Egan-Jones Downgrades U.S. Debt

[Lagboltz]

$14 trillion in debt and counting, no plan in place to curb spending, let alone balance the budget. If we keep doing what we are doing, we will just default anyway.

Have you tried the interactive program at this website. I forgot who in this forum discovered it. I put in plans from both, a liberal and conservative point of view, and came up with two different results. It is quite interesting.
http://www.nytimes.com/interactive/2010/11/13/weekinreview/deficits-graphic.html

 

[pocketfullofshells]

What credit card company would raise limit when you owe them $14 trillion?



$14 trillion in debt and counting, no plan in place to curb spending, let alone balance the budget. If we keep doing what we are doing, we will just default anyway.

the one that did it 5 times under Bush...

I'm sorry, I keep forgetting the debt was fine then...it just magically got to high the day Obama took office.

whats more likely...we vote to increase the debt ceiling...and pass the 3 to 1 spending cuts to revenue increase...bill Obama has pushed for...and the creditors say no....

or that we Stop paying our Bills because we don't want to raise taxes and can't find support for the cuts that would be needed to balance a budget...( something we have not done I don't think since...1776

Even the Ryan plan..called for raising the debt ceiling ...

 

[pocketfullofshells]

House Republicans have passed numerous pieces of legislation focused on jobs...that legislation is sitting in the Senate...you might think about who controls the Senate schedule and what bills come to the floor before you place all of this blame at the feet of the Republicans.

name one

and passing bills you know can't pass the senate...does not help...jobs are not created on hopes of a bill...but of bills that pass. thats there job...to do something that can pass.

of course in the Republican view...every bill that cuts taxes is a jobs bill...even if they don't create jobs....even if they actually cut jobs.

 

[pocketfullofshells]

Have you tried the interactive program at this website. I forgot who in this forum discovered it. I put in plans from both, a liberal and conservative point of view, and came up with two different results. It is quite interesting.
http://www.nytimes.com/interactive/2010/11/13/weekinreview/deficits-graphic.html

I did mine...its like 2am and I could not sleep...so here is my half awake one lol
http://www.nytimes.com/interactive/2010/11/13/weekinreview/deficits-graphic.html?choices=4bb1n6s0

 

[ProudLefty]

House Republicans have passed numerous pieces of legislation focused on jobs...that legislation is sitting in the Senate...you might think about who controls the Senate schedule and what bills come to the floor before you place all of this blame at the feet of the Republicans.

Name a jobs bill that Republicans have put out there. Just one will be enough. Make sure it is a real jobs bill, and not a tax cut bill with "jobs bill" in the title.

 

[Lagboltz]

I did mine...its like 2am and I could not sleep...so here is my half awake one lol
http://www.nytimes.com/interactive/2010/11/13/weekinreview/deficits-graphic.html?choices=4bb1n6s0

You have an interesting mix of liberal and conservative ideas, but it does the trick.

 

[ThisTooShallPass]

you seem to miss what hitting the debt ceiling would mean...it would not mean we start paying down debt...it means we stop paying bills owed...Not paying your Min payment on the Credit card does not increase your Credit rating...

And the closer we get the more chance others will decrease our score as they don't think we will pay those debts....once me start missing payments...down we go...

It would not mean that. Our interest payments are relatively small; our tax revenue is sufficient to cover them. If we default on our debt because we hit the debt ceiling, it will be because Tim Geithner chose to do so.

 

[clarkatticus]

yeah, you hold on to that.

 

[ThisTooShallPass]

yeah, you hold on to that.

Was this directed at me? Our current tax revenue is around $2 trillion annually. Debt service is around $300-400 billion. We have more than enough money to continue making payments on our debt.

The White House would prefer to threaten default to frighten Congress into raising the debt ceiling, but it's a hollow threat -- anyone with the ability to do math should be able to see that.

The only way we'll default is if Treasury deliberately chooses to skip debt payments.

 

[BigRob]

the one that did it 5 times under Bush...

I'm sorry, I keep forgetting the debt was fine then...it just magically got to high the day Obama took office.

The debt was not fine then...it was a "failure of leadership" according to out sitting President in fact..when he voted against such an increase.

whats more likely...we vote to increase the debt ceiling...and pass the 3 to 1 spending cuts to revenue increase...bill Obama has pushed for...and the creditors say no....

If you raise the debt ceiling by 2.4 trillion and then cut 4 trillion out of the budget over a ten year period you are still going to be running a deficit of (going by this years numbers) of over 1 trillion a year....that is the great solution we keep hearing about? Please.

or that we Stop paying our Bills because we don't want to raise taxes and can't find support for the cuts that would be needed to balance a budget...( something we have not done I don't think since...1776

You will never find support for the cuts that are needed to balance the budget. We elect leaders to make hard choices however..

Even the Ryan plan..called for raising the debt ceiling ...

It does, however that plan apparently has little support.

 

[BigRob]

Was this directed at me? Our current tax revenue is around $2 trillion annually. Debt service is around $300-400 billion. We have more than enough money to continue making payments on our debt.

The White House would prefer to threaten default to frighten Congress into raising the debt ceiling, but it's a hollow threat -- anyone with the ability to do math should be able to see that.

The only way we'll default is if Treasury deliberately chooses to skip debt payments.

You are right that a failure to increase the limit will not result in an outright default...what it will do is probably result in a downgrade (which frankly we probably deserve anyway) and make it harder to service such debt in the long term.

Not increasing the ceiling will not cause a default, but it will result in large cuts in spending...which is arguably not a terrible thing.

 

[ThisTooShallPass]

You are right that a failure to increase the limit will not result in an outright default...what it will do is probably result in a downgrade (which frankly we probably deserve anyway) and make it harder to service such debt in the long term.

Not increasing the ceiling will not cause a default, but it will result in large cuts in spending...which is arguably not a terrible thing.

Why would it result in a downgrade? If no further debt can be accrued, then our existing levels of debt would gradually diminish as we continue to make debt service payments -- and what creditor doesn't love to be paid back?

 

[BigRob]

Why would it result in a downgrade? If no further debt can be accrued, then our existing levels of debt would gradually diminish as we continue to make debt service payments -- and what creditor doesn't love to be paid back?

Why would debt get paid back simply because we can make the minimum payments (to use a credit card example)?

Even though we have stopped borrowing, that debt has not gone away. At most we are basically talking about simply paying the interest, not the principle...the creditor is not actually getting paid back in this scenario, he is just collecting interest payments.

I guess we might not get downgraded automatically, but the debt would all still be there, and we would be undergoing some serious cuts, which could potentially cause future revenue problems, and be a major issue.

 

[ThisTooShallPass]

Why would debt get paid back simply because we can make the minimum payments (to use a credit card example)?

Even though we have stopped borrowing, that debt has not gone away. At most we are basically talking about simply paying the interest, not the principle...the creditor is not actually getting paid back in this scenario, he is just collecting interest payments.

I guess we might not get downgraded automatically, but the debt would all still be there, and we would be undergoing some serious cuts, which could potentially cause future revenue problems, and be a major issue.

Debt service includes modest principal payments; it's just that interest gets prioritized (as is the case with any debt payment). That's why the national debt has actually shrunk in the few weeks since we hit the debt ceiling.

 

[BigRob]

name one

and passing bills you know can't pass the senate...does not help...jobs are not created on hopes of a bill...but of bills that pass. thats there job...to do something that can pass.

of course in the Republican view...every bill that cuts taxes is a jobs bill...even if they don't create jobs....even if they actually cut jobs.

First of all, it is not the job of the House to write a bill that they think the Senate will pass....it is the job of the House to pass a bill and send it to the Senate.

Here is an entire list of legislation.

All of this legislation impacts jobs etc..that fact that it doesn't say "Jobs Bill" does not mean it is not legislation geared towards impacting jobs.