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White House: Debt Ceiling Must Be Raised

Old 11-03-04, 06:13 PM
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White House: Debt Ceiling Must Be Raised

WASHINGTON - The Bush administration announced Wednesday that it will run out of maneuvering room to manage the government's massive borrowing needs in two weeks, putting more pressure on Congress to raise the debt ceiling when it convenes for a special post-election session.



Treasury Department (news - web sites) officials announced that they will be able to conduct a scheduled series of debt auctions next week to raise $51 billion. However, an auction of four-week Treasury bills due to be completed on Nov. 18 will have to be postponed unless Congress acts before then to raise the debt ceiling.


"Due to debt limit constraints, we currently do not have the capacity to settle our four-week bill auction scheduled to settle on Nov. 18," Timothy Bitsberger, acting assistant Treasury secretary for financial markets, said in a statement.


Congress is scheduled to return for a lame-duck session beginning on Nov. 16 to deal with the debt ceiling, an omnibus spending plan for the rest of this budget year and other matters.


The Republican-controlled Congress put off dealing with the debt ceiling before adjourning in October, preferring not to force members to vote on the politically sensitive issue of adding to the national debt before the November elections.


The government hit the current debt ceiling of $7.384 trillion on Oct. 14, forcing Treasury to begin a series of bookkeeping maneuvers to keep financing the government's normal operations without breaching the debt ceiling. But Treasury Secretary John Snow has warned that those special measures would last only until mid-November.


The Treasury Department's actions have included reducing the amount of debt in government trust funds to free up room for further borrowing from the public. The nonpublic debt is then replaced in the trust funds once the debt ceiling is increased along with any lost interest payments.


Republicans have proposed that the debt ceiling be raised by $690 billion to $8.074 trillion, an amount that would get the government through next September, when the 2005 budget year ends.
[more]
http://story.news.yahoo.com/news?tmp...h/debt_ceiling
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Old 11-03-04, 06:19 PM
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I certainly hope you voted NO on the Califormia stem cell research proposition that costs $3 billion!
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Old 11-03-04, 06:21 PM
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There's one way to stem the deficit, cut social programs. I see this happening during at least the next 2-3 years.
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Old 11-03-04, 06:22 PM
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I bet we voted exactly the same on all the ballot measures. I even voted for a Rep for the house.

(dont ask me about Boxer )
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Old 11-03-04, 06:22 PM
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Every single time this comes up, you post about it, and include the

Why? The raising of the ceiling is no big deal.
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Old 11-03-04, 06:31 PM
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cause it sucks that is a shell game with voters-

The Republican-controlled Congress put off dealing with the debt ceiling before adjourning in October, preferring not to force members to vote on the politically sensitive issue of adding to the national debt before the November elections.
Also the impact from financing the debt pulls money that could be feed back into the economy, the pressure on the inflation and the impact on the bond market.
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Old 11-03-04, 06:33 PM
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Originally posted by bfrank
Also the impact from financing the debt pulls money that could be feed back into the economy, the pressure on the inflation and the impact on the bond market.
Have you checked out the inflation rate, long term interest rates, and bond prices lately?
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Old 11-03-04, 06:34 PM
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bfrank, the average Joe Six Pack doesn't identify the debt as a major issue, so why not pull the wool over their eyes if you're in power? Their grandkids might not like paying it off though, but we live in the now and the Republicans know that. They're shrewd, but you knew that already.
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Old 11-03-04, 06:45 PM
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Originally posted by X
Have you checked out the inflation rate, long term interest rates, and bond prices lately?
OK
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Old 11-03-04, 07:15 PM
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http://news.yahoo.com/news?tmpl=stor...snow_deficit_1
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Old 11-03-04, 07:16 PM
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Originally posted by Pharoh
Every single time this comes up, you post about it, and include the

Why? The raising of the ceiling is no big deal.
It's somewhat of a big deal when you consider how the sneaky Repubs manuevered it.

For all you fiscal conservatives - one of the leading budget hawks (Blue Dog Democrat) went down in defeat by other Repub trickery.

The Repub who replaced him is probably a George W. Bush economic liberal type - loves to spend the taxpayers money.
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Old 11-03-04, 07:20 PM
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I will believe the Repubs are in favor of reducing spending when George W. Bush vetoes one his party's grandiose spending bills.

I will be convinced that the Repubs are serious about reducing the deficit when they agree to re-institute pay-go.

Until then ...........
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Old 11-03-04, 07:24 PM
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Originally posted by classicman2
I will believe the Repubs are in favor of reducing spending when George W. Bush vetoes one his party's grandiose spending bills.

I will be convinced that the Repubs are serious about reducing the deficit when they agree to re-institute pay-go.

Until then ...........

How about when pay-go adresses the real issue, the real problem, I will consider it as a viable option?
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Old 11-03-04, 07:26 PM
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And I agree with the reason Snow stated...
"Deficits do matter," said Snow. "They matter because it's critically important that financial markets have confidence in the fiscal prudence of any government."
much more than any of the above-listed reasons. That's probably why a recovering/booming economy has a much bigger effect on keeping interest rates down than low deficits.
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Old 11-03-04, 08:28 PM
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While deficits do matter somewhat, has anyone actually figured out what the theoretical limit is for a deficit when confidence decreases?

And also, tell me just what happens when markets are unconfident in the US. They go elsewhere? They go overseas?
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Old 11-03-04, 08:31 PM
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No doubt a booming economy is a big help!

EU Euro is doing super well because of this.
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Old 11-03-04, 08:37 PM
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Originally posted by bfrank
No doubt a booming economy is a big help!

EU Euro is doing super well because of this.



Huh?
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Old 11-03-04, 08:49 PM
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I think he meant a "booming" economy, like the one Spain had a while back.
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Old 11-03-04, 08:52 PM
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Originally posted by DVD Polizei
I think he meant a "booming" economy, like the one Spain had a while back.

Oh. That makes sense. I was fairly certain he wasn't talking about GDP growth rate of the EU Euro zone compared to the US.
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Old 11-06-04, 12:28 AM
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Didn't feel like making a whole new thread about this...


Slate Link

Why Democrats Should Be Thankful
At least they don't have to clean up the Bush fiscal catastrophe.
By Daniel Gross
Posted Thursday, Nov. 4, 2004, at 12:49 PM PT


On Nov. 3, as the bleary-eyed nation returned to work, the Treasury Department announced an impending crisis. If the lame-duck Congress doesn't raise the statutory $7.384 trillion debt limit, which was intentionally breached in October, by Nov. 18, the world's greatest power will run out of cash.

Congress, with the White House's blessing, left town before the election without dealing with the debt limits—but not before passing an appalling, special-interest-written, corporate tax bill that will deprive the government of more than $100 billion in future revenues. That double irresponsibility—the lousy tax bill and the ignored debt limit—was a fitting end to the past four years of essentially one-party rule.

The only solace for sullen Democrats is that now Republicans might have to clean up their own fiscal mess. The fiscal record of the past four years has been one of unmitigated—and seemingly intentional—irresponsibility. A Republican Congress working with a Republican president created the massive new Medicare prescription-drug entitlement, passed a new, subsidy-crammed farm bill, committed hundreds of billions of dollars to war efforts, and loaded up on pork-barrel spending. Meanwhile, taxes were reduced—on wage earners, investors, and companies. The end result: We collected about the same amount of taxes in fiscal 2004 as we did in fiscal 1999. But we spent 34 percent more. The total national debt has risen 30 percent in the past four years. The fiscally conservative Clinton administration had committed government to restraining spending. But now a massive structural gap has opened up between the country's financial inflows and outflows. It's only the willingness of the Chinese and Japanese central banks to buy our debt that keeps us afloat.

Freed of the need to run for re-election, will Bush act more fiscally responsible in a second term? Wishful thinking. This crowd literally doesn't have a clue when it comes to fiscal matters. Bush actually believes he has restrained Congressional spending, Cheney believes deficits don't matter, and most members of the Bush economic team can't—or won't—speak truth publicly. As for Congress, when it comes to managing the nation's fiscal affairs, House Majority Leader Dennis Hastert is a pretty good wrestling coach, and Senate Majority Leader William Frist is a pretty good doctor.

And so, while the moral-values crowd may have won, the fiscal orgy in Washington is sure to continue. Given Bush's mandate and his stated desire to fix the Alternative Minimum Tax (a huge tax reduction), make the temporary tax cuts permanent (ditto), and transform Social Seucrity (massive borrowing), his pledge to halve the deficit by 2009 is absurd.

In decades past, increasing Republican dominance of the House and Senate would have meant more fiscal discipline. But Republicans increasingly dominate the states that are net drains on Federal taxes—the Southern and Great Plains states—while fading in the coastal states that produce a disproportionate share of federal revenue. (It's Republicans, not Democrats, who are sucking on the federal teat.) What Amity Shlaes quaintly identified in today's Financial Times as the "southern culture of tax cutting" has been married to the southern culture of failing to generate wealth and the southern culture of depending on federal largesse. The offspring is an unsightly deficit monster.

Establishmentarians have long wondered when the grown-ups will asserts themselves in the Republican party. The stark truth today is that there are no grown-ups. The day before the election, I saw my congressman, Republican Chris Shays of Connecticut, greeting potential voters on Platform 19 at Grand Central Station, the launching point for the 5:01 to New Haven, the Bushenfreude express. When I thanked him for cutting my taxes, Shays smiled broadly. But when I suggested that he had raised taxes on my children, he looked at me quizzically. "You have to know all these tax cuts aren't really tax cuts. They're just tax shifts," I said. "All this debt has to be paid back."

Shays acknowledged that there had been a massive increase in debt. "But 40 percent of that is due to spending." That was the moment I realized my sober, moderate representative may have slipped the surly bonds of reality. Like virtually every other Republican in Congress, Shays had voted for each of Bush's revenue-reducing tax cuts and every spending-increasing budget. And yet he seemed blissfully, willfully unaware of the role he—and his party—played in controlling, originating, and approving all that spending. "And did you vote for the Medicare bill?" I asked. "I did," he smiled. As I scurried off to get a seat before the doors closed, I heard a plaintive cry from one of the last remaining Republican moderates in Congress: "But I voted against the farm bill!"

If this is what passes for a deficit hawk, we're in big trouble. The Republicans have suffered no political consequences for destroying the nation's balance sheet, after all. Why should they take the painful efforts needed to fix the mess they created? No one is holding them accountable. It leaves those yearning for some return to fiscal sanity in the perverse position of hoping for a crisis in the bond or currency markets to shock the faith-based crowd back into reality. And when that adjustment comes, I can't wait to see how conservatives try to find a way to blame it on Clinton.

Daniel Gross (www.danielgross.net) writes Slate's "Moneybox" column. You can e-mail him at [email protected].

Article URL: http://slate.msn.com/id/2109203/
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Old 11-06-04, 12:47 AM
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Old 11-06-04, 12:48 AM
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i don't care if you laugh. I am laughing.....RIGHT NOW!!!
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Old 11-06-04, 12:53 AM
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Originally posted by kvrdave


i don't care if you laugh. I am laughing.....RIGHT NOW!!!
Me too.
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Old 11-06-04, 12:57 AM
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So Dave, I guess you finished that sixer all by yourself then?


~~~~~~~~~~~~~


Listen, I understand that deficit spending is required every now and again. Hell, I've been in that mode for 3 years, and hopefully I've made steps to turn that around.

I also understand that some debt is okay as well. Having a car loan, home loan, and school loans are pretty normal. But there comes a point when your high debts will become a serious problem.

So with our government, at what point does a deficit become too much? There's probably not a good answer for that because circumstances dictate what you have to spend (though, if I have to spend a shitload of money on surgery, I sure ain't gonna be buying DVDs for awhile). But more importantly, at what point does the debt just become too high? There has to be a point when it becomes a clear liability.
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Old 11-06-04, 01:04 AM
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Belive it or not (and this is not something I do often) I am testing out Chaser (the hangover cure). I have needed it on several rafting trips, not because of how drunk I get (I don't really get drunk) but because of the volume I drink each day on the river.


I hope it works.


And I just can't stop laughing at this.

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