The debt-ceiling deadline gets an extension

It turns out that the Obama’s administration’s self-imposed Aug. 2 deadline for reaching a debt-ceiling deal isn’t as drop-dead as we’ve been told. From the New York Times:

Thanks to an inflow of tax payments and maneuvering by the Treasury Department, the government can probably continue to pay all of its bills for several days after Aug. 2, providing potentially critical breathing room for Congress to raise the debt ceiling, according to estimates by several Wall Street banks and a Washington research organization.

The consensus is that the government will not run short of money until Aug. 10, when it would be unable to cut millions of Social Security checks without borrowing more money.

Note that, while some of us have observed in the past that the Treasury could continue making interest payments on the debt and meet its obligations on Social Security and essential defense even past Aug. 2, this report is talking about continuing to pay all the bills after Aug. 2.

Having a few extra days is no bad thing, given that House Republicans don’t want to pass Senate Majority Leader Harry Reid’s plan and that their own plan is is as much as 30 percent less effective than advertised.

It would be nice to have a GOP that is not just vocal about cutting spending but also competent at writing bills that, you know, cut spending. (Sigh.)

– By Kyle Wingfield

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227 comments Add your comment

Yahtzee

July 27th, 2011
10:48 am

I’m starting to think that no one is serious about cutting our out of control spending. We may be heading into dark times…hope for the best, prepare for the worst.

Jefferson

July 27th, 2011
10:49 am

Yea right. The GOP can’t pass their own plan in the house. Why do you support these clowns?

retiredds

July 27th, 2011
10:50 am

Kyle, since some in your party are convinced that there is more time and that a default wouldn’t be such a bad thing, if you were in charge of what gets paid and what does not would you be willing to list those outlays you would suspend? Can you be specific as to amounts and what programs? If not then just disregard this post.

Yahtzee

July 27th, 2011
10:52 am

The GOP already passed a plan last week. They are having trouble passing one this week, because the one Boehner has presented doesn’t cut enough…and to make matters worse, the Reid alternative actually cut less than the Boehner plan.

Billybob

July 27th, 2011
11:01 am

Enter your comments here

jconservative

July 27th, 2011
11:11 am

“…list those outlays you would suspend?”

I will take the first shot at this if that is OK.

I would not cut payroll checks for late July or early August for all Federal elected officials. That is elected officials. I believe that would be all 535 members of Congress, the Vice President and the President. That is an monthly cost of $7,819,333. (someone check me on this)

But it is not just the money. It is the idea that do not pay those people who do not do their jobs. No work, no eat.

retiredds

July 27th, 2011
11:12 am

Yahtzee, actually it is comical to watch the politicos squirm. The date of reckoning has arrived and they are having a tough time doing real cuts and adjustments. The “smaller government” Republicans are the most funny as they now have to live up to their pronouncements of the last 10 years. I have for several years, ever since the Bush years, wondered when the public would finally see the hypocrites for what they are, closet spenders of our money while telling us the opposite. As Bush raised the debt limit 9 times to the tune of $5+ trillion, not a peep out of the conservatives … and where was the Tea Party then. Funny how an elected Democrat and person of color can bring out the hypocrites in droves. So let’s enjoy it for what it’s worth, great political theater.

Moderate Line

July 27th, 2011
11:18 am

I actually agreed with the Republicans on this when it first started but now they seem incompetent.

They can’t even come up with a plan that they all agree on. They have had since January to come up with something.

Plus you have Mica who has shutdown part of the FAA to stop $16.5 million on the subsidies for a few small airpots and to give airlines special union provisions. In doing so he is costing the government $200 million a day and costing thousands of jobs.

“So for three airports where their passengers are being paid a subsidy of $1,500 to $3,700 — at three airports — they’re closing down the FAA,” Mica said. “They’ve had it since last Wednesday, and they’ve sat on it.”

The extension ran on out on Friday and he blames the Senate for not caving into his demands on short notice. The Senate has passed a clean extenstion. In the meantime the FAA has laid off personel and put stop work orders on all the contracts. By law these contractors will have to be paid for all the equipment they have rented during this period of time so even with the tax not being collected the debt is going up.

http://www.faa.gov/news/media/workstop/

I have voted Republican in every presidential election. I have never been so disappointed in the Republican party in my life as I am with the potential debt ceiling fiasco and the FAA shutdown.

Billybob

July 27th, 2011
11:20 am

Poetic justice as to the fact that their have been no radical left opinion blogs in the ajc after the most embarassing presidential speech in history. If I was an obama supporter I would be embarassed and puzzled as well……as a conservative I have known who and what this guy is about since 2008. There has been a plan passed by republicans in the house and it’s the only one that meets the standards to maintain our AAA credit rating. Jefferson, that is a fact. The libs in the senate will not even debate the very thing that will put us on a road to actually fixing this problem. Jefferson, that is a fact. Be honest……this guy you support has no clue what he is doing. I hope he keeps talking like he did the other night, b/c he is creating republican votes in droves. The far left is on the way out…..enjoy libs

Yahtzee

July 27th, 2011
11:20 am

“Funny how an elected Democrat and person of color can bring out the hypocrites in droves. So let’s enjoy it for what it’s worth, great political theater.”

I agree that Bush and the Republicans that controlled congress from 2001-2006, went on a spending binge. But since the dems took control of congress in 2007, the spending binge has gotten more out of control. How it is so easy for dems to continually blame Bush for his spending woes, and not even acknowledge that what the current administration and the last 4 years of dem controlled congress has done in terms of spending is absolutely atrocious.

Funny how the only ones avoiding the issues and injecting race into the conversation are those on the left.

Billybob

July 27th, 2011
11:22 am

Retiredds and Moderate line,
Do either of you support a balanced budget amendment? That is the fix…..do you support that?

Jack McFarland

July 27th, 2011
11:27 am

Get rid of both parties. The only way to see any real “change” is for a third party option. Both parties are just alike. They both are owned by corporations and their preservation of power. They are all wealthy, and could care less about the little guy. The Democrats scream raising taxes on the rich (since that includes congress, are you going to pay more? Or are you just talking out of your can?), and the Republicans just woke up to the outrageous spending after they spent like drunken sailors for years. And neither party wants certain cuts because the lobbyists are the real people calling the shots behind this.

And the sheep on both sides of the aisle treat this like a gun fight at the old saloon.

Moderate Line

July 27th, 2011
11:33 am

jconservative

July 27th, 2011
11:11 am
“…list those outlays you would suspend?”

I will take the first shot at this if that is OK.

I would not cut payroll checks for late July or early August for all Yahtzee

July 27th, 2011
10:48 am
I’m starting to think that no one is serious about cutting our out of control spending. We may be heading into dark times…hope for the best, prepare for the worst.
++++
Since 2000 Defense spending has gone up 237%
Medicare 229%
The overall budget 193%.
The budget without medicare and defense 178%.

Billybob

July 27th, 2011
11:35 am

Retiredds,
This does not require a political solution, this requires an economic solution and the only serious plan that solves this problem did originate from the Tea Party end of the spectrum. Instead of wasting time on the tea party and race(textbook lib 101 race play, so nice job!), why not focus on the actual problem and an actual fix to it. Once again, the only plan passed by any house of congress that cuts spending, caps spending, and offers a balanced budget amendment is from the republicans……the libs will not even discuss it, so whose fault is that?

Yahtzee

July 27th, 2011
11:36 am

Under the Obama Administration, our national debt has increased 40%

Billybob

July 27th, 2011
11:37 am

I love exposing libs and their ways…..it’s fun Kyle and quite easy……

Karen

July 27th, 2011
11:38 am

Well you dont cut spending in the middle of an economic crisis. You spend to help create jobs and almost anyone knows that fact, except Boehner and Kyle. Birds of a feather.

retiredds

July 27th, 2011
11:40 am

Yahtzee, oh come on now. You and I both know that the responsibility for the debt problem fall squarely on both parties. If you go back to the Reagan years and move forward the split is almost even. And, quite frankly, if we fall into the trap that it’s the other guy’s fault then that is just a cop out. If the Republicans and Democrats and their supporters would just “fess up” and claim (yes claim) responsibility for this mess, we might get a real (not smoke and mirrors) solution. Already each side has made several proposals, none of which do what they say it will do, cut the deficit and debt. Remember the debt is cumulative and the interest on the debt is cumulative as well. The debt and its interest component have been growing for the last 30-40 years so forget that it’s just the tax and spend Dems, it is the borrow and spend Rebubs as well.

I come down harder on the Republicans because we know that Democrats would rather tax and spend, that’ not news. But the R’’s have been telling us since Reagan that they are for smaller government and less spending, but the real hard numbers record speaks otherwise. So, let’s all stop playing games with blaming and hold the politicos from BOTH parties responsible.

As an aside, I have voted mostly Democrat, over my 51 years of eligibility of voting, but on many occasions have voted Republicans for various reasons, most of them being the promise of fiscal responsibility (a lie). I first recommended a balanced budget amendment to the Constitution to my representatives in Washington, both Democrat and Republican, in the 1980’s. I got nice form letters in response telling me how they were going to cut spending but that they did not think a balanced budget amendment was the way to go. They, both Dems and Repubs, just wanted me to trust them. Well, finally the Repubs lay one on the table. But, quite frankly, I don’t believe them because they know it won’t pass. So again the R’s lay out something they know won’t happen. And why, VOTES. It looks good. They can come home and tell us (lie to us) that they proposed a balanced budget amendment but it didn’t pass (and they know that now, it won’t pass). So why bother, VOTES. Well, I’m done with them. Since the Bush spending years (and his VP stating publicly that deficits don’t matter), I will not believe a word regarding balanced budgets or reducing the debt until I see it happen for real. I’ll give them 10 years to prove themselves. I’m betting they will fail. And that failure will be our failure as well.

wallbanger

July 27th, 2011
11:44 am

This country has been on a spending binge for far too long. If those credit ratings have any meaning at all they must cut our credit rating no matter what they do in Washington now. How on earth can we, with a straight face, advocate for a higher debt ceiling without working out spending cuts? That is like asking for a rise in your VISA credit limit, when you are already defaulting or paying the minimum on your balance. It is just idiocy.

Billybob

July 27th, 2011
11:44 am

Karen,
You do spend to help create jobs in a system of central gov’t planning which the soviets were quite fond of running…….is that what you mean?

Moderate Line

July 27th, 2011
11:46 am

Billybob

July 27th, 2011
11:22 am
Retiredds and Moderate line,
Do either of you support a balanced budget amendment? That is the fix…..do you support that?
++++++++++++
I have always supported a balance budget.

Road Scholar

July 27th, 2011
11:50 am

Kyle, how can you even think to use “Competent” and “GOP” in a sentence?

Bilybob: If you were a Pres. Obama supporter…hell would freeze over!

Why not cut 10% of ALL Department’s budget/appropriations across the board to cut spending. I bet the administrators know what has value/programs that are needed. and, legislators need not call to affect the cuts. Add no federal raises, cancel the legislators health insurance..they can buy it like everyone else. Cancel any retirement monies for legislators…you were elected not hired!

Moderate Line

July 27th, 2011
11:54 am

Billybob

July 27th, 2011
Billybob

July 27th, 2011
11:35 am
Retiredds,
This does not require a political solution, this requires an economic solution and the only serious plan that solves this problem did originate from the Tea Party end of the spectrum. Instead of wasting time on the tea party and race(textbook lib 101 race play, so nice job!), why not focus on the actual problem and an actual fix to it. Once again, the only plan passed by any house of congress that cuts spending, caps spending, and offers a balanced budget amendment is from the republicans……the libs will not even discuss it, so whose fault is that?
++++
The plan put a cap at 18% of GDP which we have not met since 1966. As someone who has has NEVER voted Democrat for president that is not a serious effort but just a political ploy. Where was this during the Bush years? Suddenly, the Republicans are in and they want to balance the budget. lol

Chris D.

July 27th, 2011
11:54 am

According to President Obama America is made up of 60 States, of which he has personally visted 57. I say we get Obama to identify those extra 10 states no one else seems to realize exist and then get THEM to pay their fair share…Surely no one has collected incomes taxes, payroll taxes for maybe as long as a 100 years. Imagine how much they owe? Probably balance the deficit with tall their back payments?

Moderate Line

July 27th, 2011
11:57 am

Road Scholar

July 27th, 2011
11:50 am
Kyle, how can you even think to use “Competent” and “GOP” in a sentence?

Bilybob: If you were a Pres. Obama supporter…hell would freeze over!

Why not cut 10% of ALL Department’s budget/appropriations across the board to cut spending. I bet the administrators know what has value/programs that are needed. and, legislators need not call to affect the cuts. Add no federal raises, cancel the legislators health insurance..they can buy it like everyone else. Cancel any retirement monies for legislators…you were elected not hired!
+++++
That would cut spending less than seven percent because Social Security and medicare are about 32% of spending. Plus the Republicans will never cut defense so now you are down to 5%. However, it would be a good first start.

Billybob

July 27th, 2011
11:58 am

Retiredds,
Your inference on the BBA being about votes b/c they know it can’ts pass. Here’s one question….Why won’t reid bring it up for a vote in the senate? Because he knows it will probably pass because the public overwhelmingly supports it…..This shows reid isn’t interested in actually solving an issue, he and obama are playing pure politics with this situation. Instead of bagging on the republicans, maybe you should be asking why reid will not have a vote on it and maybe that would lead to actually having a vote on it and that might lead to it actually passing and then……….the problem you say you have with dems and repubs(spending) within 5-10 years would actually go away sir…Big problem solved, (with money capped and limited) this would lead to less bribes and political payoffs and promises for votes(which no one likes) and many other types of things…..hear me now

Billybob

July 27th, 2011
12:06 pm

Moderate Line,
Bush is gone and our credit rating has not been in jeopardy until NOW. It’s too easy. The newly elected conservative in the house are LEADING on the problem and yes that want this amendment. Your answer to that is to lol and ignore the actual problem and fix…….Next

Bart Abel

July 27th, 2011
12:16 pm

I have an idea. Some might call it radical–

Pass a clean debt-ceiling increase!

Republican and Democratic Congresses have passed scores of clean debt ceiling increases for decades. The actual legislation is about four lines long, and they could have it on the President’s desk for his signature in less than an hour. Self-inflicted crisis averted.

Threatening to crash the economy on purpose, endangering our retirement accounts, making our jobs even less secure than they already are, undermining our national security, among other awful consequences, is probably the most asinine scheme that any American politician or group of American politicians have ever devised.

While I’m making radical suggestions, I have an idea about reducing the deficits…create jobs. More jobs would create taxpayers, thereby creating more revenue, and the deficit goes down. We’re talking about austerity when we should be talking about stimulus. Payroll tax cuts wouldn’t be the most effective tool available, but it would be a good start.

retiredds

July 27th, 2011
12:21 pm

Billybob, Reid doesn’t bring it up because he knows it won’t pass. I’m not saying he wouldn’t do it if he could to buy votes. It won’t pass, period, whether you fantasize about it or not. As I mentioned above there are many of out here who have been in favor of a balanced budget amendment for many, many years. The buffoons we have representing us will not pass it. I have wanted a balanced budget amendment for one reason, and one reason only: it takes the income and spending equation out of the hands of the politicians. So please, don’t buy into the fabrication that the Repubs are for a balanced budget amendment. They, like their Democratic counterparts, enjoy too much the power of the purse. They won’t give that up without a fight. So the Republicans will vote on it because they know it won’t pass, period.

And about our credit rating, as I said above the debt and the interest on the debt is cumulative. This has been brewing for decades. Anyone who has an understanding of compound interest could see this coming. If you think it is just the last two years, while they have been bad, are the culprit you need to go back and take economics 101 and also read up on how interest compounds. Also, let us not forget that the last budget that Bush submitted and it was accepted was for $1.3 trillion deficit.

retiredds

July 27th, 2011
12:25 pm

Oh my, this from CBS news:

The nonpartisan Congressional Budget Office announced Wednesday morning that Senate Democrats’ plan to raise the debt ceiling would save the nation $2.2 trillion over the next ten years — $500 billion less than Senate Majority Leader Harry Reid claimed when he introduced the plan.

The news follows the CBO’s report late Tuesday that the House Republicans’ proposal also fell short of claims: The CBO said that plan, which is broken into two steps, would initially save only $850 billion over a decade, not the $1.2 trillion claimed by House Speaker John Boehner.

Seems like neither the Dems or the Repubs can get their numbers straight. I wonder why?

Moderate Line

July 27th, 2011
12:27 pm

Billybob

July 27th, 2011
12:06 pm
Moderate Line,
Bush is gone and our credit rating has not been in jeopardy until NOW. It’s too easy. The newly elected conservative in the house are LEADING on the problem and yes that want this amendment. Your answer to that is to lol and ignore the actual problem and fix…….Next
++++
In your opinion I am ignoring the problem, even though I have supported balancing the budget even when Reagan was president long before the current conservatives found religion. Cantor was elected in 2001. Where was he when the debt ceiling was raised during Bush’s term. Where was Boehner? Bush is gone but these hypocrits remain “leading the charge” Westmorland 2005 and Bachmann 2003.

Do I really need to go through the entire list? It is suddenly convenient for these guys to support a balance budget. Also, the Dems supported when the Republicans were in charge.

NJ

July 27th, 2011
12:31 pm

The real problem still revolves around revenues. You do not need to cut the income tax rate to stop giving billions of dollars to corporations in subsidies. Many of these do not even pay corporate or other taxes in the US because of the code, but they are still given billions.

The fact is that the government does not even collect enough revenues to pay for all the costs associated with defense and so must borrow, often from Social Security to cover the results of the Bush Tax Cuts. If the tax cuts result in revenues being so low that they will not even cover Republican priorities, there is the problem

Moderate Line

July 27th, 2011
12:33 pm

Billybob

July 27th, 2011
12:06 pm
Moderate Line,
Bush is gone and our credit rating has not been in jeopardy until NOW. It’s too easy. The newly elected conservative in the house are LEADING on the problem and yes that want this amendment. Your answer to that is to lol and ignore the actual problem and fix…….Next
+++++
There are only 100 new Republicans in the house and senate out of 500+. Our credit ratings is only in jeopardy because the threat of debt ceiling not being passed in time so one could easily argue that if the Republicans had not been elected the credit rating would not be an issue.

M.E.

July 27th, 2011
12:35 pm

Yahtzee
July 27th, 2011
11:36 am
Under the Obama Administration, our national debt has increased 40%

Yes, because we finally did away with the hokey accounting of the Bush years, and added the cost of two unfunded wars to our national debt. Coveniently, you left that part out.

NJ

July 27th, 2011
12:38 pm

And of course the published budget does not accurately reflect the cost of defense. A method of excluding payroll tax revenues when calculating the percentages was created during the Vietnam War to make the cost of the war appear to be lower than it actually was.

Because Social Security is funded by a separate payroll tax, and law prohibits these funds from being mingled, they are not all counted when calculating how much each program takes up of what because Social Security Surpluses are immediately converted into Treasury Bonds and then this is moved into “General Revenues”

One of the best things we could do is treat Social Security like the Post Office. Have it be a complete, separate agency that runs off it’s own funds. The surpluses get invested. Since the current debt ceiling talks are about to make Treasuries a less sound investment (the reason the surpluses were required to be placed in Treasuries is that it was asserted that the US Treasury would ALWAYS be a sound investment).

At that point something interesting happens. The Republicans lose the actual revenue source that finances the current tax rates.

When you look at non trust fund based government programs, all other non defense discretionary spending like Education etc, makes up about 15 percent of government spending. The rest all goes for defense or business support

Billybob

July 27th, 2011
12:40 pm

” If you think it is just the last two years, while they have been bad, are the culprit you need to go back and take economics 101 and also read up on how interest compounds”
Never said or implied any of this and I can handle econ 101, you sound foolish….let’s stay on point. My point is that we have a group that is fighting for a BBA who are in congress, we do have people who are willing to pass it. That is where we START.

M.E.

July 27th, 2011
12:45 pm

Chris D.
July 27th, 2011
11:54 am
According to President Obama America is made up of 60 States, of which he has personally visted 57. I say we get Obama to identify those extra 10 states no one else seems to realize exist and then get THEM to pay their fair share…

First, Obama never said 60. Second, if you knew anything about American history, geography and politics, you would realize that the U.S. has 57 states and territories. Get over it already.

Billybob

July 27th, 2011
12:47 pm

We have two kinds of people here today Kyle……one type that actually supports a plan that will, for once in a long time in DC, fix a serious problem…..and one type who just likes to blame people and say it can’t work and not focus on the problem or the fix……and then there is Moderate Line who suggest that if not for republicans we could keep our heads in the sand and continue to ignore the problem and pretend everything is ok……i choose the proactive stance of fighting for what is right and will work. Politics be damned……Most libs will not understand that last sentence….

Billybob

July 27th, 2011
12:48 pm

i miss cynthia tucker….

NJ

July 27th, 2011
12:48 pm

Yes, It is also conveniently forgotten that much of the Obama debt is also a result of compromises he had to make to get a few Republican votes. So when Republicans scream about the “Stimulus Package” they love to forget than about 40 percent of it was tax cuts.

Over the last three years, Obama has agreed to about 880 billion dollars in tax cuts, either by extending the Bush Tax Cuts two years longer, or just giving them as part of the stimulus package.

So far, the supply side Bush Tax Cut extension and the progressive Obama tax cuts, demand side, have done little to nothing to create jobs.

So when one thing proves itself to not be working, you definitely should be trying something else.

Raising the top marginal rate would do it. The rich would not actually pay the taxes. They would simply stop taking money as “personal income” and shift it into forms of income that are taxed at lower rates, like the long term capital gains rate. Either they could take income as personal income and pay 39.5 percent, OR take it as long term capital gains, and pay 15 or 20 percent depending on what the rates become. But by investing in in things that create jobs rather than taking personal income to buy a new yacht, the government uses a carrot/stick approach. You can hedge the bets that the wealthiest WILL use that money to create jobs.

The fallacy of the Republican argument is that ALL tax cuts are created equal. They are not. There is no way that a million dollar bonus to a corporate executive is going to be used to create jobs in his corporation, The suggestion that it could is a contradiction.

Republicans have also even distorted the supply side theory which says if tax rates are extremely high you can SOMETIMES increase government revenues by lowering the top tax rate. It also says there are times taxes are too low.

Republicans morphed this into ALL TAX CUTS ARE GOOD. When there is actually NO economic theory that asserts this.

Jefferson

July 27th, 2011
12:52 pm

Is there at least one (1) original idea or statement from a GOP supporter on this board ? Its all rehash of some neo con manifesto that just don’t work. Somebody — ?

Exit strategy

July 27th, 2011
12:53 pm

Maybe we should all just take the lead of Eric Cantor….

When Eric Cantor shut down debt ceiling negotiations last week, it did more than just rekindle fears that the U.S. government might soon default on its debt obligations — it also brought him closer to reaping a small financial windfall from his investment in a mutual fund whose performance is directly affected by debt ceiling brinkmanship.

Last year the Wall Street Journal reported that Cantor, the No. 2 Republican in the House, had between $1,000 and $15,000 invested in ProShares Trust Ultrashort 20+ Year Treasury EFT. The fund aggressively “shorts” long-term U.S. Treasury bonds, meaning that it performs well when U.S. debt is undesirable. (A short is when the trader hopes to profit from the decline in the value of an asset.)

Moderate Line

July 27th, 2011
12:57 pm

Billybob

July 27th, 2011
12:47 pm
We have two kinds of people here today Kyle……one type that actually supports a plan that will, for once in a long time in DC, fix a serious problem…..and one type who just likes to blame people and say it can’t work and not focus on the problem or the fix……and then there is Moderate Line who suggest that if not for republicans we could keep our heads in the sand and continue to ignore the problem and pretend everything is ok……i choose the proactive stance of fighting for what is right and will work. Politics be damned……Most libs will not understand that last sentence….
++++
And your not blaming people. You are blaming all the people who disagree with you.

then there is Moderate Line who suggest that if not for republicans we could keep our heads in the sand and continue to ignore the problem and pretend everything is ok

Where have I said such a thing? Ridiculous. Is that the only way you can win an argument is by putting words in peoples mouth? That is being dishonest. I believe the debt is a real problem. I believe it is the most important problem we have long term. However, if the debt ceiling doesn’t pass it will also be a problem.

I repeat that I have supported a balance budget since Reagan longer than the current come to religion Republicans but that is sticking my head in the sand.

Don’t make up stuff and put words in peoples mouth.

NJ

July 27th, 2011
12:57 pm

Yes and the real answer lies in the fact that there is no way to actually cut enough to effect the debt and we cannot simply rely on increasing revenues to do so. The fact is the only way we can get out of this is to increase revenues and to cut spending.

But the fact is that Republicans play mix and match. Both Social Security and Medicare are based on a separate revenue stream that were created to pay for them. They both currently run surpluses. Republicans have basically been using the surpluses to give tax cuts or to offset revenues that would have come from income tax revenues. If you removed them from the reach of Republicans to borrow, we could then get an accurate idea of how to handle the debt for everything that does not have a dedicated revenue stream.

Another example. Infrastructure. It is paid for out of a trust fund based on excise taxes paid on automobile tires and gasoline, etc. But in this case it has not all been passed on for those purposes. It has generated surpluses which have been taken and used for other items.

There are 200 such trust funds based on dedicated taxes that are constantly raided to offset the need for other revenues to support defense, etc.

Everyone knows about the Social Security Surpluses. Republicans say they are not real, but the reason that are not real is that they have been invested in US Treasury Notes. To say they are not real is to say that the money we borrowed from China and spent is not real. They are real, but Republicans try to say they are not for a simple reason. They borrowed them with the promise that their economic ideas would make it possible to pay the money back. Their idea failed, but now they simply want to default on the loans they took out.

Billybob

July 27th, 2011
12:59 pm

NJ…..obama spending does not create jobs so let’s let him raise taxes to create jobs? I’m sure that will work……..earth to NJ, come in? Come in NJ……

The Outlaw Josey Wales

July 27th, 2011
1:00 pm

Question for the libs;

If we have a “revenue” problem, why did Obama/Pelosi/Reid choose to extend the Bush tax cust when they had a fillibuster-proof majority in the Senate, as well as total control of the House, and therefore could have imposed any tax code or structure of their choosing? And why did B. Hussein Obama reduce Social Security taxes by 33%?

Thanks in advance for your no-doubt brilliant and insightful responses.

Swami Dave

July 27th, 2011
1:01 pm

Bart

Because passage of “clean” debt ceiling increases has done nothing in the past, but lead to greater and greater deficit spending. As most of us know, doing the same thing over and over again expecting different results is the definition of insanity.

Based on current comparable numbers, were the federal government an average American household:

- They would have a annual income of $51K.

- They would have annual expenditures of $96K.

- They would have existing credit card debt of $356K

Your “clean” increase would be akin to seeking ANOTHER $61K in credit.

The alternative is that any future increases in the debt ceiling should have equivalent commitment to change the fiscal trajectory. Personally, I would rather see spending cuts (actual cuts year-over-year instead of the currently touted “cuts” that are merely reductions in rates of growth) in much more near terms (specifically within the scope and budgetary control of THIS Congress).

Frankly, a “clean” bill that simply allows continued increases in deficit spending is a non-starter. A bill that increases taxes is a non-starter because America’s taxpayers already pay too much as it is.

The solution (short-term and long-term) is a changing of the growth curve for size & scope of government and a changing of direction where dependency and redistribution are replaced by freedom and opportunity.

…..and THAT solution will begin addressing a multitude of our problems: debt, deficits, jobs, financial markets, income mobility, etc.

-SD

The Outlaw Josey Wales

July 27th, 2011
1:02 pm

” Republicans have basically been using the surpluses to give tax cuts or to offset revenues that would have come from income tax revenues. ”

Congrats to NJ for the funniest post of the day. Totally wrong, of course, but funny nonetheless…

The Outlaw Josey Wales

July 27th, 2011
1:05 pm

During the Bush administration, the libs were telling us that deficit spending was destroying our economy. Now, with Obama having doubled-down on deficit spending, the libs tell us it creates jobs.

Liberals are so funny.

The Outlaw Josey Wales

July 27th, 2011
1:09 pm

Jefferson

July 27th, 2011
12:52 pm

“Is there at least one (1) original idea or statement from a GOP supporter on this board ? Its all rehash of some neo con manifesto that just don’t work. Somebody — ?”

This from a member of the party (Democrats) that extended the Bush tax cuts, reduced Social Security taxes by 1/3, and blames Republicans for refusing to raise taxes.

Liberals are so funny.