Raise the Ceiling!

Boost US debt ceiling to cover 2010

 

 Congress will have to raise the current debt ceiling of $12.1 trillion in coming weeks to prevent the Treasury Department from defaulting on its debt.

The House voted in the spring to raise the ceiling to $13 trillion, likely not enough to last through the 2010 elections at current borrowing rates, but the Senate has yet to act. 

 

* snip

The recession, wars in Iraq and Afghanistan and tax cuts have forced lawmakers to more than double the debt limit from $5.7 trillion when former President George W. Bush took office in 2001.

 

Uh oh. This could have serious ramifications.

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Good God, look at the reasoning

not because of a a potential default, not because of maybe more Stimulus spending, not dealing with inefficiencies, I hear we have a butt load of private contractors in Afghanistan, ....

but the reason, oh, so they can get re-elected!

Jesus, look at what lights a fire under their ass. Economic Armageddon, big banks staging a financial coup? Hell no...
but an election, they are right on that one.

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What I'm actually curious about...

You're right on, Bob!

It's a bit disturbing to read "to prevent a Treasury default", but the question that I have for you Econ-gurus is:
Will the ceiling increase be enough? and where does this put us debt % to GDP?

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YD - You ask the right question and Steve Keen explains.

I don't know if you are familiar with him but, IMHO, the best economist I can recommend with respect to understanding debt and it's relation to our current predicament is Steve Keen. Not so long ago, he published this graph of US debt to GDP ratio.

More recently, he has recapped his research and findings concerning the Global Financial Crisis in this article on his blog, commemorating the fourth anniversary of his calling the imminent GFC.

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Glad you like it YD.

Keen can get a bit wonkish, but I think he has the most fundamental understanding of what we are facing and how we got here. He is a proponent of Hyman Minsky's theories and it would behoove us all, not in the least the policy makers in DC, to pay attention to his research. In some ways I would even go so far as to say that he is today's equivalent to the GD's Keynes and Fischer.

On a personal note, I was wondering where in the Garden State you reside? I lived for 20 wonderful years in Somerset county before cashing out. I formerly owned/operated a small, boutique import/export logistics operation in the Newark port area. You have mentioned in the past that you are involved in retail, so I would guess you are in the Secaucus area? I doubt that we know each other explicitly, but I would expect we have a few friends in common.

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Keen makes a good argument for deflation

I was particularly struck by Keen's ideas on debt-deflation, the liquidity trap, and his take on oversights of classical economic thought as applied in our current situation. The last section of this article is particularly insightful.

CG, I am in CNJ - close to the New Brunswick area. I work for a national wholesale/retail chain on the retail side.

I think Bob has a way we can contact each other directly, but I don't see the instructions right now. Maybe I'm just not awake enough, yet. LOL

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system

click on user id, then click on "contact" for private email...

although I hope people to talk about econ use the comments so others can see the discussion.

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