6 ms·

I cannot get over the fact that the US is acting like a "less developed" country. It's both shocking and unbelievable, and also... entirely predictable. Shame

by cs702 3y ago

I cannot get over the fact that the US is acting like a "less developed" country. It's both shocking and unbelievable, and also... entirely predictable. Shame on all ideologues in congress incapable of compromise.

rsynnott 3y ago
The original sin was introducing this debt ceiling concept in the first place. Once it existed, it was _inevitably_ going to be used like this. (A few other countries have some sort of debt limit, but they're generally expressed in terms of fraction of GDP, which is _somewhat_ less problematic, though may have undesirable effects in a financial crisis... Doing it in absolute terms is _obviously_ going to lead to problems, though.)
- wpietri 3y ago
  Yeah, the place to solve this is within Congress. If they want to keep the debt limited, they can control that by passing budgets that fit. If they want a rule to manage that, they can make one.
  - 0zemp2c 3y ago
    when was the budget that relast time Congress passed was fiscally sound? 1980?
    - pjc50 3y ago
      Doesn't matter. The problem is that passing the budget does not automatically authorize the debt to pay for it. All that needs to happen is welding those two together.
    - acdha 3y ago
      Turn of the century. The Democrats left a balanced budget for George W. Bush but the Republicans decided that meant tax cuts were needed so they could continue campaigning against “big government spending”. https://www.factcheck.org/2008/02/the-budget-and-deficit-under-clinton/ https://www.factcheck.org/2008/02/the-budget-and-deficit-und... The most significant long-term problems they created were probably exempting rich people from Social Security taxes on more than their first $125k of income and Medicare plan D, both of which created massive time bombs as the boomers headed towards retirement. The longer we delay dealing with those, the harder it’ll be to close the gap — which is exactly what they were counting on to build support for privatization.
    - wpietri 3y ago
      Do you mean balanced? The last time the US budget was in surplus was 2001. But debt can be fiscally sound, as anybody with a mortgage knows.
      - flockonus 3y ago
        A healthy mortgage (like any healthy debt) has the expectation of timely repayments and reduces over time. What we see here is the exact opposite to the point debtors are worried about interest default.
- JumpCrisscross 3y ago
  > original sin was introducing this debt ceiling concept in the first place It was for efficiency: "Between 1788 and 1917, Congress would authorize each bond issue by the United States Treasury by passing a legislative act that approved the issue and the amount. In 1917, during World War I, Congress created the debt ceiling with the Second Liberty Bond Act of 1917, which allowed the Treasury to issue bonds and take on other debt without specific Congressional approval, as long as the total debt fell under the statutory debt ceiling" [1]. There is no original sin. We just need a law that permanently authorizes the Treasury to borrow as needed to pay for the things the Congress told it to spend on. [1] https://en.wikipedia.org/wiki/History_of_the_United_States_debt_ceiling https://en.wikipedia.org/wiki/History_of_the_United_States_d...
  - makomk 3y ago
    Having such a permanent law would be constitutionally iffy. The power to borrow money that is part of the US national debt is specifically reserved for Congress, and this is essentially part of what makes the United States a democracy in the first place: only the body made up of the country's elected representatives can tax and borrow in the name of the country. (Other countries have similar restrictions, though not necessarily debt caps; for example, in the UK Parliament must passs a budget each year or the government effectively cannot finance itself and continue operating. This would probably not work well in the USA because Congress has trouble passing budgets reliably.)
    - JumpCrisscross 3y ago
      You’d include it the language in the budget. When the Congress actually has a choice as to whether or not to spend the money. Doing it after a contract has been issued and the bill is due is asinine.
snarf21 3y ago
We are less developed because no other country in the world has this debt ceiling structure (Denmark's is way different and no other country even has one). It is sad that it is used to simply as a tool to cut programs for poor people to give rich people tax breaks. Biden should just print a $999T coin and make it a non-issue forever. They seem to be favoring the 14th amendment approach but that seems dubious given the current Supreme Court.
- sidewndr46 3y ago
  I don't actually care what the Supreme Court decides, but I really want the "14th amendment" approach to be argued in court.
  - njarboe 3y ago
    If the section of the 14th amendment regarding debts means that all US debt must be paid, I would interpret that to mean," If the debt ceiling holds interest on the debt will be paid and spending must be cut so that no more debt is incurred." Fortunately at the moment yearly debt payments are less than total US gov. income but the cuts would be drastic.
    - sidewndr46 3y ago
      Isn't the 'income' part only a minor detail. Even if there was a shortfall from tax revenue, the US has a huge amount of property it could sell off to pay it's debts. Just the National Parks alone would generate enough revenue for many years of interest payments.
      - mindslight 3y ago
        "The solution came during the budget crisis of 2330, when the Brawndo corporation simply bought the Food and Drug Administration and the Federal Communications Commission, enabling them to say, do, and sell anything they wanted" Rather than selling off real assets, the answer is for the executive to create new money themselves ("mint the coin") rather than continuing to be beholden to the Federal Reserve. As we saw with this last spate of pandemic price inflation, the Federal Reserve's technocratic mandate means they will have to adjust and take money out of circulation to compensate.
mrguyorama 3y ago
We should not encourage compromise with an entire party that is openly threatening the country's economy for dubious merit, on a subject that they never seem to care about when the head honcho has an R next to their name.

by cs702 3y ago

rsynnott 3y ago

The original sin was introducing this debt ceiling concept in the first place. Once it existed, it was _inevitably_ going to be used like this. (A few other countries have some sort of debt limit, but they're generally expressed in terms of fraction of GDP, which is _somewhat_ less problematic, though may have undesirable effects in a financial crisis... Doing it in absolute terms is _obviously_ going to lead to problems, though.)

wpietri 3y ago
Yeah, the place to solve this is within Congress. If they want to keep the debt limited, they can control that by passing budgets that fit. If they want a rule to manage that, they can make one.
- 0zemp2c 3y ago
  when was the budget that relast time Congress passed was fiscally sound? 1980?
  - pjc50 3y ago
    Doesn't matter. The problem is that passing the budget does not automatically authorize the debt to pay for it. All that needs to happen is welding those two together.
  - acdha 3y ago
    Turn of the century. The Democrats left a balanced budget for George W. Bush but the Republicans decided that meant tax cuts were needed so they could continue campaigning against “big government spending”. https://www.factcheck.org/2008/02/the-budget-and-deficit-under-clinton/ https://www.factcheck.org/2008/02/the-budget-and-deficit-und... The most significant long-term problems they created were probably exempting rich people from Social Security taxes on more than their first $125k of income and Medicare plan D, both of which created massive time bombs as the boomers headed towards retirement. The longer we delay dealing with those, the harder it’ll be to close the gap — which is exactly what they were counting on to build support for privatization.
  - wpietri 3y ago
    Do you mean balanced? The last time the US budget was in surplus was 2001. But debt can be fiscally sound, as anybody with a mortgage knows.
    - flockonus 3y ago
      A healthy mortgage (like any healthy debt) has the expectation of timely repayments and reduces over time. What we see here is the exact opposite to the point debtors are worried about interest default.
JumpCrisscross 3y ago
> original sin was introducing this debt ceiling concept in the first place It was for efficiency: "Between 1788 and 1917, Congress would authorize each bond issue by the United States Treasury by passing a legislative act that approved the issue and the amount. In 1917, during World War I, Congress created the debt ceiling with the Second Liberty Bond Act of 1917, which allowed the Treasury to issue bonds and take on other debt without specific Congressional approval, as long as the total debt fell under the statutory debt ceiling" [1]. There is no original sin. We just need a law that permanently authorizes the Treasury to borrow as needed to pay for the things the Congress told it to spend on. [1] https://en.wikipedia.org/wiki/History_of_the_United_States_debt_ceiling https://en.wikipedia.org/wiki/History_of_the_United_States_d...
- makomk 3y ago
  Having such a permanent law would be constitutionally iffy. The power to borrow money that is part of the US national debt is specifically reserved for Congress, and this is essentially part of what makes the United States a democracy in the first place: only the body made up of the country's elected representatives can tax and borrow in the name of the country. (Other countries have similar restrictions, though not necessarily debt caps; for example, in the UK Parliament must passs a budget each year or the government effectively cannot finance itself and continue operating. This would probably not work well in the USA because Congress has trouble passing budgets reliably.)
  - JumpCrisscross 3y ago
    You’d include it the language in the budget. When the Congress actually has a choice as to whether or not to spend the money. Doing it after a contract has been issued and the bill is due is asinine.

snarf21 3y ago

We are less developed because no other country in the world has this debt ceiling structure (Denmark's is way different and no other country even has one). It is sad that it is used to simply as a tool to cut programs for poor people to give rich people tax breaks. Biden should just print a $999T coin and make it a non-issue forever. They seem to be favoring the 14th amendment approach but that seems dubious given the current Supreme Court.

sidewndr46 3y ago
I don't actually care what the Supreme Court decides, but I really want the "14th amendment" approach to be argued in court.
- njarboe 3y ago
  If the section of the 14th amendment regarding debts means that all US debt must be paid, I would interpret that to mean," If the debt ceiling holds interest on the debt will be paid and spending must be cut so that no more debt is incurred." Fortunately at the moment yearly debt payments are less than total US gov. income but the cuts would be drastic.
  - sidewndr46 3y ago
    Isn't the 'income' part only a minor detail. Even if there was a shortfall from tax revenue, the US has a huge amount of property it could sell off to pay it's debts. Just the National Parks alone would generate enough revenue for many years of interest payments.
    - mindslight 3y ago
      "The solution came during the budget crisis of 2330, when the Brawndo corporation simply bought the Food and Drug Administration and the Federal Communications Commission, enabling them to say, do, and sell anything they wanted" Rather than selling off real assets, the answer is for the executive to create new money themselves ("mint the coin") rather than continuing to be beholden to the Federal Reserve. As we saw with this last spate of pandemic price inflation, the Federal Reserve's technocratic mandate means they will have to adjust and take money out of circulation to compensate.

mrguyorama 3y ago

We should not encourage compromise with an entire party that is openly threatening the country's economy for dubious merit, on a subject that they never seem to care about when the head honcho has an R next to their name.