Geithner says U.S. could hit debt limit by March 31

Geithner says U.S. could hit debt limit by March 31

news.yahoo.com

WASHINGTON (Reuters) – The United States may hit the legal limit on its ability to borrow by March 31 and faces serious consequences unless Congress acts by then to raise it, Treasury Secretary Timothy Geithner said on Thursday.

"Even a short-term or limited default would have catastrophic economic consequences that would last for decades," Geithner said in a letter to U.S. Senate Majority leader Harry Reid that was issued by Treasury.

Geithner said it was hard to pin down exactly when the current $14.3 trillion ceiling on the debt limit would be pierced but urged Congress to act bef

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I know we have focused on dead birds and fish, which is interesting, but this story is huge.

Right now the US government is rolling towards its debt ceiling. Normally, the US Congress passes legislation raising the debt ceiling, but the new Congress isn't keen on raising it.

Why is this important?

The US government borrows money to pay its debts. If we hit a Debt Wall and cannot borrow, we will be unable to pay our debts. The US government will go into default.

We will go into what is called Sovereign Strategic default, which could result in an "apocalyptic" debt crisis.

If the US Congress still at this point refuses to pass a new debt ceiling, three things will follow.

1. The US credit rating will drop
2. The US dollar value will freefall
3. The BIS, Bank for International Settlements and the IMF, will push the President into negotiating Debt Restructuring including harsh austerity measures.

This will not be pretty.

I had originally expected this crisis to occur 4 years from now. If the US Congress does not pass the ceiling legislation, the proverbial crap is not going to just hit the fan, it will knock it off the desk.

We have 84 days.

news.yahoo.com
(visit the link for the full news article)

YE!

I just knew someone would have posted this here today. lol.

The answer to this problem is obvious, and will happen. They will simply raise the debt ceiling. Problem solved. The amount the usa is in debt no longer matters. It could be 7 quadrillion, it makes no difference than 15 trillion. Either way, the country is screwed... Money no longer matters. So I'm not worried about this at all, its old news. They'll just keep bailing each other out, until their printing machines breakdown and they can't afford to hire a technician to fix it.

reply to post by xxshadowfaxx


But afterwards can we not put a programme in place to reduced the debt? I am feeling that a self-imposed austerity measure may be better than an IMF -imposed austerity. It would help to cut back the external military actions in the future.

Either way something must be done to bring the bedt down.

They really need to leave the ceiling as is, or better yet reduce it. Begin cutting spending now. Start by eliminating all foreign aid.

reply to post by xxshadowfaxx


Normally they would raise it.

The issue, is that the Republicans with Tea Party support, may make a stand on the issue, like the government shutdown of the 1990s.

I know they think they are doing the right thing. They are doing the principled thing, but it isn't the practical thing.

The only benefit I can see from this, is the crisis could be worse later, so better to start now than start 4 years from now.

I want to add both Ron and Rand Paul's words on the subject:

Ron declared that he is not in favor of raising the debt ceiling saying “I never voted for any of the spending, so why should I raise the debt for the people who’ve been spending the money? For me it’s a very comfortable vote.” Ron admitted if the debt limit isn’t increased it will cause problems, but thought that the alternative of continuing to borrow and spend endless money is much worse, and instead would rather face reality today.

The younger Paul dismissed Goolsbee’s warning and claimed since President Obama voted against raising the debt ceiling as a senator, “it’s a little disingenuous for [his] people to say ‘oh the sky is falling if we don’t do it.’” However, Rand is a bit more pragmatic than his father, suggesting “I’ll vote to raise the debt ceiling if we attach a balanced budget rule to it. If they say no more debt will be added and from here on out we’ll balance the budget, I’ll vote one time to raise the debt ceiling.”

www.mediaite.com...

Congressman Paul is right about the fact if we face the crisis today it will not be near as bad if we have to face it in the future.

Senator Paul has a more practical view of the issue, basically giving Washington one last chance to balance the budget. I personally agree with Rand on the issue, but if things fail it will be better to face the music now rather than later.

Even should they pass a balanced budget rule, they will install some loophole allowing the continued waste/fraud/abuse we see currently. I say NO. Leave the ceiling as is and cut spending now.

I'll bid 10 renmimbi for the statue of liberty.. It will make a nice lawn ornament...

well if they raise the debt ceiling, what will they do when we reach the next debt limit? Since when did the government dictate to the fed about their borrowing limit? Either case sooner or later we are going to have to realize that this is a serious concern, the government is spending so much money it has to raise it's debt limit.. The government needs to be figuring out how to prevent hitting the debt, limit period.

Originally posted by sonofliberty1776
Even should they pass a balanced budget rule, they will install some loophole allowing the continued waste/fraud/abuse we see currently. I say NO. Leave the ceiling as is and cut spending now.

I have to ask those who are against raising the debt ceiling:

Are you ready?

Unless you are prepared for the crisis, I would not be quick to invite it.

Originally posted by MikeboydUS

I have to ask those who are against raising the debt ceiling:

Are you ready?

Unless you are prepared for the crisis, I would not be quick to invite it.

edit on 6/1/11 by MikeboydUS because: r

Yes, it is past time to begin setting things straight. There will be pain, there will be blood. Waiting will only make things worse.

Originally posted by MikeboydUS

If the US Congress still at this point refuses to pass a new debt ceiling, three things will follow.

1. The US credit rating will drop
2. The US dollar value will freefall
3. The BIS, Bank for International Settlements and the IMF, will push the President into negotiating Debt Restructuring including harsh austerity measures.

Two of those three will happen regardless of whether or not the debt ceiling is raised.

As for raising the debt ceiling I think it needs to go along with what the Paul's are pushing and that's a balanced budget agreement so this type of thing wont occur again. Spending is completely out of control and unless or until that is reigned in raising the debt limit is only delaying the inevitable anyway.

Basically, the choices are, raise the debt ceiling, or armageddon...

So they'll raise the debt ceiling, and let the greed hungry ptb borrow forever. As long as they have a constant supply of crisp 100's in their hand, nothing else matters. And they will raise the debt, because they are too powerful to stop. When they fall, we all fall. So I'm not worried about this at all, the debt ceiling will be raised, even if the tea party stands in the way. Worse case, they assassinate their competition and raise it anyway. It's impossible to stop them. The only way they'll fail, is when they feel like it. They run the country, they run the world.

Just keep raising the debt limit...its the only real option...other than terminating the federal reserve and allow for state banking...the treasury department printing AND ISSUING all the currency. Almost everyone has not figured out yet that a limited money supply will eventually allow the IMF&World Bank to indirectly claim ownership of the USA!

When a regular customer takes out a loan and fails to make his payments the bank reposses the agreed collateral and can even make a lien against other personal property to help offset damages. If the federal reserve is america's semi-private CENTRAL BANK, does that not mean currency is in private hands rather than in government's hands? Government is suppossed to look-out for the welfare of the private and public at large...which means anything american owned/operated? Isn't it usury to force people&corporations to pay interest in the form of taxation? Interest is a fee for borrowing money, money that does not belong to you!

Sooner or later when the bankers call-out for their loans to be payed in full and governments cannot meet those outrageous obligations, we will get the formation of central currencies such as the EURO, AMERO etc. The euro has been reality for over a decade already as all nations had to do away with their respective national currency. The amero will bring the North American Union, just like the euro brought the European Union and other continents will follow suit.

Next thing you know 30 years from now we will have a global currency, with a global government and a global ID. Hello NWO and world dictatorship!!! I read some of the posts in this thread and the level of ignorance is staggering. Be careful what you wish for comes to mind........

Basically All governemnts are terrified of the civil unreast that would arise from the cuts that would be necessary to reduce budget spending. Frankly I think it may well need a dictatorship to implement the cuts in a reasonable timescale.

Originally posted by tiger5
Basically All governemnts are terrified of the civil unreast that would arise from the cuts that would be necessary to reduce budget spending. Frankly I think it may well need a dictatorship to implement the cuts in a reasonable timescale.

Yeah I read a tongue in cheek series about something like that about 25 years ago or so. It was by Piers Anthony, called bio of a space tyrant. Basically, he extrapolated the world out into the solar system. The "USA" in the series was in the same position we find ourselves now. The protagonist assumed dictatorial powers via Constitutional convention in order to fix all the problems the "country" had. It was an interesting take. In the books, he was a benevolent dictator. In reality, there is no such thing as a benevolent dictator. No, we must face our problems head on. We need to make cuts; serious, deep cuts. The entitlement state must end. Socialism cannot work long term. That is being seen all over the world. We are no exception.

Are you kidding, you think for one minute that cap won't be raised?

To many are blissfully happy with the current crap, as the status quo is enabled, as long as the money keeps flowing, or trickling in this case, for some.

If they didn't raise the cap, it would be like pulling the plug on everything.. There are too many who are still too happy with the raping of the people for their gain.

Honestly tho, they shouldn't raise the cap, we need to get back to a balance, and we are far swung out to do it easily.
Raising the limit won't help us get out'a debt, will only give us more debt.

S&F for this post. Does it really matter if they raise it now or later. Will they just be prolonging the inevitable kind of like what's going on with the housing/banking bailouts & QE. I think the system is really trying to correct itself and the longer they delay it the worse it is going to be. I guess they think they can keep patching up all the leaks until they can find a fix and make the necessary corrections. I guess I will try to remain optimistic on this issue. Thanks for the find OP.