CBC's The National briefly covered the situation in the United States regarding the $14.3 trillion debt ceiling.

The BBC also carried an article on the subject on its website: http://www.bbc.co.uk/news/world-us-canada-13770390


Perhaps news sources from the United States provide further insight into the matter (please post links to articles, videos etc.)


So, what are your thoughts on the issue?


Should the United States increase its debt ceiling?

Yes, with agreed upon actual and substantial spending cuts.

Absolutely and of course. If the US defaults it'll make Lehman look like a bump in the road. The fact that politicians are playing with this fire I find more than a little scary. For that reason, I disagree with RJ. This should not be part of the political football. Want to hold the budget hostage? Fine. Want to hold funding for [insert special interest here] hostage? Again, that's fine. All part of legit politics.

The debt ceiling is NOT a legitimate political football. Mess it up and you could start the contagion of all contagions. We assume most politicians know this, but the way some of them talk, it scares the crap out of me.

Raise the debt ceiling after a balanced budget amendment is passed along with a 20% reduction in current budget levels. The reduce the debt ceiling to a much more fiscally responsible level. We all agree the 14.3TRILLION is crazy.

The talk coming out of the left in response to Republican demands over the debt ceiling has been pretty strong. "Blackmail" is what they're calling it, and if the Republicans allow the nation to default because the left says no to their demands, and thereby taking the nation over a cliff, they are committing political suicide (though if that happens political suicide will be the least of our problems.) I'm thinking the left is starting to realize this and may play a game of chicken. They know the constituency that cares the most about the ceiling are generally Republicans and that in the end Republicans will take care of their own.

My worry is that some of these new tea-partiers may see their constituency differently and believe some of the political rhetoric they are spewing and won't listen to their leadership when it comes time to blink. Scares the crap out of me. Remember the financial crisis trigger was Lehman's default. What happens when something 1000 times the size of Lehman defaults? We cannot know, but it cannot be good.

George,
Do you think there needs to be changes in the way the US government spends money? Does there need to be MAJOR changes? I would think we are in agreement that there does..
We have been on the edge of the debt ceiling before, and nothing has ever changed. Each time the ceiling is increased, the problem gets worse. If we don't change the way spending and debt is dealt with the problem will get worse. Why not stand for the changes that are needed, rather than just go with the status quo? If it will only get worse without the MAJOR changes that are needed, why make the problem worse by vacillating?

Yes, it will be bad if the credit rating is adjusted, or debts ceiling is reached. In my eyes, that is small potatoes compared to the problem growing larger without major changes.

b

Why not stand for the changes that are needed, rather than just go with the status quo? If it will only get worse without the MAJOR changes that are needed, why make the problem worse by vacillating

?

Can you define what will happen if the US defaults on its credit obligations? Do you believe the mayhem that Bernanke and others are predicting or do uou think they are exagerating or fibbing?
If they are right, defaulting would cause so much damage that the recent financial implosion will seem shallow.
Surely the debt eiling has to be taken out of the equation. Responsible people should be able to deal with the debt reduction without taking a chance on triggering another financial tsunami

I do believe that there will be chaos. How much worse will it be IF there are not any changes, just like before? Will it be less chaos or more chaos if no changes are made, and we approach the ceiling again (just as we always have before?)

Can I define what mayhem will occur? Somewhat. I agree that there will be chaos. The chaos will be worse if nothing changes... Surely we can agree on that.

What is the definition of insanity? doing the same thing and expecting different results. All I am saying is make drastic changes. Then, and ONLY then, increase the debt ceiling. What is irresponsible about that? Surely that can get done quickly if it is sooo important.

Oh wait, it took over a year to get a budget out of congress. That might be the problem. Crisis management, rather than the rule of 6 P's.

Prior Proper Planning Prevents Poor Performance.

Brad, you scare the crap out of me. I just hope that people in congress don't think the same way.

My nightmare scenario is an unholy alliance of the ultra-left who don't have any constituents with a money market account, Tea-Partiers who don't really understand how things work, and a few old guard republicans who are blinded by the belief that a declining economy will be good for their chances in 2012, teaming up to scuttle any deal and allowing a default, and utter chaos ensues. Chaos that makes the financial crisis seem like a walk in the park.

I don't want a default. Really I don't. I want things fixed, and fixed right. Don't you? Isn't it better to fix things? Can't we fix things and not default? That is why I said fix things and raise the debt ceiling. After the fixes begin to drop the debt, lower the debt ceiling.

Why is everyone afraid of fixing the problem?

How well do you fix things while a gun is being held to your head?

They must not even think there is a problem. Obama seems rather proud of how they handled things.

As far as bbauska is concerned geo it's a Mexican standoff

geojanes wrote:How well do you fix things while a gun is being held to your head?

Strange answer to my questions, George. I always thought it was poor etiquette to answer a question with a question.

I work well under pressure. Politicians should also. It is what we hired them for.

Really I don't. I want things fixed, and fixed right. Don't you? Isn't it better to fix things

If a default occurs, the damage to the economy will be severe and tax revenues will fall. again. Making the problem you want to fix worse.
Where the US currently borrows 40 cents of every dollar required to operate it may have to borrow 50 cents - but that 50 cents will cost even more...So you say, fine, only spend what you bring in...
Okay, you figure out what 50% of the spending would look like?
Defaulting would be suicidal. You don't solve problems by first making them worse .

geojanes wrote:How well do you fix things while a gun is being held to your head?

I get it. You're talking about the President holding a gun to the Republicans' (collective) head--threatening Armageddon if they don't give him a blank check.

Good point. On the other hand, there is the notion that our credit-worthiness is on the line, so maybe it's a good idea to cut some spending in a real way (not the smoke and mirrors that politicians prefer).