Posted on 06/16/2003 12:23:20 PM PDT by sbw123
Jun 16, 2:54 PM (ET)
WASHINGTON (AP) - The government could hit the new $7.4 trillion limit on the national debt next year- any time from April through October, Treasury Department spokesman Rob Nichols said Monday.
President Bush last month signed a bill allowing a record $984 billion increase in the amount the federal government can borrow. It marked the second increase in the debt ceiling in roughly a year. In June 2002, the debt ceiling was increased by $450 billion to $6.4 trillion.
The issue is politically touchy. Democrats have blamed the government's need to borrow more on Bush's tax cuts, his handling of the economy and ballooning federal government budget deficits. Republicans have blamed the weak economy and the costs of fighting terrorism for the need to extend the debt limit.
Seriesly, though, we can both grow ourselves out of it by cutting taxes while forcing "tough decisions" on scaling back entitlements by choking off the money going to the feds. Ramp up the social security age to 70, institute partial privatization, cut back on medicare/medicaid, and you're golden. THAT's where all the spending is, for all the talk about little pork projects and Farm Aid.
It could hit the debt ceiling?! They're going to bloody-well smash through it. With stunts like sending $400 welfare checks from the IRS and calling it a tax cut and getting ready to spend hundreds of billions more on medicare with their prescription drug scam, coupled with the extra defense spending that we have needed for a decade and $7.4 trillion will just be a starting point. And the fed has lost it's freaking mind thinking that there isn't going to be a price to pay for flooding the economy with truck-loads of new dollars once they work their way through the system. It wouldn't be a bad idea to buy some gold.
Since you are, apparently, indeed, totally cluesless, let me offer a clue: the equity markets appear poised to have broken through the last bear market resistance with a close above S&P 1000. This will force a reassessment by those who've been foolish enough to believe the likes of Puplava's disciples and the other Financial Sense(less) who've been predicting gloom & doom forevermore. Their inevitable reallocation into equities will continue to improve market returns which will return capital gains to the treasury. Even at the lower rate, having gains to take & pay taxes on will dramatically increase intakes in revenue and improve the deficit situation which is due - in considerable part - to the significant losses incurred over the past few years and, thus, lack of corresponding taxes.
The debt ceiling is completely arbitrary, self-imposed, a wimpy attempt to control federal spending, and subject to the whim of the moment. It affects nothing but the theoretical marketability of gov't bonds.
Precisely. The Republicans would rather not take the political hit for it, though, so the idea is to reduce taxes to the point where it's either: A) Cut entitlements or B) Massive tax hikes. That way Democrats have to support B to pay for entitlements, which gives Republicans cover to do A without paying a big price come election time.
The other shoe is the economy; the higher the tax cuts, the better the economy, the more money to pay for entitlements with as small a %age of GDP as possible.
How can spending more than you're taking in be beneficial? At some point, doesn't the debt come due?
The deficit never comes due, really. It just keeps rolling over. The idea is that with economic growth, the debt/deficit can become a smaller and smaller %age of GDP even as it gets bigger in $ terms.
But yes the idea is to kick the "tough decisions" down the road a bit to where it's more politically expedient and when we may have more money (fed. revenue) at a lower tax rate.
Don't mind DigiLinus. He's a bitter liberal, but we welcome into the FreeRepublic "Big Tent" anyway, though that doesn't mean we have to take him seriesly.
I beg to differ; I won my school spelling bee. It was a hugh upset!
Maybe a graphic can help show what is happening.
The approval of President Bush's latest tax cuts will push the U.S. budget deficit to a record of more than $400 billion this year, the Congressional Budget Office reported in its latest monthly budget review on June 9, 2003. (Reuters Graphic)
Globalist neocons owe allegience solely to the bottom lines of transnational corporations. To that end, the American Middle Class is merely a market to plunder and submerge with the burden of perpetual debt. And so long as their own coffers are full, they couldn't care less if the U.S. Treasury goes bankrupt.
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