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New IMF Head Says US Must Raise Debt Limit, or Face 'Nasty Consequences'
fysdt writes with this from an article on ABC News: "The International Monetary Fund's new chief foresees 'real nasty consequences' for the U.S. and global economies if the U.S. fails to raise its borrowing limit. Christine Lagarde, the first woman to head the lending institution, said in an interview broadcast Sunday that it would cause interest rates to rise and stock markets to fall. That would threaten an important IMF goal, which is preserving stability in the world economy, she said. The U.S. borrowing limit is $14.3 trillion. Obama administration officials say the U.S. would begin to default without an agreement by Aug. 2."
can people expect to wage 2 ground wars, and 1 air war, while giving tax cuts to the wealthy.
"There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning." Warren Buffet. His tax rate is lower then his secertary. They pay more then the none rich, because they make retardedly huge amounts of money, but for some reason their taxes as a percent of income is much lower then those of the middle class.
The US won't "default" no matter what happens. Enough tax money comes in every day to sustain the interest payments on the debt. The tough decisions politicians need to make are the budget cuts. Obama and the Democrats don't want to cut anything (except for defense). The elephant in the room is all those people on the welfare dole. "Entitlements" account for the vast majority of the budget. Does a millionaire retiree really need that $2000 social security check and medicare? Those programs should be means-tested. Otherwise, they're just Ponzi schemes that are approaching the inevitable demise of more people taking out than putting in.
For those who want to raise taxes, I ask you: When has a tax increase ever created a job? On the contrary, Reagan knew what Kennedy (JFK) knew: tax cuts INCREASES private investment, which increases jobs, which adds more TAXPAYERS to the system. We don't need more taxes, we need more people paying taxes. Obama can sing his class warfare song (rich vs. poor) all he wants but the fact of the matter is, rich people INVEST their money. That creates jobs. Confiscate their money through taxation and that's less money available to invest. It's really quite simple. I'm glad my boss is a millionaire. If he wasn't, I might be unemployed right now.
I used to agree with this line of thinking. The problem is the rich aren't investing in US companies. The current tax breaks are creating jobs they just happen to be in China.
Er... this has almost nothing to do with what happened with the banks in 2008. In fact, it's about as unrelated as it is possible for one looming economic crisis to be to some recently past economic crisis. The fallout from the prior crisis is a major contributing factor, of course, but if there is any issue of "looting", it's going to be we the people, through our elected representatives in Congress, who do it.
This crisis is entirely voluntarily precipitated by our political leadership, albeit with the excuse that they believe *some* crisis is coming sooner or later. We are facing default not because we've spent more than was budgeted, or more than was appropriated, but because we spent money that as budgeted and appropriated but now Congress won't let the Treasury raise the money to pay the people we owe money to as a result.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
A relevant cartoon.
Oh, the infamous Lafffer curve (too lazy to post a link to wikipedia, check it yourself). Too bad it has not been proved, nobody knows where the optimal point is (why they always assume the optimal point is with LESS taxes, and no with more?), and everything else. But it gives some people a good mantra to repeat and repeat.
As other post has already put, everyone is willing to make sacrifices and cut costs... unless it is in something that benefits them.
At least some people is honest and choses consequently "I want good public services and I'll pay the taxes needed to/I do not want good public services but I want less taxes instead". Others just say"If I pay less taxes then everything will magically solve". With the first people one can try to get to a common point, arguing with the later ones is just a waste of time.
Why can't
In other news, heroin addict must get another fix or face "nasty consequences".
Set your phasers on "funky"!
The Laffer curve is a miserable failure, as anyone with even the slightest knowledge of economic history can deduce.
The only private investments tax cuts will spur will be in paying accountants to find new and unique ways to hide the taxable income in esoteric financial constructs designed specifically for the wealthy.
Balancing the budget requires cutting spending AND raising taxes.
~X~
I don't think you have your finger on the pulse of America (what little pulse there is). Unless you're going to acknowledge the same civil rights to gay people that everyone else has on a federal level, or you're going to shut down the NFL, or you're going to ban latte's, there is nothing that will ever cause the US to erupt. If that video of our troops unloading on unarmed people with really pathetic commentary on the open mics didn't cause a riot, nothing will. If Goldman Sachs executives running the treasury giving massive bailouts to Goldman Sachs didn't cause riots, nothing will. If going to war for almost a decade against a country that didn't attack us for reasons that were later acknowledged to be manufactured and false (and that we're still participating in) didn't cause riots, nothing will.
Why do you hate your grandparents?
Because they spent decades partying as they built up huge debts that they now expect their grandchildren to pay?
You're kidding, right? Congress has been dominated by giant pussies for decades, who do whatever the president demands of them. They may bitch and whine and moan, but when it comes down to the voting and the actions, they're less a counterbalancing branch of the government than they are the lapdogs of the president (whichever president it is at the time).
Frankly, it's time to fucking grow up and stop spending more than we make. It's bullshit to say "you can't point that gun against our head!" when referring to refusing to raise the debt ceiling. Continuing to have unrestrained spending forcing us to continue raising our debt is itself a threat held against our own heads. When someone has a spending problem, you cut up the fucking credit cards. I don't see how difficult this is for us to understand.
I mean, really, what do you expect to happen? We're going to raise the ceiling this time around and everyone will promise to "be really good" next time? The democrats will promise not to spend zillions on more bullshit social programs and the republicans will promise not to spend billions on bullshit military actions? Really? If we just promise to let them go over this one more time?
This is the same fucked up "logic" that the public was fed to justify bailing out corporate America. Feed them bullshit through the media until everyone was worked up into a frenzy. We can't afford NOT to hand out seven trillion dollars! If we don't, the entire country will be bankrupt and you will be eating road kill off the streets as your house burns to the ground and your entire family contracts malaria!
All these endless threads here about "conservatives durp durp" and 'liberals durp durp". Let's call it what it is... fucktards and fucktards. And both groups of fucktards are trying to scare the shit out of you to continue raping us all. And we're fucking falling for it, like morons.
It's clear what's going to happen. We'll raise the ceiling into the indefinite future and we'll continue to spend more and more into the indefinite future, until our deficit becomes so large that it topples over and the whole country is done. There will be a breaking point, eventually. We have to get control of this bullshit, sooner rather than later. But... we won't. And so we'll get what we deserve.
It would frankly be wonderful if enough Congresscritters had the chuzpa to not raise the limit.
Yeah, it would be great if our credit rating were downgraded. That would be wonderful. Paying extra percentages on the 14 trillion we already owe and can barely pay is a wonderful way of staying afloat. In fact, I stay up nights thinking "Gee, I wish the value of the dollar entered the sort of massive decline that Mexico saw in the 90's."
What I really wish is that the Republicans or Democrats actually believed that a balanced budget was worthwile. I'm sorry, if you're willing to axe a historic deal because you don't want to close tax loopholes on the most profitable industry in America (all the while cleaning up after its oil messes), then you're just a posturing nit. Oh no, we can't lower military spending. Oh, Social Security is sacrocent. And while we're at it, let's extend those tax cuts for the rich again, and keep taxing income from stock accounts at half of what normal income is taxed as.
The ______ Agenda
"military contractors, lay off TSA, DEA, ATF, etc. " You mean they could remain on furlough until some heinous crime or terrorist act happens. Then Obama would get screwed. And those aren't the agencies driving the debt. 2/3 of the budget is ENTITLEMENTS. Fail to attack those means you do squat against the debt.
There is another aspect to the debt. The Bush tax cuts were enacted when they "could see surpluses as far as the eye can see". Well, that lasted...well...it didn't last. Why didn't it last? Two elements: (1) Bush never funded the wars, and (2) the Clinton years were the dot.com bubble. Regarding (2), there was deadlock between Congress and the White House, neither would agree to the other's spending plans. So they simply stopped increasing spending lest their enemies get the leg up in the next election.
In addition, the economy changed during the aughts. Companies shifted more of their operations overseas due to shortsighted Business School Product, and an antiquated tax structure that made it prohibitive for Big Business to invent in the U.S. The latter is open to speculation. Anyhow, the anti-regulation atmosphere of the Bush Years (although started under Clinton attempting to "triangulate") allowed investment banks to invade the loan market. They were aided by the credit rating agencies, and Congress who thought any business is good business. Their bright idea was to securitize (sp?) loans and sell them widely...with collateral "guaranteed by the rating agencies".
That alone wouldn't have caused the current mess.The missing element was the American people. Being greedy and too dumb to understand (or read) the fine print, they bought houses they couldn't afford, bought second houses, flipped houses, took equity out of their houses to piss off on large SUVs (thereby distorting the car market), etc.
This encouraged the Contractors. It used to be you found a contractor to build a house the bank decided, based on your financials, to loan you the money to have build. But in the rarefied atmosphere of no-one minding the store, mega-contractors took over. They will buy a 100 acres or more and build speculation houses (spec-houses). And the American people sucked them right up. Being dumb, you could buy one and think it was worth the purchase price. Being greedy, you could buy one with the intention of flipping it.
And now, the chickens have come home to roost. And everyone wants to point fingers. There is plenty of blame to spread around, and I've neglected several miscreants.
And the Tea Party is not intent on wrecking the economy. The economy is already wrecked, now we are only fighting on how to fix it.
That's not really insightful, anybody knowledgeable enough about economics to be head of the IMF would have come to the same conclusion. In fact I came to that conclusion and I've had very little training in economics. It's one of those the sky is blue observations.
The rates that investors typically demand for their money is related to the perceived risk. Right now that risk is low because investors believe that the US will do whatever it needs to do to keep paying those bonds off. But, if the debt ceiling isn't lifted and or we stop paying our bills that would undoubtedly trigger investors to demand more for their risk.
It takes a certain level of delusion to believe that there is something special about the US which would prevent that from happening if we start defaulting on our debts. And unfortunately, right now US Savings bonds and the like are still the best bonds to invest in, if the GOP has its way, they're likely to not be worth the paper they were printed on.
Raising taxes will only further DECREASE revenue.
That is just an opinion that the vast majority of economists (and educated people) disagree with. Sometimes I wish we could send all the people like you to a separate country, so that you can screw up your own lives without affecting mine. Perhaps the feeling is mutual =). There is no tax, and no government in Somalia. Go for it.
Like all pain, suffering is a signal that something isn't right
Oh, for fuck's sake - listen up closely; I'll say this again.
Ready? SOCIAL SECURITY HAS A $2.5 TRILLION SURPLUS. IT'S NOT A FUCKING PROBLEM AND WE HAVE DECADES TO IMPROVE IT.
Pain is merely failure leaving the body