What is the worst that can happen if we do not raise the debt ceiling?

It cannot be permitted to happen. The US not funding the debt would be the equivalent of a family deciding to not pay the mortgage.As it is now the government pays off old debt by issuing new debt. That would be the same as someone taking out a loan to pay the mortgage . If they suddenly could not take that loan because they were maxed out ,then they would have no means to pay that mortgage . They would defaut on that house.

There would be a Treasury default.

Right now the Treasury Dept can shuffle some funds they have in reserve to temporarily stall it and can begin to make hard decisions on security issues . This includes the suspension of issuing securities to help state and local governments. But as this drags on then there would be a sovereign currency crisis . We would see in the US what we are seeing in Greece today.

This is all politics. In the dead of night there will be a bill signed to raise the debt ceiling. Perhaps the Republicans can get some concessions from the Dems and the President to save face. But in the end;they cannot be the ones that allows a sovereign collapse because they didn't raise the ceiling. They would've had an easier time holding the line on the threat of a shut down. But they folded like a cheap tent . This is not the place to make a stand .

Perhaps they can get tough on debt reduction with next year's budget. But not now. It would be suicide.
Raise the ceiling now ,and make a budget that has both debt reduction and pro- economic growth . That should be the goal . Focusing on cuts only or stimulation through spending increases like the Dems did 2009-2010 will not work .

All of those lovely little spending programs that give you such a warm glow cannot proceed and along with it are some big ones too. You are already seeing the consequences with funding for programs like medicare not being topped up sooner or later it means the bills don't get paid because the government can't borrow any more money. When this happens credit ratings will get down graded, and that translates to higher borrowing costs for the government and everyone else because no organisation or state can have a higher credit rating than the soveriegn credit rating. You shouldn't have taken that tax cut

Stop with the tax cuts already . Every time there have been tax cuts revenues increase. Leave it to a socialist to think increased taxes stimulate the economy . It's a one trick pony ....tax the rich ...tax the rich... tax the rich .. It's all they know.
You cannot tax your way out of this fiscal mess.

Let's start with the consolidation and elimination of duplicate government services. You could streamline the whole thing and eliminate whole depts of the bureaucracy.

You are right about spending on entitlements . America's demographics shows that the future ratio of beneficiaries to workers supporting the system will be tipped too heavily in favor of the beneficiary over the ones who will have to pay for it.

But talk to a "progressive " about reforms that involve choice and their head spins like Regan from 'The Exorcist' .

Exactly... if I was rich and had a big business... I'd move everything off shore where the tax structure didn't punish me for investing time, work and money... or shut down and mothball everything rather than be forced to operate at a loss.

Which not surprisingly so many actually do.

Stop with the tax cuts already . Everytime there have been tax cuts revenues increase. Leave it to a socialist to think increased taxes stimulate the economy . It's a one trick pony ....tax the rich ...tax the rich... tax the rich .. It's all they know.
You cannot tax your way out of this fiscal mess.

Let's start with the consolidation and elimination of duplicate government services. You could streamline the whole thing and eliminate whole depts of the bureaucracy.

You are right about spending on entitlements . America's demographics shows that the future ratio of beneficiaries to workers supporting the system will be tipped too heavily in favor of the beneficiary over the ones who will have to pay for it.

But talk to a "progressive " about reforms that involve choice and their head spins like Regan from 'The Exorcist' .

I think you miss the point Tom more revenue means less borrowing because the government has more money. It is pointless taxing the poor because 10% of nothing is still nothing. Now I would agree with you that spending programs need to be modified to fix your problems. America, like most developed economies, is sitting on an entitlement time bomb, you have seen the results of this in Greece, better to take the pill now and it does mean that eventually the rich will have to pay or move on to those lovelly little tax havens in the Caribbean. The old remedies don't work any more, you have had tax cuts and your economy is stagrant, you have had stimulation and your economy is stagnant, you have zero interest rates and your economy is stagnant, you have had fiscal easing and your economy is stagnant. What I suggest is if the rich won't spend their money, take it away and do something with it, there is a socialist thought for you to complain about

Means testing for the entitlement programs would make them whole in short order. But it would expose the ponzi scheme fraud that the socialists have burdened the free world with .Then again... this whole debt burden is the result of nannystatism.

The long term solution is to decouple us from the fraud .

As far as the debt goes ;extending the ceiling may buy some time. But the fiscal mess just gets worse. Sky asks what might happen.. How about investors of US Bonds getting a haircut on principle and interest (payout less than promised ) ? That is almost definitely going to happen to the European countries in a debt crisis . That is what happened to Latin American and South American nations that have been in a debt crisis before.
The IMF will dictate the terms if they can spring their boss from jail.

American bonds are held by almost everyone directly or indirectly because they have been considered the safest place to invest. Public and private pensions are heavily invested and of course China could wallpaper every home in Beijing with the bonds they hold.

Exactly....if I was rich and had a big business...I'd move everything off shore where the tax structure didn't punish me for investing time, work and money.....

With this administration you can't even expand to another state (http://www.thenewstribune.com/2011/04/20/1634171/ruling-boeings-south-carolina.html) without being punished.

With this administration you can't even expand to another state (http://www.thenewstribune.com/2011/04/20/1634171/ruling-boeings-south-carolina.html) without being punished.
Can you explain how that issue is pertinent to the Obama administration?

Means testing for the entitlement programs would make them whole in short order. But it would expose the ponzi scheme fraud that the socialists have burdened the free world with .Then again... this whole debt burden is the result of nannystatism.

Well of course you means test these programs even our socialists agree with that, in fact they are first in the queue to implement it. Can't give free money to your political rivals?


The long term solution is to decouple us from the fraud

The long term solution is to decouple you from the world.


As far as the debt goes ;extending the ceiling may buy some time. But the fiscal mess just gets worse. Sky asks what might happen.. How about investors of US Bonds getting a haircut on principle and interest (payout less than promised ) ? That is almost definitely going to happen to the European countries in a debt crisis . That is what happened to Latin American and South American nations that have been in a debt crisis before.
The IMF will dictate the terms if they can spring their boss from jail.

American bonds are held by almost everyone directly or indirectly because they have been considered the safest place to invest. Public and private pensions are heavily invested and of course China could wallpaper every home in Beijing with the bonds they hold.

Last I heard that solution was called repudiating the national debt. Most failed economies resort to it eventually, then the IMF bails them out with austerity campaigns. What a great pity there is no bigger economy than the US, oh wait, there is China who needs a market for its junk goods. So you are doing a roaring trade in wall paper these days, or is that shin plaster? But there will be no bailout for you you arrested the boss of the IMF

With this administration you can't even expand to another state (http://www.thenewstribune.com/2011/04/20/1634171/ruling-boeings-south-carolina.html) without being punished.

Yeah... isn't that a fact. They are refusing to let Boeing build a plant in North Carolina and Hire people from there. Apparently he didn't get enough campaign support last election from that state. And we know Chicago Politics is ALL about quid pro quo.

Exactly....if I was rich and had a big business...I'd move everything off shore where the tax structure didn't punish me for investing time, work and money..... Which not surprisingly so many actually do.Hello again, smoothy:

It's not the tax structure that sends companies off shore... It's the wage structure. Indeed, our corporate tax rate is high, but the deductions are generous - so much so, as to result in MANY corporations paying NO taxes at all. The talk about high corporate taxes is just so much hot air..

I could take my company off shore, but I like hiring American workers. Yes, I'm willing to spend MORE to do it, too. Plus, it's PATRIOTIC to keep my company here.. I LOVE my country. I'm here to HELP it.

excon

Hello again, smoothy:

It's not the tax structure that sends companies off shore... It's the wage structure. Indeed, our corporate tax rate is high, but the deductions are generous - so much so, as to result in MANY corporations paying NO taxes at all. The talk about high corporate taxes is just so much hot air..

I could take my company off shore, but I like hiring American workers. Yes, I'm willing to spend MORE to do it, too. Plus, it's PATRIOTIC to keep my company here.. I LOVE my country. I'm here to HELP it.

excon
Tax structure plays a big part... and I agree, not the ONLY part. But like wages... Taxes also push up costs and thus prices. The USA has among the highest corporate taxes in the world. Add the fact even the prospect of our minimum wage would have the Chinese popping off in their pants like a 13 year old with a Sports Illustrated swimsuit edition. Its no wonder business owners got tired and just moved things to were they were more appreciated.

Yeah a lot of people would LIKE to buy American... but can't afford to thanks to the Screw the businesses and screw the rich policies they left has been pushing driving up costs for EVERYTHING, and driving all the good jobs that were once here overseas.

When it comes to paying rent, and putting food on the table thanks to the current Obama induced Economy.. its no wonder Buy American takes a back seat, few people can actually afford to.

Our corporate tax rates are now the highest in the world ;and yes there are some loopholes to compensate... and yes some companies take advantage of them and pay no taxes. But the vast majority are overtaxed .

That wouldn't be corporations like the oil companies .They pay a fortune to the US Treasury . They are not friends of Obama. GE is a friend of Obama... they paid no taxes. No one is talking about their subsidies being revoked.

The tax system needs an overhaul.That too is part of the problem . There are too many loopholes indeed . Most of them are the result of political payback.
Iowa is the 1st State that decides in the primaries... no problem give the corn growers generous subsidies to destroy the agriculture industry ,the energy industry ,and the environment... causing massive food market distortions here and around the world .

GE is a friend of Obama ...they paid no taxes. That's been proven to be a lie: GE and Taxes | GE Reports (http://www.gereports.com/setting-the-record-straight-ge-and-taxes/)

What ? The NY Slimes lie ? Never . The Grey Lady is the paper of record ;the gatekeepers of truth . Bwaaaahaaahaaahaaaaaa!!

Well the thing that isn't a surprise here was you reposting right-wing disinformation talking points without fact checking anything... again.

If the Slimes is the source why do any source checking ? You on the other hand use a GE response and call it the truth . Did you fact check their reply ? NOPE

I didn't try to smear anyone, you did.

Smear ? Au contraire .I admire their ability to scheme a flawed system . It's not their fault the system is so screwed up . They were just better than most because they managed to get their "hopenchange" .

I'm just saying that if our tax system wasn't so punitive to business there would be no need to game the system.

Canada's Effective corporate tax rate is 16.5%. That's double the US. You say I should admire the Canadian system. That's one part of it I do. Smoothy is right . The tax rate and regulatory culture forces companies to do things like move off shore and game the system for every advantage despite Excon's use of the Biden ploy of a call to patriotism.

Our corporate tax rates are now the highest in the world ;and yes there are some loopholes to compensate ...and yes some companies take advantage of them and pay no taxes. But the vast majority are overtaxed .

.

You make this claim but the facts don't actually bear it out. The question of tax can only really be measured as a take out of GDP. At 28.2% the US rates in mid range well behind countries like Canada and Australia who are much higher.Rather than being among the highest taxing nations you are the lowest of the developed nations. It sounds to me like much bleating from the sheep being sheared
List of countries by tax revenue as percentage of GDP - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/List_of_countries_by_tax_revenue_as_percentage_of_ GDP)

The tax rates are what they are. What does total revenue from taxes to do with the corporate rates ? If anything it suggests my point that lower rates stimulate the economy and increase revenues . This was true when Jack Kennedy ,Ronald Reagan and GW Bush cut taxes. Revenues were never greater .

It is no longer competitive for American companies dealing with companies that pay less than half the US corporate rates.

The tax rates are what they are. What does total revenue from taxes to do with the corporate rates ? If anything it suggests my point that lower rates stimulate the economy and increase revenues . This was true when Jack Kennedy ,Ronald Reagan and GW Bush cut taxes. Revenues were never greater .

It is no longer competitive for American companies dealing with companies that pay less than half the US corporate rates.

Tom those companies have established themselves in the developing countries for a reason and it isn't lower tax. As an accountant we have a business maxim; tax shouldn't drive the business. If you wish to compete with the alsoruns, well go ahead but your policies and outcomes give the lie to lower tax stimulates the economy. Spending is what stimulates the economy, sometimes with the wrong result, but the money must flow and if private enterprise won't provide the flow inside your nation then the government must fill the vacuum. Germany has significantly higher taxes than you do yet it is the economic powerhouse of Europe. Australia completed a complete turnaround of its economy with a much higher tax regime than it has today. Tax was only really reduced when we got the balance right and taxed the black economy enabling reform of the entire system. What you need to realise is you don't need lower tax you need uniform tax so the various parts of your economy aren't competing with each other. Giving subsidies and incentives through the tax system provides false signals

How to you tax a "black" economy... that is off the books and unaccountable?

How to you tax a "black" economy....that is off the books and unaccountable?

You do it with a consumption tax, what we style a goods and services tax, which is applied at every level and every business must collect and account for.. Our forward estimates of the impact were found to be grossly underestimated and I am aware of businesses who closed rather expose their earnings not only to the tax, but to the inevitable inclusion in the income tax regime.

The money will inevitably be spent somewhere, and when it is, the tax is collected. Kerosene tins of money in the backyard are a poor investment

Yeah layer and layer of multiple taxation on the same item. Already prices are becoming burdensome . What happens when layers of taxes are added to goods ? Can't collect much revenue if people don't purchase.

Can't collect much revenue if people don't purchase.

Well that might be so but the rich aren't confined and they pay. There are more luxury cars on the road than there used to be, the waterways teem with yachts and there are tourists coming and going, You have to tax it all, but in an economy which has shut down it doesn't matter what the tax base is, there is less revenue, but what your "less tax lobby" forgets is less tax, then less expenditure, less nice rich government contracts to get fat on

By the way it isn't layer of tax on layer of tax it is that the end user pays the tax, but the mechanism takes a little at each stage so avoidence is limited. If you buy wholesale you still pay tax. At whatever level the supply chain stops the tax is paid. It means there are millions of tax collectors, like pirannas taking a little nibble here and there

You do it with a consumption tax, what we style a goods and services tax, which is applied at every level and every business must collect and account for.. Our forward estimates of the impact were found to be grossly underestimated and I am aware of businesses who closed rather expose their earnings not only to the tax, but to the inevitable inclusion in the income tax regime.

The money will inevitably be spent somewhere, and when it is, the tax is collected. Kerosene tins of money in the backyard are a poor investment
Believe it or not... THAT is pretty easy to cheat on. Particularly for a cash business.

Trust me... Italy has an IVA which is otherwise known as a VAT in English speaking countries. And I've been getting around that for the most part for 25 years.

but what your "less tax lobby" forgets is less tax, then less expenditure, less nice rich government contracts to get fat on

And that's a problem why ?


it is that the end user pays the tax,
Exactly my point. Taxes get passed on in prices no matter how you tax businesses ,especially VAT taxes .

Still I'd go along with it if there were reciprical reductions in income taxes . At least with consumption taxes the consumer knows when they are getting screwed . The government cleverly deducts from payroll to hide it from the worker.

Believe it or not....THAT is pretty easy to cheat on. Particularly for a cash business.

Trust me....Italy has an IVA which is otherwise known as a VAT in English speaking countries. And I've been getting around that for the most part for 25 years.

The only way you can cheat on it is not spend the money, buckets of cash going nowhere. Oh you may not account for your part of the tax to the government but the tax is paid when you spend or if you pay in cash when someoneelse spends, it is paid somewhere in the system. It has been paid before the goods reached you and it is paid when the money is spent. What you are saying is you also cheat on your income tax but you cannot be invisable. Why do you think they wrote that stupid provision in the health bill to identify transactions, they know people are cheating

The only way you can cheat on it is not spend the money, buckets of cash going nowhere. Oh you may not account for your part of the tax to the government but the tax is paid when you spend or if you pay in cash when someoneelse spends, it is paid somewhere in the system. It has been paid before the goods reached you and it is paid when the money is spent. What you are saying is you also cheat on your income tax but you cannot be invisable. Why do you think they wrote that stupid provision in the health bill to identify transactions, they know people are cheating

Really... how about if the business gives you a break on price and does it without a receipt, off the books, they pocket the difference, and no business can account for every single item they take in vs sell. They don't pay the VAT on the sale because the sale never officially took place. Remember no receipt and it never passed the cash register. Thus it never happened. No sale.. no tax. I've been doing it and getting away with it for 25 years now. Not on EVERYTHING... but a lot of things.

Real easy way to get a chunk of your business off the books and NOT collect or pay that VAT. Got to love cash businesses.

Really....how about if the business gives you a break on price and does it without a receipt, off the books, they pocket the difference, and no business can account for every single item they take in vs sell. They don't pay the VAT on the sale because the sale never officially took place. Remember no receipt and it never passed the cash register. Thus it never happened. No sale..no tax. I've been doing it and getting away with it for 25 years now. Not on EVERYTHING....but a lot of things.

Real easy way to get a chunk of your business off the books and NOT collect or pay that VAT. Gotta love cash businesses.

The reality is you are not listening, the tax gets paid before it gets to the retailer so if the transactions is off the book the retailer has paid the tax admittedly a sightly smaller amount but paid nevertheless when he paid his supplier. For what you are proposing to work there would have to be a complete cash economy and we know the cash economy is steadily giving way to electronic payment and at that point everybody pays.. One individual might get a small break but most don't. This is why we abolished our inefficient sales tax system, so many people were cheating and claiming exemptions they weren't entitled to, or running these cash businesses. As I said the tax gets paid somewhere, if not you then the guy who put the cash in his pocket, he has to spend it somewhere. What happened here is the government collected so much reveneue it gave out massive tax breaks to everyone. There is an economic theory called the multiplier effect and this is how you benefit from it

The reality is you are not listening, the tax gets paid before it gets to the retailer so if the transactions is off the book the retailer has paid the tax admittedly a sightly smaller amount but paid nevertheless when he paid his supplier. For what you are proposing to work there would have to be a complete cash economy and we know the cash economy is steadily giving way to electronic payment and at that point everybody pays.. One individual might get a small break but most don't. This is why we abolished our inefficient sales tax system, so many people were cheating and claiming exemptions they weren't entitled to, or running these cash businesses. As I said the tax gets paid somewhere, if not you then the guy who put the cash in his pocket, he has to spend it somewhere. What happened here is the government collected so much reveneue it gave out massive tax breaks to everyone. there is an economic theory called the multiplier effect and this is how you benefit from it

But that's NOT how VAT works in most of the world. It does work exactly how I described it... and the way around it is exactly how I described it. I know more than a couple business owners in Europe... and that's exactly how I know how its implemented there and how it can be circumvented.

But that's NOT how VAT works in most of the world. It does work exactly how I described it...and the way around it is exactly how I described it. I know more than a couple business owners in Europe....and that's exactly how I know how its implemented there and how it can be circumvented.

Yes well some people in this world are innovative enough to stop the cheats even if it means a monolithic administration system that imposes compliance costs. I recommend your nation adopt our model and then you will have earned your tax cut. It is simple, each link in the production chain from the primary producer to the retailer pays to the government a percentage of their selling price (tax included) after deducting the tax on imput costs they have paid, So in reality the only imput cost that hasn't been taxed is labour. It is a good measure of how a business is going, if you don't have a tax liability, should you be in business? Businesses have to register with the government and this allows the tax returns to be cross corrolated with income tax records and other sources of data regarding business operators. It works well for contractors too, no registration, a masssive withholding is mandated.

There is a let out, if your business is below a certain threshold, you are exempt from participating but you can't claim the tax on your imputs you just pay. It's good for startups too, they can get back the tax in setup costs before they are making a profit

These are all the programs that the new Republican House has proposed cutting.

* Corporation for Public Broadcasting Subsidy. $445 million annual savings.
* Save America 's Treasures Program. $25 million annual savings.
* International Fund for Ireland . $17 million annual savings.
* Legal Services Corporation. $420 million annual savings.
* National Endowment for the Arts. $167.5 million annual savings.
* National Endowment for the Humanities. $167.5 million annual savings.
* Hope VI Program.. $250 million annual savings.
* Amtrak Subsidies. $1.565 billion annual savings.
* Eliminate duplicative education programs. H.R. 2274 (in last Congress), eliminates 68 at a savings of $1.3 billion annually.
* U.S. Trade Development Agency. $55 million annual savings.
* Woodrow Wilson Center Subsidy. $20 million annual savings.
* Cut in half funding for congressional printing and binding. $47 million annual savings.
* John C. Stennis Center Subsidy. $430,000 annual savings.
* Community Development Fund. $4.5 billion annual savings.
* Heritage Area Grants and Statutory Aid. $24 million annual savings.
* Cut Federal Travel Budget in Half. $7.5 billion annual savings
* Trim Federal Vehicle Budget by 20%. $600 million annual savings.
* Essential Air Service. $150 million annual savings.
* Technology Innovation Program. $70 million annual savings.
* Manufacturing Extension Partnership (MEP) Program. $125 million annual savings.
* Department of Energy Grants to States for Weatherization. $530 million annual savings.
* Beach Replenishment. $95 million annual savings.
* New Starts Transit. $2 billion annual savings.
* Exchange Programs for Alaska , Natives Native Hawaiians, and Their Historical Trading Partners in Massachusetts . $9 million annual savings
* Intercity and High Speed Rail Grants. $2.5 billion annual savings.
* Title X Family Planning. $318 million annual savings.
* Appalachian Regional Commission. $76 million annual savings.
* Economic Development Administration. $293 million annual savings.
* Programs under the National and Community Services Act. $1.15 billion annual savings.
* Applied Research at Department of Energy. $1.27 billion annual savings.
* FreedomCAR and Fuel Partnership. $200 million annual savings.
* Energy Star Program. $52 million annual savings.
* Economic Assistance to Egypt . $250 million annually.
* U.S. Agency for International Development. $1.39 billion annual savings.
* General Assistance to District of Columbia . $210 million annual savings.
* Subsidy for Washington Metropolitan Area Transit Authority. $150 million annual savings.
* Presidential Campaign Fund. $775 million savings over ten years.
* No funding for federal office space acquisition. $864 million annual savings.
* End prohibitions on competitive sourcing of government services.
* Repeal the Davis-Bacon Act. More than $1 billion annually.
* IRS Direct Deposit: Require to deposit fees for taxpayer services to the Treasury, instead its budget. $1.8 billion savings
* Require collection of unpaid taxes by federal employees. $1 billion total savings.WHAT!!
* Prohibit taxpayer funded union activities by federal employees. $1.2 billion savings over ten years.
* Sell excess federal properties the government does not make use of. $15 billion total savings.
* Eliminate death gratuity for Members of Congress.
* Eliminate Mohair Subsidies. $1 million annual savings.
* Eliminate taxpayer subsidies to the United Nations Intergovernmental Panel on Climate Change. $12.5 million annual savings
* Eliminate Market Access Program. $200 million annual savings.
* USDA Sugar Program. $14 million annual savings.
* Subsidy to Organisation for Economic Co-operation and Development (OECD). $93 million annual savings.
* Eliminate the National Organic Certification Cost-Share Program. $56.2 million annual savings.
* Eliminate fund for Obamacare administrative costs. $900 million savings.
* Ready to Learn TV Program. $27 million savings..
* HUD Ph.D. Program.
* Deficit Reduction Check-Off Act.

* TOTAL SAVINGS: $2.5 Trillion over Ten Years

My question is, what THE HECK is some or all of this doing in the budget in the first place?

Didn't know the Wilson center got a grant. I wonder if other 'think tanks ' get similar funding . Yeah yeah.. they call themselves non-partisan and non-advocacy.. Right.

These are all the programs that the new Republican House has proposed cutting.

My question is, what THE HECK is some or all of this doing in the budget in the first place?

Sounds like a great place to start, they should throw in the joint strike fighter while they are at it and save us both a lot of money

they should throw in the joint strike fighter while they are at it and save us both a lot of money

Yup... but only if the build more Raptors.

yup ...but only if the build more Raptors.

And where are you going to use those? On the Mexican border? No just bring the ones you have back from Afghanistan and withdraw support of Pakistan, more billion dollar savings