Should Congress Abolish the Federal Debt Limit?

Real Time Ec onomics ^ | Jul 10, 2015 | Nick Timiraos

[silverleaf]

No - but the people we voted for gave the man-boy Barry a $20trillion line of credit ( the debt clock froze at above $18 trilion 2 months ago and no one even commented)

Hey boehner what time is happy hour?

[Enlightened1]

All I hear is one dumb@ss idea after the next coming out of the media every day.

The fact that this is even being considered is insane.

It will make our money worthless.

What a DUMB idea!

[expat_panama]

Why not? They never fail to increase it when they hit the old one anyway.

Who knew?

why not do away with the charade?

That's one of the biggest "no-limit" arguments, but there's still a lot to be said for the "kabuki theater", imho it keeps everything in the spot light so folks are made to face the reality of what's happening.  I'm ok w/ an increasing debt, as long as it lags the growth of a bigger America with more people, more wealth, and more income.

[ProtectOurFreedom]

Cut spending? Now that is WAY beyond “extraordinary measures.” That’s off in looney bin territory.

[CSM]

Yeah! Let’s be more greek!

[discostu]

Might as well, they don’t do anything with it except extend it.

[Lurkina.n.Learnin]

” I’m ok w/ an increasing debt, as long as it lags the growth of a bigger America with more people, more wealth, and more income. “

If you run up debt during bad times shouldn’t you pay it back down during good times? Reload for the future.

[expat_panama]

If you run up debt during bad times shouldn’t you pay it back down during good times?

That's exactly the policy the United States began with when John Adams established America's first embassy in Holland for the sole purpose of borrowing to finance the revolution.  We ran up such a huge debt that for the first and only time the U.S. had to seriously weigh the option of default.  What happened next is that we not only paid the debt but we proceeded to run up a surplus.

The question now is whether America is enjoying good times or suffering bad times.  mho is that we're enjoying good times that should be a lot better, so we need to wind way back the rate of debt growth and then let the debt increase along w/ the size of the economy.

[i_robot73]

Abolish the FED, and the debt limit is ‘no longer a problem’. MUCH harder to spend into infinity when you can’t just print funny $$...and take us one more step back to our Constitutional founding.

[i_robot73]

The only thing a BBA would give us: more slavery.

It does NOTHING to fix the root problems: unconstitutional Fed, unconstitutional entitlements....unconstitutional GOVT. In D.C. speak ‘balanced’ = more taxes, year after year for vote buying.

Nobody wants to bring down the house of cards. No politician in the ring today will answer the simplest of question “By what authority?”. If they’d have to site ‘for what’ their taxes/fees were FOR, it’d show what a fraud the whole system has become

SS/welfare? unconstitutional
HCare? unconstitutional
School? unconstitutional
EPA/TSA? unconstitutional
etc.

I’m still reading my copy to see where the 5th, 9th, 10th and 13th have been superseded for ANY of the above....Never have known a CLAUSE to negate the whole.

[RFEngineer]

“I’m ok w/ an increasing debt, as long as it lags the growth of a bigger America with more people, more wealth, and more income. “

We haven’t had that for a long, long time.

I remember hearing “deficits don’t matter” from the first Bush administration, and cringing.

Guess what....they matter, they always mattered, and so does our total debt matter.

It matters so much that they will simply increase the debt limit ad nauseum - and will not ever stop until, of course, they can’t do anything else but stop.

That will be a bad day, all because nobody in Congress has an ounce of Pro-America honesty. Not one Democrat, not one Republican.

[expat_panama]

haven’t had that for a long, long time.

Measuring years by saying "long, long time" works great in Star Wars but when it comes to managing money adults that pay for the movie tickets need times and dates. 

From 1970 to the '08 election the debt/gdp averaged 34%.   Right before the '08 election it was 35% and when Reagan left office it was 39%. 

Right now it's 74%. Let's think together. Putting Bush debt in the same box as today's debt is what Occupy-Wall-Street drops on a cop car. We got twice the debt burden we had w/ Reagan & Bush. There is no repeat no comparison.

[Chode]

they should just have the printing presses feed it straight into the fire

[RFEngineer]

“Measuring years by saying “long, long time” works great in Star Wars but when it comes to managing money adults that pay for the movie tickets need times and dates. “

Cute.

Well if we want to talk about adults, then we have to talk about the bond market. From 1980-ish (after the Carter spike) to 2008 it was a manufactured decline - nobody cared because you could (if you were big enough) game the difference between the long and short gov’t debt and make money all day long, until it all went to “zero”

If we are all adults talking here, we have the future entitlement books that have to be considered.

If we are adults we have to consider all of these things.

Fiscal Sanity and Solvency was indeed a long long time ago and seemingly in a galaxy far away practiced by an alien species that speaks a different language than we do now.

The prosperity we’ve experienced since the 80’s was indeed somewhat manufactured. Now we (like Greece) have to decide if we are going to be a real country of adults who build things, and have a government we can afford, and a population that primarily works at productive endeavors.

Again, we haven’t been that for a long, long time, Obie-wan. The difference, no matter how you choose to measure it, is debt that has to be paid off, and GDP that is fake and getting more fake every year.

So our debt is much bigger, and our “real” GDP (ex gov intervention) is much smaller than you are led to believe.

But adults should be able to face reality, shouldn’t we?

[expat_panama]

...need times and dates. “

Cute.

Ooops! That's as far as I got 'cause somehow we got off on the wrong track and went from arguing to quarrelling.  That's super easy to do with chats about the economy, the subject is passionate, and rightly so as a messed up economy causes unspeakable suffering and there's no need for it.

Life's too short and while I'd love to somehow salvage our convo my supper's on and by the time I get back on FR some other disaster will probably be monopolizing our focus.  In the meantime do have a good evening and hopefully we can steer our thinking more carefully next time.  Cheers!

[RFEngineer]

Friend....I appreciate spirited debate in all it’s forms and take nothing personally, nor do I see it as a quarrel.

One can look at the cold war spending and provide some justification for it, even though in hindsight perhaps not as much as we thought.

However, since the cold war, any measure that includes “debt” in the numerator or “GDP” in the denominator is misleading (and lots of people are mislead).

The difference between the fiction of debt/GDP and (debt+future entitlements) / GDP_Adjusted_to_reality is measured in 100’s of percent. So much to make even Obamas government spending binge statistically irrelevant.

I think that is something we can both agree on.