# US Debt Ceiling



## BradK (15 July 2011)

The United States will crawl with news about the debt ceiling raise in the next few weeks, as the August 2 deadline looms for an agreement between the Republicans and Democrats. 

There are some pretty hardline Republicans out there such as Eric Cantor calling for deep spending cuts and no new taxes. 

Barack Obama went on CBS news last night and suggested that he could not guarantee that Social Security cheques will go out on August 3 if agreement is not reached. 

Will they reach an agreement? What will be the consequences if they dont? 

Discuss


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## Tyler Durden (15 July 2011)

If the ceiling is raised, I bet you there'll be a rise in the market (at least temporarily), which doesn't make sense to me at all. It's like a person saying "look, I maxed out my credit card at $10,000 and can't pay it back in time, but can you raise my limit to $15,000 so I can spend more and have more time to _possibly_ pay it back?"...and that's going to be read as 'good' news.


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## Bigukraine (15 July 2011)

Hi Bradk,

So that you know i believe that they have to reach agreement to lift the debt cieling by the 22nd of july due to the process involved in the senate and admin. they really only have a week to sought it before 2nd august ,they are being backed into a corner by the rating agencies now.... fix it or they will lose their "AAA" rating and if this happens watch the markets tumble.....


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## basilio (16 July 2011)

The American debt ceiling crisis is serious sxxx.  With the European community in crisis it seems as if American treasuries are the "safest" place to park your money. If this starts to look wobbly (and it certainly is) I think confidence in the financial structure of the whole world economy  would collapse.  

At this stage the negotiations are not going well. The Republicans are determined to  make Obama a one term President so they are resisting all efforts to come to a  broad based long term attempt at a solution to this crisis. President Obama is proposing a big picture long term cut of $4trillion with savings from a all sectors  of Government including medicare .  But he also wants to have an increase in taxes on the wealthiest Americans as part of the budget balancing exercise.  The Republicans have refused to consider this and furthermore the Tea Party republicans don't even want to increase the debt limit and are prepared to cause a financial catastrophe. 

*I think this is criminally deranged behavior.*

I have a feeling President Obama will be making a big "Osama Bin Ladden" statement within the next few days if this deadlock isn't broken. I think he has to ensure that the debt limit is raised and that America does not default and does not stop paying it's social security pensions, wages ect. So he simply can't allow  a rump of Republicans to destroy the financial system simply because they don't understand what they are doing.

Exactly how he does it I don't know but allowing a default to occur would be unthinkable so almost any other action would have to be better. 

We'll see won't we ?


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## Aussiejeff (16 July 2011)

basilio said:


> The American debt ceiling crisis is serious sxxx.  With the European community in crisis it seems as if American treasuries are the "safest" place to park your money. If this starts to look wobbly (and it certainly is) I think confidence in the financial structure of the whole world economy  would collapse.
> 
> At this stage the negotiations are not going well. The Republicans are determined to  make Obama a one term President so they are resisting all efforts to come to a  broad based long term attempt at a solution to this crisis. President Obama is proposing a big picture long term cut of $4trillion with savings from a all sectors  of Government including medicare .  But he also wants to have an increase in taxes on the wealthiest Americans as part of the budget balancing exercise.  The Republicans have refused to consider this and furthermore the Tea Party republicans don't even want to increase the debt limit and are prepared to cause a financial catastrophe.
> 
> ...




Maybe he'll declare himself "Sole Dictator" of the US? LOL

IMO Unca Sam is between a verrrryyyy Bigrock & a verrrryyyy hard place, no matter what the outcome.

The 10-15 years of "stabilisation of our finances" that Obamasan is proposing (entailing spending cuts of up to $US4 Trillion) is a soft con. 

In reality, the loss of $US4 Trillion worth of spending throughout the US economy that he proposes would amount to 10-15 years of terrible STAGNATION. Forget GDP growth. Forget rising living standards. Forget employment growth. Forget rising house prices. Forget America?

The Empire is falling.....

*sniff*


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## BradK (17 July 2011)

Jim Rogers and Peter Schiff believe the whole thing is political opera. 

Seems they will come up with an 11.59pm deal, and the day will be saved. 

Still, I agree ... a) bodes bad for America either outcome 

and b) doesn't seem to be worrying the investors... nor the ASF punters... 

Brad


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## Glen48 (17 July 2011)

USA has done in 80 yrs what the Roman empire took 200  to do , When parking meter's and the revenue generated has been sold to an over seas country some thing is wrong.


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## explod (17 July 2011)

Glen48 said:


> USA has done in 80 yrs what the Roman empire took 200  to do , When parking meter's and the revenue generated has been sold to an over seas country some thing is wrong.




And there is plenty of big USA money invested in China so maybe they can do it in 20 years.  Ten to go, or is that five.


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## Starcraftmazter (19 July 2011)

If the Obama administration chooses to suspend all congressional salaries, pensions and all other benefits as an interim budget deficit saving measure, I'm sure they will be able to reach a deal pretty damn quick.

Then again, congress gets so much money from lobbyists, that I suppose it's debatable just how effective that would be


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## Aussiejeff (20 July 2011)

Starcraftmazter said:


> If the Obama administration chooses to suspend all congressional salaries, pensions and all other benefits as an interim budget deficit saving measure, I'm sure they will be able to reach a deal pretty damn quick.
> 
> Then again, congress gets so much money from lobbyists, that I suppose it's debatable just how effective that would be




Hooorah! The "Gang of Six" have saved the day, let Mr Obamasan & Mr Market rejoice!!



> President Barack Obama embraced a $3.7 trillion debt-cutting plan by a bipartisan group of senators that would combine tax increases and spending cuts, saying it could end a congressional deadlock over raising the U.S. borrowing limit.
> 
> “We now are seeing the potential for a bipartisan consensus,” Obama said today at the White House, where he called the proposal by the so-called *Gang of Six* “good news” and “a very significant step” in so far fruitless negotiations between Republicans and Democrats over boosting the $14.3 trillion’s borrowing authority before a threatened default on Aug 2.



http://www.bloomberg.com/news/2011-...ding-cut-bill-with-no-debt-deal-imminent.html

See? It was all just a bad dream after all!

Mmmm.... back to sipping champers again....

LOL


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## springhill (2 August 2011)

A chart of US spending over a generation.


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## nulla nulla (2 August 2011)

Aussiejeff said:


> Hooorah! The "Gang of Six" have saved the day, let Mr Obamasan & Mr Market rejoice!!
> 
> http://www.bloomberg.com/news/2011-...ding-cut-bill-with-no-debt-deal-imminent.html
> 
> ...




Is there enough left in the till for some canapes with the champers?


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## Bigukraine (2 August 2011)

Wouldn't count my" Obama's(chickens)" just yet.... mumbles around the senate and the vote still to come going to go down to the wire... US markets dipped last night ,ours today will prob. give back what it gained yesterday and no matter what deal is reached the "AAA" is still under threat.

I'd be putting the champs back in the ice bucket and reaching for some quickeze at the minute


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## Calliope (2 August 2011)

FAQ; America's Debt Crisis Explained.

http://www.news.com.au/business/uni...fault-threat-faq/story-e6frfm1i-1226106044741


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## tech/a (2 August 2011)

UK looks sick!


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## Aussiejeff (2 August 2011)

Bigukraine said:


> Wouldn't count my" Obama's(chickens)" just yet.... mumbles around the senate and the vote still to come going to go down to the wire... US markets dipped last night ,ours today will prob. give back what it gained yesterday and no matter what deal is reached the "AAA" is still under threat.
> 
> I'd be putting the champs back in the ice bucket and reaching for some quickeze at the minute




Obama Bin Debt Laden's 's Kentucky Fried Chickens have come home to roast, for now.... 

But, but, but..... Mr Market fell flat on his farce.... ooo-er. 

Having digested this grist with some difficulty, I decided to *sniff* the Champers and pop the cork back in till 2025.

Orf to tha Eurozone Rave tonight artyman: for some more  fun!

LOL


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## Bigukraine (2 August 2011)

Aussiejeff said:


> Obama Bin Debt Laden's 's Kentucky Fried Chickens have come home to roast, for now....
> 
> But, but, but..... Mr Market fell flat on his farce.... ooo-er.
> 
> ...




More like chinese... makes you feel full for now but you'll feel a lot hungrier later


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## Aussiejeff (3 August 2011)

Awwww, shoot!

Not only did Mr Market fall flat last night, 'e started burrowing frantically down towards the fallout bunker...

Caught 'tween a rock & a hard place. What a conundrum the human race finds itself in. Next 20 years are going to be incredibly interesting for all sorts of reasons.... population growth pressure, energy shortage pressure, debt growth pressure, food shortage pressure, rare metals shortage pressure, just pressure, pressure, pressure all round.... all this Dud Debt Deal has done is reduce the pressure a teensy-weensy bit. For now.

Somethin's gotta give sooner or later?


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## Calliope (5 August 2011)

*Where to Hide?*



> It's a reflection of how desperate things have become. The conundrum: where to put your money? Share markets are overvalued, especially now that the latest ructions will wreak all sorts of dislocations and current earnings forecasts will have to be reined in. Commodities are plunging on the diminishing prospects for global growth and demand. Gold is already sky-high and bond markets are groaning under an ever-rising weight of supply.
> 
> Many governments will struggle to just meet interest payments. Against this backdrop, US treasuries have rallied as investors flee for cover. It's the Armageddon play.
> Now then, what's the plan? There seem to be two choices on the policy menu.
> ...





Read more: http://www.smh.com.au/business/the-...ts-the-plan-20110805-1iemc.html#ixzz1U802ilXJ


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## DB008 (28 December 2011)

Here we go again...

*Obama to Ask for $1.2 Trillion Increase in Debt Limit
*



> WASHINGTON ”” President Obama will ask Congress this week for $1.2 trillion in additional borrowing authority, which would raise the federal debt limit to $16.4 trillion and avoid the need for further increases before the 2012 elections, administration officials said Tuesday.
> 
> This would be the final increase allowed under the budget agreement reached in August after the government came close to default. Since signing legislation to codify that agreement on Aug. 2, Mr. Obama has obtained two increases totaling $900 billion.
> 
> The budget agreement largely pre-empts the partisan debate over federal deficits and debt that the request might otherwise have touched off in Congress.




More on Link above...


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## young-gun (28 December 2011)

DB008 said:


> Here we go again...
> 
> *Obama to Ask for $1.2 Trillion Increase in Debt Limit
> *
> ...




might aswell just raise it to 20 tril and be done with it...for a year or two


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## Knobby22 (28 December 2011)

young-gun said:


> might aswell just raise it to 20 tril and be done with it...for a year or two




As long as taxes can't be increased to the top earners and a war is going on, there is no alternative.


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## young-gun (31 December 2011)

Knobby22 said:


> As long as taxes can't be increased to the top earners and a war is going on, there is no alternative.




at some point it has to stop. they can increase taxes all the want, it wont do anything. sure it will buy them sometime, but thats about it. they have too much debt, it has to deflate. governments account for some staggering amount of a nations spending(i cant remember the figure but its up over 25%) meaning that if they cut gov spending too much the country will fall into recession anyway. you cant have the best of both worlds.

they're in trouble, and the end result no matter how it happens is going to be disastrous for everyone.


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## Tyler Durden (2 January 2012)

young-gun said:


> at some point it has to stop. they can increase taxes all the want, it wont do anything. sure it will buy them sometime, but thats about it. they have too much debt, it has to deflate. governments account for some staggering amount of a nations spending(i cant remember the figure but its up over 25%) meaning that if they cut gov spending too much the country will fall into recession anyway. you cant have the best of both worlds.
> 
> they're in trouble, and the end result no matter how it happens is going to be disastrous for everyone.




That catch-22 situation is nicely illustrated in the easy to understand video below:


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## algis (2 January 2012)

Tyler Durden said:


> That catch-22 situation is nicely illustrated in the easy to understand video below:






Take a look at: http://www.usdebtclock.org/.  Also take a look at "About" and "Money/Banking History".

As you can see, the US Govt debt is approx $15T out of a total debt of $56T.  

You do realise that the US Federal Reserve is a private institution?

A question: why should a government have to borrow money at interest from a private institution when it once created its own as it did 100 years ago?


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## Tyler Durden (3 January 2012)

algis said:


> Take a look at: http://www.usdebtclock.org/.  Also take a look at "About" and "Money/Banking History".
> 
> As you can see, the US Govt debt is approx $15T out of a total debt of $56T.
> 
> ...




You're preaching to the converted.


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## young-gun (3 January 2012)

Tyler Durden said:


> That catch-22 situation is nicely illustrated in the easy to understand video below:





thanks for the vid tyler, exactly what i was talking about. european govs are in the same boat at the moment(only with not qutie as much debt). people are arguing that its not going to happen, and to those i ask to present a plausible working solution to prevent this coming collapse.

one good point the video points out also is that its not guaranteed to happen next month(unless something big happens out of the blue that no one is ready for eg lehmans) but it may very well take another year or two. everyone is doing everythign they can to prevent it, which is causing it to unfold in a very slow burning sort of way at the moment. the question is will there be a point at which the slow burn turns into a bush fire, or if they will be able to slow burn for 10-15 years all the way to the bottom of this mess.


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## Punta (3 January 2012)

Here's an interesting, rosier view on US debt by nobel laureate Paul Krugman

http://www.nytimes.com/2012/01/02/opinion/krugman-nobody-understands-debt.html?src=me&ref=general

Seems to be saying it's no big deal, as long as you have growth...?


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## young-gun (3 January 2012)

Punta said:


> Here's an interesting, rosier view on US debt by nobel laureate Paul Krugman
> 
> http://www.nytimes.com/2012/01/02/opinion/krugman-nobody-understands-debt.html?src=me&ref=general
> 
> Seems to be saying it's no big deal, as long as you have growth...?




this man just seems ignorant, and has overlooked alot of important factors.

but hes right, growth would see the US out of their debt woes, but where is the growth coming from?


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