talkpolitics | Entries tagged with debt

"The validity of the public debt of the United States...shall not be questioned." --Fourteenth Amendment

The obvious question here is why didn't they do this the last two years when they had control of congress and the White House? Dems just passed a spending bill a few weeks ago without increasing the debt ceiling to allow debt to pay for it. Normally you could just spend the revenue coming in to pay for it, but Dems passed a couple trillion in new spending this FY, so they already spent the record revenue coming in. They also knew about the debt ceiling for even longer than that since they voted to suspend it last year, and were around when it was raised a decade ago. What did they do last year besides increase the debt to 10 trillion over the previous ceiling?

This would of course be disastrous. The US is already paying 500bn a year just to service the existing debt. Removing the limit altogether would remove one ability to limit excessive spending, which would further increase the debt leading to further wasted interest payment and more fiscal crises, and slow the economy. Thoughts?

Democrats push to eliminate the debt ceiling, allow unlimited government borrowing

fridi

Hey everyone debt and deficits matter again to the GOP.

Celebrate goood times c'mon!

Democrats push to eliminate the debt ceiling, allow unlimited government borrowing

That said, the obvious question here is why didn't they do this the last two years when they had control of Congress and the White House? Dems just passed a spending bill a few weeks ago without increasing the debt ceiling to allow debt to pay for it. Normally you could just spend the revenue coming in to pay for it, but Dems passed a couple trillion in new spending this FY, so they already spent the record revenue coming in. They also knew about the debt ceiling for even longer than that since they voted to suspend it last year, and were around when it was raised a decade ago. What did they do last year besides increase the debt to 10 trillion over the previous ceiling?

This would of course be disastrous. The US is already paying 500bn a year just to service the existing debt. Removing the limit altogether would remove one ability to limit excessive spending, which would further increase the debt, leading to further wasted interest payment and more fiscal crisies, and slow the economy.

fridi

Looks like we are going to see how stiff McCarthy's and the house republicans collective spines are sooner than anticipated.

In the article the WH says flatly that they will not negotiate, that this should just be done no questions asked.

Let us hope McCarthy does not agree.

https://edition.cnn.com/2023/01/13/politics/debt-limit-janet-yellen-letter-to-kevin-mccarthy/index.html

They are dishonest and anti-American enough to blow up the economy just to say they've "owned the libs". This, after decades of tax cuts that blow up the deficit followed by blaming the Democrats.

While we're at it... Why did the Treasury wait until the 11th hour to say something?

fridi

Yeah. It's that time of the year when we're talking about the debt ceiling again. And yet again, there seems to be just one adult party in the room. The other pseudo-party is composed of Tea Party-types who vilify the government, and for whom compromise is anathema. You can't work seriously with them, because they aren't inherently serious:

https://www.cnbc.com/2021/09/20/what-the-federal-debt-ceiling-showdown-could-mean-for-you.html

I think there's a solution to this since the Treasury can decide which bills to pay first if the debt ceiling is not raised. Just not pay any bills owed in states from which their Senators voted against raising the ceiling. That's Medicare payments to hospitals and doctors, Social Security pensions, Medicaid reimbursements, payments to contractors in those states, etc.

If those bills are not paid, there will be plenty of money available for all of the other state bills who support the debt ceiling increase. How about eliminating the debt ceiling altogether and end this regular blackmail?

You know, this isn't entirely a domestic US issue. Because if the shit hits the fan, the entire global economy is going to tank, and then we're all screwed.

mahnmut

The record prices of the raw materials and low interest rates are encouraging African countries to take loans as high as the rates back in the 90s. Some of them are still combating high debt in the conditions of shrinking revenue due to the slowing growth.

Public debt as a share of the GDP in Africa (specifically, south of the Sahara) has doubled for the last decade, nearing its levels at the turn of the century. This is naturally raising concerns. The IMF reports that out of 54 African countries, 20 are nearing or have already fallen into difficulties, which means they'll be finding it hard to meet their obligations from here on.

( Read more... )

fridi

I get it. The students of are our future. Bernie and other progressives like Warren seem to understand that future has to be protected, and not cripple it before it can grow...

Bernie Sanders to unveil plan to cancel all $1.6 trillion of student loan debt

On the other hand, canceling the student loan debt sounds fine, but isn't it just one half of what should actually be done? If the system that allowed all that debt to be accumulated is not reformed, in a few years you're going to need to cancel a similar amount of student loan debt again.

Here's an alternative proposal. Why not more work/study programs, apprenticeships, and some form of service to the country to forgive student loans? These rainbow and unicorn campaigns are not helping progressives much. This is partly how the Trumpster will defeat them in 2020 again. These guys need to wise up if they really wish to win.

fridi

Visualizing the State of Government Debt Around the World

Countries with the Biggest Debt to GDP Ratio

1. Japan - 238%
2. Greece - 182%
3. Italy - 132%
4. Portugal - 126%
5. United States - 105%
6. Belgium - 103%
7. Egypt - 103%
8. Spain - 98%
9. Cyprus - 97%
10. France - 97%

abomvubuso

Failed companies, billions worth of lost investments and savings, millions of personal dramas... For many people, the mechanism that translates little digits jumping on the laptop screens of some costumed gentlemen sitting in their Manhattan offices, into a Greek docker losing their job, remains a complete mystery. But as all-encompassing as it may've been, the crisis never really reached to the core of the system. It didn't change the way the markets function, and neither did it prompt us to cleanse the financial system of the piled systematic problems, or to uproot the errors that have led to them.

( Read more... )

abomvubuso.livejournal.com

A new financial crisis may be coming up in the emerging economies that could cause much more damage than 2008 - that is what a World Bank report says after having analysed the international transactions of the central banks of most major economies.

The dark forecast mostly causes concern about fast developing markets such as China, which the experts are showing signs of over-heating. And there is also the problem of backdoor local borrowing, which helps increase debt. They remind of the situation in the US and UK just before the 2008 crisis. Now these new problems could send the whole economy into another downward spiral for a few years. The central banks may find themselves compelled to abruptly raise the interest rates to fight inflation, which would otherwise suffocate economic growth.

China's rising debt, and Trump's promise of economic protectionism are the main causes for concern. Right now, China's debt is 166% of the GDP, which is double its size from a decade ago. The debt in other countries in the Asian-Pacific region is also rising - Thailand and Hong Kong for example.

The global economy is still recovering from the global crisis and the euro crisis from 2008-2010. In both cases, the systematic problems were caused by disproportionately large debt-to-GDP ratios, and this situation looks likely to repeat soon again.

airiefairie.livejournal.com

John Oliver made a splash the other night, when he brought up the problem with the debt-buying industry, namely that it allows hospitals to sue thousands of patients for having the impudence to be both sick and poor. He shined the light on the illegal tactics that debt collectors often use to get paid for debts they often cannot prove anyone owes.

So the goofy Briton decided to stir things up a bit by demonstrating how ridiculously easy it is to set up a debt buying company (he called it CARP, and for a good reason), after which he bought the debt of 9000+ people, plus all their contacts, thus obtaining the legal right to harass them into paying their last dimes to him. But instead of doing what that sleazy industry so much enjoys doing (watch the segment and you will see for yourself), he decided to forgive all that debt - on public, on his show. And that practically became the largest giveaway in the history of television:

John Oliver Curses Out Oprah, Gives Away $15M

Now imagine for a moment if a good number of American billionaires do something similar. John (well, HBO anyway) bought $15 million in debt for $60,000. If even a handful of multi-billionaires buy huge quantities of debt for pennies on the dollar and then just forgive them like John just did, wouldn't that be the best example of the gods of the free market actually doing what's right once, for a change? It would practically cost them nothing to do that, and they could help thousands upon thousands of people. But does that happen? Not likely - although I am always prepared to leave the door ajar for a massive surprise. I for sure have not heard any such thing. Now imagine if Donald Trump did something like this on a regular basis instead of filing lawsuits for any sort of nonsense, maybe people would like him a lot more?

dreamville-bg.livejournal.com

Putting lurking mode off and weighing in, in turn, on the Greek issue - although the other day's post was indeed very good, and much has been said. I am only going to focus on two questions: "How did it come to this", and "What now". So bear with me.

Greece's detractors have been arguing that the referendum that Tsipras called was a populist move, an attempt of the Greek government to transfer the responsibility to its people. The problem is, the Greek people are hardly the culprit for Greece's predicament. They weren't the ones who ate all the money that is now missing. The thing is, the problem with the Greek crisis was planted even before the time of the Goldman Sachs involvement, although it was thanks to that interaction that the problem was largely concealed for a long enough time to allow a series of Greek governments to simulate compliance with the Eurozone standards for financial stability, and keep Greece within the Eurozone and have all those Euro-funds flowing in without interruption. You are familiar with the "They be buyin' limos & stuff with money for tractors and fertilizers" meme.

( Read more... )

abomvubuso.livejournal.com

The payment schedule on the Greek sovereign debt looks pretty full as of now. First, Greece will have to pay 200 million euro back to the IMF, come May 1. And then in June, there are a bunch of new payments to the IMF worth a total of 2.5 billion. Those are installments that Greece received from the IMF as part of the earlier aid package.

Christine Lagarde, the IMF chairlady has made it clear that she'll insist that the payments be made on time. For the last three decades, the IMF has never given a single day of deferment to their debtors. There hasn't been a single case of a developing country requesting such, respectively. Greece would be the first if they dare do that. But even so, the IMF doesn't look likely to grant the request. In other words, there'll be no exceptions - because they've got strict rules, and they don't see a reason to make a compromise with them.

( The pressure on Tsipras is building up )

luzribeiro.livejournal.com

Frankly, I haven't stopped watching this counter for a few minutes. It's mesmerizing:

U.S. National Debt Clock: Real Time

Alright. Now that ~~all~~ most of the hubbub surrounding the shenanigans on Capitol Hill has subsided somewhat, time to get back on topic, i.e. "Speculative Scenarios". And the topic I'm gonna occupy you with, is again... the debt ceiling! :)

Anyone know for sure what would've happened if Thursday came and went and Congress was still stuck at an impasse without being able to raise the debt ceiling? It's not like the US won't arrive at exactly the same point next year, right? Sure, we already know that, simplistically put, not raising the debt ceiling would mean the government would no longer have the authority to borrow money to pay its bills. Sounds bad at a first reading, that's for sure.

( But what next? )

peristaltor.livejournal.com

The sheer silliness of even casting a shadow of a glimmer of a sliver of blame on the Democratic Party members in Congress regarding this shutdown thing is laughable enough. There is more than enough evidence that the Tea Party has run with this ball all the way. I won't bother recounting it here.

What I found interesting was a very conservative political person suggesting why default may be the ultimate aim, not a stated consequence. Regarding the debt:

What I don’t think [the Obama administration and those on Wall Street] understand is that there has been a movement under way for some years among right-wing economists and activists not merely to default on the debt, but even to repudiate it.

Those making this argument are largely unknown to professional economists and journalists, but their research permeates the obscure Web sites where Tea Party members get their ideas. And not all are obscure.

As with most weirdnesses in our country, much of this can be traced back ( to the Civil War. )

liveco.livejournal.com

I was just reading now on LA times (McManus: Europe's continental drift), and a phrase really captured my attention; The author, while describing how bad the situation is in Europe (especially the southern countries) goes as far as saying:

"Southern Europe is experiencing its worst drop in living standards since World War II"

To anyone who has been following the economy news for the last 5 years, this wouldn't come as a surprise, yet, as curious as i am always, I read further and then did my own research about the countries in Spain, Italy, Greece and Portugal. I checked three indicator, GDP growth in year 2012, unemployment in the Eurozone Countries and Public Debt as a % of the GDP.

GDP Growth in year 2012
Greece: -6.4%
Spain: -1.4%
Italy: -2.4 %
Portugal: -3.2 %

Unemployment Percentage in march 2013
Greece: 27%
Spain: 27.1%
Italy: 12.6%
Portugal: 17.7%

Public Debt as a % of the GDP
Greece: 161%
Spain: 85.3%
Italy: 126%
Portugal: 120%

The numbers say it all, the economies of Greece, Spain, Italy and Portugal are shrinking, the unemployment is very high (numbers reach 50% in youth unemployment alone) and the public debt is high especially in Greece.

The crisis is turning into a humanitarian issue especially in Greece and Spain; it is becoming more difficult to make a living and maintain even the basics of survival.

Is there a way out of this economic crisis?

404.livejournal.com

So apparently the city of Detroit is having to file for Chapter 9 bankruptcy, to help the city restructure the 18.5 billion dollars in debt it owes to creditors. Less than a month ago, the city of Detroit diverted roughly 283 million dollars from economic development funds to help fund a new arena for the Detroit Red Wings, the hockey team owned by billionaire Mike Ilitch, who just so happens to own the Detroit Tigers. The Togers got their new stadium, also partially publicly financed in the early 2000's.

From an Associated Press story about the financing of the new Red Wings stadium:
Michigan lawmakers in December approved a measure allowing tax dollars collected by the Downtown Development Authority to be used for the development. The DDA has been allowed for nearly two decades to pay down Detroit's general obligation bonds with about $12.8 million a year that otherwise would have gone to education statewide.
http://redwings.nhl.com/club/news.htm?id=674634

Over the first decade plus, the state of Michigan and Wayne County (the principal county for Detroit) have or will have contributed public funds to build three new stadiums for owners that are billionaires (Illitch owns the Red Wings and the Tigers, the Ford family, of the Ford Corporation owns the Lions, the football team that plays in Ford Field) while the finances for the state and city have been dangerously close to default. The Ford family and Mike Ilitch must be taking their cues from the OCP Corporation and Dick Jones:

I say good business is where you find it.

In a previous post, I discussed the billion dollar albatross that is the Miami Marlins ball park, and how Jeffrey Loria basically conned the city Miami residents into paying for a new stadium, and then turns the club that occupies the park into a minor league team bereft of much talent. This is not the same for Detroit, the teams are doing well in their respective leagues (except for the Lions, but well, they are the Lions, so maybe next year), but it seems unconscionable for a city to pony up or to guarantee loans for a stadium when the city finances are a mess. The city has been a punchline for decades. Hell, in RoboCop 2 (1990), OCP banks on the city to default on their loans, so demolition can start of the old city, to be replaced by Delta City. This is only averted when the city is given an emergency loan from unknown sources, but I'll let you watch the movie for spoilers!

( I'd buy that for a dollar )

paft.livejournal.com

From the New York Times

'Someone loses their job,' Ms. Wu said, 'so they can’t pay their bills — and now they can’t get a job because they couldn’t pay their bills because they lost a job? It’s this Catch-22 that makes no sense.'

Back in 2010, I posted an OP about employers essentially saying "the unemployed need not apply" for job openings. I observed that the trend seemed to increasingly be that once you're out, you're out. If employers see simply being without a job as a bar sinister, then unemployment can go from being a temporary downturn to a live-ruining catastrophe.

According to this New York Times article, people affected by the current downturn in the economy are facing yet another hurdle -- prospective employers are doing credit screenings, and refusing to hire people who have problems with debt.

The increasing gulf between the rich and the poor in this country tends to be spoken of in terms of income inequality, but there's more to it than that. Many of the haves seem to be making an effort to actually close ranks against the have-nots. Got laid off? Faced hard times? Run up debt? This indicates you are incompetent and untrustworthy. The workplace doors are now closed, buddy.

And this is being done at the same time struggling Americans are being told that the only solution to putting food on the table is getting a job. Or two jobs. Or three.

What, exactly, is someone supposed to do if they are denied employment because they are unemployed and/or have bad credit AND are cut out of unemployment benefits and food assistance? How are they supposed to exist?

*

farmerz-agent.livejournal.com

[Before you tare apart my post, please try to do so constructively. I am new in the insurance industry but not new to sales. I sold my first policy on 11-28-12! My Agency is bound to Farmers Insurance Exchange but I paid for this franchise so, keep in mind my heart and soul is in what I do, it feeds my family. With that said I am looking for ways to do things that will help people and make a better America. My agency is involved in a lot of local charities and events. We've raised money for the March of Dimes as well as bought a booth at their charity walks and gave away free digital photo ID software to the parents.]

One of the major goals of our government is to help the poor. This is an admirable goal and as nation we’ve spent $15 Trillion dollars on the War on Poverty. We are a very giving nation and we do a lot for the poor but a lot of what we do is spent on making their lives comfortable not helping them get out of poverty.
All of the welath we've redistributed and we haven't even made a dent in poverty. In fact, welfare has grown 19% under President Obama, that’s two and a half times greater than any other welfare increase in the history of the country.
One of the problems with our effort to help the poor is that we aren’t giving them help that will get them out of their situation only help that will keep them comfortable (relatively speaking) than we do on actually helping them get out of their situation.
I do not consider this the fault of our government though, they simply aren’t equipment with a means for wealth redistribution that would we be fair and equitable to all. However I think there might be a simple pro-capitalism solution to poverty: Term Life Insurance.

The rates for term life insurance has fallen by 50 percent.

( Sales pitch! )

peristaltor.livejournal.com

Got a heads-up today about a notion I've heard before, but which now seems to be getting some actual attention: What if the Treasury minted a couple trillion-dollar platinum pennies?

Thanks to an odd loophole in current law, the U.S. Treasury is technically allowed to mint as many coins made of platinum as it wants and can assign them whatever value it pleases.

Under this scenario, the U.S. Mint would produce (say) a pair of trillion-dollar platinum coins. The president orders the coins to be deposited at the Federal Reserve. The Fed then moves this money into Treasury’s accounts. And just like that, Treasury suddenly has an extra $2 trillion to pay off its obligations for the next two years — without needing to issue new debt. The ceiling is no longer an issue.

In fact, the most disturbing aspect of this follows immediately: ( Got your attention, have I? )

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Talk politics.

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Entries tagged with debt

Debt ceiling again

Not sure how this is a good idea

Not this debt ceiling shite again

This debt ceiling thing again

Back into the debt swamp

Nice idea, and yet...

Friday offtopic. Still on yesterday's subject

Lessons unlearned

Doom and gloom once more?

The debt-buying industry

Greece again

What now, Tsipras?

Some questions on the debt ceiling... and then some more

When The Captors Want The Hostage Dead, Is It Kidnapping?

The Eurozone crisis, Is there a way out?

Detroit files for bankruptcy protection

"...Need Not Apply."

My solution to class warfare / wealth redistribution.

Trillion Dollar Pennies

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June 2025

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