U.S. to Hit Debt Limit 12/31/12, This is different from the “Fiscal Cliff”

The Treasury said the debt ceiling is set to be reached on Dec. 31, but analysts believe extraordinary measures can stave that date off into February.

www.foxbusiness.com...

also on ZH

www.zerohedge.com...

Wow, So we have a fiscal cliff and the debt ceiling to hit at the same time on 12/31/12.

With this latest development, the debt ceiling takes priority over the “fiscal cliff”

The government will start raiding the government retirement fund to fund the government for another 2 months. After that point, all government funds are halted and the government "shuts down" or they raise the debt ceiling and we most likely get our rating cut again.

With what has happend in the last few weeks, i doubt this will be delt with right now. They have yet to pass the "fiscal cliff" and we get hit with the debt ceiling. My hopes on the fiscal cliff are now long gone. get ready for ALL your taxes to go up!

Its going to be an ugly monday

reply to post by camaro68ss


The future of those of us in the US need to look no further than to what is happening in Greece and Spain.....our elected officials are doing nothing more than prolonging the inevitable and trying to milk us dry. For anyone to believe the theatrics of the so called fiscal cliff, is doing nothing more than burying their heads in the sand and praying for the same criminals in our government to pull a rabbit out of their hat and save us!

The people have the power to end this nonsense, but they believe in the criminals that put us in this spot, and they don't have one damn bit of common sense due to thier cognitive dissonance, to stop it..........

The people are brain dead, and we might as all bow down to our new masters or at least plan on fighting them...

I reckon they're gonna implement stop-gap measures to kick the can yet further into the abyss all the while the media extol the admin for saving the world from financial catastrophe yet again.

This is not news ... we've hit the debt ceiling many times .. as of January 2011 it has been raised 75 times.

It's been going on since Jimmy Carter was president.

www.washingtonpost.com...

It's business as usual, until the budget can be reigned in it will keep happening..

Originally posted by miniatus
We've hit the debt ceiling a ton of times .. as of January 2011 it has been raised 75 times.

It's been going on since Carter

www.washingtonpost.com...

So this is hardly anything new or shocking... is it good? of course not .. but it's business as usual

this is understood. The problem is how it’s growing expeditionary. The last rise in the ceiling brought on a credit down grade. Today’s times are a lot different than when carter was president.

Personally I think we need to go over the "fiscal cliff" .. it will tight for many of us but it will at least funnel revenue back into the system.

I find it ironic that the republican stance is that they won't accept any deal that raises taxes on a single person so they are not agreeing.. but by not agreeing, they effectively raise taxes on EVERYONE.. makes no sense

Originally posted by camaro68ss

Originally posted by miniatus
We've hit the debt ceiling a ton of times .. as of January 2011 it has been raised 75 times.

It's been going on since Carter

www.washingtonpost.com...

So this is hardly anything new or shocking... is it good? of course not .. but it's business as usual

this is understood. The problem is how it’s growing expeditionary. The last rise in the ceiling brought on a credit down grade. Today’s times are a lot different than when carter was president.

True.. but it's just a symptom to a larger problem.. it can't be fixed until the spending is brought under control and revenue is coming in rather than bleeding out. .. my only point is that these ceilings aren't a new thing.. I don't see it stopping for years to come

The problem is not the lending that is now. Because both neo-classical as well as Keynsian economic models point out that you can't starve yourself out of a depression. There has to be stimulus. That the republicans is trying to block the economy for every time it goes after the fiscal cliff, is counter-intuitive. Every theory in the book as well as every part of history shows that this move is just not going to be positive for the economy. If the Republicans really believe that they have a new economic theory that contradicts everything that is known, or if they are just playing games with the people of America so they can crash the economy to win the next election, is a matter that can be debated. The problem is the lending done by USA when there were good times. Some of those money went into wars, other went into systems that looks a lot like corruption.

But, the really bad news is that USA has a really bad problem ahead of itself. There might be a crash in the bound-market. There are three reasons for this : The first would be the downgrade. When I say the downgrade, I mean both the one that transpired as well as future ones due to a dead-locked congress. Then, there is the interest-levels. Increasing the interest-levels could be catastrophic for the economy. So, nobody dares to make it higher. That's why they are too low now, there is much growth in emerging markets that can be more lucrative for investors to participate in.

The third factor will be the dollar-volume. The financial war that has gone on with downgrading the euro has made EU aware that there are forces that deal with dollars that want to ruin their markets. That UK has become an outsider in EU is a part of a conflict with two sides. The public is aware of the gross inefficiency in EU. But, there is also legitimate fear in the financial markets that EU will act against those financial markets who serve USA more than EU. There might be heavier regulation on financial markets to avoid these kinds of things in the future. There is also agreement in BRIC to shun the dollar. And, this is not just for the parties in the alliance, but also for those outside. Also, the petro-dollar didn't hold. This is the final nail in the coffin for the US dollar. Much of the oil won't be traded in dollars. Also, oil is not the only kid in the block anymore. Natural gas also plays a part. Those won't be traded in dollars. The bond-markets for US-treasuries will soon realize this. When it does, a crash will come.

The fiscal cliff is nothing compared to the bond-crash. I don't think the dollar will be scrapped, but it will become a part of a basket of currencies. When this happens, USA will have to get a more fiscally responsible politic when they take up debt. Problem is that USA will probably cut in the basic safety net of its citizens instead of in its military spending. That will lead to a spiral of more social unrest, that leads to more spending in law-enforcement and military. This social unrest might be enough to prevent further growth in USA in the foreseeable future.

Originally posted by seeker1963
reply to post by camaro68ss

 

The future of those of us in the US need to look no further than to what is happening in Greece and Spain.....

No worries, European union will bail you ehm.. your government out.

No?

Originally posted by miniatus
Personally I think we need to go over the "fiscal cliff" .. it will tight for many of us but it will at least funnel revenue back into the system.

I find it ironic that the republican stance is that they won't accept any deal that raises taxes on a single person so they are not agreeing.. but by not agreeing, they effectively raise taxes on EVERYONE.. makes no sense

Well yes it makes sense since the fiscal cliff includes sharp spending cuts too.

And the deficit is projected to be cut in half in 2013.

reply to post by miniatus

Personally I think we need to go over the "fiscal cliff" .. it will tight for many of us but it will at least funnel revenue back into the system.

I find it ironic that the republican stance is that they won't accept any deal that raises taxes on a single person so they are not agreeing.. but by not agreeing, they effectively raise taxes on EVERYONE.. makes no sense

That fact that you blame the Republicans and do not recognize that the two party system is a nothing more than a version of professional wrestling using the good guy vesus the bad guy theatrics to keep the American masses intransed in their play really amazes me.........

Can you not see it? Do you truely believe that thru out the history of our nation and the many years of it's existance that to blame one party over the other is ridiculous? They are BOTH one and the same! They have nothing to lose, because they have their D.U.M.B.'s to run and hide in when they realize that the PEOPLE wake up enough to realize that their fraudulent game is over! They are BUSTED! They are SCARED! How can you deny our current police state? Do you hear anyone from either party saying much against it? Isn't that enough to wake you up from believing that their is a difference between the two???

My God man! Please wake up! The psyops has warped you ability to think straight....

reply to post by miniatus


it's simples... the republicans and demorcrats work for the same people.. this "fiscal cliff" shinnanigans and everything to do with it has been orchestrated for this period of change the mayans spoke of.. its all a pantomime designed to distract and keep the average man/women "dumbed down"...

have you seen the film- "the esoteric agenda"[youtube?]

But the 'Fiscal cliff' was designed so as to make the debt ceiling irrelevant. They are closely tied together.
The Fiscal cliff was set to go into effect when the country reached the debt ceiling. The Fiscal cliff raises taxes, and cuts spending, so as to eliminate the country's deficit. Thus negating the need for more debt.
This was only discussed a year ago....people's memories are so bad.

The real issue coming up is still the Fiscal Cliff, not the debt ceiling.

Originally posted by Ghost375
But the 'Fiscal cliff' was designed so as to make the debt ceiling irrelevant. They are closely tied together.
The Fiscal cliff was set to go into effect when the country reached the debt ceiling. The Fiscal cliff raises taxes, and cuts spending, so as to eliminate the country's deficit. Thus negating the need for more debt.
This was only discussed a year ago....people's memories are so bad.

The real issue coming up is still the Fiscal Cliff, not the debt ceiling.

No need for more debt? not so sure.

It's $2 trillion over ten years in projected spending cuts right?. So that's about 200 billion each year in cuts.

Deficit hit $172B in November www.foxnews.com...

snip wall st, print money to pay someone who needs work to build a new school or bridge or something, go back to gold standard & outlaw usury....

problem solved.

Originally posted by Ghost375
But the 'Fiscal cliff' was designed so as to make the debt ceiling irrelevant. They are closely tied together.
The Fiscal cliff was set to go into effect when the country reached the debt ceiling. The Fiscal cliff raises taxes, and cuts spending, so as to eliminate the country's deficit. Thus negating the need for more debt.
This was only discussed a year ago....people's memories are so bad.

The real issue coming up is still the Fiscal Cliff, not the debt ceiling.

You can't be faulted for thinking so. Given the hype over the "Fiscal Cliff", it would appear to be the case.

However that is not the case. Even if all the tax increases proposed by the Democrats and all the spending cuts proposed by the Republicans were to be agreed to and implemented there would still be huge gap between the revenues and spending, which needs to be bridged by further borrowing i.e, increasing the debt ceiling. So all this bickering over the spending cuts/tax increases is simply to distract attention away from the actual problem for which no one has any solution.

Truth be told, the 'Fiscal Cliff' isn't a big problem, Yeah, everyone will see their taxes going up and some benefits will see a cut. Not a catastrophe.

However, if the debt ceiling is raised, it is going to see a sell off of the existing bonds (when the credit rating is downgraded further, banks have to disinvest). Since there will be no takers for those bonds their value will plummet, resulting in banks having to write off their assets and banking system collapse. If the FED pitches in buying up those bonds to avert a banking collapse, it would have introduced huge cash into the system, likely leading to hyperinflation. If the debt ceiling is not raised, the US government will have to default on the interest payments, immediately making all the bonds junk grade leading to a banking collapse.

About the only way a debt ceiling increase will not result in an immediate banking collapse/hyperinflation is if the rating agencies do not downgrade the investment in US Treasury bonds. If their reaction when the debt ceiling was raised last time is any indication, they are most likely to downgrade the US Sovereign Debt if there is a further increase in the debt ceiling.

Originally posted by criticalmindseed
snip wall st, print money to pay someone who needs work to build a new school or bridge or something, go back to gold standard & outlaw usury....

problem solved.

you are the exact reason that an education in economics needs to be taught. please do some actual research during the 1800's of america of the booms and busts of the economy. this has been tried, nothing new except ignorance. please explain IN DETAIL how going back to the gold standard would be a benefit.

reply to post by jimmyx


Still a better system than the one we have now with unchecked corruption and a private banking institution running our monetary supply. There's a good reason that first Thomas Jefferson and then Andrew Jackson killed both of our first two privately owned federal banks.

Originally posted by Krazysh0t
reply to post by jimmyx

 

Still a better system than the one we have now with unchecked corruption and a private banking institution running our monetary supply. There's a good reason that first Thomas Jefferson and then Andrew Jackson killed both of our first two privately owned federal banks.

yeah, i agreee with you on that, but, the budgets for bank and security regulators have been cut dramatically for years, and needs to be restored. they are bringing these guys to justice, it is just taking a longer time because of the deliberate cutbacks in manpower, and resourses. so, when you here "regulations need to be cut so we can create more jobs"....don't believe a word of it.

They will raise the debt celling and the show will go on. Business as usual.