Warning: U.S. Hits Debt Ceiling Today.

This has been coming down the pipeline for a while now and it is now here.

The U.S. government is expected to hit the $14.294 trillion debt ceiling Monday, setting in motion an uncertain, 11-week political scramble to avoid a default.

The Treasury Department plans to announce Monday it will stop issuing and reinvesting government securities in certain government pension plans, part of a series of steps designed to delay a default until Aug. 2.

The Treasury's moves buy time for the White House and congressional leaders to reach a deficit-reduction agreement that could clear the way for enough lawmakers to vote to raise the amount of money Congress allows the nation to borrow.

Source

It seems that both parties cannot come to an agreement about what should be done to bring the deficit down and even whether or not to increase the debt ceiling.

There's much interesting talk in the article about what may get cut. Things like health-care, agriculture subsidies, and federal retirement programs. Also, there is speak of stepping up anti-fraud efforts and selling off government property.

The goal is apparently to cut the deficit by $4 trillion over 10 years.

All I can say is I wish the best for everyone in these trying times. For more information on what could happen in the case of a default or bankruptcy go to my thread here:The Debt Ceiling: What Is Happening and What Could Happen if the Ceiling Isn't Raised?

Can the U.S. Government actually pull itself together and find a way out of this mess or is it too late? One way of the other, I have a feeling the future (the near future) is going to look very different, we are in for a bumpy ride.

Peace & Respect,

AS

www.usdebtclock.org...
all ready over it..

They love taking your pensions to pay the spending instead of borrowing... for now.

No way they don't raise the debt ceiling, that would mean cutting 50% of the budget at least.

Without the ability to borrow money :

2011 budget

income - interest on debt = amount spendable.

No deficit = Taxes - Interest on the debt = Budget
2.17 trillion - 250.7 billion = 1919.3 billion

From the 3.82 trillion projected budget, it's a cut of 1.9 trillion +, just shy of a 50% cut.

Those numbers are just projected numbers from the 2011 budget. They most likely will change.

From the 2011 budget :

787.6 billion in pensions.
898 billion in health care.
140.9 billion in education.
928.5 billion in defense.
464.6 billion in welfare.
57.3 billion in protective services.
104.2 billion in transportation.
29 billion in general government expenses.
151.4 billion in other spending.

So... You need to cut 1.9 trillion. Good luck with that. Cut pensions, health care, education or welfare and you'll riots/strikes. And you ``can't`` cut defense, unless you bring the troops home (which won't happen) and cutting the defense budget will fire probably tens of thousands in the defense industry.

So they will raise the debt ceiling.

But at some point, the bond market will impose those cuts on the US. And then the fecal matter will hit the fan.

so if they raise the debt ceiling..how long until it's reached again? I mean this just can't go on forever can it?

hmmm...
wonder how bad its gonna get when the US actually defaults?

reps and dems need to work together, and not let their country crumble.
seems like the US economy is already over the edge and plumeting towards certain death...

Originally posted by Neopan100
so if they raise the debt ceiling..how long until it's reached again? I mean this just can't go on forever can it?

After the 2012 election.

And no it cannot go on forever... one day, Bondzilla is gonna show up and destroy Bernanke. Interest rates on the US treasuries are gonna skyrocket.

wonder how bad its gonna get when the US actually defaults?

It won't. Well unless interest rate skyrockets or the dollar loses it's status as world currency.

Chains you can bereave in!

Originally posted by Vitchilo

Originally posted by Neopan100
so if they raise the debt ceiling..how long until it's reached again? I mean this just can't go on forever can it?

After the 2012 election.

And no it cannot go on forever... one day, Bondzilla is gonna show up and destroy Bernanke. Interest rates on the US treasuries are gonna skyrocket.

wonder how bad its gonna get when the US actually defaults?

It won't. Well unless interest rate skyrockets or the dollar loses it's status as world currency.

I wonder if Vegas is giving odds on that. lol

Theres an easy way to bring the debt down. Take us out of wars. Simple

I suppose if I am asking this question, that is why I do not make the big bucks.

If both sides agree there is a problem and things are going down hill, then why is the answer always to do something to delay the outcome which apparently both sides see, instead of going to the heart of the problem.

reply to post by Skewed


I have said that from the beginning...back when they were handing bailouts out like candy...they should have just stood up and taken the medicine..bit the bullet and dealt with it all then instead of delaying the inevitable. I mean lets just get this mess over with so we can start anew.

Originally posted by CoachSlamYou
Theres an easy way to bring the debt down. Take us out of wars. Simple

Except even if you cut defense budget to 0, still won't fix the deficit.

So... try again.

Originally posted by Vitchilo
They love taking your pensions to pay the spending instead of borrowing... for now.

No way they don't raise the debt ceiling, that would mean cutting 50% of the budget at least.

Without the ability to borrow money :

2011 budget

income - interest on debt = amount spendable.

No deficit = Taxes - Interest on the debt = Budget
2.17 trillion - 250.7 billion = 1919.3 billion

From the 3.82 trillion projected budget, it's a cut of 1.9 trillion +, just shy of a 50% cut.

Those numbers are just projected numbers from the 2011 budget. They most likely will change.

From the 2011 budget :

787.6 billion in pensions.
898 billion in health care.
140.9 billion in education.
928.5 billion in defense.
464.6 billion in welfare.
57.3 billion in protective services.
104.2 billion in transportation.
29 billion in general government expenses.
151.4 billion in other spending.

So... You need to cut 1.9 trillion. Good luck with that. Cut pensions, health care, education or welfare and you'll riots/strikes. And you ``can't`` cut defense, unless you bring the troops home (which won't happen) and cutting the defense budget will fire probably tens of thousands in the defense industry.

So they will raise the debt ceiling.

But at some point, the bond market will impose those cuts on the US. And then the fecal matter will hit the fan.

What amazes me is that Defense and wellfar encompass over a trillion dollars in debt.

They spend 3 to 1...Wellfare to Education. Am I the only one that finds that to be absolutely ludacris?

Almost 2 to 1 defense to wellfare, again, completely out of control.

The thing that really scares me the most, I have no idea where to start to change this spending habit.

SOME ONE, please tell me where I can start to make even the slightest impact on this!

They should all stay home and not get paid.
That would save lots of money, plus it would keep the bumbling buffoons from doing anymore damage.

They should just raise the ceiling, raise taxes and cut defense spending. Mainly raising taxes. The problem is that we arent collecting enough tax dollars.

Originally posted by gorgi
They should just raise the ceiling, raise taxes and cut defense spending. Mainly raising taxes. The problem is that we arent collecting enough tax dollars.

Who will pay those taxes?

I can assure you that those who have the ear of the government won't.

Originally posted by CoffeeMonster
hmmm...
wonder how bad its gonna get when the US actually defaults?

Look at what happened to Iceland and Russia......oh wait they seem to be doing alright.

If the U.S. defaults then the owners of U.S. debt, mainly China, Japan, the investor class, and the Wall Street bankers, will be left holding the bag. The biggest bag holder will be the Wall Street bankers.

The biggest fear monger about U.S. default is Tim Geitner, who is well connected to the Wall Street banks. Coincidence?

Originally posted by Vikus

Originally posted by gorgi
They should just raise the ceiling, raise taxes and cut defense spending. Mainly raising taxes. The problem is that we arent collecting enough tax dollars.

Who will pay those taxes?

I can assure you that those who have the ear of the government won't.

The rich should pay. We have one of the lowest tax rates in the industrialized world.

reply to post by gorgi


no you should pay lets just tax you 90% and see how long you like it.

guess the constitution means nothing to you.

every heard of taxes being uniform through out this country?

guess not

Originally posted by gorgi

Originally posted by Vikus

Originally posted by gorgi
They should just raise the ceiling, raise taxes and cut defense spending. Mainly raising taxes. The problem is that we arent collecting enough tax dollars.

Who will pay those taxes?

I can assure you that those who have the ear of the government won't.

The rich should pay. We have one of the lowest tax rates in the industrialized world.

That will never happen. The people who don't have it are ALWAYS the one's who pay!! Middle class is always the short end of every stick