US Threatened to Default on it's National Debt

[yxboom]

Treasury Expects to Reach Debt Limit
By MARTIN CRUTSINGER
The Associated Press (http://www.washingtonpost.com/wp-dyn/articles/A31060-2003Feb19.html)
Snow's request will set off a fresh debate in Congress that could last for weeks. In the meantime, Treasury Department will use a variety of techniques to keep government borrowing within the debt limit so the United States is not forced to default on any of its debt obligations, something that has never occurred before.

[Ryokan]

And people are always asking me how I can be against tax cuts as a conservative.

[Em7add11]

I'm for tax cuts even in the face of a looming debt. We don't give credit card abusers more money to waste when they spend money they don't have uncontrollably. I'd rather be broke because of me than because the government wastes it for me.

[Ryokan]

if we don't pay off the debt, then inflation or higher interest rates will. You are going to be taxed no matter what, its just a matter of how.

[Epoetker]

But Ryo, legislators are also going to spend money on pork programs "no matter what," just a matter of how profligately. Defaulting on the national debt is bad, of course, but which situation would you rather have-a debt defaulted with no money left in the taxpayers' pockets to fall back on or a debt defaulted with some repayments in the form of tax rebates?

The solution is to restrain spending first before tax increases can even be considered.

And let's note I am SO sad Moynihan died:cry:

[Ryokan]

See, Epo, what I am saying is there is NO answer besides fiscal restraint. If you cut taxes, the government will have to take out loans, reducing the supply of loanable funds. This will raise interest rates. So, by cutting income taxes, you are essentially levying a tax on people who need loans. The other thing the gov could do is take out a loan and then print more money to lower the interest rate. This, of course, would raise inflation, taxing everybody on the sly, and rewarding debtors. Somebody HAS to pay for the debt.

[Ben Franklin]

04-08-2003 @ 12:53 PM post located here (http://www.theologyweb.com/forum/showthread.php?s=&postid=58988#post58988)
Ryokan:

See, Epo, what I am saying is there is NO answer besides fiscal restraint. If you cut taxes, the government will have to take out loans, reducing the supply of loanable funds. This will raise interest rates. So, by cutting income taxes, you are essentially levying a tax on people who need loans. The other thing the gov could do is take out a loan and then print more money to lower the interest rate. This, of course, would raise inflation, taxing everybody on the sly, and rewarding debtors. Somebody HAS to pay for the debt.

And the bonds issued by the government will be bought by investors, thus shrinking capital investments. And the bonds will have to be paid off by future taxpayers. And the interest on our current public debt will increase. It's a lose-lose situation.

[Bob Jenkins]

National Debt Clock (http://www.brillig.com/debt_clock/)

Each citizen's share of the national debt is $23,717.70. There is no balanced budget in sight - so that will grow in principal and compounded interest.

Who holds the debt? (http://www.publicdebt.treas.gov/opd/opdpdodt.htm)

Frequently Asked Questions (FAQ) about the Debt (http://www.publicdebt.treas.gov/opd/opdfaq.htm#opdfaq33)

My thought is that the entire economy will colaspe if the debt is defaulted. Look for the Treasury Dept. to jump through hoops to avoid even one day of default.

[Vorkosigan]

Agree with Ryo. Bush's record spending tax cuts will hurt US freedom and living standards more than any terrorist ever will.

Vorkosigan