:32 AM  
Why do we have a debt limit again? I mean other than so Republicans can hold the sovreignty of our debt hostage and downgrade our credit rating to push a radical regressive agenda every time we hit it from now on even though it used to get raised as a procedural vote?
 
2012-11-21 08:32:09 AM  
Never let a sucker keep his money. If people are stupid enough to buy US debt, thinking that the money they get back in ten or whatever years will be worth as much as they're giving up now, take it.
 
2012-11-21 08:37:16 AM  
FTA: "Debt limit increases allow for more borrowing which means more spending and, in theory, more equity in the long run."

Umm... no. In the long run, it will just make the inevitable crash more severe. We're decades past the point where we could have a painless recovery. Our only "option" is to keep borrowing our prosperity for ever, and that's not an option. We're screwed.
 
2012-11-21 08:39:06 AM  

DrPainMD: FTA: "Debt limit increases allow for more borrowing which means more spending and, in theory, more equity in the long run."

Umm... no. In the long run, it will just make the inevitable crash more severe. We're decades past the point where we could have a painless recovery. Our only "option" is to keep borrowing our prosperity for ever, and that's not an option. We're screwed.


Paul Krugman, is that you?
 
2012-11-21 08:47:16 AM  
In other words "Just print more money." Good idea.
 
2012-11-21 08:54:47 AM  
The debt limit has been since 1917. In 1917 there were 5 political parties in Congress including Progressing, Prohibition, and Socialist.
 
2012-11-21 08:58:58 AM  
Geithner needs to go. If Romney had won, he would have been shiatcanned. Fortunately, it looks like he's leaving on his own.
 
2012-11-21 09:02:07 AM  
This thread is going to be a bastion of stupid. I wish it had been greened to the Politics tab.
 
2012-11-21 09:16:37 AM  
The debt ceiling was supposed to stop us from borrowing money until the cows come home. It hasn't done that. In fact, it's failed miserably at that. We've raised it at least a hundred times since it was created. That's because a current Congress cannot bind a future Congress. Ever. The only solution is to elect Congressmen who are willing to be responsible themselves rather than forcing other people to be responsible.
 
2012-11-21 09:21:08 AM  

GoldSpider: In other words "Just print more money." Good idea.


Yeah, this hyperinflation we've been experiencing the last few years is KILLING me.
 
2012-11-21 09:21:47 AM  

dramatools: Geithner needs to go. If Romney had won, he would have been shiatcanned. Fortunately, it looks like he's leaving on his own.


If Romney was going to fire him, we probably should keep him.
 
2012-11-21 09:36:24 AM  

DrPainMD: FTA: "Debt limit increases allow for more borrowing which means more spending and, in theory, more equity in the long run."

Umm... no. In the long run, it will just make the inevitable crash more severe. We're decades past the point where we could have a painless recovery. Our only "option" is to keep borrowing our prosperity for ever, and that's not an option. We're screwed.


Good grief, doc, stick to running your pill mill. The President is a Keynsean who spent as needed to avoid a crash (continuing what Bush started in '08), confident that in later years he can roll spending back as economic growth resumes. We already see that discussions about the 'fiscal-sort-of-slope' awaiting us on January 1st. We likely won't hit a balanced budget in Obama's second term like we did in Clinton's (he had the tech bubble to help him), but the idea that we're going to blindly drive off the sovereign debt cliff like so many lemmings is a Rush Limbaugh wet dream.
 
2012-11-21 09:42:48 AM  

Stone Meadow: ...confident that in later years he can roll spending back as economic growth resumes.


Except members of Congress usually have other ideas when it comes to rolling back spending in their respective districts/states.
 
2012-11-21 09:47:05 AM  

ghare: If Romney was going to fire him, we probably should keep him.


I beg to differ. This is the guy who wanted to sell Wachovia to Citigroup and enact a massive hit to the Federal Deposit Insurance Fund. The Wells Fargo deal that ultimately prevailed required no financial assistance. For being a Democrat's appointee, Geithner sure embraces the Republican "spend like there's no tomorrow and let the middle class pay for it" doctrine.
 
2012-11-21 09:48:28 AM  

GoldSpider: Stone Meadow: ...confident that in later years he can roll spending back as economic growth resumes.

Except members of Congress usually have other ideas when it comes to rolling back spending in their respective districts/states.


Tru dat, except that this time it is the President who has the bully pulpit. In any case, there is lots of support for cutting spending to reign in debt growth, so I suspect the President will pretty much get his way with the budget for the next several years.
 
2012-11-21 09:48:45 AM  
The debt ceiling makes no sense and it would do our nation a lot of good to get rid of it now that it's become such a political tool.
 
2012-11-21 09:51:36 AM  
Creditors will only tolerate being taken crass advantage of for so long. Greece shows what happens when that time runs out, and while the US is probably in a position to hold out against that for longer, patience even with the US is still not infinite.
 
2012-11-21 09:52:26 AM  

Stone Meadow: Tru dat, except that this time it is the President who has the bully pulpit.


I wouldn't be so sure. He believed that in 2009, and both Reid and Pelosi dug in their heels. He couldn't even force through the public option in the ACA.

Stone Meadow: In any case, there is lots of support for cutting spending to reign in debt growth...


John Q. Public: "...as long as said spending cuts don't affect ME!"
 
2012-11-21 09:53:06 AM  

CPennypacker: Why do we have a debt limit again? I mean other than so Republicans can hold the sovreignty of our debt hostage and downgrade our credit rating to push a radical regressive agenda every time we hit it from now on even though it used to get raised as a procedural vote?


It's rare that I agree with you but this is one of those times.

I would be surprised of any compromise reached on the fiscal cliff didnt include a raising of the debt ceiling to a level that would mean Obama not having to deal with it again.
 
2012-11-21 09:53:40 AM  

DrPainMD: FTA: "Debt limit increases allow for more borrowing which means more spending and, in theory, more equity in the long run."

Umm... no. In the long run, it will just make the inevitable crash more severe. We're decades past the point where we could have a painless recovery. Our only "option" is to keep borrowing our prosperity for ever, and that's not an option. We're screwed.


There's always the option of killing your creditors, or perhaps killing other people and using their money to pay off your debts. We don't have the largest military in history just for the fun of it
 
2012-11-21 09:55:34 AM  
Well, that website certainly seemed legit.
 
2012-11-21 09:59:59 AM  

Stone Meadow: DrPainMD: FTA: "Debt limit increases allow for more borrowing which means more spending and, in theory, more equity in the long run."

Umm... no. In the long run, it will just make the inevitable crash more severe. We're decades past the point where we could have a painless recovery. Our only "option" is to keep borrowing our prosperity for ever, and that's not an option. We're screwed.

Good grief, doc, stick to running your pill mill. The President is a Keynsean who spent as needed to avoid a crash (continuing what Bush started in '08), confident that in later years he can roll spending back as economic growth resumes.


Despite the fact that ever since Keynes' time, no "good time to cut back spending" has ever once occurred? Even during periods of relative prosperity, it's not generally disputed that Keynesian-style spending cuts would have been disastrous.

Keynesian economics is an interesting idea, but it's shown itself to be a serious trap. Keynesian spending was theorized to be a stimulus that only needs to be applied in short bursts, but it has turned out in practice to be a stimulant on which economies quickly become dependent. There is no "good time" to get out of the cycle -if there were, it would actually vindicate Keynes- but there will never be a better time either.
 
2012-11-21 10:03:21 AM  

GoldSpider: Stone Meadow: Tru dat, except that this time it is the President who has the bully pulpit.

I wouldn't be so sure. He believed that in 2009, and both Reid and Pelosi dug in their heels. He couldn't even force through the public option in the ACA.

Stone Meadow: In any case, there is lots of support for cutting spending to reign in debt growth...

John Q. Public: "...as long as said spending cuts don't affect ME!"


Your skepticism is certainly understandable, but I remain optimistic that we are not headed for a cataclysmic economic melt-down. In the US corporate profits are at all time highs, housing is coming back...slowly, unemployment is inching down, energy costs easing world-wide. If the EC and China can avoid collapse things will be brighter all 'round in the coming years.
 
2012-11-21 10:04:04 AM  

Debeo Summa Credo: CPennypacker: Why do we have a debt limit again? I mean other than so Republicans can hold the sovreignty of our debt hostage and downgrade our credit rating to push a radical regressive agenda every time we hit it from now on even though it used to get raised as a procedural vote?

It's rare that I agree with you but this is one of those times.

I would be surprised of any compromise reached on the fiscal cliff didnt include a raising of the debt ceiling to a level that would mean Obama not having to deal with it again.


It just seems really disingenuous to me to have this limit even though everyone KNOWS it will have to be raised every time we reach it just so it can be used as a bargaining chip.
 
2012-11-21 10:04:45 AM  

Millennium: Despite the fact that ever since Keynes' time, no "good time to cut back spending" has ever once occurred? Even during periods of relative prosperity, it's not generally disputed that Keynesian-style spending cuts would have been disastrous.


I can only think of once where we pulled back spending in recent history. Reagan and Bush 1's Peace Divedend. I do not think Clinton's welfare reform counts because welfare constitutes a very small amount of spending.
 
2012-11-21 10:05:20 AM  
Since we literally raise it every single time we get there anyway we might as well get rid of it just to end that charade. It's a waste of time in Congress, and a waste of time in the news.
 
2012-11-21 10:14:32 AM  

Millennium: Stone Meadow: DrPainMD: FTA: "Debt limit increases allow for more borrowing which means more spending and, in theory, more equity in the long run."

Umm... no. In the long run, it will just make the inevitable crash more severe. We're decades past the point where we could have a painless recovery. Our only "option" is to keep borrowing our prosperity for ever, and that's not an option. We're screwed.

Good grief, doc, stick to running your pill mill. The President is a Keynsean who spent as needed to avoid a crash (continuing what Bush started in '08), confident that in later years he can roll spending back as economic growth resumes.

Despite the fact that ever since Keynes' time, no "good time to cut back spending" has ever once occurred? Even during periods of relative prosperity, it's not generally disputed that Keynesian-style spending cuts would have been disastrous.

Keynesian economics is an interesting idea, but it's shown itself to be a serious trap. Keynesian spending was theorized to be a stimulus that only needs to be applied in short bursts, but it has turned out in practice to be a stimulant on which economies quickly become dependent. There is no "good time" to get out of the cycle -if there were, it would actually vindicate Keynes- but there will never be a better time either.


There have been plenty of good times to reduce spending or increase taxes, and in fact many forms of Keynesian spending have been reduced in times of prosperity (see the Clinton era welfare reforms, for example). The problem is that there is no political will to increase taxes broadly. The fight over increasing just 3% on people making 250K is proving to be a bloodsport, imagine if we were talking about middle class tax increases, like Keynes would recommend during economic growth.

The other problem is that people mistake how government debt works by comparing it to the notion of household debt and stoke the idea that we're on the verge of a Greece-style debt crisis. The fact that our bonds are very much in demand even at near-zero interest rates proves that the market does not believe our debt levels to be an issue. There will always be some level of government debt, and there always should be, but there should also be a sensible plan set forth to bring the debt levels down to more psychologically comfortable levels (say 50% of GDP) over the next 10 - 15 years, and then to continue to reduce gradually past that point over the following 20+ years.

The debt limit should be eliminated because it puts a political brake on what should be a process of monetary policy.
 
2012-11-21 10:30:50 AM  

GoldSpider: In other words "Just print more money." Good idea.


Newsflash: They've been doing that all along. It's just that a few saw a black man in the White House and decided to make a stink about it. Calls for austerity when times were good were easily quelled by handing out $300 checks.
 
2012-11-21 10:36:11 AM  

Stile4aly: spending have been reduced in times of prosperity (see the Clinton era welfare reforms, for example).


Spending was never reduced during Clinton, it has always increased. The only reason the budget looked better in his years was the windfall of tax revenue from the dot.com bubble.

From '92 - 2000, spending increased 29% but receipts increased 85%.

This is why gov't spending to goose the economy, which studies are starting to realize doesn't work (pdf).

Robbert Higgs was 100% right about the governmental ratchet effect.
 
2012-11-21 10:43:27 AM  

DrPainMD: FTA: "Debt limit increases allow for more borrowing which means more spending and, in theory, more equity in the long run."

Umm... no. In the long run, it will just make the inevitable crash more severe. We're decades past the point where we could have a painless recovery. Our only "option" is to keep borrowing our prosperity for ever, and that's not an option. We're screwed.


Assuming the human race lives on forever, there are infinite future generations to enslave with debt.
 
2012-11-21 10:47:41 AM  

MugzyBrown: From '92 - 2000, spending increased 29%


In raw dollars or per capita inflation adjusted? From 1992 to 2000 there was ~20% cumulative inflation and the population increased by almost 15%.
 
2012-11-21 10:50:44 AM  
Congress in effect voted to increase the debt ceiling when they voted for laws that would require a debt. The pres should have stated this Aug before last.
 
2012-11-21 10:56:38 AM  

CPennypacker: Why do we have a debt limit again? I mean other than so Republicans can hold the sovreignty of our debt hostage and downgrade our credit rating to push a radical regressive agenda every time we hit it from now on even though it used to get raised as a procedural vote?


The debt ceiling was created by Democrats in the early 70s as part of the post-Watergate strangling of the Executive branch. Much like the War Powers Act, there's no way to really enforce it.

But even after the Senate runs the country over the "fiscal cliff," the Federal Government will be running a deficit. But it'll be a lot closer to balanced, meaning this issue goes away somewhat.
 
2012-11-21 11:06:18 AM  

you have pee hands: In raw dollars or per capita inflation adjusted? From 1992 to 2000 there was ~20% cumulative inflation and the population increased by almost 15%.


In raw dollars. Inflation adjusted Outlays: increased 10% and receipts increased 58%
 
2012-11-21 11:18:19 AM  
Geithner knows what happens if you say "Fark it lets not pay people back" doesn't he?

Generally they go away and they think...and then they INSTANTLY stop lending you cash. At which point you guys are farked.
 
2012-11-21 11:22:22 AM  

HMS_Blinkin: Well, that website certainly seemed legit.


Seriously, it seems like no one realized that "article" was an Onion reject.

//Well, besides you and me, obviously.
 
2012-11-21 11:24:09 AM  

hurdboy: The debt ceiling was created by Democrats in the early 70s as part of the post-Watergate strangling of the Executive branch. Much like the War Powers Act, there's no way to really enforce it.


Not the 70s, closer to 1917. However, in 1979 a more of automated process was created, which might be what you are thinking of.
 
2012-11-21 11:33:03 AM  

DrPainMD: FTA: "Debt limit increases allow for more borrowing which means more spending and, in theory, more equity in the long run."

Umm... no. In the long run, it will just make the inevitable crash more severe. We're decades past the point where we could have a painless recovery. Our only "option" is to keep borrowing our prosperity for ever, and that's not an option. We're screwed.


We are not screwed, but we have to play the long game and not get caught up in the moment.
We have to be willing to admit that between 2013 and about 2040 our economy is just not going to grow, it is probably going to shrink. Yeah, we are looking at an entire generation of educated people who won't be joining the middle class and a reduction in prestige, power, and military might.

Yes entitlements will need to be capped, yes taxes must increase, yes military spending must decrease. Yes this will affect GDP growth, employment, and the well being of most people. If we can manage this crises carefully and keep the core economy intact, well between 2030 and 2050 we are looking at the biggest turnover of wealth the world has ever seen. When the Baby Boomers die off their assets will be turned over, those assets will be broken up, put to work and drive growth.

Until then though the economy is going to suck and suck a lot for Mellinials.
 
2012-11-21 11:38:23 AM  

DrPainMD: FTA: "Debt limit increases allow for more borrowing which means more spending and, in theory, more equity in the long run."

Umm... no. In the long run, it will just make the inevitable crash more severe. We're decades past the point where we could have a painless recovery. Our only "option" is to keep borrowing our prosperity for ever, and that's not an option. We're screwed.


Oh, I don't know.
blogs.artinfo.com
 
2012-11-21 12:00:02 PM  
The debt limit should be removed for one simple reason, there is no reason for it other than to be used as a political tool.

Congress authorizes spending and sets out revenue streams. There is no reason for them to have to authorize debt to cover their expenditures and revenue shortfalls. A debt limit can only make sense if it is controlled by a party other than that which makes the cash flow decisions.
 
2012-11-21 12:01:40 PM  

Serious Black: The debt ceiling was supposed to stop us from borrowing money until the cows come home.


No.

In the early days Treasury had to get specific Congressional authorization to issue any debt at all. Imagine if every bond auction today needed a bill to pass first!

So they streamlined it long ago to instead be "Treasury can issue whatever debt it needs to up to $X".

The time has come to further streamline it to "Treasury can issue whatever debt it needs to to fund Congressional appropriations that are above and beyond tax receipts".

Congress can appropriate less or tax more if it's concerned about debt levels, no need for a ceiling.
 
2012-11-21 12:02:16 PM  

dywed88: The debt limit should be removed for one simple reason, there is no reason for it other than to be used as a political tool.

Congress authorizes spending and sets out revenue streams. There is no reason for them to have to authorize debt to cover their expenditures and revenue shortfalls. A debt limit can only make sense if it is controlled by a party other than that which makes the cash flow decisions.


Just as an example of this, in corporations, financing is authorized by the Board of Directors while decisions that affect cash flows are made by management.
 
2012-11-21 12:37:50 PM  
"Debt limit increases allow for more borrowing which means more spending and, in theory, more equity in the long run."

Depends on what you spend the money for. If it's infrastructure like roads or public buildings, then maybe you've gotten some equity out of the deal. If it's spent on things like free pot or transgender studies , not so much .
 
2012-11-21 12:50:04 PM  
That picture speaks volumes.

scrapetv.com
 
2012-11-21 01:18:55 PM  

jjorsett: "Debt limit increases allow for more borrowing which means more spending and, in theory, more equity in the long run."

Depends on what you spend the money for. If it's infrastructure like roads or public buildings, then maybe you've gotten some equity out of the deal. If it's spent on things like free pot or transgender studies , not so much .


What about better ways to murder people?
 
2012-11-21 02:56:34 PM  

Gaseous Anomaly: Serious Black: The debt ceiling was supposed to stop us from borrowing money until the cows come home.

No.

In the early days Treasury had to get specific Congressional authorization to issue any debt at all. Imagine if every bond auction today needed a bill to pass first!

So they streamlined it long ago to instead be "Treasury can issue whatever debt it needs to up to $X".

The time has come to further streamline it to "Treasury can issue whatever debt it needs to to fund Congressional appropriations that are above and beyond tax receipts".

Congress can appropriate less or tax more if it's concerned about debt levels, no need for a ceiling.


why even bother taxing at that point then if you are simply ignoring revenue in favor of wishful thinking? Borrow 100% and see how long we can do that. We're already borrowing well beyond our revenue stream....whats the difference? We can't pay it back to begin with.
 
2012-11-21 02:59:27 PM  

TDBoedy: Gaseous Anomaly: Serious Black: The debt ceiling was supposed to stop us from borrowing money until the cows come home.

No.

In the early days Treasury had to get specific Congressional authorization to issue any debt at all. Imagine if every bond auction today needed a bill to pass first!

So they streamlined it long ago to instead be "Treasury can issue whatever debt it needs to up to $X".

The time has come to further streamline it to "Treasury can issue whatever debt it needs to to fund Congressional appropriations that are above and beyond tax receipts".

Congress can appropriate less or tax more if it's concerned about debt levels, no need for a ceiling.

why even bother taxing at that point then if you are simply ignoring revenue in favor of wishful thinking? Borrow 100% and see how long we can do that. We're already borrowing well beyond our revenue stream....whats the difference? We can't pay it back to begin with.


This is why Republicans can't be allowed to be in charge. Because they see the situation, call a slippery slope where there is none, and act as if that slope is a cliff.
 
2012-11-21 03:24:11 PM  
Everyone needs to take a chill pill and stop pretending that our sovereign debt is in any way similar to personal debt or that the US is in anywhere near as much trouble as Greece. Many of the world's largest, most successful corporations have a much higher debt to income ratio than the US government has. On top of that the US government is in control of the currency it borrows in.

The real problem is that the people in charge don't think we're smart enough to understand the truth. They're right to some degree, but that mainly has to do with the asshats (there aren't any English words nasty enough to accurately describe them so I'm going with asshats) in the media. And no I am not just talking about fox/rush/etc.

Even President Obama has bought into this crap and it needs to stop.
 
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