Posted on 05/08/2002 12:26:04 PM PDT by survivalforum.com
05/08/2002 11:17 AM EDT
By JEANNINE AVERSA
WASHINGTON (AP) - Congress needs to extend the government's authority to borrow or risk an unprecedented default on the national debt, something that would cast a cloud over U.S. securities, Treasury Secretary Paul O'Neill warned Wednesday.
O'Neill made his latest pitch for swift congressional action on raising the debt ceiling in a speech to Republicans gathered at the Capitol Hill Club.
He has repeatedly asked Congress to boost the debt ceiling by $750 billion, but the request has become stuck in a political fight over the budget. The limit now stands at $5.95 trillion.
Treasury last week said it can shift some funds to avoid hitting the debt ceiling in mid-May. But those maneuvers won't be useful in late June, raising the prospect of a default on payments to bondholders.
"If we run into the ceiling that's really bad," O'Neill said in remarks to the Republican Main Street Partnership. "Because world capital markets will say they knew they needed to do it and they've know for six months that they needed to do it and they didn't do it and that casts a shadow on the good faith and credit of the United States."
If the government were to miss payments on debt coming due, it would be technically in default on the $5.95 trillion national debt, something that has never happened in the country's history. That would cast a cloud over U.S. securities, now considered the world's safest investment, and would mean the government would be forced to pay billions of dollars in higher interest payments on the national debt in future years.
Economists and other experts don't think that would happen because Congress is sure to eventually raise the debt ceiling.
O'Neill appeared to agree.
"It's not a question of whether we are going to do it or not. It's just a question of how close to the cliff we're going to run before we do what we know we need to do," he said.
Government policy and action/making sense ... working definition of an oxymoron.
However most people can visualize how much $1,000.00 can purchase.
If you were given 1 Million dollars with the stipulation that you had to spend it at a rate of $1,000.00 per day it would take you roughly 2.74 years to spend it.
100 Million dollars spent $1,000.00 per day ---> 274 years
1 Billion dollars spent $1,000.00 per day ---> 2,740 years
1 Trillion dollars spent $1,000.00 per day ---> 2 million, 740 thousand years.
My family is in debt for more than that on a per capita basis on my home mortgage alone. Am I bankrupt?
No, you have an asset (house) worth more than your liability.
The federal government has certain assets (land, equipment, etc.) but these generally cost money, not generate income.
Imagine that you had a license to steal as much as you could from any and every one of 280 million people (taxes), plus could collect extortion on goods moving into your turf (tariffs).
Imagine that you still spent and borrowed until you had the next 2.5 years of thieving spent.
Imagine that you had made promises with an accrued value of another 8 years of future thieving.
Imagine after all this, you said you needed to steal more. Would I be sympathetic to you?<./sarcasm>
For freedom,
Locke
Unfortunately, that's almost exactly how much hubby and I ended up paying the Greedy Hand this year: $56,000 between the two of us, on a gross income of $212,000.
If more taxpayers were raped and pillaged to the extent we are, there's no question in my mind the tax-and-spend CLYMERS in Congress would be fired in the next election.
Corporations borrow money with the intent of earning more than the cost of the funds. This is at the heart of capitalism. Stock has a cost also. When corporations pay more on their debt than they can earn by investing it, they end up in trouble.
I have no problem with governments borrowing money for long-lived assets like roads, bridges and buildings, but borrowing to pay the rent, groceries and utilities is a foolish proposition.
What I say to you is wait and we will find out what impact this has because clearly there is no political will to stop the borrowing.
The thought of the government having any role in the investment of that Social Security money scares the bejeebers out of me. I'd rather we had a massive unfunded liability looming on our horizon than give the government that kind of power. There is no way the economic damage caused by SS going bankrupt could be worse than plunging the country into outright socialism, which is exactly the effect that permitting direct government investment in corporate stock would have.
The American People make the world economy. We make the food markets by the production of our farmers. The jealous people in communist countries or dictatorships get upset because we are what we are, and we feed them. They don't want to be free, they want what we have, and they want it for free. They want all the problems to be worked out for them, no strife, no struggle. Freedom comes with a price! I can't sell or give them the freedom I enjoy, and the freedom that they envy so much, must be fought for. My way of life, my Liberty, was fought for a long time ago. It started with a Revolution and it hasn't ended yet. It was won from battles, and men dying again, and again. Men dying for the same cause. A singular thought, freedom & liberty. One man, meant to be free, free from the chains that another man would put upon him. Free to be what ever God gives him the tools to be. Against all odds, that man can be the best that has ever been.
Every man enslaved by a socialist system will envy our freedoms. It is their nature to take our liberty away from us. If freedom & liberty is less important than life, then let life be your goal. But, if liberty and freedom be your goal, then give your all, that being your life, and all your worldly wealth to protect and defend it. Then take the soul of liberty and freedom to your grave. The time has come to stand & deliver!
Did you click on George's link? The debt has increased every year. The debt is still increasing. If there's a surplus, somebody forgot to tell the "bookkeepers." If there's a surplus, who's hiding all that extra money?
Explain how that works.
In reality, payments always come out of general funds. It's not really realistic to include future Social Security payments into the national debt, or the national debt would arguably be infinite.
However, the silly game Congress plays with Social Security puts a portion of it into the national debt figure.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.