US debt ceiling: Will there be enough time to get a deal through?

[StayinThailand2much]

On 5/24/2023 at 8:09 PM, placeholder said:

This so-called "crisis" is entirely a manufactured one.

Yes, but solving it "last minute", or even after could have serious consequences for financial markets, people's pension funds, etc.

[heybruce]

20 minutes ago, nauseus said:

I did not introduce increases into this discussion. You are misquoting me. Ignore list.

You didn't introduce the subject of tax increases, but you posted uninformed and misleading opinions on the subject.  For example:

 

On 5/25/2023 at 3:05 AM, nauseus said:

Clinton's tax increases had an easily visible effect and produced some surpluses but these were also enabled by Social Security taxes and a booming economy pre the dot-com crash.

 

The economy is far different now and the debt is so great that the effect of tax cuts would have much smaller overall sway, that is what I said. Yes, raising taxes always brings in extra revenue but doing this right now could crash the economy completely at the same time. 

 

2 hours ago, nauseus said:

There is a danger that slowing the economy could trigger a recession, unemployment and, so, lower incomes. It may be too late to stop that happening already.

You also seemed unaware that interest rate increases reduce inflation by slowing the economy, but curiously seemed certain that tax increases slow the economy.  The gaps in your knowledge of economics give me the impression that your opinions are simply restatements of the biased nonsense spewed by wing-nut pundits on television.

 

I'm happy to be on your ignore list.

[nauseus]

19 minutes ago, heybruce said:

You didn't introduce the subject of tax increases, but you posted uninformed and misleading opinions on the subject.  For example:

 

 

You also seemed unaware that interest rate increases reduce inflation by slowing the economy, but curiously seemed certain that tax increases slow the economy.  The gaps in your knowledge of economics give me the impression that your opinions are simply restatements of the biased nonsense spewed by wing-nut pundits on television.

 

I'm happy to be on your ignore list.

Good because you're on it but unfortunately I can still see your post of twisted words, to fit your own biased, condescending and erroneous narrative. 

 

 

[placeholder]

3 hours ago, nauseus said:

There is a danger that slowing the economy could trigger a recession, unemployment and, so, lower incomes. It may be too late to stop that happening already.

Another thing I don't understand is why support a draconian cut in govt. spending if you're so concerned about the fragile state of the economy.

[heybruce]

9 hours ago, nauseus said:

Good because you're on it but unfortunately I can still see your post of twisted words, to fit your own biased, condescending and erroneous narrative.

There is nothing twisted about my words.  You clearly don't understand basic economics.

[placeholder]

Trump urges hardline position as debt ceiling talks paused: ‘Do not fold!!!’

“Republicans should not make a deal on the debt ceiling unless they get everything they want (Including the ‘kitchen sink’),” Trump wrote on Truth Social. “That’s the way the Democrats have always dealt with us. Do not fold!!!”

https://thehill.com/homenews/house/4012313-trump-urges-hardline-position-as-debt-ceiling-talks-paused-do-not-fold/

[dingdongrb]

I asked Bard if the US would be raising the debt ceiling before the deadline.

 

NOTE: I know the deadline was June 1st but then moved to June 5th.

 

.....but Bard's reply said July 31st. Can anyone tell me why Bard may be stating this date as I haven't heard/read anything.

 

Bard's reply (some of it):

 

"It is currently uncertain whether the US will raise the debt ceiling in time to avoid the deadline. The deadline is currently set for July 31, 2023. If the debt ceiling is not raised by then, the US will default on its debt, which would have a significant impact on the economy."

[ozimoron]

On 5/26/2023 at 5:27 PM, placeholder said:

Another thing I don't understand is why support a draconian cut in govt. spending if you're so concerned about the fragile state of the economy.

It's all about cutting out the free stuff for the poor, leaving more money in the budget for stuff they care about. Like reducing their own taxes.

[billd766]

IMHO the first thing to be cut should be EVERY senators and representatives salary and expenses, phone bills, cars, flights etc should all be frozen, and it should not be restored until it is the last item left.

[nauseus]

1 hour ago, billd766 said:

IMHO the first thing to be cut should be EVERY senators and representatives salary and expenses, phone bills, cars, flights etc should all be frozen, and it should not be restored until it is the last item left.

Don't forget the judges either, m'laud.

[kickstart]

As someone from the other side of the Atlantic, been fowling this as lot of political pundits have been saying on the radio for the past month, it is party politics, it will be resolved at the last moment, there is no way they will default.

 

[billd766]

1 hour ago, nauseus said:

Don't forget the judges either, m'laud.

I am up for that one as well.

 

I forgot them as they don't seem to be mentioned.

[jerrymahoney]

Debt ceiling news: 'An agreement in principle' is reached

 

https://www.nbcnews.com/politics/congress/live-blog/debt-ceiling-live-updates-rcna86529

[ThailandRyan]

23 minutes ago, jerrymahoney said:

Debt ceiling news: 'An agreement in principle' is reached

 

https://www.nbcnews.com/politics/congress/live-blog/debt-ceiling-live-updates-rcna86529

Here is another link that gives some more info.

 

McCarthy and Biden reach agreement in principle on debt limit - POLITICO

 

In addition to lifting the $31.4 trillion borrowing cap through the 2024 presidential election, the deal in principle would keep non-defense spending roughly flat for the fiscal year that begins Oct. 1, according to a person familiar with the negotiations, falling far short of the $130 billion in cuts at fiscal 2022 levels that Republicans had originally demanded.

 

Non-defense spending would increase by 1 percent in 2025, followed by years of non-enforceable funding targets, according to the person familiar. Republicans had initially pushed for a decade of strict funding limits.

 

.....McCarthy, speaking to reporters, touted that the deal had “historic reductions in spending,” no new taxes, no new government programs and would make reforms to “lift people out of poverty,” referring to the adjusted work requirements.

[Jingthing]

Has to pass the house.

The more extremist maga fascists under the orders of Mr. Trump will likely not approve it because Mr. Trump is demanding all or nothing. 

I don't know the vote numbers on that but the fat lady hasn't sung yet.

[billd766]

https://www.bbc.com/news/world-us-canada-65736734

 

The White House and the Republicans have agreed in principle to raise the US debt ceiling and avert a default after weeks of bitter negotiations.

The deal still needs to be approved by a divided US Congress.

President Joe Biden described the agreement as a "compromise", while House Speaker Kevin McCarthy said it "has historic reductions in spending".

The US Treasury earlier warned the country would run out of money to pay its bills on 5 June without a deal.

Such a default would upend the US economy and disrupt global markets.

The US must borrow money to fund the government because it spends more than it raises in taxes.

Republicans have been seeking spending cuts in areas such as education and other social programmes in exchange for raising the $31.4tn (£25tn) debt limit, a law that caps how much debt the US government can accrue.

[BenStark]

On 5/25/2023 at 12:56 AM, Jingthing said:

On 5/24/2023 at 10:54 PM, BenStark said:

What I don't understand is that, although the default is now almost a certain thing, the $ increases in value every day it comes closer.

 

I would have expected the opposite

The market is assuming that default won't happen because it has never happened in American history.

Thanks for your knowledgeable explanation.

 

Debt ceiling has been approved, and look. Don't give up the day job ????

 

Edited June 1, 2023 by BenStark

[placeholder]

6 hours ago, BenStark said:

Thanks for your knowledgeable explanation.

 

Debt ceiling has been approved, and look. Don't give up the day job ????

 

You don't seem to understand that there can be  more than one factor driving the value of a currency. Clearly you're not aware that the markets now have significantly lowered that odds that the Feds will raise interest rates again whereas the EU look like it will raise interest rates.. In addition, there's been a decline in US manufacturing output. So fears of a recession have grown stronger.

Other than these considerations, thanks for the great comment.

[ThailandRyan]

Let's hope that the senate does not stall this and cause a default. A default would be disastrous. This deal may not be good for both sides, but it keeps the spending in check and flat which should over time reduce the actual overall debt.