Obama says U.S. can't afford more showdowns over debt, deficits

Comments (108)
minipaws wrote:

IOUSA – proof that democracy doesn’t work!

Jan 05, 2013 7:00am EST  --  Report as abuse
marinevet69 wrote:

Obama must be willing to abandon his holier than thou attitude to get a deal done. All factions involved are not going to be happy with the eventual deal, but, the only way to get this done is compromise by all. Senate democrats are going to have to disregard yhe extreme liberal wing of their party, likewise the republican house with the tea party. When it is over no one faction should be able to claim victory and our elected officials will have to accept that they will have ruffled the feathers of some in their respective districts and states. They must have the courage to risk re-election for the good of the country.

Jan 05, 2013 7:26am EST  --  Report as abuse
cactus02 wrote:

Obama was given most of the taxes he wanted now is the time for the Democrats to get serious about entitlement and medicare reform. I remember the little girl,”Mister ,stop digging”.

Jan 05, 2013 7:59am EST  --  Report as abuse
tmc wrote:

The republicans, spurred by Grover Norquist, do have a very valid point. The democrats always say implement the tax hike now, then we’ll make cuts, or more cuts, but then they never do. Spending continuously goes up. It must stop NOW. We of the Gen X and younger are getting really tired of paying fore all the stuff that you promised yourselves, and making weapons of mass destruction.
Instead of increasing the debt limit, CUT spending at a rate of two thirds defense cuts, one third spending cuts. Yes, we’ll loose a few more jobs from defense cuts. Prepare by moving long term un-employed to a new and improved welfare system (the jobs are not coming back any time soon) so the newly unemployed can go on unemployment for a while.

Jan 05, 2013 8:00am EST  --  Report as abuse
PKFA wrote:

Well, ok then, Mr. President. Put some cuts on the table.

Jan 05, 2013 8:06am EST  --  Report as abuse
sylvan wrote:

More threats of more stunts from the little boys in the GOP. Now jump in your clown car and drive off. After all, we have a magic coin.

Jan 05, 2013 8:17am EST  --  Report as abuse
zy-yz wrote:

“Obama says U.S. can’t afford more showdowns over debt…” — then — CUT SPENDING (which he pretty much refuses to do). What a bigmouth, another “Huey Long” populist demagogue, or maybe Hugo Chavez of Venezuela is the better analogy.

Jan 05, 2013 8:25am EST  --  Report as abuse
johnwayland wrote:

When Obama actually cuts the deficit , then he will have some degree of honesty in his comments. Until then , it is all just hot air.

Jan 05, 2013 8:25am EST  --  Report as abuse
MrScott wrote:

In other words let us spend as we want without restraint.

Jan 05, 2013 8:26am EST  --  Report as abuse
Johan-Doh wrote:

NOW and not before the “fiscal cliff”? Now that the debt ceiling is upon him and he is at a position of weakness, that’s why he doesn’t want a showdown, NOW.

Jan 05, 2013 8:27am EST  --  Report as abuse
CDouglas wrote:

Pass a budget, which is the only constitutionally mandated process to fund the government. Whether they be and (R) or a (D), they put their pork into every bill that is passed. Math apparently does not matter to these people.

Jan 05, 2013 8:28am EST  --  Report as abuse
Hawk420 wrote:

The only way your going to get any cuts during the sequester talks is by raising more revenue Tax rate hikes or cuts in deductions
That is it GOPeeers

Jan 05, 2013 8:39am EST  --  Report as abuse

To sylvan:

Try to understand this concept: The democratic process is cooperative give and take, a consensus building exercise not a policy driven dictatorial edict issued by fiat.

Jan 05, 2013 8:51am EST  --  Report as abuse
rwmccoy wrote:

So much for building a consensus. President Obama is as trapped by his ideology as the Republicans are. It will be a lively six weeks.

The president’s opinion is essentially correct about other’s paying the price for brinkmanship, but I wonder if he is part of the solution or the problem.

Perhaps some remedial lessons in leadership would be in order.

Jan 05, 2013 8:54am EST  --  Report as abuse
SeventhMan wrote:

If all in the above article by Jeff Mason is reasonably accurate, then it is safe to say, the President’s take on the issue of continued stalled talks, on fiscal cliff, is foregone. What is now or should be on the table is debt and deficit reduction… meaning a probable tax increase at some point. “But!” Nothing, I repeat not one political piece of legislation should hinder consumer confidence or momentum at this point or the slight upward mobility of the manufacturing sector. Federal revenue, a big talking point in 2012 by reactionaries in the Republican Party, I’m confident, will be possible due to the passage of the fiscal cliff legislation very soon. The Hill can’t afford to hurt or discourage consumers at this crucial point in time, i.e. no more politicking. Politicians have got to let consumers do what they do best and that is to spend money on good reliable, needed, and wanted products… preferably made in America.

Jan 05, 2013 8:57am EST  --  Report as abuse
johnwayland wrote:

“Balanced” implies there will be cuts in the Government, however Obama fails to keep his promises.

Jan 05, 2013 9:05am EST  --  Report as abuse
USA4 wrote:

B.O. almost seems like a child with the silly comments he makes and his approach to leadership and negotiation. It is lost on me why anyone thinks that he is intelligent.

Jan 05, 2013 9:25am EST  --  Report as abuse
libertyville wrote:

To Obama these debt ceilings are an inconvenient truth. To the American people it’s the only thing holding back his unrestrained spending and sustaining our future.

Jan 05, 2013 9:25am EST  --  Report as abuse
Harry079 wrote:

“Obama says U.S. can’t afford”

Buying $85 billion a month in securities to keep the markets happy.

This alone will cost nearly $1 Trillion dollars this year.

Jan 05, 2013 10:00am EST  --  Report as abuse
SDaignault wrote:

The idea of ‘correcting/simplifying the tax code to close loop holes not available to the general public’ is another meaningless concept like ‘quantitative easing is going to create good jobs’. Until concepts like there are written out in detail and made measureable in practice, deep pocket interests are going to pervert the intents of these legislative activities.

The last thing special interests want are closed loopholes. These interests won’t parade their determination in the media, but, the backroom dealing to ensure loopholes remain or are replaced by other loopholes will be relentless. Responsible tax code legislation is desperately important and pretty much impossible, in my opinion, with our present system. Tying it to spending is insane. The idea that we have to fix the tax code in order to reign in our spending doesn’t make sense to me.

As an aside, I am also disturbed by Obama’s willingness to draw lines in the sand that sound to me like, “Do what I say or else.” … “We can’t have more showdowns.” What does a statement like that accomplish? It lands on the front page of a paper or website and incites the people who read it. Does it help policy making???

Jan 05, 2013 10:04am EST  --  Report as abuse
Rollo2 wrote:

I don’t recall ever seeing a more dishonest, divisive or incompetent person than Obama. Washington is dysfunctional and filled with incompetence but Obama has created a hostile environment beyond what existed under any former president. The dangerous thing is he is not even aware of the depth of his incompetence and dishonesty. He has abused the office of President. We need to start finding and demanding accountability and honesty from ALL our elected officials before it is to late.

Jan 05, 2013 10:05am EST  --  Report as abuse
wildabeast wrote:

Obama is intelligent in that he has convinced the voting public that his agenda is best for America and they believe it. He got the republicans to vote for a tax increase which was no small accomplishment. One could argue that the republicans won by keeping the taxes the same for most tax payers. The truly wealthy that receive income and pay their taxes thru carried interest are untouched (political donors). But taxes did just go up on the majority of taxpayers. We are free spending money people that haven’t even been born yet are paying for with no restraint in site. And the voting public believes this is the way to go.

Jan 05, 2013 10:08am EST  --  Report as abuse
Perv889966 wrote:

A dysfunctional tax-and-spend President telling us what we cannot afford. How about that?

What we cannot afford is spending that increases the national debt.

Jan 05, 2013 10:25am EST  --  Report as abuse
QuarkHadron wrote:

We can’t ‘afford’ more showdowns over debt, deficits – but we CAN ‘afford’ more debt and deficits….. What an interesting way of thinking….

(You may have to think about that for a minute to see the irony.)

Jan 05, 2013 10:27am EST  --  Report as abuse
Abulafiah wrote:

It is pretty much a foregone conclusion that the GOP will onecs again behave like a pck of spoiled brats and hold the US economy hostage to try and force their minority views onto the majority.

Three things could happen.

The first is that Obama passes an executive order, and avoids the whole problem. This would be the ideal, and of course the Republicans would be howling fit to burst, but in reality their is not much they could do about. Sadly, I doubt Obama will do that.

The second is that he stands his ground and plays chicken, the ceiling is not raised, the US defaults on payments owed and the whole system collapses. That would be the end of the Republican party, but the price is too high so I don’t think Obama would be willing to pay it.

The third is that Obama plays his usual act of being the last reasonable man in Washington, agrees to the spending cuts as the EU did, and the USA follows the EU into endless stagnation. Expecting the same action to get different results, as the right-wing are doing, is insanity.

Unfortunately for the USA, I think the third-action is the most likely. The GOP will achieve their aim of sabotaging the US economy.

Jan 05, 2013 10:46am EST  --  Report as abuse
InMotion wrote:

Congress needs to come up with spending cuts that look like this: First cut – foreign aid, 2nd – welfare to profitable corporations, 3rd – defense, 4th – congressional staff and entitlements, 5th – change welfare to a works program so that we get value for the $$, 6th – close corporate loopholes, 7th – eliminate ax breaks for companies moving off shore. After doing all of that, then, if necessary, look at medicare and social security.

Jan 05, 2013 10:55am EST  --  Report as abuse
jw_collins wrote:

Since when does affordability dictate ANYTHING the Federal gummint types do? The far right is going to push us into fiscal oblivion. The far left is going to print more, tax more, spend more. NOBODY is going to cast an eye to the waste, abuse, fraud, inflation, pork, theft associated with every one of the thousands of Federal offices, bureaus, departments, hot-shots, admins, judicial systems ad nausea. Nobody. That debt clock will hit fifty trillion and the current crop of “Legislators” will walk off with their pockets full. History is replete with this same old tired story. America is not wise enough, not smart enough, not diplomatic enough, not disciplined enough to alter that script. Prove me wrong. Please.

Jan 05, 2013 10:59am EST  --  Report as abuse
wildabeast wrote:

@Abulafiah. Not being argumentative, just want to understand what is behind your thinking because this is what my previous comment was referring to. You said the whole problem will be avoided if we raise the debt ceiling level and ,further, that spending cuts would be a problem. I am not seeing how there is any fiscal sanity to this equation but this is what got voted for.

Jan 05, 2013 11:12am EST  --  Report as abuse
wildabeast wrote:

Also Abu, how do you think the EU got to where they are?

Jan 05, 2013 11:16am EST  --  Report as abuse
helmetbreaker wrote:

Obama needs to stop dictating what needs to be done in his so-called balanced answer to our debt. All he wants is tax increases and this “over the cliff” deal just piles more debt on top of the $16 trillion we have now. If Republicans have any guts and care for the country, they should hold Obama to at least equal spending cuts to the taxes passed during Obamacare and this last minute cliff deal! Since the first of the year, that’s right, since January !st, the government has issued 5,500 new regulations on businesses! Moody’s has indicated they will bump our credit rating down if the debt issue isn’t handled! If the interest rate goes up for what we have to borrow, more debt will be piled on! Obama wants more taxes.. we can’t afford it! And instead of looking at changing our tax system and streamlining government, he is set on killing the 2nd Amendment and giving uillegal immigrants free passage to citizenship.

Jan 05, 2013 11:16am EST  --  Report as abuse
fedupaj wrote:

America can’t afford any more debt and America can’t afford anymore of Obama’s big spending ways.

Jan 05, 2013 11:37am EST  --  Report as abuse
jw_collins wrote:

Obama’s spending ways? Let’s be CLEAR, sir. Congress controls the purse, and has been spending for DECADES…long before Obama was even born. They spend because they have the ONLY constitutional authority to do so. Obama cannot spend one single nickle. Not a cent. CONGRESS is the problem. As soon as the whiners understand this MOST BASIC civic lesson, the sooner we can get on track as informed voters. It ain’t Obama, my friend. It’s the CONGRESS.

Jan 05, 2013 11:50am EST  --  Report as abuse
Speaker2 wrote:

Guys on the right what are you smoking? The deficit is the result of 30-years of tax cuts by the Republicans while Congress continues to spend and expand programs.

It was the Republicans who brought us two unfunded and un-needed wars, put in de-regulation of the banking industry who brought us the housing mess.

BTW, Social Security has nothing to do with the current debt. Of course we have to look at Congress giving out IOU’s and spending the money, so they would have to raise taxes.

The reality, it will take additional taxes and spending cuts to pay down the debt. Get rid of un-needed departments such as Homeland Security and the DEA’s war on drugs (tax drugs), reduce defense spending by 75%.

Presidents do not control the purse strings, Congress does.

Jan 05, 2013 12:12pm EST  --  Report as abuse
usagadfly wrote:

The fact is that there is a large minority of Americans who refuse to permit anyone else to rule this country, whether they lose election after election or not. They are anti-democratic, with a small “d”. They believe in the Dictatorship of the Righteous, as many political movements have in the past century, and they will wreck the place before they accept someone different from themselves.

These people loudly announce their devotion to the US Constitution but ignore almost every part of it, primarily embracing mechanisms which are blatantly un-Constitutional but traditional more than such niceties as the Bill of Rights and representative Government. These are the gerrymanderers. The election riggers. The war mongers. God’s true chosen people. They do not want a fair system. They want power.

Jan 05, 2013 12:17pm EST  --  Report as abuse
BioStudies wrote:

I would like to see more job creation and less attacking of the 1%. I’m very far from the 1% and I can tell you that I don’t benefit from tax increases on the “rich.” I end up paying their taxes when I buy goods.

I fail to see how another round of crises talks wont stall the economy right now no matter what BO says. He’s part of the problem. Can’t believe people really voted for this guy again.

Jan 05, 2013 12:19pm EST  --  Report as abuse
vrajavala wrote:

2 million new jobs???? Where?

Jan 05, 2013 1:37pm EST  --  Report as abuse
smit1610 wrote:

We have to stop borrowing and spending $1 trillion more a year than we bring in. It is immoral that future generations will have to deal with a problem we created. I am all for shutting down the government to reduce spending and lowering the debt if that is what it takes. Stop the politics Mr. President and start acting like a leader. The problem in Washington is President Obama.

Jan 05, 2013 1:47pm EST  --  Report as abuse
wildabeast wrote:

Futile and pointless. This is all just a battle of egos.

Jan 05, 2013 1:55pm EST  --  Report as abuse
Harry079 wrote:

@Speaker2

“BTW, Social Security has nothing to do with the current debt”

WRONG: Social Security has been borrowing money to pay current retirees since 2010.

Jan 05, 2013 2:39pm EST  --  Report as abuse
SandyC69 wrote:

Mr. President,

The US can’t afford more debt and higher deficits, Sir.

You could tax the rich at 100% of all income and the revenue would still not cover the waste, fraud, duplication of agencies, cost of foreign aid (a high percentage going to our enemies), and my favorite – pork added to every bill.

For once, why not follow the constitution. Get out your calculator and do a little simple math, and pass a budget, then cut spending, clean house, and live within that budget.

After all, the rest of of taxpayers have to do that, why not our government?

Jan 05, 2013 2:52pm EST  --  Report as abuse

The truth is we can’t afford Mr. Obama. We can’t afford his $4 million Hawaii vacations. We can’t afford his tax & spend mentality. You can confiscate all the wealth of everybody in the top 2% of income & it won’t be enough to do what he is hell-bent on doing. One way or the other, the man needs to go and it needs to happen before there are food riots, major portions of large cities reduced to rubble, tanks in the streets and martial law.

Jan 05, 2013 3:30pm EST  --  Report as abuse
K3HY wrote:

The “It’s all Obama’s fault” from the fascist Republican Taliban Tea Party just doesn’t work anymore.

That’s why the GOP lost the presidential election and will lose the house majority in 2014.

Whining and crying about President Obama doesn’t make a bit of difference.

Jan 05, 2013 3:33pm EST  --  Report as abuse

We need to close the federal government. And we need to just leave it closed this time. That’s the only way we’ll get any savings. So called emergency functions will continue and that’s really all the government should do anyway. We can open it again when there is no national debt. That should be some time in the next millenium. That would be fiscal responsibility. Anything else is just more hot air, taxing, spending, and improvidence.

Jan 05, 2013 3:39pm EST  --  Report as abuse
txproud wrote:

We just agreed to new taxes with the promise of spending cuts but Obama is not wanting to talk spending cuts until american taxpayers agree to even more taxes. Seems like his plan is slowing unfolding in this term and it is not looking good for America. Hopefully we will not be where he wants us to be in 2016. I have to think this is on purpose. How could anyone be doing this bad for us on accident.

And Speaker2 I have to wonder about the wanting to get rid of Homeland Security, cutting the defense by 75%, and legalize drugs. These ideas have to make me think they are from another country. Just guessing.

Jan 05, 2013 3:49pm EST  --  Report as abuse
eddo wrote:

The US can’t afford the uncontrolled spending we see by this administration!

Jan 05, 2013 3:57pm EST  --  Report as abuse

“All Obama’s Fault”… Well, let’s see… The fiscal cliff was supposed to be the answer to deficit reduction if congress & the president couldn’t agree. What did we wind up with? CBO says what we wound up with ADDS $3 trillion to the debt over 10 years even after raising taxes by $600 billion. $40 in new taxes for every $1 in spending reductions. The only way I could view this as not being Obama’s problem is as follows. Perhaps Obama is merely a symptom of the problem. The real problem is the army of depraved fools who would have such an individual for their leader. That’s the only way I could see this problem residing someplace other than Obama.

Jan 05, 2013 3:59pm EST  --  Report as abuse
Wassup wrote:

Obama, the epitomy of hypocracy utters another tidbit of knowledge for the 48% who know he is a large part of the “fiscal cliff” problem. He goes along with Congress and kicks the problem down the road a month or to and then utters this gem. That while he vacations in Hawaii on the taxpayer dole not once but twice. What a charlatan!

Jan 05, 2013 4:03pm EST  --  Report as abuse

You don’t want a showdown or a debt downgrade… OK, fine. Mint your $1 trillion coin, deposit it with an incompetent federal bank whose abject failure in its supervisory responsibility was largely responsible for the housing collapse in the first place & take $1 trillion in freshly printed dollar bills (or their electronic equivalent — the guy is an MIT grad after all). I think we can then pretty well kiss our national credit rating good bye. That means junk bond status. That means foreign investors fleeing the US. It means 20% interest rates. It means either government insolvency on the interest payments alone, or hyperinflation from monetizing that debt. It means, yes, you guessed it… Another housing collapse. So, let’s not have any more idiotic talk of $1 trillion coins, ok?

Jan 05, 2013 4:12pm EST  --  Report as abuse
Eugene31 wrote:

The President could and should fortify his case here with the report coming out yesterday from the International Monetary Fund which shows how devastating Republican-style “austerity” measures have been when practiced by European governments on their economy. The stats should be repeated again and again that the GOP is set on policies which do nothing short of threatening the future of jobs and progress here in the US. Do we want to end up back in recession as Europe has done to itself or not? It’s as simple as that. If we don’t want recession, then we work at stimulating the economy and adding infrastructure at this time, until the economy is growing at a pace that can withstand cuts. Say it now, Mr. President. You have logic and precedent on your side.

Jan 05, 2013 4:17pm EST  --  Report as abuse
tonytwotoes wrote:

spending is the problem

Jan 05, 2013 4:28pm EST  --  Report as abuse
D.Regan wrote:

By the way all of you who keep calling our form of government a democracy need to learn a little more about this great country we live in. we are a representative republic.

Jan 05, 2013 4:44pm EST  --  Report as abuse
Joe_Casepack wrote:

If Obama believes what he says then he is the one to stop playing all of these last second games.

He should talk to other politicians and quit pretending he is still campaigning for his job. You have the job, bub.

Jan 05, 2013 4:50pm EST  --  Report as abuse
Blackbeered wrote:

Mr Prez, what the solution to the debt?

Jan 05, 2013 4:53pm EST  --  Report as abuse

Eugene31:

The first stimulus added 93 cents to GDP for every $1 added to the national debt (a truly remarkable Keynes multiplier less than unity).

There are two reasons for this that are somewhat interrelated. The first problem is the huge national debt existing before the stimulus. The second problem which is related to the first, is that our problem isn’t a liquidity crisis, but a solvency crisis. Stimulus is an appropriate medicine for the former, but it only makes the latter problem worse. By using the wrong treatment, we found a cure which was worse than the disease. And the preexisting condition (solvency) which made stimulus inappropriate is worse now and therefore makes it even more inappropriate.

The conditions precipitating the 2008 collapse exist in an even bigger way now. The derivatives time bomb hasn’t grown smaller, but bigger. The fed has ballooned its balance sheet & is effectively “out of bullets” with each new round of money-printing less effective than the last. They talk of ending QE, but that is all it is. They have to keep printing to keep the markets from collapsing and they know it. Similarly, the government is out of road to kick the can down. It’s a dead end.

Jan 05, 2013 4:54pm EST  --  Report as abuse
TheNewWorld wrote:

@Eugene31

Austerity was not a choice for EU. They ran out of money, and ran out of peope willing to loan them more money. The other option for the EU was to allow the deficit spending and debt to continue to pile up, and then print their way out of the problem which would have destroyed the currency. The EU is in their position because they were doing what we are doing and spending more than they make for far too long. Austerity will happen in the US in one shape or another. It may be an out of control inflation, it may the bankruptcy of social security, it may be drastic spending cuts, it may be a huge securities market crash with the default of treausry securities, or it may be a combination of all of the above. The only thing that is certain is we are in a fiat economy that runs on faith, and we are putting ourselves in a position where we have to default on the faith.

Jan 05, 2013 4:56pm EST  --  Report as abuse
AlaskanDude wrote:

Dear Barry;
What America can’t afford is your inability to realize we don’t want to be 40 trillion in debt and still unemployed.
Please don’t go about the country making personal attacks against congressional republicans and then blame them for not doing your will. It is YOUR responsibility to LEAD. Bill Clinton balanced the budget with a republican senate and house. He did not fly around the country like some stand up comedian to do it.

Jan 05, 2013 4:57pm EST  --  Report as abuse
usa.wi.vet.4q wrote:

Wrong Mr. President! The US can’t afford any more debt is the correct headline.

Jan 05, 2013 5:01pm EST  --  Report as abuse
slimy wrote:

Government attempting to do more than allowed under the Constitution is the problem. They are bound to fail.

Look guys and gals, don’t do America any favors. You’ve proven you’re all a bunch of drama queens. It’s embarrassing. Obama? Presidential? He does not lead. He’s a puppet concerned with air time and padding his savior resume.

Libertarian politics will get us where we need go. The existing parties are too brainwashed.

Jobs / jobs / jobs? These were the campaign promises? What idiot thinks government creates jobs. It’s time for America to wake up!

Jan 05, 2013 5:11pm EST  --  Report as abuse
slimy wrote:

Listen to Retired Sandman.

Jan 05, 2013 5:27pm EST  --  Report as abuse
xyz2055 wrote:

Is this the year that the majority of Americans will finally realize that Congress creates the debt not the President? Why would Congress try and hold the president hostage to something they created. Why is there even as issue? Congress passed the spending bills that creates debt. They have therefore already authorized it. The total debt is simply a function of all those spending bills that Congress wrote and passed. While the Presidents are willing participants since they either sign or veto the legislation, Congress is ultimately responsible. And in the case of Barack Obama…the vast majority of the spending bills driving the debt higher were in place before he took office.

Jan 05, 2013 5:55pm EST  --  Report as abuse
xyz2055 wrote:

slimy said “What idiot thinks government creates jobs. It’s time for America to wake up!”.

In 2002 Congress created the Department of Homeland Security. Today the DHS employees 240,000 people.

Jan 05, 2013 6:00pm EST  --  Report as abuse
Gigimoderate wrote:

Umm…where is The Rooster to throw in some common sense?

Jan 05, 2013 6:14pm EST  --  Report as abuse
wildabeast wrote:

Finally someone (Slimy) questions the role government is playing which I think is the heart of the matter since what our federal government should be doing will very simply define how much we need to tax and how much we need to spend.
I would be interested in hearing what the Reuters readers believe the top five responsibilities of the federal government should be.

Jan 05, 2013 6:19pm EST  --  Report as abuse
wildabeast wrote:

As far as European economies go, they keep a very small military force because we have taken on the role of defending them. We don’t have the luxury of cutting our military spending to the levels of any of the free nations.

Jan 05, 2013 6:25pm EST  --  Report as abuse
TheNewWorld wrote:

@xyz2055

“Is this the year that the majority of Americans will finally realize that Congress creates the debt not the President? Why would Congress try and hold the president hostage to something they created. Why is there even as issue? Congress passed the spending bills that creates debt. They have therefore already authorized it. The total debt is simply a function of all those spending bills that Congress wrote and passed. While the Presidents are willing participants since they either sign or veto the legislation, Congress is ultimately responsible. And in the case of Barack Obama…the vast majority of the spending bills driving the debt higher were in place before he took office.”

You have to blame Obama and the media for that. They constantly referred to Bush’s economy, Bush’s recession, Bush’s tax cuts, Bush’s spending, etc. All of a sudden though you can’t say Obama’s economy, Obama’s recession, Obama’s tax cuts, Obama’s spending. But really, like you said Congress controls spending, and guess who was Senator from 2005-2008 when the spending sky rocketed. Obviously one Senator or Representative can’t take the blame for the spending, so I blame them all. I am trying to do better about portraying on branch as the problem and instead blame the executive and legislative branches as a whole.

I wont disagree that the majority of the deficit spending was in place before Obama took office. He stepped into a government on a spending spree, and he increased their spending and asked for more stimulus every year was in office. This was a complete 180 of his campaign stumping where he called GW Bush unpatriotic for $4 trillion in 8 years. There is a difference in assigning blame for the situation, and recognizing someone who has failed to fix or address the issue. The tax increase is a start, but if it comes with more spending it too is a failure. Clinton is the only modern President whose administration is exemplary of fiscal responsibility. Bush Sr. would be a second, I wouldn’t consider Reagan or Bush Jr to qualify. Obama still has 4 years to turn it around, and I hope he does.

Jan 05, 2013 7:54pm EST  --  Report as abuse
bigphallus4u wrote:

And we can afford even less artificial self imposed deadlines put in place to distract the public and give a stage for nonsensical political theater

Jan 05, 2013 8:02pm EST  --  Report as abuse

Top priorities of government are only two in my scheme of things:

1) Killing people and incarcerating them.

2) Breaking things.

That’s because these are the only things the federal government really does well. We need a criminal justice system so we can incarcerate & kill people who are truly evil (and there are those). I’m not talking non-violent drug offenders, traffickers in smut, prostitution, gambling or other self-regarding vices here. But when folks do go to schools, mow down scores of kids and don’t have the common decency to kill themselves afterwards, we need a government to do that for them.

And we need a government to protect us from outsiders in a truly limited sense. That means protecting our borders and protecting americans traveling abroad.

The rest should be left on a more local level because it can be done better there and everything the government touches promptly turns to caca.

Send us the bill for those things, and I’d be more than glad to pay it. The rest of everything else doesn’t belong with the federal government primarily because they do an absolutely lousy, inefficient job.

Jan 05, 2013 8:36pm EST  --  Report as abuse
DeannaTx wrote:

The last battle over the debt ceiling which was drawn out beyond the final date cost American taxpayers an additional $11 billion wasted dollars. I’m sorry but tossing $11 bil out the window seems a bit excessive to fund partisan posturing.
This time I want the ceiling decision made on its own standing and made on time. And by one time I don’t mean at the 11th hour or 3 days late.
American politicians can decide to do a lot of things but one of those isn’t deciding not to pay the bill for what they’d previously approved.

Jan 05, 2013 9:30pm EST  --  Report as abuse
DeannaTx wrote:

The debt ceiling battle shouldn’t be a battle. It’s a stand alone case. The amount approved covers pre-approved spending.
Until we stop garbaging every single bill which is presented to Congress with elements that are unrelated, we’ll have more of the same.

Take each issue on it’s own merit. Battle it on it’s own merit.

Jan 05, 2013 9:34pm EST  --  Report as abuse
wildabeast wrote:

I think some of you are confused as to what the debt ceiling is. If you keep paying your debt with debt, you are a sinking ship.

Jan 05, 2013 11:02pm EST  --  Report as abuse
foiegras wrote:

This manufactured fiscal cliff drama is a great distraction from the real problems facing America. Look at what health insurance companies are doing right now in term of raising rates by double digits. It’s only a small piece of a much big problem that’s facing this country – the myth of the efficiency of free markets – but it’s real money coming out of the pockets of Americans (a tax?) that the Affordable Care Act doesn’t touch. But the private health insurers and their paid agents (lobbyists, and bought-and-paid-for legislators) don’t want it touched. If you want evidence of how well this distraction is working, just read the comments above.

Jan 05, 2013 11:21pm EST  --  Report as abuse
wildabeast wrote:

These markets are not free.

Jan 05, 2013 11:55pm EST  --  Report as abuse
Whatsgoingon wrote:

“If Congress refuses to give the United States the ability to pay its bills on time, the consequences for the entire global economy could be catastrophic,” What magic does the Congress have to pay for spendings beyond total tax income? It was a shame that sub-prime bubble almost engulfed entire finance system. Why is the president so eager to elevated it to the federal level?

Jan 06, 2013 1:13am EST  --  Report as abuse
Abulafiah wrote:

TheNewWorld wrote:
“Austerity was not a choice for EU.”

Of course they had a choice. They still have a choice, and foolishly choose to continue killing growth through austerity.

The USA also has a choice, and so far has chosen not to be stupid and kill growth through austerity which has been rewarded with three years of continuous growth.

The biggest problem the USA has now is Republicans like you who want to kill growth because… well, who knows why. Ideology over reality? Because you hate the USA? Willingness to sacrifice the USA for perceived political gain?

Whatever the reason, it is definitely not an economic one.

TheNewWorld wrote:
“They ran out of money, and ran out of peope willing to loan them more money.”

More nonsense. How, in your alternative universe, can a *currency* run out of money? That is like saying that a tree stopped growing because it ran out of wood.

Nor did they run out of people to lend money. The problem is that while the Euro is a currency, it is not a sovereign currency so they are being charged sky-high interest rates. Curiously, the main lenders charging huge interest are the Germans who imposed austerity and the Americans who keep downgrading the credit ratings.

TheNewWorld wrote:
“The EU is in their position because they were doing what we are doing and spending more than they make for far too long.”

Yet more nonsense. Go ahead – make me laugh. Explain exactly why deficit spending suddenly led to a recession in 2008, but didn’t in 2006. How is it it possible for deficit spending to produce growth, and then suddenly u-turn and create a recession?

I would really like to know what mechanism you think produced that – especially as EU deficits where at a historic low before the GFC.

You are only saying that because you heard it on Fox, and Fox say it because they don’t want to admit that it was the collapse of the global banking system, caused by fiscally incompetent Republicans, that caused it. It is nothing but a smokescreen.

Jan 06, 2013 3:32am EST  --  Report as abuse
xyz2055 wrote:

Abulafiah..so what exactly is your position on debt and deficits? Are you of the Dick Cheney opinion? (deficits don’t matter). What about repaying the debt? It isn’t important? You seem to be a support of the status quo? Do you not respect honoring the basic principles of a contract? If you take out a loan that you have an obligation to repay it? In your alternate universe you can continue running up debt to any level regardless of the revenue you take in. Totally ignoring that at some point the interest payments alone will cost more than the revenue you take in. The basic principle of solvent financials is that you can’t continue to spend more than you earn. There is an end game in that madness.

Jan 06, 2013 11:57am EST  --  Report as abuse
Jen06 wrote:

Is this short for “Be quiet and let me keep spending?”

Jan 06, 2013 1:59pm EST  --  Report as abuse
TheNewWorld wrote:

@Abulafiah

You would have made a great leader in Mexico or Zimbabwe… I am finished arguing basic macroeconomics or explaining to you what a fiat economy is. Please never run for office, or take up accounting for a company. If you do please be up front with them with your theories on deficit spending and debt.

Jan 06, 2013 8:22pm EST  --  Report as abuse
TheNewWorld wrote:

@abulafiah

“You are only saying that because you heard it on Fox, and Fox say it because they don’t want to admit that it was the collapse of the global banking system, caused by fiscally incompetent Republicans, that caused it. It is nothing but a smokescreen.”

How do you know what Fox says? It sounds like you are the one watching Fox. I am a Ron Paul supporter, and agree with a lot of what he says. If you knew what you were talking about, you would know that the Fox crowd makes fun of Ron Paul and dismiss him as a loon…

Jan 06, 2013 8:24pm EST  --  Report as abuse
Abulafiah wrote:

xyz2055 wrote:
“Abulafiah..so what exactly is your position on debt and deficits?”

They are not a life and death problem. Maybe Japan should be getting worried, but not the USA. The problem in the USA is a lack of growth, which is the entailment of the Republican recession.

Republicans want to talk about debt and deficit to avoid reminding the population that they trashed the economy. It is the same tactic the NRA is using with the suggestion of armed guards in schools – now everybody is talking about that instead of about gun control.

xyz2055 wrote:
” Are you of the Dick Cheney opinion? (deficits don’t matter).”

Why do I have to take sides? I can make my own opinions.

xyz2055 wrote:
“What about repaying the debt? It isn’t important?”

You do that when the economy is strong. Not when it is weak and the velocity of currency is low.

xyz2055 wrote:
“If you take out a loan that you have an obligation to repay it?”

Sovereign currencies don’t take out loans. It is a ridiculous analogy. The USA has no bank account and no credit card.

xyz2055 wrote:
“Totally ignoring that at some point the interest payments alone will cost more than the revenue you take in.”

I totally ignore it because it is a baseless Chicken Little argument. The USA is nowhere near that point. The debt would have to increase by something in the order of 900% to reach that point, and even then it is debatable given that most of the debt is owed to the USA.

The USA has had higher debt in the past and survived. So has every other country that was involved in WW2. So have a lot of other countries right now.

Jan 06, 2013 11:34pm EST  --  Report as abuse
xyz2055 wrote:

Abulafiah…OK. So I researched “Interest on the Debt”. Found the Treasury website that posts what we’ve been paying annually on the debt going back to 1988. There has to be some kind of voodoo economics going on here, as the amount paid annually has not risen appreciably between a $3T total debt and a $16T total debt. We still paid $360B on just the interest for 2012. That’s a lot of cash to essentially just give away. Check out this data.

http://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm

Jan 07, 2013 1:23am EST  --  Report as abuse
Abulafiah wrote:

@xyz2055

$360bn is a very small portion of the annual budget. Not something to panic about and it is definitely not worth risking a financial melt-down to reduce it.

The answer to all financial issues is growth. Obama has delivered that, but the GOP seem to be opposed to it. The obsession with spending cuts is just the most obvious anti-growth ploy, but just about everything they do seems to be aimed at holding back economic growth; opposing stimulus; obstructing job creation schemes; playing silly games with the debt ceiling; generally doing their best to stop government from functioning.

Jan 07, 2013 3:53am EST  --  Report as abuse
xyz2055 wrote:

Abulafiah..I think that like a lot of people my eyes get big when I see those trillions that we are in debt. But you are right $360B is only around 12% of the overall annual budget. And I agree with you regarding the Republicans. Look at 2000 to 2006. Their focus is clearly on the 2% of this country. Which we all know will do nothing to promote growth. Good conversation. You’ve made me think and put this in context.

Jan 07, 2013 9:47am EST  --  Report as abuse
Abulafiah wrote:

@xyz2055

Yes… all those noughts are scary, then there is the intuitive concept that lots of debt can’t be good, and for a lot of people the notion that a sovereign currency can roll debt over for ever or create new money to pay it off feels wrong, as though it is witchcraft. I can totally understand why people feel like that, but I am glad you can get past the dumbed down politics for dumbed down people.

I think it was Winston Churchill who said something along the lines of ‘the best argument against democracy is a ten minute conversation with a voter’. It can feel like that forums sometimes.

Trust in the miracle of aggregation!

Jan 07, 2013 10:15am EST  --  Report as abuse
actnow wrote:

President Obama is trying to set the stage for unlimited spending, but more and more Americans are realizing that the debt ceiling must be used to prevent this. Rightly so.

Jan 07, 2013 11:48am EST  --  Report as abuse
TheNewWorld wrote:

@xyz2055

The interest rate has dropped considerably due to the Fed. They have kept it abnormally low since 2002. That is why Simpson-Bowles predicts $1 trillion in interest payments in 2020. If the economy starts to get strong again, we will raise the interest rates, causing the interest on the debt to rise as well. Correct me if I am wrong, but it is at 0% right now.

Abulafiah has no specifics to address issues with debt and deficits, just a promise that when the economy grows we will be just fine. Simpson-Bowles, and pretty much every other economist recognizes the dangerous situation we are creating. As many European nations have learned, depending on the economy to get better to raise revenues and cut your deficit and debt is a gamble. Also pushing yourself to the limit with deficits and debt puts you in a horrible position if you run into say a housing/financial crisis like in 2008.

Jan 07, 2013 6:20pm EST  --  Report as abuse
TheNewWorld wrote:

@Abulafiah

“Sovereign currencies don’t take out loans. It is a ridiculous analogy. The USA has no bank account and no credit card.”

Ever hear of a bond? It is the equivalent of a loan, and if you don’t pay it back, you will never be able to sell your junk bonds to raise money again. And we are starting to see foreign governments shy away from taking on US Debt.

I will make your points for you, that you either don’t want to admit, or that you don’t quite understand. You are correct, we don’t ever have to default on our debt. All of our debt is issued in dollars. We have the printing press that makes dollars. We can just print out the payments. This was not an option for Greece, Italy, or Spain, hence that is why they have a debt crisis. Don’t ever ask me what the difference is between their 60% GDP being an issue and ours being higher but not crisis again, I just answered it.

The downside of the US printing out their payments is inflation and currency depreciation. And that is exactly what we are seeing right now in some of the world commodities markets (oil) and currency exchanges (Canada). Your plan to kill the dollar to grow the economy actually hurts the economy, and everyone in it. It plays a role in the growing wealth disparity. The purchasing power of the dollar erodes quicker than pay increases happen. Conversely, business owners in effect pay less, raise the prices to reflect the weaker dollar, and keep more for themselves.

Every time the treasury goes off to print more money to continue our Keynesian economics, the dollar becomes worth less and less. That is a fact, and that is the consequence of the deficit and the debt. The US dollar has lost 94% of its value since the Federal Reserve was created. $5 a gallon gasoline is in our near future, and yet again the poor and the middle class will take the brunt of the effects of the monetary policy that you promote.

Jan 07, 2013 6:58pm EST  --  Report as abuse
Abulafiah wrote:

TheNewWorld wrote:
“Ever hear of a bond? It is the equivalent of a loan, and if you don’t pay it back, you will never be able to sell your junk bonds to raise money again.”

Yes… beginners guides to economics describe them as the equivalent of a loan, so you have just given a very good indication of the level of your knowledge.

For those of us who have got past learning what the word means, no – a bond and a loan are two very different creatures. Loans cannot be sold, so loan don’t have a market value, so loans have no yield. Most importantly, and the one that sinks your simplistic argument – bonds are not repaid buy the issuer. They are purchased at a predetermined time.

TheNewWorld wrote:
“This was not an option for Greece, Italy, or Spain, hence that is why they have a debt crisis. Don’t ever ask me what the difference is between their 60% GDP being an issue and ours being higher but not crisis again, I just answered it.”

No you haven’t. You have simply parroted back to me something I have explained to you several times and pretending you thought of it yourself. It is good that you are finally learning from me, but you are still wrong on one point.

The problem in the EU is not the size of debt, as you keep insisting because Fox tells you that. The problem in Europe is the interest rate being charged by commercial banks. You will most likely say there is no difference so you can cling to your ideology, but there is a huge difference. If the ECB would take on the role of a national bank for EU countries, and lend at the predictable and very low rates enjoyed by sovereign currencies, the problems in Spain and Greece would disappear.

So the next time you say (and you will…) “Waaah! Europe is in a mess because they spent too much and the debt is too high!” yes, I will ask you to justify why 60% of GDP is too high. And you will avoid answering it rather than give up your faith.

TheNewWorld wrote:
“The downside of the US printing out their payments is inflation and currency depreciation.”

Like many people at your level of understanding, you think inflation and currency are the same thing with the same causes. They are not.

Inflation is almost inevitable, necessary, and in the USA it is both low and under control. All that nonsense about inflation on Fox is just that- nonsense. Another typically right-wing Chicken Little argument.

Currency depreciation is a reflection of how safe foreign markets think the USD is, not how many dollars are in circulation. It went into decline back in 2001 because the only people in the world who think Republican economics make sense are you Republicans. It declined even more when the lack of confidence in Republicans was proven true by recession.

It stabilised a bit when Obama fixed your recession, and recently has climbed slightly (Despite QE – reality proves you wrong again…) though Republican attempts to stop government from functioning doesn’t exactly inspire confidence in the USA as a brand, so it will probably remain low.

TheNewWorld wrote:
“The US dollar has lost 94% of its value since the Federal Reserve was created. $5 a gallon gasoline is in our near future, and yet again the poor and the middle class will take the brunt of the effects of the monetary policy that you promote.”

All currencies lose value all the time. Pick any currency you like, and look at wages or property prices 200 years ago, and they are a fraction of current figures. This is a normal, natural, phenomenon.

The simple fact that you don’t know this, think it is a problem, and a result of monetary policy, is another indication of how little you understand.

Jan 08, 2013 12:18am EST  --  Report as abuse
Abulafiah wrote:

TheNewWorld wrote:
“I know very well the difference in bonds and loans”

You obviously don’t, as you are still clinging to the beginners notion that they are the same thing.

TheNewWorld wrote:
“FYI, loans can be transferred (IE banks can sell their house loans to another bank, and another person can assume the debt of a loan), so you are wrong there as well.”

A transfer is not a sale. It has no market value and hence no yield, because a loan is not a bond.

TheNewWorld wrote:
“do you not think that the US government has to pay its debt, which again is in the form of bonds”

No, they don’t. They roll it over for as long as they want, which they can do because it is a *bond*, not a *loan*…

I know what you are going to say now: “Aaaah… but what if China chooses not to roll over?”

No problem. What Fox doesn’t tell you is that the USA holds a whole of Chinese bonds, so they would respond in the same way and the two transactions pretty much cancel each other out. You can stop panicking. The sky is not falling.

TheNewWorld wrote:
“How is that hard for you to understand?”

It was me that taught you all that. I know you are trying to come across as clever but telling me a load of stuff I already explained to you? Big fail…

Your original statement was *Europe* had no choice. Now you are squirming by changing it to Greece, which doesn’t work because Greece didn’t choose anything – the EU forced austerity on Greece and the EU did have a choice in that.

TheNewWorld wrote:
“What makes you think that I believe they are the same thing? I never said that, and I never thought that. Instead of trying to attack me all the time, try reading for comprehension.”

I know you think that for three reasons. You lump them both together as consequences of increased money supply. You refer to them with a singular verb. You refer to them jointly as “The purchasing power of the dollar”. These all require a presupposition that that inflation and exchange rate are two faces of the same thing. That, or you were just rambling with no idea what you were writing.

Now that I have corrected you, you are trying to pretend you knew that all along, just as you are with the EU’s problems.

TheNewWorld wrote:
“It is not a natural phenomenon that just happens.”

Is that a fact? Go on then – explain how you can have a growing population, and/or a growing economy, and deflation all at the same time.

TheNewWorld wrote:
“You can trigger the loss of currency value very easily by increasing the supply of currency in circulation.”

Once again, you are confusing currency value with inflation.

You could spend as much as you like buying dollars to push up their market value, and it would make no difference to domestic inflation. They are not the same thing.

Let me try to explain for a second time. Inflation is a market phenomenon, because goods are sold to the highest bidder. For your deflation to happen, the seller would have to sell to the lowest bidder, which happens only in your alternative universe.

Currency value is a judgement, not a market phenomenon. There is no bidding, only a judgement by investors on the value of the dollar. This is why currency can fall in value, but inflation is naturally positive.

TheNewWorld wrote:
“Well if that is the case you need to tell the Federal Reserve that there is no point to their existence, and that monetary policy designed to fight inflation, stagnation, etc is pointless because we live in an economy where things just happen for no reason at all.”

You are being silly. Inflation being a natural phenomenon is not even close to saying it is uncontrollable.

TheNewWorld wrote:
“I realize you love trolling me with the Fox comments.”

It is not trolling to observe that all you ever post is Republican talking points:

“The debt! The debt! We must repay the loans! Look at the EU – they had too much debt! Blah blah blah”

Maybe you crawl around right-wing blogs instead of watching TV but it adds up to the same thing – everything you say can be heard on Fox.

TheNewWorld wrote:
“You can buy into your Keynesian economics no matter what the cost theory all you want.”

Again you illustrate how little you know. Let me guess: you read on a blog/saw on Fox that Keynes is spend, spend, spend?

Here is a fact. The USA is in a mess now because Bush didn’t follow Keynes. Had he done so, there would have been no recession. Let’s see if you can figure that one out on your own…

TheNewWorld wrote:
” About 10 years from now when you get a little real world experience your point of view will change.”

If you are working towards the standard issue right-wing posture of “I have been running a business for X years”, don’t bother. I wouldn’t believe you anyway. Every right-winger in a forum says that at some point, or that they are ex-military. Or both. It is really kind of sad, but funny at the same time.

Jan 08, 2013 3:23am EST  --  Report as abuse
jaham wrote:

We ran a deficit of about $1,100B in 2012 and Obama’s tax-the-rich-plan is expected to net about $70B per year = we have a spending problem.

Why won’t Obama simply cut spending as he promised via his “balanced approach” and as his own deficit commission recommended?

Jan 08, 2013 10:31am EST  --  Report as abuse
txguy2112 wrote:

From what I have been seeing recently, I do not think Obama really cares what happens so long as he can blame the Republicans for it. He really needs to stop campaigning and start leading, you know what he was elected to do.

Jan 08, 2013 3:53pm EST  --  Report as abuse
Abulafiah wrote:

jaham wrote:
“LOL, you unbridled arrogance again leads you to confuse your own opinion with fact; the above quote is pure conjecture.”

No… it is not conjecture that Republicans wrecked the economy. If you check the historic record you will find that it really did happen. It is a fact. It was in the news and everything.

Nor is it conjecture that Bush didn’t follow Keynes. If you check the historical record of what Republicans did, you will find that that too is a fact.

Jan 09, 2013 12:12am EST  --  Report as abuse
TheNewWorld wrote:

Bush didn’t follow Keynes? Show me the year that he didn’t increase spending, grow the government, and use tax cuts and even cash checks to consumers to stimulate the economy. Wow that is rich coming from you. Spend, spend, spend is your philosophy, Bush should be your hero…

Jan 09, 2013 6:05am EST  --  Report as abuse
joe10082 wrote:

Take off you rose colored glasses Mr President and get to work on reducing the national debt. You are the leader of the nations or so I have been led to believe. Start with cutting the size of the federal government,and make it law that elected officials are paid based upon performance standards on behalf of the average American citizens in their respective states. Place strict limitations on the number of lobbyists a major Fortune 500 Company can have to represent them – say just one! Limit by law job outsourcing. If pursued to vigorously by a company penalize/tax them. Take away the profit incentive in this activity altogether.

Jan 09, 2013 8:55am EST  --  Report as abuse
Abulafiah wrote:

TheNewWorld wrote:
“Bush didn’t follow Keynes? Show me the year that he didn’t increase spending, grow the government, and use tax cuts and even cash checks to consumers to stimulate the economy. Wow that is rich coming from you. Spend, spend, spend is your philosophy, Bush should be your hero…”

Right there you confirm that you have no idea about Keynes, which confirms that don’t really understand the topic at all.

Ask somebody to explain ‘counter cycle spending’ to you. Then consider how much better the USA would be if Bush had followed Keynes, instead of being all Republican and ‘stimulating’ an economy that didn’t need it.

Jan 09, 2013 10:48am EST  --  Report as abuse
jaham wrote:

We have just over $52,000 in federal debt for every man, woman and child in the US and are borrowing about $.46 out of every dollar we spend.

The 2012 deficit is approximately $1.1T and Obama’s tax the rich legislation is expected to net $70B in incremental revenues per year. That means if we had started taxing those evil rich people a year ago, we would have still run a budget deficit of $1,030B (=$1,100B – $70B); we have a spending problem.

Why won’t Obama just cut spending as he promised via his “balanced approach”, as his own deficit commission recommended, as the math dictates a necessity and the debt ceiling will be raised accordingly?

Jan 09, 2013 11:28am EST  --  Report as abuse
jaham wrote:

@abulafish: “Had he done so, there would have been no recession”…is conjecture; look it up if you don’t know the definition.

Jan 09, 2013 11:29am EST  --  Report as abuse
MikeyLikesIt wrote:

Ahh the delicious hypocrisy of the liberal thought process.

They blame Bush for the massive spending and economic hardship starting in late 2007 (when the democrats controlled both houses of congress), yet now they say that the problem resides in congress and that obama has no blame.

For the cherry on top, check out the voting history of then senator obama when the democrat controlled congress in Bush’s last two years increased spending by orders of magnitude…

Jan 09, 2013 2:09pm EST  --  Report as abuse
jaham wrote:

@MikeyLikesIt…LOL, I completely agree; playing semantics and deflecting blame as it suits them…go figure.

Jan 09, 2013 4:42pm EST  --  Report as abuse
scolli wrote:

“Obama says U.S. can’t afford more showdowns over debt, deficits”
Then stop trying to raise the debt!!!

Jan 09, 2013 8:18pm EST  --  Report as abuse
Abulafiah wrote:

jaham wrote:
“Loans can and are sold; they do have a market value based on present values of expected future cash flows”

No they aren’t and no they can’t. Like TheNewWorld you are an amateur who has been trawling teenage blogs and picking up half-baked ideas based on blurring definitions.

Outstanding debt can be traded. Loans can’t. If I lend you $10,000, I can trade the outstanding debt. It has a market value as it has a revenue stream attached. You cannot sell your loan. If you could, the deal would be “I owe $10,000. Do you want to buy it and then pay it off for me?” I suspect you would take that deal, but the rest of us wouldn’t.

jaham wrote:
“Wrong, they can “roll it over” as long as someone is willing to invest in that debt. As Obama’s refusal to cut spending becomes more clear, investors will be less keen to invest tin US treasury bonds and bills if we can’t properly manage our finances.”

It sounds a great argument if you ignore real-life and live on Planet Fox.

Near enough one-third of those ‘investors’ are actually other US government departments. I know you FoxBots imagine that one department is going to demand that another department pays back its debts, but that is just a joke; a Chicken Little argument. It is never going to happen

Another third is held by foreign governments, who for reasons already explained are not going to demand payment.

Of the remaining third, most of that is held by other governmental bodies – state governments and so on – and the rest, around 13% of the total depending whose figures you look at, is your ‘investors’. That small percentage is not going to destroy the USA. You can calm down. The sky is not falling.

jaham wrote:
“And Rachel Maddow forgot to tell you that the Chinese own far more of our debt than we hold of theirs. ”

Which sounds good if you ignore real-life some more. The US economy is twice the size of the Chinese economy – you seem to have forgotten that fact. As long as the exchange hurts China more than the US, everything is okay. You idea that the holdings must be of the same value is an indication of how little you understand the situation.

jaham wrote:
“The value of the US currency (being a reserve currency) then has an impact on inflation because relatively cheaper US dollars spur consumption of goods and commodities priced in US dollars and that demand increases prices.”

Yeah… that is what all the teenage bloggers say. Another indication of where your ‘knowledge’ comes from.

In the real world, a declining USD on the foreign market reduces prices *for foreigners*, not for people using the USD. It is an exchange rate, not inflation. Like TheNewWorld, you too don’t understand the difference.

In the real world, demand does not increase price. If that were true, baked beans, Bic pens, and iPads would cost a fortune. You are making a really fundamental error – another indication of how little you know. Lets see if you can figure it out for yourself.

jaham wrote:
“Asserting that the “USA is in a mess now because Bush didn’t follow Keynes. Had he done so, there would have been no recession.” is conjecture, NOT fact.”

Right… so in your opinion Bush did nothing wrong, and the recession was a random event that would have happened anyway, had no connection with anything Republicans did, and would have happened regardless of any economic policy?

For the rest of us, who are not blinded by religious faith in Republican ideology, the *fact* of the recession proves the *fact* that Republicans messed up by failing to follow Keynes.

Jan 09, 2013 11:54pm EST  --  Report as abuse
vitka wrote:

Republicans with their arrogant tea-party leaders are deaf to any reasoning, they are willing to sink the economy and US credit ratings under fake assumptions. Disgusting.

Jan 10, 2013 12:12am EST  --  Report as abuse
Abulafiah wrote:

MikeyLikesIt wrote:
“They blame Bush for the massive spending and economic hardship starting in late 2007 (when the democrats controlled both houses of congress), yet now they say that the problem resides in congress and that obama has no blame.”

No they don’t. That is just another Republican fantasy.

‘They’ blame Bush for deregulation, massive spending, and ignoring all the warning signs that the economy was in trouble, all of which happened long before 2007.

In the real world, recessions don’t just happen out of the blue with no warning signs.

Jan 10, 2013 12:19am EST  --  Report as abuse
TheNewWorld wrote:

@Jaham

I have quit wasting my time with Abulafiah. Any conversation with a person that is so clearly devoted to “I am right, and you are wrong” results in nothing useful. Everyone opposed to him must be a Republican. Yet from where I stand as a Libertarian, I see no difference in Obama’s economic policies and Bush’s. Maybe Obama’s stimulus focused more on union based organizations than Bush’s, but for the most part Bush grew the government and Obama has ensured that it stays as big as possible. The Fed has played its Keynesian role throughout the 12 years keeping interest rates completely low. And both Bush and Obama have followed their Keynesian roles by trying to stimulate different sectors of the economy to spend. Whether it was tax cuts for capital gains to kick start the market after the Dot Com bubble, or the many various tax credits for equipment etc, it is Keynesian economics. I am sure I am mistaken in some point and I will let Abula point it out for everyone.

I still hold out hope that Obama can at least cut the Defense budget. Iraq is over, Afghanistan should be winding down, the Defense spending should be cut by a good 25%. I am afraid though that we will see that money just siphoned off to something else instead of cut though. Which is what Abula says. Never cut spending in any economy. Never. Spend all the money you can print, or in the Fed’s case just wire to a bank.

Jan 10, 2013 1:52pm EST  --  Report as abuse
Abulafiah wrote:

jaham wrote:
“In fact, on bank UPBR balances sheets loans must be designated “held for sale” or “not held for sale”; chew on that one for a bit…”

Yes. Written next to outstanding debts. Not loans. For someone pretending to be in the industry, you are struggling to differentiate the two.

jaham wrote:
“I am only demonstrating that your claim that “They roll it over for as long as they want, which they can do because it is a *bond*, not a *loan*” is incorrect. The US government can only “roll it over” if investors are willing to invest in our debt.”

Yet in the real world they are investing, and they are rolling over, for al the reasons I gave. For the third time – the sky is not falling.

jaham wrote:
“I didn’t say our economy was the same size or that our debt was equal, ”

Yes you did:
“And Rachel Maddow forgot to tell you that the Chinese own far more of our debt than we hold of theirs. ”

jaham wrote:
“You then follow that apparent miscomprehension with “In the real world, demand does not increase price”…the opposite of which is one of the most basic tenants of economics. I won’t waste time trying to educate you with econ101, I’ll let you attempt that on your own time.”

Econ 101 – the law of *supply* and demand. It is the difference between the two that puts pressure on price. Not demand alone as you say.

jaham wrote:
“I suggest you refrain from further exposing yourself as an economic and financial dunce”

…says the guy who is struggling with the concept of supply and demand, or the difference between an outstanding debt and a loan…

Jan 10, 2013 8:47pm EST  --  Report as abuse
LesLegato wrote:

“Obama says U.S. can’t afford more showdowns over debt,”

HEY OBAMA, THE U.S CAN”T AFFORD MORE DEBT!

Jan 10, 2013 10:06pm EST  --  Report as abuse
Overcast451 wrote:

Don’t sound like we can afford to send his royal tool-ness on anymore vacations of golf outings either.

Jan 11, 2013 10:25am EST  --  Report as abuse
Overcast451 wrote:

Inflation is largely BS.

It’s not ‘inflation’ – that’s the media spin, it’s really DEFLATION of the value of a dollar.

Next time you see gas go up in price – don’t look at it as gas being more expensive – the reality is, your dollar buys a bit less of it due to it’s value dropping.

Inflation is a buzz term for the sheeple, sure it does exist some – but the prime component of prices ‘going up’ – is really the value of the dollar going down…

Jan 11, 2013 10:31am EST  --  Report as abuse
m1234567890 wrote:

Mr President, I could not agree more.

So now, live up to your campaign promises and setup “responsibly” reducing spending.

Jan 11, 2013 11:30pm EST  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.