The Debt Ceiling

iVillage Member
Registered: 07-30-2004
The Debt Ceiling
11
Wed, 10-09-2013 - 12:35pm

      The basic budgetary equation for any economic entity – individual, business or government – is income minus spending equals savings or borrowing.   If income is more than spending then income minus spending equals savings or we can say there is a surplus, if income is less than spending then income minus spending equals borrowing or we can say there is a deficit.  So, any process of determining income and spending also determines the level of savings or borrowing and in other words the level of surplus or deficit.  The level of surplus or deficit is the amount of decrease in the total debt, in the case of a surplus or amount of increase in the total debt, in the case of a deficit. 

      In the US government the congress votes on government income (mainly taxes) and government spending.  By doing so the congress also determines the amount of surplus or deficit.  That is by voting on government income and spending the congress has already voted on amount by which government debt will decrease or increase before any vote on the debt ceiling.  If the increase in the debt ceiling is high enough to cover any increase in the debt that has already been voted on by congress then there is no problem.  But, if the increase in the debt ceiling is not high enough to cover the already determined increase in the debt then there is a problem.

      If that is the case that is if the increase in the debt ceiling is not high enough to cover the increase in the debt that the congress has already voted on by voting on the level of income and the level of spending then something has to give.  Either the level of income would have to be increased above what congress has already voted on or the level of spending would have to be decreased below what congress has already voted on.  What this means is that by not voting for a large enough increase in the debt limit to fund the already voted on difference between spending and income (mainly taxes) congress is fighting against itself.

      The dilemma, at least for this year, is that the congress has already determined – voted on – a fairly detailed budget in regard to government income and government spending and therefore, by doing so, has already determined the increase in the debt.  If the increase in the debt limit is not enough to cover the increase in the debt that has already been determined by the congress by voting on taxes and spending, then the congress would have to go back to either raise taxes or lower spending or do a combination of the two.  But if there is only a matter of days before the debt limit is to be passed, the congress would not have enough time to renegotiate the level of taxes and spending in the detail that has already been done.  What this means is that the congress has already negotiate taxes and spending with different sides making concessions, but then congress would have to redo this within a very short time.  This does not make sense to me.

      Another possibility would be for the congress to only vote once on the debt increase, by voting for the level of taxes and spending and not have a separate debt limit vote.  Also the congress could vote on the level of deficit or surplus they want and the amount of income (mainly taxes) and the level of spending would then be determined by this voted on deficit or surplus and income.  A third possibility would be for the congress to vote on the level of deficit or surplus and the level of spending, with the level of income (taxes) being determined by the outcome of those votes.  Additionally congress could vote on the debt limit before the regular budgetary process and then determine the level of taxes and spending that would fit that debt limit.  All of these would avoid the last minute problems we see happening now.

       Tom,

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iVillage Member
Registered: 03-08-2011
Tue, 10-29-2013 - 7:06pm

795. Debt ceiling crisis continues and shopping mall shooting (10/20/2013)

 It happens just as what I have said, the government maintains that big financial crisis – move it to three months later. The framework negotiated by Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell would fund the government through Jan. 15, 2014, and suspend the debt limit until Feb. 7, setting up another round of confrontations.

 Though both parties and Obama are criticized for playing politics and leave public interest alone, they don’t care. They just follow their master’s order. It means if the Feds succeeded in their next plot, the Americans will face a big financial turmoil early next year.

I also allege that “Kenya Mall massacre” was created by the Feds to justify a “shopping center shooting spree” in US. I had experience of “attempt murder in bank robbery” (see #402, 404, 561 562) .so I try to go shopping when bank closed – in holiday or in evening. California Market was a Chinese supermarket I used to go which located at Landess Ave cross with Morrill Ave. (2 in map) started from later last year, California market shrank gradually (only part of it was opened) so I had to turn on to the Sea Food City cross the street which supplies food for Philippines’. (1 in map).

http://thumbs.myopera.com/sz/colx/katsung47/albums/12490382/Super%20market.PNG?1382297941

 In later March this year, a news rattled me. A bank was robbed continuously in Season’s Market Place. It was the market where Sea Food City located. (see “764. Plot to eliminate Kat Sung (3/23/2013)”) I didn’t notice there was a bank in that place. I asked people, they told me it might be on business started from last year. I found that US Bank is just next door to the supermarket. I also found it open to business on weekends too. I think all these were manipulated by the Feds. They arranged a bank for bank robbery shooting trap. To force me go there they shut down the other supermarket I used to go. It was lucky for me that I used to go there later on Sundays. US bank closes at 3 p.m. on Sunday.

California Market closed in April, (a coincidence with April plot marked with Boston bombing), it remains unchanged until September. On Oct. 6, it reopened. It was a hurry up opening. I didn’t go inside. Kenya mall shooting just happened. Would there be another trap?

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