Will the US Raise the Debt Limit??

[Hatha Sunahara]

We, the people have no say in this debate. So, it doesn't matter. If they raise it, it will only forestall a general recognition that government debt is a ponzi scheme. If they don't raise it. the bond markets will collapse. The dollar will be devalued, and the price of precious metals will skyrocket. Lots of stuff will happen real fast.

My hope is that they raise the debt ceiling because i would prefer a more sedate life. But I know it won't last much longer because Bernanke will just keep printing money to buy the US bonds because nobody else will. We are either going to have a depression soon, or a full blown inflation. In terms of disorder, I assume they are equal, but I'm not sure how severe it would be if we had both depression and hyperinflation simultaneously. A bit more disorder, or a bit less? Does it matter? If we're at the edge of a cliff, should we jump? Or should we wait until we grow wings?


Hatha

[osoab]

It doesn't matter either way if they publicly raise the limit. There could be a stealth thing with the FED. We will find out about in 2-5 years on how our asses were saved by the glorious bankers.

Next step if they don't, since they already are raiding fed pensions and didn't pay up on the bi annual debt slips to SS and Medicare (http://market-ticker.org/akcs-www?post=189249), is 401k's and IRA's.

It would only be fair for us to share the burden that the fed gov workers are feeling wouldn't it now.

[Sparky]

There's no chance of it not being raised.

[Silver Rocket Bitches!]

They will do whatever is most politically expedient. That means raising the ceiling to keep the bond market and the entitlements flowing.

[chad]

i'm going to laugh my ass off when they raise it, and then the media finds out they have to instantly auction off billions in treasuries to replace the raided pension money, and we're suddenly at the limit again.

[Silver Rocket Bitches!]

I was going to post this in a separate thread but it applies here:


Will Barack Obama Use The 14th Amendment As A Way To Get Around The Debt Ceiling?

Section 4 of the 14th Amendment to the U.S. Constitution says the following....

"The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned."

At a breakfast hosted by Politico last month, U.S. Treasury Secretary Timothy Geithner actually pulled out a copy of the Constitution and read this clause out loud.

Geithner (and others) are now attempting to argue that the debt ceiling is actually unconstitutional. They believe that the phrase "shall not be questioned" means that if the U.S. government refuses to make debt payments it would be directly violating the U.S. Constitution.

So what does Barack Obama think of this legal theory?

Reporters have been trying to ask him this question, but right now Obama is not answering.

Certainly Obama would very much prefer to have the Republicans and the Democrats reach a deal far before the debt ceiling deadline arrives.

So what will Obama do if a deal is not reached?

Nobody seems to know.

But this clause of the 14th Amendment brings up some deeper issues as well.

Does this clause make it unconstitutional for all future generations to renounce the national debt?

Does this clause make it illegal for all U.S. citizens to even question the validity of the U.S. national debt?

Most Americans would like to think that when it comes to constitutional questions there should always be some clear answers. But the truth is that for many constitutional questions there are a lot of gray areas.

http://theeconomiccollapseblog.com/archives/will-barack-obama-use-the-14th-amendment-as-a-way-to-get-around-the-debt-ceiling

I was not aware of this little clause. An example of how they will use the constitution when it is convenient for them.

[Ash_Williams]

I don't know what that clause has to do with anything. No on is questioning the debt, they are just questioning if the country should take on more. It has nothing to do with interest payments on that debt either, as the US has plenty of revenue to cover those if other things were cut. They might not want to cut those other things, but still, the potential to make the payments is clearly there, so the debt celling has nothing to do with questioning the debt.


We, the people have no say in this debate. So, it doesn't matter. If they raise it, it will only forestall a general recognition that government debt is a ponzi scheme. If they don't raise it. the bond markets will collapse. The dollar will be devalued, and the price of precious metals will skyrocket. Lots of stuff will happen real fast.

I think the only thing holding PM's down right now is this debt ceiling debate. Once it's raised and the world knows the US has no plans to stop spending, we'll see gains.

[EE_]

An idiom that seems to fit..."by hook or by crook"

Of cource they will raise it, again and again!

[palani]

You cannot question the method used by the government to provide you with benefits when you are beneficiary to the trust. This statement is true for beneficiaries of the 14th amendment trust. So what if you are not a beneficiary of this trust? After all, the escape mechanism and remedy is still in place (15 Stat 249). Is the debt ceiling for the non-14th amendment non-citizen or for the 14th amendment citizen-slave? The citizen-slave is the one who is ultimately going to pay for the benefits he receives while the non-14th amendment non-citizen receives no benefits (or pays for those government services he/she receives at the time they are received). The non-14 amendment non-citizen really has no concern for the debt ceiling because he/she is neither a debtor or a creditor involved in the federal debt. It could be said that it is a fault to meddle in that which does not concern you.

End analysis - the 14th amendment does prohibit questioning the debt while you benefit from it. The debt ceiling is for the benefit of the creditor and not the beneficiaries. Who is stepping forward as a creditor? Geithner?

[Sparky]

i'm going to laugh my ass off when they raise it, and then the media finds out they have to instantly auction off billions in treasuries to replace the raided pension money, and we're suddenly at the limit again.

Yeah, most people don't realize that we continue to accumulate "debt" implicitly, even as the ceiling holds at $14.4T. We have been raiding federal pension funds to the tune of $20B per week for the last 7 weeks, and Geithner has pledged to restore it immediately once the ceiling is raised. That's an immediate $150B to $200B.

The ceiling will be raised by more than $2T in order to get them through the 2012 elections. What I'd really laugh my ass off about is if the debt accumulates a little faster than they estimate, and the ceiling gets threatened as election day approaches. That would really put a crimp in all those re-election campaigns. We can only hope.

[Sparky]

Another thing regarding the debt ceiling: What exactly is the penalty for exceeding the debt ceiling? Who has the authority to instruct the Treasury to issue bonds? I've seen another excerpt from the Constitution (similar to above) that implies the president has the authority to do this if necessary. This just seems like an unenforceable law/rule, with no specified penalty.

[chad]

Yeah, most people don't realize that we continue to accumulate "debt" implicitly, even as the ceiling holds at $14.4T. We have been raiding federal pension funds to the tune of $20B per week for the last 7 weeks, and Geithner has pledged to restore it immediately once the ceiling is raised. That's an immediate $150B to $200B.

The ceiling will be raised by more than $2T in order to get them through the 2012 elections. What I'd really laugh my ass off about is if the debt accumulates a little faster than they estimate, and the ceiling gets threatened as election day approaches. That would really put a crimp in all those re-election campaigns. We can only hope.

that would be funny. imagine if we are back to this point next fall.

[Hatha Sunahara]

Another thing regarding the debt ceiling: What exactly is the penalty for exceeding the debt ceiling? Who has the authority to instruct the Treasury to issue bonds? I've seen another excerpt from the Constitution (similar to above) that implies the president has the authority to do this if necessary. This just seems like an unenforceable law/rule, with no specified penalty.

There is no penalty for exceeding the debt limit other than what is imposed by nature. The debt limit is an expression by Congress of how much they are OFFICIALLY willing to take responsibility for in the name of the 'people' (whom they no longer really represent unless it is to pile debt on them). If they are up to the debt limit, as they are now, they have to find other sources of financing--such as diverting federal employee pension contributions to paying for current expenses. Or nationalizing IRAs and 401Ks. The person responsible for managing the debt--according to the law is the Treasury Secretary. He is not authorized by law to borrow more money unless congress approves it, and that is what this issue is all about.

The debt limit is only the veneer of lawfulness. The bunch running the government are unabashed criminals, but to stay in office, they have to at least create the appearance that their actions are legitimate. Hence, we get denials that we are at 'war' in Libya by deviant definitions of war. Ditto for torture. We'll likely start seeing semantic deviations from the meaning of 'debt' soon.

The crash is coming. It is not a matter of if, but of when. The government is sinking into a death spiral regarding its inability to pay for its programs with current taxes. When they raise the debt limit, it sends a message to lenders that buying US bonds is not as safe as everyone thinks it is. So, people don't buy these bonds with money that anybody worked for. The buyer of last resort for these bonds is the Fed. (Bernanke) He'll buy the bonds with money that no one ever worked for--money he conjures up out of thin air, which will dilute the money supply that people actually worked for, and the value of the dollar will suffer accordingly--and we will see it as hyperinflation. There is no escape from this. We can all avoid the consequences personally if we own gold. Otherwise, our savings will vanish. And we'll be debt slaves like the Greeks.

Hatha

[Neuro]

They will raise the debt ceiling, and they will auction of about $ 500 Billion in new debt in about a month without any federal reserve buying, end of QE2 remember? Don't underestimate the effect this will have on stockmarket, bond prices, and PM's, stay in cash if you have it, sub 30 silver is coming, and probably sub 25 also. Right now I am trying to convince my bullheaded dad to sell his stocks, to no avail, I am afraid. His argument was that they would know about this information in the US by now, so why is it still going up? I can't stop thinking about a fool and his money... ;)

[palani]

Grassley says there may be a way out of debt limit logjam

http://thegazette.com/2011/07/07/grassley-says-there-may-be-a-way-out-of-debt-limit-logjam/

Re-enforcing the notion that the national debt is tied solely to the 14th amendment citizen-slave.

[gunDriller]

i think they will try both covert & overt approaches.

i wouldn't be surprised to hear them talk about how QE3 is fiscally responsible, because then the debt ceiling doesn't have to be raised !

for sure, raising the debt ceiling & officially announcing QE3 by January 2012.

[wrs]

The bigger question is when will it be paid back or defaulted? One or the other has to occur.

[Joe King]

Another thing regarding the debt ceiling: What exactly is the penalty for exceeding the debt ceiling? Who has the authority to instruct the Treasury to issue bonds? I've seen another excerpt from the Constitution (similar to above) that implies the president has the authority to do this if necessary. This just seems like an unenforceable law/rule, with no specified penalty.

There is no penalty. Do you actually think that Congress would penalize themselves?...for anything? Well, other than for sexual indiscretions anyway. lol
As far as the Presidents authority, the Treasury Secretary works for the President. So imho all Obama would have to do is order lil' Timmy to go ahead and issue the debt. Likely under emergency orders invoking the rule of necessity. Kinda like the emergency orders issued under a previous administration to deal with a financial crisis. One that techincally continues to this day.

[Horn]

Just heard that little Muslim dude on CNN say that

"The US has an impeccable credit record going back to its inception, there is no way it can default"

LOL

[1970 silver art]

The U.S. will end up ultimately raising the debt limit IMO. The scare tactics and fears of a U.S. default will force Congress to vote to raise the debt limit. Will Congress and the White House find 4 Trillion dollars worth of cuts in gov't spending? Of course they are but you (the taxpayer) are going to feel the pain of the gov't spending cuts. Not that any of this matters because the U.S. dollar will eventually completely collapse because money printing will continue regardless of how much the U.S. gov't cuts spending and/or raise taxes.

[osoab]

Retirement Fund Plunder Update: $206 Billion So Far, $62 Billion Left (http://www.zerohedge.com/article/retirement-fund-plunder-update-206-billion-so-far-62-billion-left)


Only 62 billion left in the fed workers pension coffers. 401k's and IRA's are in the batter's box.

[Hatha Sunahara]

After watching the MSM news tonight, I am convinced this is all theater. But the politicians want to demagogue the issue. The repugs need to cut costs they say, and they are not budging. Of course, neither the MSM or the Democrats will tell anybody that the repugs want that because they are trying to NOT raise taxes for the wealthy. The democrooks want to pretend they will raise taxes on the wealthy, but they won't by much if they do at all. But nobody wants to frame this as a debate about raising taxes on the rich. You don't hear that issue at all. You hear about cutting social programs and benefits people get from the government.

But most of all, no politician wants to fix the debt problem. They want to defer it until they can no longer defer it. That's the path of least resistance. So,they will raise the debt limit, and it will be business as usual until the next crisis.


Hatha

[Joe King]

But most of all, no politician wants to fix the debt problem. They want to defer it until they can no longer defer it. That's the path of least resistance.
Well of course. No one wants to deal with huge, over-the-top potentially life-crushing messes right now that just might be able to be put off until after they're dead. lol

Not sayin' it's the "right" thing to do, but that's it, in a nutshell.
ie hopefully only screw over the as yet un-born generations as opposed to your own.

[Ash_Williams]

There is no fix.

Govt spending is about 40% of GDP right now.

Tax revenue is about 15% of GDP.

To balance the budget, they gotta take that up to about 27%.

Taxing the 40% of GDP that is govt spending would essentialy be cannibalism and not change things, so what is left is the 60%. That means taxes would have to be approx 1/2 of private sector GDP to balance the buget, without GDP going down!

The funny thing about the tax-cuts-for-the-rich part of the debate is that they're only talking 78 billion... when faced with a 1600 billion problem. It's almost like they're pretending to have that as a backup secret weapon, ignoring the fact that their secret weapon is inadequate. There is no way to balance the budget by increasing tax revenue.

[Ash_Williams]

You can steal all the revenue from the fortune 500 and do a 90% tax bracket for the rich and bring the troops home and the country is still screwed. Every worker, even part-time at Micky dees, is supporting more than one other non-worker. The three big social programs (SS, Medicare/Medicaid, and Welfare) are just over 60% of the budget on their own. The borrowing at present allows the nonworkers to live a semi-decent life without taking over half the income of the workers to support it.

Another way to look at it is, with the deficit being around 40% of budget, that every single government dollar that isn't borrowed (ie. every single tax dollar from every source) goes towards those big social programs and nothing else. Forget the courts and the borders and the parks and highways and interest on the debt the wars and schools and whatever else. That should be a wake up call for the country.