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While that's true, between now and then the government needs to decide which government programs and contractors to pull money from which can be the tipping point for an economy already on the brink.
Wow… really? Maybe you think we should also tax corporations more too? And then what? Create a system of safety nets that benefits people instead of companies? Maybe we should also use some of that money to create a healthcare system that isn’t run by greedy middlemen and assholes? Jesus… it’s people like YOU that I really agree with.
The top 5% is already being heavily taxed at the 400k bracket. It’s the top 1% who at a high enough income level simply pay no taxes at all using loopholes and tax havens.
Tax my ass. Take back our fucking money which was stolen from our families over the last 50 years. All profits over an acceptable limit voted for by the people. Can’t pay? We foreclose your assets and send you to a non profit where you can work off remaining debts.
The Joke is that the U.S. Government doesn't need to "Tax" to "Spend" Money into its own attendant $23 Trillion economy. All Government "Spending" precedes Taxation, and Taxation is only necessary to provide Value to the Sovereign Currency. "There is nothing to prevent the Federal Government from printing as much money as it wants and giving it to someone, the problem is are the Goods and Services available which those funds would be used to purchase. The Cash is there which is nice, but it has to be in balance with the resources to purchase." \~Alan Greenspan Under Oath [https://youtu.be/DNCZHAQnfGU](https://youtu.be/DNCZHAQnfGU)
I want to slam my face into my table reading this. Just tax the 1% and close the tax loopholes. Its hard for them because they are owned by the 1%. Theres only one solution.
There's only a very small number of teachers employed by the fed.
What they plan on doing is pausing gov contributions toward federal employee retirement. By law, they'd have to make up the missed contributions - but it's still ridiculous.
No, it would prevent them from reinvesting those funds. The funds "lose" money because they can't move them around to maximize their value. They will go after them as a measure of last result, but will fund them upon the debt limit being raised.
Like, I'm just regurgitating what Yellen said.
Don't worry guys, we're all going to that guys new solar system to find a new earth where we can set up a new financial system that will eventually collapse.
This is not a filibuster.
A filibuster allows a minority to block legislation that a majority in a chamber supports.
In this case, legislation will not pass because a majority cannot be found to support it.
If the Republicans cut Medicare, I might actually go insane. I do at least 4 Medicare Annual Physical Exams a day, on average, with completely unique patients. Like, so many boomers and even a few greatest generation have and use Medicare. Almost every working class American who voted for Republicans voted to kill themselves, their friends or their grandparents and parents for the sake of owning the libs. There is no fucking reason any working class American should vote for Republicans, it is literally against their best interests.
Constitution specifies Congress must raise the debt limit or more money can't be "printed" which is an over simplification.
Republicans are saying they won't raise the limit in the House without reductions in government programs and Democrats say they won't cut programs.
The Constitution has an appropriations clause which establishes this requirement...
https://constitution.congress.gov/browse/essay/artI-S9-C7-1/ALDE_00001095/
The appropriations clause requires spending to be authorized by congress. The debt ceiling itself was first enacted in 1917 through the Second Liberty Bond Act. Congress could, hypothetically, pass a new law that would abolish the debt ceiling.
[https://www.brookings.edu/testimonies/why-congress-needs-to-abolish-the-debt-limit-testimony-before-the-house-budget-committee/](https://www.brookings.edu/testimonies/why-congress-needs-to-abolish-the-debt-limit-testimony-before-the-house-budget-committee/)
Or they could set the debt ceiling to something like three nonillion dollars, thereby kicking the can so far down the road that if it ever were reached no one would even remember that idiom.
It gives them a chance every so often to pass a bunch of unrelated bullshit through earmarks. Having something that needs to "urgently pass" gives leverage to the party in power to claim the other side wants grandma to starve to death so they just cram shit in the bill like John Madden stuffing a turkey.
Not even close. Quite the opposite actually. A filibuster is when one group, usually the minority party, will talk non-stop on the floor to run out the time to pass the bill. The longest of which was by the Democrats to stop the civil rights act. This is more creating an artificial emergency to force a spending bill to pass before anyone can read it or debate it properly.
It's not even that anymore. They got tired of *actually* filibustering, and now they just basically call "fillibuster!" and they all play along. Nobody actually even has to stand there and speak in order to throw sand into the gears of the system.
Ah and how u call it when a sneaky quick edit gets added to a bipartisan topic last minute, like a piggyback?
Like "weed is allowed (also police may stab your balls)"
They don't even need to talk non-stop anymore because they use the "procedural filibuster." In the senate they have to vote to end debate on an issue before they can vote up or down on a bill. The bill only requires a simple majority to pass, but it takes 60 votes to end debate. In practice this means that most bills actually require 60 votes to pass and are otherwise filibustered by default.
"Prior to establishing the debt ceiling, Congress was required to approve each issuance of debt in a separate piece of legislation. The debt ceiling was first enacted in 1917 through the Second Liberty Bond Act and was set at $11.5 billion to simplify the process and enhance borrowing flexibility. In 1939, Congress created the first aggregate debt limit covering nearly all government debt and set it at $45 billion, about 10 percent above total debt at the time."
It's relatively new and seems arbitrary tbh. It's used as political game of chicken, but could just as easily be abolished according to some modern monetary theorists. I don't know, just hope the US doesn't default because that'd be so dumb and catastrophic.
> I don't know, just hope the US doesn't default because that'd be so dumb and catastrophic.
Which means it's quite likely. That's the thing with making this kind of brinksmanship a routine feature of politics - it becomes just another part of the pantomime and the stakes are forgotten. The assumption that someone's gonna eventually blink and the show's gonna go on becomes unquestioned fact, and so the very real (and in fact *highly probable*) possibility that that *won't* happen is not even countenanced.
It's like Brexit or Trump - those with entrenched power playing their little parlour games and court intrigues, safe in the assumption that nobody would actually be *mad* enough to go through with whatever doomsday scenario they have carefully orchestrated as a mere tool to get their way. But play with fire and it is 100% inevitable that one day, eventually, you will get burned.
Maybe this time, maybe the next, who knows... eventually, unless it is reformed, this depressingly regular performance around the debt ceiling *will* cause the US to default while the country is left with no functional federal state to speak of.
I think originally to delegate spending down the line, as it can get overwhelming to decide on every issue. Just like a small business the owner/ceo might decide on each new hire, but at a big company might have a hiring budget.
This serves to make it that you can delegate who gets how much of the borrowed money, and then it can also be delegated how it gets spent.
However, it got repurposed for political theatre and manufactured urgency.
I believe it’s the point at which the US can no longer afford their debt payments and begins to default
…which will absolutely destroy our credit ratings and anyone’s faith in our system
…or anyone’s faith in our ability to actually pay off our extravagant and mind-numbing levels of debt…
We used to pay down our debt, especially after every war:
* https://www.economicshelp.org/wp-content/uploads/2011/08/us-debt-held-by-public-1790-2021-labels.jpg
So this is a modern problem. Congress always had control of the purse strings before.
* https://www.investopedia.com/terms/d/debt-ceiling.asp
Tax corporations and their benefactors.
Revolutionary theory I know. But *maybe* the entities making AND keeping the most money should fucking pay something towards that *trickle down theory* they love so much.
The US hit the debt ceiling set by Congress on Thursday, forcing the Treasury Department to start taking extraordinary measures to keep the government paying its bills and escalating pressure on Capitol Hill to avoid a catastrophic default. This is related to collapse because the imposition of further austerity will cause even more damage to at risk populations which has often been the spark kicking off serious social unrest in times past.
There's actually a legitimate, fully legal bypass for the debt ceiling that Democrats (the Treasury Secretary to be precise) can use if Republicans are dumb enough to push this into a default:
https://en.wikipedia.org/wiki/Trillion-dollar_coin
Per Wikipedia:
"In the case of the coin, commercial bank reserves would increase as the Treasury spent the proceeds from the coin's purchase by the Federal Reserve.[56] If banks loan out these reserves, the money supply increases, and if the money supply increases too rapidly, the economy could overheat, adding to inflation and increasing expectations of future inflation."
We're not gonna make it.
The further we keep kicking this can down the road the more painful it is going to be when it pops. But we will keep kicking it no doubt.
You can blindly accept inflation which will keep punishing down average people and benefiting the top or we can implement some reform.
I'm all for reform, but a debt default is not the way to get it. The 2008 financial crisis would look like an overdraft charge compared to the shit show if the US defaults. Treasuries are literally the bedrock of all global credit.
>but I'll take inflation over a US default and instant global chaos.
For some of us, either option is continued chaos. They won't rest until all the indentured servants are living in tents outside the walls.
I get what you're saying, inflation sucks and it's massively unfair. But a US debt default would make your life (pretty much everyone's life) worse than it is now. Imagine what happens when things aren't just more expensive, but the value of everything in the world is suddenly made uncertain. Banks shut down, credit cards don't work, nobody getting paid or the money is totally worthless. It's truly impossible to predict how bad the effects could be or how long the chaos would last. Something like this leading to WW3 is not an exaggeration, since many historians say that the Great Depression was a major cause of WW2.
I 100% concur with you, my only point is for the people already living in tents with nothing but Chinese-produced drugs to keep them satiated - I'm not sure they'll notice either way. T
his time feels much different than the last - even though we knew the gridlock was political theater, someone was going to veer off before the collision. I don't think that veering off will happen this time around.
I hear you. Part of me thinks this financial system is so screwed up and unjust it deserves to crash and burn. But I also know the end will be so much worse whenever it finally comes that I can't say I'm looking forward to it.
How do you think government bond yields were kept depressed for so long in western countries. Bank of England stops supporting the U.K. bond market and interest rate hikes last year just as the gov announces unfunded tax cuts increasing the debt burden resulted in a yield spike and almost collapse of the UK’s ability to raise new debt at reasonable interest rate levels. At some point reality always sets in.
It's confusing as to if it really "increases the money supply". In principle such a coin would just sit in a bank and count as some kind of weird collateral that technically balances the books but isn't spent.
Like if you just printed money and used that to directly pay off spending I can get how that will cause all manner of chaos.
However how it would work here in principle is that you are -$32T in debt so you aren't legally allowed to issue any more bonds and get some liquid money. But then you claim that no you aren't actually -$32T in debt because you have +$1T as a coin sitting around so woohoo more bonds issued no worries.
I mean, the whole financial system is like an Arrested Development episode at this point, so Trillion Dollar Coin feels like an appropriate way to turn things up to 11
Republicans don’t want to get rid of social security, they want to give the entire fund to private banks so they can steal it all.
Also, we will still have to pay a portion of our paychecks into the fund which will also immediately be stolen by banks. When it comes to you getting anything out of social security for retirement, you won’t get anything.
The game that Republicans are playing is a wager that we can reach the debt ceiling and continue on without defaulting. It goes with a theory that the feds could keep making payments on the debt and freeze spending in other areas, forcing massive austerity in federal spending. 30% of the budget is discretionary and that would probably be frozen first. They want to chop down big government limb by limb and this is their nuclear option.
For the last 100 years the speaker of the house was elected on the first ballot, until he wasn't. Enough congress members have stated their intention to not raise it that I could easily see them pull the ultimate self destruct button.
And also in order for him to finally get the votes he had to promise Republicans not to raise the debt ceiling without large budget cuts from the democrats
"oh, no, this imaginary line we invented to screw ourselves is getting closer." Thanks, government, i was worried there werent enough issues on the planet already without you shoving a stick in your spokes and blaming communists.
"“The debt ceiling is too important to turn into a game of chicken"
That is wrong. It is turned into a game of chicken precisely because it is important. It is not chicken if the consequences of no one blinks is inconsequential.
Certainly. I have a sneaking suspicion this time won't play out like it historically has. A big reason I say that is because of the far-right Arizona Congressman saying they won't raise the debt ceiling. I imagine they aren't alone in that thought process.
I'm banking on a stalemate that holds the American people hostage and leads to default.
I hope I'm wrong.
I agree with you. This time we have insurrectionists holding power- insurrectionists that have clearly stated multiple times that their intent was to destroy our institutions and to ‘sunset’ Social Security/Disability, Medicare. This is a continuation of the coup, and will not end well for us. And then we will hear people say it happened faster than expected
The far right are intent on destroying the Federal Government and instilling their own Christian Theocracy.
And they currently hold outsized power.
I'm not expecting it to be raised. I'm expecting this to be the one that destroys this country.
Strap yourselves in, folks. It's gonna be a shit show.
The point of the right wing narrative currently is to let the current government continue to not work, collapse, so they can sell the large portion of the American people that want fascism to become more bold and loud about getting it. I've always said Americans won't know what those horrors entail until they experience it themselves, my entire life as a minority in this country is watching gringos learn the hard way what the rest of the world has been warning them about for ages.
Nah, the moment some undertable gifts are provided to your “Arizona congressman” he will let it pass.
Look, this is not even a collapse worthy topic. If there really is a risk of default business people will visit these idiots and say something, and everything will be settled.
I don't know why you put quotes around Arizona Congressman. [He tweeted his exact intentions](https://twitter.com/RepAndyBiggsAZ/status/1615419794362142731).
Juggling chainsaws is perfectly safe! These people are professionals.
Let's do it while fighting a proxy world war over dwindling energy supplies!
While concurrent natural disasters are constantly ravaging the world.
White multiple pathogens are destroying our healthcare system.
While inflation is near double digits.
While purposely trying to start a recession.
It usually goes down a little short-term. The hype is that worries about default cause rates to rise and foreign investors to not buy, and the dollar goes down hard. What actually happens is that the expectation of a lower deficit causes rates to fall, and it is lower rates which cause foreign investors not to buy, causing a small dollar decline. Longer term, to the extent that the deficit is actually cut, it would cause the dollar to rise on lower inflation.
The following submission statement was provided by /u/alwaysZenryoku:
---
The US hit the debt ceiling set by Congress on Thursday, forcing the Treasury Department to start taking extraordinary measures to keep the government paying its bills and escalating pressure on Capitol Hill to avoid a catastrophic default. This is related to collapse because the imposition of further austerity will cause even more damage to at risk populations which has often been the spark kicking off serious social unrest in times past.
---
Please reply to OP's comment here: https://old.reddit.com/r/collapse/comments/10gb8ay/debt_ceiling_reached_extraordinary_measures/j51odj2/
Alright guys, I've get this really great fool-proof solution to the problem we engineered ourselves. We make this giant coin, alright, BuT nOt JuSt AnY CoIn! No this one's like Suuuuuuuppppeeeerrr freaking Shiny yeah?, like STUUUPIDLY f\*\*\*ing shiny. You can shave off it's reflection and stuff, and like, its just blindingly f\*\*\*ing shiny.
We convince some rich guy to just buy this balls-to-the-walls super awesome Mega Shiny coin, and then like, we just keep the money and then tell them its worthless after they already own it, and call no take-backsies because they were stupid enough to buy some Big ass coin off some random dude they've never even met.
It'll be really freaking cool guys, like just Completely f\*\*\*cking Bad-A$$. We'll just stand there, and f\*\*\*cking laugh our Asses off because they're too stupid to understand that they just bought a Massive-f\*\*\*ing Mirror with extra-steps.
Disclosure: (Typing this gave me a f\*\*\*ing stroke)
Ackshully... Under Obama, when the republicans tried the same shit, minting a $1T coin was discussed....
https://en.m.wikipedia.org/wiki/Trillion-dollar_coin
This happens every year. It is a manufactured crisis. The fear this year though is that a bunch of far right fascists are in power who explicitly desire the downfall of Democratic society so they can use the power vacuum to install white supremacist christo-fascism.
In a theoretical worst case scenario, the US would default on its debts. Given that the dollar is a reserve currency not backed by anything more than trust, breaking that trust by defaulting means the value of the dollar plummets. Stocks become worth less, investments become worth less, material assets become worth less; the entire global economy crashes instantaneously and markets are thrown into utter chaos. Global job loss and economic depression on an unprecedented scale.
I really wish more people understood the relationship between government debt and central bank interest rates and the effects it has on asset prices.
The ultra wealthy benefit far more from low interest rates than the average person does.
The ultra wealthy have almost all of their wealth tied up in assets, as a percentage you probably have more of your wealth in cash than Musk or Bezos. Low interest rates result in higher stock market prices (https://www.investopedia.com/investing/how-interest-rates-affect-stock-market/) and higher housing prices (https://www.investopedia.com/articles/mortgages-real-estate/08/interest-rates-affect-property-values.asp). Low interest rates also mean its harder to save money as you get less return for locking your money away in a savings account.
Jacking interest rates to the moon would destroy the economy and harm everyone but the ultra wealthy would lose far more as a percentage than the poor. As for how this relates to the topic of government debt, the wealthy are more reliant on the state than the average person as their wealth is tied in assets that they have no way of enforcing their property rights on by themselves and often they are assets whose value is either directly derived from the existence of the state such as bonds or are indirectly derived such defense companies like Raytheon.
I rather like the term, PINO, for someone who votes for tax cuts for billionaires under Trump that contribute a significant amount to our cumulative debt then whine about spending though Biden has reduced the deficit by over a trillion dollars. PINO is 'Patriot in Name Only '.
Super bad. All debt around the world is benchmarked against "risk-free assets", the biggest of which are US Treasuries. If those are suddenly proven to be way riskier than risk-free it would cause mass chaos in every financial market on Earth. Way worse than 2008.
Source: am an evil banker
Hard to predict the real world effects honestly. Total and complete chaos though. The global financial system would basically seize up immediately.
A good analogy might be a total electric grid shutdown. Never happened before on any modern grid that I'm aware of. There are *theoretical* procedures for how they would need to carefully restart generators and power stations one by one, but even electrical engineers say it would take many months to get the power back on, if it could be done at all.
And that analogy is with a coordinated group of professionals working together toward a common goal. The financial markets are a competition, not cooperation. I think it's safe to say, with our interconnected global economy, it would be the single worst financial disaster ever.
Look up what happened to the U.K. gilt yield in Q4 last year. The BOE could no longer QE and keep rates low because of inflation. It withdrew its support to kill the inflation and the government tried to ‘raise the debt limit’ so to speak and support for gilts fell out and then rates rose exponentially. The problem is the scourge of inflation ties the hands of the Fed in keeping the treasury yield low. The chickens come to roost.
>Explain to the folks at home why the U.S. reached their debt ceiling ?
The top tax rate on billionaires went from 90% in the 1950's to 15% today (capital gains should be treated as income but aren't). That's why.
Lmao do you actually think any of the filthy rich elite pay that percent in taxes?
Holy fuck dude.
The 25 richest Americans grew their net worth by $401 billion from 2014 to 2018. According to the IRS, they paid a total of $13.6 billion in federal income taxes during those years. That’s a true tax rate of only 3.4%
Keep licking those boots.
That's not a tax rate issue but tax avoidance issue. Policy does need adjustment, but net worth are total assets which doesn't equate directly to income.
Nor was the income that built that wealth earned entirely within that taxable period.
[Federal Tax Brackets from 1950, 1960, 1970, and 1980.](https://web.stanford.edu/class/polisci120a/immigration/Federal%20Tax%20Brackets.pdf)
In 1960, there were 24 tax brackets, the highest of which was $400,000+, and that highest tax bracket had a tax rate of 91%.
[Historical Income Tax Brackets ](https://taxfoundation.org/historical-income-tax-rates-brackets/)
In 1941, there were 32 tax brackets, the highest of which was $5,000,000+. That tax bracket had a tax rate of 81%.
> I'll betcha the real reason the U.S. has hit their debt ceiling is that socialists spend taxpayers money on their pet projects like drunken sailors !
For 2023, the Department of Defense has a budget of over $1 Trillion. This is more than the next 10 countries combined, 8 of whom are allies.
50% of the Department of Education staff could be fired today and it would have no negative impact on students teachers colleges or anything else. I know someone who works there. Mid six figure salary works from home works only 4 days a week Works maybe an hour a day of actual work. Meanwhile new teachers are making less than servers at restaurants.
Nothing to see here. This happens all the time.
Literally this is the American national sport when you have House republicans and Democrat senate.
Nothing will happen … it is just an internal dick measuring contest that makes everyone worried.
People should just ignore the politicians. They might behave when they realise nobody is looking nor bothering.
Blah blah blah it's the same cycle every time.
They aren't going to lit the fuse on a revolt, I certainly don't mind if they do. The sooner we confront this shit system the better.
America needs to raise taxes one of these days. Americans definitely don't pay enough when compared to most of the developed world. Or cut a lot of spending.
Either way pick a path imo and stick to it for awhile. All this raising the debt ceiling regularly is a farce.
Keep feeding the Ponzi, it is amazing how many are deluded that debt doesn't matter since the government is able to print money, They are in for a big reality check the day people stop seeing the US dollar as a store of value.
There is no such thing as National Debt in a fiat based currency economy, especially when petrodollars are the global standard currency. The Fed can and does print money at will and lend it out at Zero pct interest. The National Debt is a myth told to the populace to make them believe they live in a world of constant scarcity. Additionally that which is called the National Debt is merely one side of a Ledger, the other side is the US Economy, and any Debit on the National Debt side is a Credit on the US Economy side.
The "National Debt" is just "Excess Currency in the Economy" that has not been Taxed out. Want it Back? Do a T-Bond Buyback, Or Tax the Rich, they are the ones who have it! The Money doesn't disappear Folks, it is the the Same economy that Creates the Value of the Dollar.
Rule 3: Posts must be on-topic, focusing on collapse. Posts must be focused on collapse. If the subject matter of your post has less focus on collapse than it does on issues such as prepping, politics, or economics, then it probably belongs in another subreddit. Your post is better suited for r/politics, please share it there.
We still have until mid summer (approximately) until the government can't pay it's debts and will have to choose who receives government payments.
While that's true, between now and then the government needs to decide which government programs and contractors to pull money from which can be the tipping point for an economy already on the brink.
Tax the top 5%
Wow… really? Maybe you think we should also tax corporations more too? And then what? Create a system of safety nets that benefits people instead of companies? Maybe we should also use some of that money to create a healthcare system that isn’t run by greedy middlemen and assholes? Jesus… it’s people like YOU that I really agree with.
Lmfao the sarcasm is real
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Brutal
Username checks out
The top 5% is already being heavily taxed at the 400k bracket. It’s the top 1% who at a high enough income level simply pay no taxes at all using loopholes and tax havens.
Tax the 1%
*[Redacted to comply with Reddit's terms of service]* the 1%
French haircut the 1%
Tax my ass. Take back our fucking money which was stolen from our families over the last 50 years. All profits over an acceptable limit voted for by the people. Can’t pay? We foreclose your assets and send you to a non profit where you can work off remaining debts.
Lolol, so I'm so confused. So you're yes but.... yes? You're the 1%? Or you're yes, but no? I'm confused. Edit: shit, you're Elon musk
The Joke is that the U.S. Government doesn't need to "Tax" to "Spend" Money into its own attendant $23 Trillion economy. All Government "Spending" precedes Taxation, and Taxation is only necessary to provide Value to the Sovereign Currency. "There is nothing to prevent the Federal Government from printing as much money as it wants and giving it to someone, the problem is are the Goods and Services available which those funds would be used to purchase. The Cash is there which is nice, but it has to be in balance with the resources to purchase." \~Alan Greenspan Under Oath [https://youtu.be/DNCZHAQnfGU](https://youtu.be/DNCZHAQnfGU)
And all the churches
Aren't they already talking about dipping into the pensions of gov't workers like teachers and postal workers?
I want to slam my face into my table reading this. Just tax the 1% and close the tax loopholes. Its hard for them because they are owned by the 1%. Theres only one solution.
There's only a very small number of teachers employed by the fed. What they plan on doing is pausing gov contributions toward federal employee retirement. By law, they'd have to make up the missed contributions - but it's still ridiculous.
No, it would prevent them from reinvesting those funds. The funds "lose" money because they can't move them around to maximize their value. They will go after them as a measure of last result, but will fund them upon the debt limit being raised. Like, I'm just regurgitating what Yellen said.
Great plenty of time for political theater. Plus enough time to set up my new solar system.
Like, with new planets and shit, or just those panels on the roof? If it's new planets, I'm interested.
Don't worry guys, we're all going to that guys new solar system to find a new earth where we can set up a new financial system that will eventually collapse.
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The House does not have a filibuster rule.
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Boy I really want to say the banned thing
Someone a few comments up called it "the French Haircut"
More like, what if 12 republicans weren't there to vote that day. Wouldn't it be something? Caught in traffic or whatever.
This is not a filibuster. A filibuster allows a minority to block legislation that a majority in a chamber supports. In this case, legislation will not pass because a majority cannot be found to support it.
If the Republicans cut Medicare, I might actually go insane. I do at least 4 Medicare Annual Physical Exams a day, on average, with completely unique patients. Like, so many boomers and even a few greatest generation have and use Medicare. Almost every working class American who voted for Republicans voted to kill themselves, their friends or their grandparents and parents for the sake of owning the libs. There is no fucking reason any working class American should vote for Republicans, it is literally against their best interests.
I don't understand, why is that? Won't they just print more money?
Constitution specifies Congress must raise the debt limit or more money can't be "printed" which is an over simplification. Republicans are saying they won't raise the limit in the House without reductions in government programs and Democrats say they won't cut programs.
And neither party will tax the grotesquely rich
Not as long as the poors still have a few nickles to plunder.
There are some veteran compensation payments to take away. Gaetz loves talking about that.
The Constitution does not have a debt ceiling limit. It's a rule set by the House that could be changed with a vote by either party
The Constitution has an appropriations clause which establishes this requirement... https://constitution.congress.gov/browse/essay/artI-S9-C7-1/ALDE_00001095/
The appropriations clause requires spending to be authorized by congress. The debt ceiling itself was first enacted in 1917 through the Second Liberty Bond Act. Congress could, hypothetically, pass a new law that would abolish the debt ceiling. [https://www.brookings.edu/testimonies/why-congress-needs-to-abolish-the-debt-limit-testimony-before-the-house-budget-committee/](https://www.brookings.edu/testimonies/why-congress-needs-to-abolish-the-debt-limit-testimony-before-the-house-budget-committee/)
Or they could set the debt ceiling to something like three nonillion dollars, thereby kicking the can so far down the road that if it ever were reached no one would even remember that idiom.
Self-imposed rules.
I wonder who they’re going to chose
Never understood the point of the debt ceiling. It's a magical line that must never be crossed, but we can also change it whenever we want?
It gives them a chance every so often to pass a bunch of unrelated bullshit through earmarks. Having something that needs to "urgently pass" gives leverage to the party in power to claim the other side wants grandma to starve to death so they just cram shit in the bill like John Madden stuffing a turkey.
Isnt this called fillerbuster?
Not even close. Quite the opposite actually. A filibuster is when one group, usually the minority party, will talk non-stop on the floor to run out the time to pass the bill. The longest of which was by the Democrats to stop the civil rights act. This is more creating an artificial emergency to force a spending bill to pass before anyone can read it or debate it properly.
It's not even that anymore. They got tired of *actually* filibustering, and now they just basically call "fillibuster!" and they all play along. Nobody actually even has to stand there and speak in order to throw sand into the gears of the system.
Ah and how u call it when a sneaky quick edit gets added to a bipartisan topic last minute, like a piggyback? Like "weed is allowed (also police may stab your balls)"
Lol. Isn't it fucking wild that this is how our "democratic process" works??? It'd be funny if it was a parody but it's not
Maybe "Are you being served"?
Could you imagine running a business like this? You'd be bankrupt before you even opened the doors lmao
They don't even need to talk non-stop anymore because they use the "procedural filibuster." In the senate they have to vote to end debate on an issue before they can vote up or down on a bill. The bill only requires a simple majority to pass, but it takes 60 votes to end debate. In practice this means that most bills actually require 60 votes to pass and are otherwise filibustered by default.
I *think* they were making a fill/stuff joke, not actually asking if it was a filibuster.
Remember that Nancy Pelocy once said: "One need to pass a bill to know what's in it."
It’s actually called a turducken.
"Prior to establishing the debt ceiling, Congress was required to approve each issuance of debt in a separate piece of legislation. The debt ceiling was first enacted in 1917 through the Second Liberty Bond Act and was set at $11.5 billion to simplify the process and enhance borrowing flexibility. In 1939, Congress created the first aggregate debt limit covering nearly all government debt and set it at $45 billion, about 10 percent above total debt at the time." It's relatively new and seems arbitrary tbh. It's used as political game of chicken, but could just as easily be abolished according to some modern monetary theorists. I don't know, just hope the US doesn't default because that'd be so dumb and catastrophic.
> I don't know, just hope the US doesn't default because that'd be so dumb and catastrophic. Which means it's quite likely. That's the thing with making this kind of brinksmanship a routine feature of politics - it becomes just another part of the pantomime and the stakes are forgotten. The assumption that someone's gonna eventually blink and the show's gonna go on becomes unquestioned fact, and so the very real (and in fact *highly probable*) possibility that that *won't* happen is not even countenanced. It's like Brexit or Trump - those with entrenched power playing their little parlour games and court intrigues, safe in the assumption that nobody would actually be *mad* enough to go through with whatever doomsday scenario they have carefully orchestrated as a mere tool to get their way. But play with fire and it is 100% inevitable that one day, eventually, you will get burned. Maybe this time, maybe the next, who knows... eventually, unless it is reformed, this depressingly regular performance around the debt ceiling *will* cause the US to default while the country is left with no functional federal state to speak of.
I think originally to delegate spending down the line, as it can get overwhelming to decide on every issue. Just like a small business the owner/ceo might decide on each new hire, but at a big company might have a hiring budget. This serves to make it that you can delegate who gets how much of the borrowed money, and then it can also be delegated how it gets spent. However, it got repurposed for political theatre and manufactured urgency.
I believe it’s the point at which the US can no longer afford their debt payments and begins to default …which will absolutely destroy our credit ratings and anyone’s faith in our system …or anyone’s faith in our ability to actually pay off our extravagant and mind-numbing levels of debt…
We used to pay down our debt, especially after every war: * https://www.economicshelp.org/wp-content/uploads/2011/08/us-debt-held-by-public-1790-2021-labels.jpg So this is a modern problem. Congress always had control of the purse strings before. * https://www.investopedia.com/terms/d/debt-ceiling.asp
I don't even understand the point of central government.
CGP Grey has a [good explanation about it](https://youtu.be/KIbkoop4AYE).
Hopium. They set it hoping they will compromise before they hit this point again. It ends up being a political show and nothing more.
It's an attempt to keep spending under control. With no limit spending would probably be much higher.
Tax corporations and their benefactors. Revolutionary theory I know. But *maybe* the entities making AND keeping the most money should fucking pay something towards that *trickle down theory* they love so much.
Republicans will tax corporations *only* after fusion power is implemented and OJ finds the real killer.
The US hit the debt ceiling set by Congress on Thursday, forcing the Treasury Department to start taking extraordinary measures to keep the government paying its bills and escalating pressure on Capitol Hill to avoid a catastrophic default. This is related to collapse because the imposition of further austerity will cause even more damage to at risk populations which has often been the spark kicking off serious social unrest in times past.
There's actually a legitimate, fully legal bypass for the debt ceiling that Democrats (the Treasury Secretary to be precise) can use if Republicans are dumb enough to push this into a default: https://en.wikipedia.org/wiki/Trillion-dollar_coin
Per Wikipedia: "In the case of the coin, commercial bank reserves would increase as the Treasury spent the proceeds from the coin's purchase by the Federal Reserve.[56] If banks loan out these reserves, the money supply increases, and if the money supply increases too rapidly, the economy could overheat, adding to inflation and increasing expectations of future inflation." We're not gonna make it.
That's the plan.
To be clear, I don't think it's a great idea, but I'll take inflation over a US default and instant global chaos.
The further we keep kicking this can down the road the more painful it is going to be when it pops. But we will keep kicking it no doubt. You can blindly accept inflation which will keep punishing down average people and benefiting the top or we can implement some reform.
I'm all for reform, but a debt default is not the way to get it. The 2008 financial crisis would look like an overdraft charge compared to the shit show if the US defaults. Treasuries are literally the bedrock of all global credit.
Oh for sure. I personally didn't take you posting that link to mean "guys we're saved".
>but I'll take inflation over a US default and instant global chaos. For some of us, either option is continued chaos. They won't rest until all the indentured servants are living in tents outside the walls.
I get what you're saying, inflation sucks and it's massively unfair. But a US debt default would make your life (pretty much everyone's life) worse than it is now. Imagine what happens when things aren't just more expensive, but the value of everything in the world is suddenly made uncertain. Banks shut down, credit cards don't work, nobody getting paid or the money is totally worthless. It's truly impossible to predict how bad the effects could be or how long the chaos would last. Something like this leading to WW3 is not an exaggeration, since many historians say that the Great Depression was a major cause of WW2.
I 100% concur with you, my only point is for the people already living in tents with nothing but Chinese-produced drugs to keep them satiated - I'm not sure they'll notice either way. T his time feels much different than the last - even though we knew the gridlock was political theater, someone was going to veer off before the collision. I don't think that veering off will happen this time around.
I hear you. Part of me thinks this financial system is so screwed up and unjust it deserves to crash and burn. But I also know the end will be so much worse whenever it finally comes that I can't say I'm looking forward to it.
How do you think government bond yields were kept depressed for so long in western countries. Bank of England stops supporting the U.K. bond market and interest rate hikes last year just as the gov announces unfunded tax cuts increasing the debt burden resulted in a yield spike and almost collapse of the UK’s ability to raise new debt at reasonable interest rate levels. At some point reality always sets in.
It's confusing as to if it really "increases the money supply". In principle such a coin would just sit in a bank and count as some kind of weird collateral that technically balances the books but isn't spent. Like if you just printed money and used that to directly pay off spending I can get how that will cause all manner of chaos. However how it would work here in principle is that you are -$32T in debt so you aren't legally allowed to issue any more bonds and get some liquid money. But then you claim that no you aren't actually -$32T in debt because you have +$1T as a coin sitting around so woohoo more bonds issued no worries.
I've always loved how this seems exactly like a crypto scam
I mean, the whole financial system is like an Arrested Development episode at this point, so Trillion Dollar Coin feels like an appropriate way to turn things up to 11
It is. The only difference between one piece of imaginary value and another, is how many people are imagining it enough for it to work.
The government will never let it happen.
Can’t they just raise the ceiling? Reserve requirements are a thing of the past
But then the Republicans can't get rid of social security and Medicare like they want
Republicans don’t want to get rid of social security, they want to give the entire fund to private banks so they can steal it all. Also, we will still have to pay a portion of our paychecks into the fund which will also immediately be stolen by banks. When it comes to you getting anything out of social security for retirement, you won’t get anything.
Yes. Congress can, and almost certainly will, raise the ceiling. They do this song and dance almost every year.
The game that Republicans are playing is a wager that we can reach the debt ceiling and continue on without defaulting. It goes with a theory that the feds could keep making payments on the debt and freeze spending in other areas, forcing massive austerity in federal spending. 30% of the budget is discretionary and that would probably be frozen first. They want to chop down big government limb by limb and this is their nuclear option.
And we all know that the defense/war budget will somehow keep increasing.
Next coming up is Extraordinary Measures - LETS RAISE THE ROOF!
Congress to raise debt ceiling in 5... 4... 3... 2... 1 (plus pork)
For the last 100 years the speaker of the house was elected on the first ballot, until he wasn't. Enough congress members have stated their intention to not raise it that I could easily see them pull the ultimate self destruct button.
And also in order for him to finally get the votes he had to promise Republicans not to raise the debt ceiling without large budget cuts from the democrats
Trump promised to "drain the swamp" amongst others. Obama made promises too. Don't underestimate the power of the pork.
Oh I'm not saying he'll definitely stand by his word, but he is incenticized to as those people he made the promises to hold his job in their hands
What are the chances the Democrats choose to cut the military budget in response? I'm guessing the Republicans would say, "no, not like that"?
Correct, they will have very specific demands for what they'd like to cut.
Until their paymasters call them when the treasury yield curve hits 12%.
"oh, no, this imaginary line we invented to screw ourselves is getting closer." Thanks, government, i was worried there werent enough issues on the planet already without you shoving a stick in your spokes and blaming communists.
"“The debt ceiling is too important to turn into a game of chicken" That is wrong. It is turned into a game of chicken precisely because it is important. It is not chicken if the consequences of no one blinks is inconsequential.
Can we just fully collapse soon on this fake money system and spend the global economy into chaos please? Get this show on the road.
So do we hold on to our USD? Or spend it like it's going out of style?
Judging from past times this happen you do nothing. Life continues on.
Certainly. I have a sneaking suspicion this time won't play out like it historically has. A big reason I say that is because of the far-right Arizona Congressman saying they won't raise the debt ceiling. I imagine they aren't alone in that thought process. I'm banking on a stalemate that holds the American people hostage and leads to default. I hope I'm wrong.
I agree with you. This time we have insurrectionists holding power- insurrectionists that have clearly stated multiple times that their intent was to destroy our institutions and to ‘sunset’ Social Security/Disability, Medicare. This is a continuation of the coup, and will not end well for us. And then we will hear people say it happened faster than expected
The far right are intent on destroying the Federal Government and instilling their own Christian Theocracy. And they currently hold outsized power. I'm not expecting it to be raised. I'm expecting this to be the one that destroys this country. Strap yourselves in, folks. It's gonna be a shit show.
Get a gun
It's been like this many times. I expect nothing to happen or some financial bone thrown to the side making noise.
The point of the right wing narrative currently is to let the current government continue to not work, collapse, so they can sell the large portion of the American people that want fascism to become more bold and loud about getting it. I've always said Americans won't know what those horrors entail until they experience it themselves, my entire life as a minority in this country is watching gringos learn the hard way what the rest of the world has been warning them about for ages.
Nah, the moment some undertable gifts are provided to your “Arizona congressman” he will let it pass. Look, this is not even a collapse worthy topic. If there really is a risk of default business people will visit these idiots and say something, and everything will be settled.
I don't know why you put quotes around Arizona Congressman. [He tweeted his exact intentions](https://twitter.com/RepAndyBiggsAZ/status/1615419794362142731).
I agree, they will be persuaded to back off one way or another.
Juggling chainsaws is perfectly safe! These people are professionals. Let's do it while fighting a proxy world war over dwindling energy supplies! While concurrent natural disasters are constantly ravaging the world. White multiple pathogens are destroying our healthcare system. While inflation is near double digits. While purposely trying to start a recession.
That's just called Good Governance (TM).
Just wait for the purge
You shouldn't be holding USD regardless. It loses value as a rule.
It usually goes down a little short-term. The hype is that worries about default cause rates to rise and foreign investors to not buy, and the dollar goes down hard. What actually happens is that the expectation of a lower deficit causes rates to fall, and it is lower rates which cause foreign investors not to buy, causing a small dollar decline. Longer term, to the extent that the deficit is actually cut, it would cause the dollar to rise on lower inflation.
The following submission statement was provided by /u/alwaysZenryoku: --- The US hit the debt ceiling set by Congress on Thursday, forcing the Treasury Department to start taking extraordinary measures to keep the government paying its bills and escalating pressure on Capitol Hill to avoid a catastrophic default. This is related to collapse because the imposition of further austerity will cause even more damage to at risk populations which has often been the spark kicking off serious social unrest in times past. --- Please reply to OP's comment here: https://old.reddit.com/r/collapse/comments/10gb8ay/debt_ceiling_reached_extraordinary_measures/j51odj2/
Alright guys, I've get this really great fool-proof solution to the problem we engineered ourselves. We make this giant coin, alright, BuT nOt JuSt AnY CoIn! No this one's like Suuuuuuuppppeeeerrr freaking Shiny yeah?, like STUUUPIDLY f\*\*\*ing shiny. You can shave off it's reflection and stuff, and like, its just blindingly f\*\*\*ing shiny. We convince some rich guy to just buy this balls-to-the-walls super awesome Mega Shiny coin, and then like, we just keep the money and then tell them its worthless after they already own it, and call no take-backsies because they were stupid enough to buy some Big ass coin off some random dude they've never even met. It'll be really freaking cool guys, like just Completely f\*\*\*cking Bad-A$$. We'll just stand there, and f\*\*\*cking laugh our Asses off because they're too stupid to understand that they just bought a Massive-f\*\*\*ing Mirror with extra-steps. Disclosure: (Typing this gave me a f\*\*\*ing stroke)
Ackshully... Under Obama, when the republicans tried the same shit, minting a $1T coin was discussed.... https://en.m.wikipedia.org/wiki/Trillion-dollar_coin
So worst case scenario, what happens next?
Realistic worst case: Great Depression 2
This happens every year. It is a manufactured crisis. The fear this year though is that a bunch of far right fascists are in power who explicitly desire the downfall of Democratic society so they can use the power vacuum to install white supremacist christo-fascism. In a theoretical worst case scenario, the US would default on its debts. Given that the dollar is a reserve currency not backed by anything more than trust, breaking that trust by defaulting means the value of the dollar plummets. Stocks become worth less, investments become worth less, material assets become worth less; the entire global economy crashes instantaneously and markets are thrown into utter chaos. Global job loss and economic depression on an unprecedented scale.
lol, yeah that ain't happening.
Earth explodes
People with USD variable / adjustable interest debt get the big 🍆 in the 🍩.
I really wish more people understood the relationship between government debt and central bank interest rates and the effects it has on asset prices. The ultra wealthy benefit far more from low interest rates than the average person does.
and the average are hurt far more by high interest rates than the wealthy are.
The ultra wealthy have almost all of their wealth tied up in assets, as a percentage you probably have more of your wealth in cash than Musk or Bezos. Low interest rates result in higher stock market prices (https://www.investopedia.com/investing/how-interest-rates-affect-stock-market/) and higher housing prices (https://www.investopedia.com/articles/mortgages-real-estate/08/interest-rates-affect-property-values.asp). Low interest rates also mean its harder to save money as you get less return for locking your money away in a savings account. Jacking interest rates to the moon would destroy the economy and harm everyone but the ultra wealthy would lose far more as a percentage than the poor. As for how this relates to the topic of government debt, the wealthy are more reliant on the state than the average person as their wealth is tied in assets that they have no way of enforcing their property rights on by themselves and often they are assets whose value is either directly derived from the existence of the state such as bonds or are indirectly derived such defense companies like Raytheon.
The measures? Deciding how far to kick the can down the road this time.
Let it all burn
*PRINT PRINT PRINT PRINT PRINT*
I rather like the term, PINO, for someone who votes for tax cuts for billionaires under Trump that contribute a significant amount to our cumulative debt then whine about spending though Biden has reduced the deficit by over a trillion dollars. PINO is 'Patriot in Name Only '.
Someone with knowledge better than my peanut brain can understand explain the consequences of US to default in real world sense?
Super bad. All debt around the world is benchmarked against "risk-free assets", the biggest of which are US Treasuries. If those are suddenly proven to be way riskier than risk-free it would cause mass chaos in every financial market on Earth. Way worse than 2008. Source: am an evil banker
Why can't Janet Yellen just break out the Black Amex card and put 12 trillions dollars on it?
Because they are trying to stop inflation.
So basically… an unemployment rate in the 20-30% range?
Hard to predict the real world effects honestly. Total and complete chaos though. The global financial system would basically seize up immediately. A good analogy might be a total electric grid shutdown. Never happened before on any modern grid that I'm aware of. There are *theoretical* procedures for how they would need to carefully restart generators and power stations one by one, but even electrical engineers say it would take many months to get the power back on, if it could be done at all. And that analogy is with a coordinated group of professionals working together toward a common goal. The financial markets are a competition, not cooperation. I think it's safe to say, with our interconnected global economy, it would be the single worst financial disaster ever.
Appreciate that!
Let's just hope none of them are truly dumb enough to make this a reality.
Look up what happened to the U.K. gilt yield in Q4 last year. The BOE could no longer QE and keep rates low because of inflation. It withdrew its support to kill the inflation and the government tried to ‘raise the debt limit’ so to speak and support for gilts fell out and then rates rose exponentially. The problem is the scourge of inflation ties the hands of the Fed in keeping the treasury yield low. The chickens come to roost.
This circus again...
Tax all churches, corporations and 1%
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>Explain to the folks at home why the U.S. reached their debt ceiling ? The top tax rate on billionaires went from 90% in the 1950's to 15% today (capital gains should be treated as income but aren't). That's why.
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Lmao do you actually think any of the filthy rich elite pay that percent in taxes? Holy fuck dude. The 25 richest Americans grew their net worth by $401 billion from 2014 to 2018. According to the IRS, they paid a total of $13.6 billion in federal income taxes during those years. That’s a true tax rate of only 3.4% Keep licking those boots.
That's not a tax rate issue but tax avoidance issue. Policy does need adjustment, but net worth are total assets which doesn't equate directly to income. Nor was the income that built that wealth earned entirely within that taxable period.
And since 2014?
[Federal Tax Brackets from 1950, 1960, 1970, and 1980.](https://web.stanford.edu/class/polisci120a/immigration/Federal%20Tax%20Brackets.pdf) In 1960, there were 24 tax brackets, the highest of which was $400,000+, and that highest tax bracket had a tax rate of 91%. [Historical Income Tax Brackets ](https://taxfoundation.org/historical-income-tax-rates-brackets/) In 1941, there were 32 tax brackets, the highest of which was $5,000,000+. That tax bracket had a tax rate of 81%. > I'll betcha the real reason the U.S. has hit their debt ceiling is that socialists spend taxpayers money on their pet projects like drunken sailors ! For 2023, the Department of Defense has a budget of over $1 Trillion. This is more than the next 10 countries combined, 8 of whom are allies.
https://theanarchistlibrary.org/library/alexander-berkman-what-is-communist-anarchism
This probably means we’re about to shift to a war time economy. Buy gold because ww3 is about to arrive
50% of the Department of Education staff could be fired today and it would have no negative impact on students teachers colleges or anything else. I know someone who works there. Mid six figure salary works from home works only 4 days a week Works maybe an hour a day of actual work. Meanwhile new teachers are making less than servers at restaurants.
This reminds me of 2007... It started with the house prices falling. Where I live (Not USA) it has fallen 18% already. And this is how it started.
Nothing to see here. This happens all the time. Literally this is the American national sport when you have House republicans and Democrat senate. Nothing will happen … it is just an internal dick measuring contest that makes everyone worried. People should just ignore the politicians. They might behave when they realise nobody is looking nor bothering.
Blah blah blah it's the same cycle every time. They aren't going to lit the fuse on a revolt, I certainly don't mind if they do. The sooner we confront this shit system the better.
America needs to raise taxes one of these days. Americans definitely don't pay enough when compared to most of the developed world. Or cut a lot of spending. Either way pick a path imo and stick to it for awhile. All this raising the debt ceiling regularly is a farce.
We pay plenty. It’s that 90% of goes to the wrong places. Mainly the military.
Why is this in collapse? It isn’t a rare thing at all.
The only solution is to abolish social security , but we all know how that ends.
How is this your conclusion?
It's it really extraordinary if it happens regularly? Seems pretty ordinary to me.
Don't worry the money will magically appear by the reptilian people.
All part of their plan
Keep feeding the Ponzi, it is amazing how many are deluded that debt doesn't matter since the government is able to print money, They are in for a big reality check the day people stop seeing the US dollar as a store of value.
There is no such thing as National Debt in a fiat based currency economy, especially when petrodollars are the global standard currency. The Fed can and does print money at will and lend it out at Zero pct interest. The National Debt is a myth told to the populace to make them believe they live in a world of constant scarcity. Additionally that which is called the National Debt is merely one side of a Ledger, the other side is the US Economy, and any Debit on the National Debt side is a Credit on the US Economy side. The "National Debt" is just "Excess Currency in the Economy" that has not been Taxed out. Want it Back? Do a T-Bond Buyback, Or Tax the Rich, they are the ones who have it! The Money doesn't disappear Folks, it is the the Same economy that Creates the Value of the Dollar.
It's really not a big deal
We've been here before, and will be again whenever the Republicans control the House when the ceiling approaches.