Egan-Jones Downgrades U.S. Debt

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.

I haven't seen that it has been shrinking, how much has it gone down by?
 
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I haven't seen that it has been shrinking, how much has it gone down by?

Well, according to the Treasury's Debt to the Penny report (which is more accurate than the nonsensical distortions propagated by the Treasury Department itself), we hit the debt ceiling on May 16. The debt then was $14.3455 trillion. As of July 15, it was $14.3429 trillion. The total decrease has been just under $2.6 billion.

It doesn't have to continue climbing, of course; once we clear the debt limit again we can start reissuing debt until we hit the ceiling and simply repeat the process. But it's clear that making debt service payments has been enough to reduce the debt itself.
 
Why do you say "Surely a sign of bad things to come"? Are Republicans determined to destroy America? Is getting Obama out of office that important to Republicans that they would destroy America's credit rating and crash our economy? Do Republicans believe American voters are too stupid to notice what is going on? Do Republicans believe voters will reward them in 2012? The plain fact is that if voters do anything, it will be to vote out the incumbents, just like they did in 2010, and that says bye-bye to the Republicans in the House, too. not just Democrats.

If problems result it will be shared by both parties. It will not be the result of not raising the debt ceiling but of not cutting expenses.
 
No. The downgrade is simple: It is a reaction to the fact that the US refuses to deal with the debt ceiling. Serious people look at non-serious remarks from people like Michelle Bachman and realize America has lost its ability to govern.

(Please don't respond with a lecture about all America has to do is listen to the rants of inexperienced politicians such as Paul Ryan, Rand Paul, Sarah Palin, and Michelle Bachman.)

As if she were the only one with non serious remarks. Don't forget our fearless leader. It takes two to reach an impasse.
 
this can't be true, Bachmann already told us nothing will happen if we don't raise the debt ceiling...so I mean it must be true right?

If we don't raise the ceiling and we cut our spending we are fine. if we don't raise the ceiling and we keep spending and things go south it will be the fault of the spending.

The debt ceiling was created by both parties to do just what it is doing and president Obama favored not raising the debt ceiling back when he was a congressman.
 
Again, the downgrade was made because of America's debt-to-GDP ratio, not because of the debt ceiling.

Hitting the debt ceiling will do precisely nothing to impact our credit (it will, in fact, boost it, as debt will begin to be paid off), and raising it does not address the underlying issue: we're spending more money than we have.

An excellent point. In fact raising the debt ceiling would allow the debt-to-GDP to get even worse would it not?
 
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...

The gov presently has enough income to pay its debt and SS and the soldiers. It is the other programs that would need to be cut so no bills would go unpaid.

To use your analogy the gov does have enough money to pay the minimum on the credit cards. And to continue to use your analogy increasing the credit limit on your credit cards does indeed lower ones credit score.
 
Republicans will never pass a jobs bill...they have not in 2 years and they will not in the next 2...better to talk about abortion and watch the econ stay in the pits...better chance for them in 2014...I hate to say a party wants the nation to fail, for its own gain...but I can't see any other reason they have done nothing on jobs..after thats all they talked about to get elected.

Maybe of any of the "jobs bills" were actually jobs bills they would have been passed.

The best way for the economy to improve is for the gov to stop spending too much and after that to increase revenue by lowering taxes. Then it should focus on prosecuting bad guys while not regulating good guys.
 
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....

It does not seem likely that any spending cuts the dems promise to make in the future would ever happen. Therefore we should not rais the debt ceiling based on unreliable promises.


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


It also does not seem likely that the dems would ever support cuts needed to balance the budget. But they could be forced to make them anyway if the debt ceiling is not raised. What would not happen is that we dont pay our bills. The bills will get paid.
 
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

I have no doubt that any of the cuts you propose would result in saving. That is certain.

But the historical data shows that increased taxes does not always result in increased revenues. Unless the program can tell us which tax increases will result in increased revenues and which will result in decreased revenues it makes no sense to raise taxes.
 
Well, according to the Treasury's Debt to the Penny report (which is more accurate than the nonsensical distortions propagated by the Treasury Department itself), we hit the debt ceiling on May 16. The debt then was $14.3455 trillion. As of July 15, it was $14.3429 trillion. The total decrease has been just under $2.6 billion.

It doesn't have to continue climbing, of course; once we clear the debt limit again we can start reissuing debt until we hit the ceiling and simply repeat the process. But it's clear that making debt service payments has been enough to reduce the debt itself.

That's the best political news I have heard all year. The debt ceiling that president Obama liked when he was a senator is working. Good job Senator Obama.
 
I have no doubt that any of the cuts you propose would result in saving. That is certain.

But the historical data shows that increased taxes does not always result in increased revenues. Unless the program can tell us which tax increases will result in increased revenues and which will result in decreased revenues it makes no sense to raise taxes.

Generally when you raise taxes...you have more money....But go ahead...do the same thing I did...and raise no taxes....see how it works out.
 
An excellent point. In fact raising the debt ceiling would allow the debt-to-GDP to get even worse would it not?

Correct.

I don't know if the ratings agencies take our obligations to the SS trust fund into account, but I don't believe they do. They're typically not interested in intergovernmental holdings, and Treasury already missed a large coupon payment to the trust fund less than a month ago and no one raised a stink about it. That's the only risk to our credit rating as far as not raising the debt ceiling's concerned.
 
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Correct.

I don't know if the ratings agencies take our obligations to the SS trust fund into account, but I don't believe they do. They're typically not interested in intergovernmental holdings, and Treasury already missed a large coupon payment to the trust fund less than a month ago and no one raised a stink about it. That's the only risk to our credit rating as far as not raising the debt ceiling's concerned.

I wish you had some source for that assertion. All reliable sources I have seen most certainly do not agree with that position. This is not like some small business that can just write the checks as they come due, and then not mail the checks for a week or so until some money comes in.

But beyond that, if your position were actually true then that'd mean that more money is coming in than is going out, and therefore, no debt ceiling problem anyway. We are all agreed that that is just not true.
 
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