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Debt ceiling?

 
 
maxdancona
 
  2  
Reply Thu 19 Sep, 2013 10:02 pm
@Buffalo,
Do you have a clue of how Obamacare really works?
0 Replies
 
Ragman
 
  2  
Reply Thu 19 Sep, 2013 10:26 pm
@Buffalo,
Quote:
I hope your debt to income ratio is better than Obama's ...


It isn't Obama's. It is Congress's.
0 Replies
 
Romeo Fabulini
 
  1  
Reply Fri 20 Sep, 2013 08:01 am
I've never been in debt in my life, and I don't have a credit card, is there something wrong with me?
maxdancona
 
  1  
Reply Fri 20 Sep, 2013 08:25 am
@Romeo Fabulini,
Nothing wrong with that, although it is a bit surprising. You never took out a loan for school, or financed a car, or used a mortgage to buy a house?

Personally I could not have possibly gone to college without going into debt. And, this debt has paid off handsomely for me. The cars I borrowed to get, especially early in my career, probably paid off too because it meant I could get to work.
Romeo Fabulini
 
  1  
Reply Fri 20 Sep, 2013 11:02 am
@maxdancona,
I never had the slightest desire to buy into college or buy a car or a house..Smile
maxdancona
 
  1  
Reply Fri 20 Sep, 2013 11:04 am
@Romeo Fabulini,
Borrowing money to go to college was incredibly profitable for me. It was, by far, the best financial move I have ever made.
Romeo Fabulini
 
  1  
Reply Fri 20 Sep, 2013 11:23 am
@maxdancona,
I was glad to leave school and get out into the big wide world with just a couple of minor exam passes, and the thought of paying to go onto college never entered my head.
And I can honestly say that my lack of diplomas never held me back in the slightest and I could talk my way into most jobs by simply being great at interviews.
Sir Alan Sugar summed it up when he said- "You might look good on paper, but it's PERSONALITY that opens doors", and I can vouch for that fact..Smile
maxdancona
 
  1  
Reply Fri 20 Sep, 2013 11:44 am
@Romeo Fabulini,
That depends on what field you are in. My field (engineering) has a specialized knowledge base. A degree is a necessity. I make a very nice salary that I couldn't possibly make had I not received a university degree (especially since I don't have a personality).

It is a mathematical truth that as a whole, people with university degrees earn substantially more than people without college degrees. (And in university one learns that anecdotes don't change the mathematical facts).
Romeo Fabulini
 
  1  
Reply Fri 20 Sep, 2013 02:13 pm
@maxdancona,
When I left school I had no ambition to do anything and was happy to take various jobs that didn't need qualifications.
The size of a pay packet and possessions never interested me much either, and I never wanted to get married or have kids.
Looking back i often think I should have been a monk because I like the simple uncomplicated life..Wink
Kolyo
 
  1  
Reply Fri 20 Sep, 2013 07:36 pm
@maxdancona,
maxdancona wrote:

It isn't the credit card company setting the limit. The United States has even come close the amount of money that people are willing to lend us. The United States has a credit rating that is high and can borrow right now with a pretty low interest rate.

We have not maxed out our credit card limit. This is a limit set by us.


Good point, Max. You debunked his analogy. Too bad he completely ignored you.
0 Replies
 
maxdancona
 
  1  
Reply Sat 21 Sep, 2013 01:52 am
@Romeo Fabulini,
That's fine for you, I make no value judgement. I am simply saying that from a purely subjective economic viewpoint, where the goal is to maximize the amount of money that you end up with, going into debt is often a smart idea.

If you don't care about money, then of course this argument is irrelevant.


0 Replies
 
JPB
 
  1  
Reply Sat 21 Sep, 2013 06:41 am
I hate debt. Personal debt or public debt. It's fine to have credit for when you need it; it's a problem when your budget (personal or public) relies on increasing debt in order to sustain your lifestyle. In those cases it's time to trim your lifestyle back to the point where you're living within your means, including slowly reducing your debt obligations to the point where there are none. Getting a raise would help too so long as you didn't turn around and spend it all on a new TV that costs more than the raise itself.

That said, Congress refusing to raise the debt ceiling in order to pay the bills for spending THEY approved in the first place is insanity. I have no problem whatsoever with reducing the size of the public budget. In fact, I heartily endorse it beginning with $10B/year to the NSA. But, therein lies the rub. We all (or many of us) bitch about the size of the budget and the need for debt increases, but we seldom agree where the cuts should be made.

Max and I will disagree on whether our spending is out of control. His position is that we're not out of control so long as there are people (typically other countries) willing to loan us money. My position is that any budget deficit not intended to meet emergency needs, and a willingness by the American people to buy the bonds necessary to pay it off, is overspending.

But that STILL doesn't mean we don't have to raise the debt ceiling in order to pay for our Congressionally appropriated spending.
JPB
 
  1  
Reply Sat 21 Sep, 2013 06:54 am
@JPB,
I'll add a caveat to what I said above. Keeping with the personal/public analogy, increasing debt is fine so long as there are enough assets to pay off the obligations upon death. I don't care if someone doesn't leave an inheritance to their family. The value of personal property that can be sold off at the end of life should be taken into account when deciding if someone is or isn't living within their means. Putting that in terms of public debt, I don't think any of us are looking to the day when the US has to pay it's creditors because we've reached the end, but it's arrogant to assume that day could never come.
0 Replies
 
Romeo Fabulini
 
  1  
Reply Sat 21 Sep, 2013 09:58 am
Can we get a simple guide to national economics somewhere, I've surfed around and looked at a few youtube vids but they're too complicated for me.
The way I see it, American taxpayers pour billions of dollars into the US Treasury, so how on earth can America have a national debt?
Where has all that money gone?
JPB
 
  1  
Reply Sat 21 Sep, 2013 12:17 pm
@Romeo Fabulini,
http://www.cbpp.org/images/cms/WhereOurTaxDollarsGo-f1_rev4-12-13.jpg

Source
RABEL222
 
  2  
Reply Sun 22 Sep, 2013 12:06 am
@Buffalo,
I am retired now at 78 years of age but I worked for 65 years before I retired. I also paid for health insurance and still do. I raised 3 kids and a grand daughter during my working years. You are just what has been described as a tea bagger. You let me and people like me send you to school for an education. You let people like me build the road you drive your car on. You let us spend our money on infrastructure for your benefit and now are crying like a baby about having to pay your share. Yep, your a cry baby tea bagger.
0 Replies
 
Romeo Fabulini
 
  1  
Reply Sun 22 Sep, 2013 04:31 am
@JPB,
Thanks for that pie chart showing where the money goes, but how does debt come into it?
For example suppose 10 billion tax dollars pours into the US Treasury every week, why isn't it just neatly sliced up?
Does the govt spend MORE than 10 billion each week?
JPB
 
  2  
Reply Sun 22 Sep, 2013 05:29 am
@Romeo Fabulini,
The President submits an annual budget. It typically includes more spending than revenues because we've gotten used to deficit spending. Congress ignores the budget and approves a Continuing Resolution (you'll see it in the press as a CR) that keeps the government running without an approved budget. It too contains much more in spending than in revenues.

Max is right. At current interest rates, borrowing is cheap. People differ on whether or not that means we should continue to outspend our revenues. As you can see from the chart, 6% out our spending goes to paying off our debt. That's 6% too much for people like me who think interest payments are tantamount to flushing revenues down the toilet.

There are some who think we need a Balanced Budget Amendment to force the gov't to do just what you said - take the revenues and divvy it up. There are others (most) who feel that the government needs the capability to borrow. There's another group <raises hand> who believe the government needs the capability to borrow, but that it should be an emergency situation and the loan should primarily be made by the American people via US Savings Bonds and Treasuries.

I'm old enough that I remember the push to buy US Bonds in elementary school. We brought in a quarter, or 50cents, or 1$ per week and got little stamps on a card. After a certain # of weeks the cards were turned in to the bank and the bank gave you a Savings Bond that would eventually double in value. It was part of the school curriculum that taught kids to save and to invest in their country. Kids who couldn't afford the 0.25/week didn't go to that class. We barely had food in our household, but my parents thought it was important to learn to save and pay off debt obligations so they scraped up the quarter every week.

Our schools don't teach those lessons any longer, and Bonds are barely worth the paper they're printed on. Times have changed and we've become a debtor nation.
0 Replies
 
Romeo Fabulini
 
  1  
Reply Tue 24 Sep, 2013 05:31 am
All that economic mumbo-jumbo is way over my head. For example regarding the National Debt, who is the nation in debt TO?
Have they borrowed it from some other country or what?
And does the fact that the nation is in debt mean the politicians have somehow messed up their handling of the nations taxes?
maxdancona
 
  1  
Reply Tue 24 Sep, 2013 07:23 am
@Romeo Fabulini,
The US borrows money by selling "bonds". Anyone can buy them.

A little over half of US debt is owned by US citizens or companies. If you have a 401K, you probably have some yourself (in other words you have loaned the US government money with interest).

The rest is owned overseas.
 

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