Fear, Uncertainty, Doubt — FUD Over Not Raising National Debt Ceiling — When Will Government Spending and The Budget Balanced? — The American People Would Like To Know! — Videos

Posted on October 7, 2013. Filed under: American History, Blogroll, College, Communications, Economics, Education, Federal Government, Federal Government Budget, Fiscal Policy, Foreign Policy, government, government spending, history, History of Economic Thought, Illegal, Immigration, Law, liberty, Life, Links, Literacy, media, People, Philosophy, Photos, Politics, Press, Rants, Raves, Regulations, Resources, Talk Radio, Tax Policy, Taxes, Unemployment, Video, War, Wealth, Weapons, Wisdom | Tags: , , , , , , , , , , , |

U.S. National Debt Clock



Obama Lies About the Implications of Raising the Debt Ceiling


Jack Lew attacks Ted Cruz and Tea Party – says they are dangerous exttremists

Dan Mitchell Debunking Myths about the Partial Government Shutdown

Does Government Have a Revenue or Spending Problem?

Funding Government by the Minute

What Can We Cut to Balance the Budget

Will Higher Tax Rates Balance the Budget?

Will Taxing the Rich Fix the Deficit?

What Are the Dangers of Too Much Debt?

How Big Is the U.S. Debt?


                                                  STAR - TREASURY FINANCIAL DATABASE

                                                        ACCOUNTING DATE:  08/13

   PERIOD                                                                     RECEIPTS                OUTLAYS    DEFICIT/SURPLUS (-)
+  ____________________________________________________________  _____________________  _____________________  _____________________

     OCTOBER                                                                   163,072                261,539                 98,466
     NOVEMBER                                                                  152,402                289,704                137,302
     DECEMBER                                                                  239,963                325,930                 85,967
     JANUARY                                                                   234,319                261,726                 27,407
     FEBRUARY                                                                  103,413                335,090                231,677
     MARCH                                                                     171,215                369,372                198,157
     APRIL                                                                     318,807                259,690                -59,117
     MAY                                                                       180,713                305,348                124,636
     JUNE                                                                      260,177                319,919                 59,741
     JULY                                                                      184,585                254,190                 69,604
     AUGUST                                                                    178,860                369,393                190,533
     SEPTEMBER                                                                 261,566                186,386                -75,180

       YEAR-TO-DATE                                                          2,449,093              3,538,286              1,089,193


     OCTOBER                                                                   184,316                304,311                119,995
     NOVEMBER                                                                  161,730                333,841                172,112
     DECEMBER                                                                  269,508                270,699                  1,191
     JANUARY                                                                   272,225                269,342                 -2,883
     FEBRUARY                                                                  122,815                326,354                203,539
     MARCH                                                                     186,018                292,548                106,530
     APRIL                                                                     406,723                293,834               -112,889
     MAY                                                                       197,182                335,914                138,732
     JUNE                                                                      286,627                170,126               -116,501
     JULY                                                                      200,030                297,627                 97,597
     AUGUST                                                                    185,370                333,293                147,923

       YEAR-TO-DATE                                                          2,472,542              3,227,888                755,345


 USER ID  :     
 DATE: 2013-09-10 TIME: 22.20.06                                                                                         PAGE   1(2)
1                                                    BUREAU OF THE FISCAL SERVICE
                                                  STAR - TREASURY FINANCIAL DATABASE

                                                        ACCOUNTING DATE:  08/13

                                                                         ACTUAL          ACTUAL       ACTUAL COMP.     BUDGET EST.
   CLASSIFICATION                                                      THIS MONTH    THIS FY TO DATE  PRIOR PERIOD       FULL FY
+  _________________________________________________________________ _______________ _______________ _______________ _______________

   INDIVIDUAL INCOME TAXES                                                    85,286       1,175,536       1,015,419       1,309,683
   CORPORATION INCOME TAXES                                                    3,595         216,360         186,272         278,684


     EMPLOYMENT AND GENERAL RETIREMENT (OFF-BUDGET)                           54,771         614,010         521,335         674,143
     EMPLOYMENT AND GENERAL RETIREMENT (ON-BUDGET)                            16,703         194,450         186,822         214,817
     UNEMPLOYMENT INSURANCE                                                    5,969          56,524          66,145          58,593
     OTHER RETIREMENT                                                            313           3,256           3,449           3,746
   EXCISE TAXES                                                                6,315          72,894          69,420          85,334
   ESTATE AND GIFT TAXES                                                       1,253          17,783          13,026          17,690
   CUSTOMS DUTIES                                                              2,843          28,859          27,570          32,154
   MISCELLANEOUS RECEIPTS                                                      8,322          92,871          98,069         101,719
   ALLOWANCES                                                                 ......          ......          ......          ......

       ;BTOTAL RECEIPTS                                                      185,370       2,472,542       2,187,527       2,776,563

         ;C(ON-BUDGET)                                                       130,599       1,858,532       1,666,192       2,102,420
         ;C(OFF-BUDGET)                                                       54,771         614,010         521,335         674,143


   LEGISLATIVE BRANCH                                                            345           3,955           4,097           4,792
   JUDICIAL BRANCH                                                               669           6,508           6,650           7,283
   DEPARTMENT OF AGRICULTURE                                                  10,859         146,486         129,810         159,620
   DEPARTMENT OF COMMERCE                                                        682           8,322           9,513           9,391
   DEPARTMENT OF DEFENSE-MILITARY PROGRAMS                                    53,367         559,942         601,176         610,266
   DEPARTMENT OF EDUCATION                                                     7,028          38,725          53,177          44,431
   DEPARTMENT OF ENERGY                                                        1,650          22,576          29,635          25,977
   DEPARTMENT OF HEALTH AND HUMAN SERVICES                                    94,535         832,894         793,470         903,970
   DEPARTMENT OF HOMELAND SECURITY                                             3,633          52,272          43,932          58,377
   DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT                                 2,289          32,545          46,807          56,518
   DEPARTMENT OF THE INTERIOR                                                  1,153           8,455          11,393           9,964
   DEPARTMENT OF JUSTICE                                                       2,428          27,125          28,226          29,897
   DEPARTMENT OF LABOR                                                         5,972          75,930          98,314          86,163
   DEPARTMENT OF STATE                                                         1,714          21,774          23,222          29,536
   DEPARTMENT OF TRANSPORTATION                                                7,730          67,605          66,944          78,505


     INTEREST ON TREASURY DEBT SECURITIES (GROSS)                             25,488         395,826         342,541         414,655
     OTHER                                                                     2,619          23,821         135,586         -10,700
   DEPARTMENT OF VETERANS AFFAIRS                                             17,996         131,489         118,198         138,901


Debt ceiling: Understanding what’s at stake




It is the economic calamity that no one expects and everyone fears.

Experts agree that failing to raise the nation’s debt ceiling by Oct. 17, when U.S. officials say the government will run out of money to pay its bills, would gravely wound the economy, and perhaps even throw it back into recession. Because Treasury bonds and the dollar are cornerstones of the global financial system, meanwhile, the shock wave would be felt around the world.

“The potential is disastrous,” said Gus Faucher, senior economist with PNC Financial Services Group. “We would see interest rates spike across the board. We’d see a huge crash in the dollar. People count on lending their money to the federal government and getting it back, and if that trust is taken away — it’s never happened that we haven’t met our obligations as a nation — then that has very, very negative consequences for the U.S. economy.”

The consequences are so severe that, even as the government shutdown enters its second week, most seasoned political observers still expect Congress to ultimately reach an eleventh-hour deal to lift the government’s borrowing limit.

But what exactly is the debt ceiling, and exactly how worried should Americans be that it could come crashing down?

What is the debt ceiling?

The debt ceiling is the total amount of money the U.S. government can borrow (by selling Treasury bonds) to pay its obligations, including interest on the national debt, Social Security and Medicare benefits, and many other payments. That limit is currently $16.7 trillion, although technically the government already exceeded it in May. The Treasury Department has since used various measures to continue borrowing.

During World War I, amid uncertainty regarding the total costs of funding U.S. involvement in the conflict, Congress created the cap in 1917 to put an upper limit on federal borrowing. Since 1960, Congress has raised the debt ceiling 78 times.

How is the debt ceiling changed?

Lawmakers can adjust it by passing a standalone bill or by including it in another piece of legislation as an amendment.

Does raising the debt ceiling increase the federal debt?

No. Lifting the borrowing limit simply allows the government to pay its existing bills. That debt exists whether or not Congress authorizes additional borrowing, and to avoid default it must be paid.

Why can’t Congress and the White House avoid lifting the cap by cutting federal spending?

Because preventing the government from borrowing to meet its obligations would require all discretionary spending, such as for defense, education, housing and other annual appropriations, to stop, according to the Congressional Research Service. Most of the outlays for mandatory programs, such as Social Security, also would have to be halted, while taxes would need to rise to ensure the government had money to spend. Deep spending cuts and tax hikes would throw the economy into recession.

Why is Oct. 17 a critical date?

Treasury Secretary Jacob Lew recently forecastthat on Oct. 17 the government would have about $30 billion on hand. That isn’t enough because the government spends as much as $60 billion per day. “If we have insufficient cash on hand, it would be impossible for the United States of America to meet all of its obligations for the first time in our history,” he said last week in a letter to congressional leaders.

What happens if Congress doesn’t raise the debt ceiling?

If the government runs low on cash, it will have to withhold a range of payments. Retirees might not get their Social Security checks, especially worrisome for the millions of Americans who depend almost entirely on the social insurance program for income. The same goes for Medicare and Medicaid recipients. Holders of Treasury notes, from Wall Street and other global banks to foreign governments, also could get stiffed, jeopardizing the solvency of many financial institutions and choking off global credit flows.

The U.S. also would struggle to pay the interest on its debt, including a $6 billion payout due at the end of the month. At that point, the U.S. would be in default of its obligations. The value of Treasury bonds and the dollar would nosedive. The nation’s borrowing costs would soar as anxious investors demanded a higher return to buy suddenly shaky U.S. debt. And because the interest rate on Treasuries provides a benchmark for rates on other loans, from mortgages and credit cards to car and student loans, borrowing would become far more costly for consumers and businesses. Stock markets in the U.S. and elsewhere around the world would almost certainly plunge.

“When stock prices fall, investment or other spending to expand a business is more costly,” the Treasury Department said in a report last week outlining the potential impact of the debt-ceiling fight. “The effects on households and businesses, moreover, are reinforcing. Less capacity and willingness of households to spend, when businesses have less incentive to invest, hire and expand production, all lead to weaker economic activity.”

In short, the already fragile economic recovery could stall.

Haven’t we been here before?

There is recent precedent for such turmoil. Consumer confidence plummeted after lawmakers squared off over the debt ceiling in the summer of 2011, while the Standard & Poor’s 500 stock index dropped nearly 20 percent. Hiring among small businesses slowed. Ever after a deal was struck to raise the cap in August of that year, credit rating agency Standard & Poor’s downgraded U.S. debt for the first time ever.

Beyond the immediate economic fallout of defaulting on its debt, for the U.S. the symbolic blow might be even greater. In the post-World War II era, Treasuries and the greenback have — for better and for worse — served as the foundation of the global financial system. A default would shatter the faith on which that system relies.

How much danger are we in?

Although financial markets are not yet in panic mode, the standoff in Washington has them worried. Unlike during the 2011 dispute, when Republicans and most Democrats favored cutting federal spending, the stark division over Obamacare suggests there may be less room for compromise this time around. One clear sign of distress: Interest rates on short-term Treasury bonds rose last week, as investors seek greater yields to offset what they perceive as the greater risk of holding the debt.

Still, most economists, stock analysts and, for all the pointed rhetoric on Capitol Hill, even congressional leaders themselves downplay the chances of a default. The belief is that common sense, or at least a sense of political self-preservation, will prevail.


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