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Debt ceiling dumb idea: economists

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Master_Pedant
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16 Oct 2013, 6:36 pm

http://www.cbc.ca/news/u-s-government-s ... -1.2055705

Daniel Schwartz wrote:
The U.S. has had a debt ceiling, limiting the amount of money the government can borrow, for nearly a century. But the idea hasn't caught on with other nations (only Denmark has something similar) or with economists.

John Blank, chief equity strategist for Zacks Investment Research, calls the debt ceiling "incredibly stupid," adding that the vast majority of “economists do not think that it's a good idea.”

He cites a University of Chicago January survey of U.S. economists that found 84 per cent of them agree or strongly agree that “a separate debt ceiling that has to be increased periodically creates unneeded uncertainty and can potentially lead to worse financial outcomes.” Only three per cent expressed any disagreement.

[...]

Kirkegaard, who is a senior fellow at the Peterson Institute for International Economics in Washington, says the two debt ceilings are only similar legally, in that both of them have a binding limit on what the respective governments can borrow.

But in political terms, he said, they are "absolutely not" similar.

Having looked closely at debt ceiling laws, Kirkegaard says he can find no other country where the issue is comparable to the U.S.


Hey, congress, don't want debt? Don't approve budgets where spending exceeds revenues. I know that might be hard, with voodoo economic thinking ... I mean "dynamic scoring", but shouldn't be impossible.


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16 Oct 2013, 11:53 pm

Debt and Economists are dumb ideas.

It may boost the economy one time to put imaginary money into circulation, but it is then blead forever by very real interest payments.

Debt is a way to redirect profit gained to money lenders.

Five acres owned is better than share cropping ten or twenty.

A bad year is a bad year, but with debt, a bad year is a total loss of everything you own.

Since Government does not make a profit, it should not be allowed debt. If it needs more, raise taxes and pay as you go.

We The People are in debt equal to the Bush Tax Cuts for the super rich. At Clinton tax rates, we would not have a National Debt.

Economists, theft through lying.



zer0netgain
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17 Oct 2013, 7:31 am

Those economists are idiots.

Yeah, no debt ceiling keeps things going...until your currency is considered worthless. In a closed system where there are no national economies with their own currencies, perhaps it would work (so what if the DingGong isn't worth squat...it's the only currency we have). In reality, when a nation's currency is backed by nothing and huge volumes of worthless notes are in circulation, people wake up and realize that currency can't be trusted to be redeemable, so they bail and go to a currency with better odds of being redeemable.

In any case, a policy of "live within your means" is always sound. It's a check to make you question if you really NEED something and what will you SPEND to obtain it.

If every government program in the USA was put in place with an irrevocable mandate that new taxes pay for it that could not be misappropriated or eliminated without eliminating that program, we would have a whole lot less government and programs in place today because the people screaming for more stuff DO NOT want to have to pay for it.

You see this every day with credit cards. Don't want to pay for that pizza, charge it...but someday the credit card company will refuse to increase your credit limit and then you are unable to buy more stuff and now you either pay down all that debt or you go bankrupt and risk loosing everything.



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17 Oct 2013, 11:33 pm

zer0netgain wrote:
Those economists are idiots.

Yeah, no debt ceiling keeps things going...until your currency is considered worthless. In a closed system where there are no national economies with their own currencies, perhaps it would work (so what if the DingGong isn't worth squat...it's the only currency we have). In reality, when a nation's currency is backed by nothing and huge volumes of worthless notes are in circulation, people wake up and realize that currency can't be trusted to be redeemable, so they bail and go to a currency with better odds of being redeemable.

In any case, a policy of "live within your means" is always sound. It's a check to make you question if you really NEED something and what will you SPEND to obtain it.

If every government program in the USA was put in place with an irrevocable mandate that new taxes pay for it that could not be misappropriated or eliminated without eliminating that program, we would have a whole lot less government and programs in place today because the people screaming for more stuff DO NOT want to have to pay for it.

You see this every day with credit cards. Don't want to pay for that pizza, charge it...but someday the credit card company will refuse to increase your credit limit and then you are unable to buy more stuff and now you either pay down all that debt or you go bankrupt and risk loosing everything.


Two comments. James Buckley federal judge and formerly (senator NY-C) I think the only conservative party candidate ever elected to any national office, was asked for his vote to raise the debt limit. He replied by asking why the US has a debt ceiling...you never stick to it.

Secondly as for the US dollar, despite the fact that the 'fed' is NOT printing money, and I have actually had people scared when I tell them, the US dollar is 'gold' to the world. As evidence I put to you bloggers here, that even after that ridiculous downgrade of US T-bills to AA, immediately thereafter, billion$ of 10 year notes sold out in a matter of minutes and at historically low interest rates. The fearmongering is more dangerous than US borrowing because the world knows of and has absolute and total respect for the American labor force and [its] ability to work and pay, not only the interest but someday...the principal.