Debt Limit Analysis: Bipartisan Policy Center

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Silverbird,

We will probably buy the months of August and September with spending reductions in May, June, and July. At least I hope 'The Economic Black Swan' is doing this - see the May MTS Number where Federal spending was $50 Billion less than last year.

If you study the PowerPoint presentation you see something very scarey. And, it is not what the presenters are presenting - at least directly.

Here it is...

We are rolling debt payment into new debt. Constantly. Just the way things are done.

Folks, that has gotta stop. We either pay or cut. That is the only choice.
 
Current travel restrictions in my agency are the strictest they've been in my 20+year career, out of town multi-month details are being cut short-to be finished longdistance from home unit, people allowed to go on extended details are only being allowed under strictest of requirements for absolutely minimizing travel costs. Early outs are being offered with no buyout incentives as of this past week-time-limited offer. Havent seen earlyout authority since mid90s.
 
Failure to Raise U.S. Debt Cap Seen Idling 800,000 Federal Workers

June 28, 2011, 3:07 PM EDT
More From Businessweek

By Heidi Przybyla and Cheyenne Hopkins

June 28 (Bloomberg) -- The U.S. government wouldn’t be able to fund about 50 percent of its obligations and would have to furlough about 800,000 federal workers if Congress fails to approve an increase in the $14.3 trillion debt ceiling, a coalition of former budget officials says.

Sometime in the first half of August, no funding would be available for the Departments of Veterans Affairs, Education, and Housing and Urban Development, as well as unemployment insurance and Internal Revenue Service refunds, according to a report by the Bipartisan Policy Center in Washington.

“The reality would be chaotic,” Jay Powell, the author of the study and a former Treasury undersecretary under President George H.W. Bush, said at a news conference when the report was released. “Treasury would be picking winners and losers.”

More:
http://www.businessweek.com/news/20...u-s-debt-cap-seen-idling-800-000-workers.html
 
Guess we need to stop hiring and institute mandatory retirements at reduced rates......
 
Due to Mgt holding back over 20%+ of our planned spending until the budget passed, and then the trickle down process, we are now in what I call "Just buy by Oct 1" stupid mode. So much for speaking at seminars, there's no way to schedule these things so quickly. Too bad we can't save it for pay in case of an out of money error. Of course, haven't heard a thing about next year's budget, so trying to buy a year and a quarter's worth of stuff in 3 months....
 
The issue is:
If you reach your credit limit so now you don't have the money to pay the bills, your credit score will go down.
That sounds logical to me. If I ran up my credit card to the limit and ddin't make my house and auto payment, I don't expect my credit score to stay over 700.
 
Silverbird said:
If I ran up my credit card to the limit and ddin't make my house and auto payment, I don't expect my credit score to stay over 700.
Click to expand...

What do you think your credit score might go to if you keep paying the house and auto payments but never pay the credit card? And how long do you expect Credit Card Peter to keep loaning you money to pay Home/Auto Paul (plus Peter's interest)?

In my experience, you'll do better if you come clean with the creditors and make a realistic and sustainable plan rather than just tell them don't worry the check's in the mail because I'm going to go borrow some more money to pay you. Which of those strategies would you put more trust in?

That's the part that confuses me.
 
burrocrat said:
In my experience, you'll do better if you come clean with the creditors and make a realistic and sustainable plan rather than just tell them don't worry the check's in the mail because I'm going to go borrow some more money to pay you. Which of those strategies would you put more trust in?

That's the part that confuses me.
Click to expand...

Me too Burro, The strange thing is that Joe citizen has figured it out over the last three years. In hard times you cut back on spending and pay your debt down as much as possible. Which most of us have done. We, the not so smart ones that need the government to take care of us, are in many cases better off than before the crisis (assuming we still have a job). While the all-knowing politicians decided it was a good thing to go crazy spending and throwing money at every problem and even at our enemies. Yep that'll fix the problem all right! We'll borrow and spend our way out of this crisis. Have they lost their minds?
 
Yes, it's better to own up to your debt. But right now what we have is, credit card at max, making payments by borrowing, haven't made a deal with the creditors, no sign of more income, and about to run out of credit. So it's not a matter of choosing one over the other, what we have right now is the worst of both worlds. So we are talking about a potential two major strikes on that credit score.
 
[sarcasm] If your credit card is maxed, all you have to do is get the limit raised and you're not maxed any more. [/sarcasm]
 
SilverBird,

Many folks are hearing only what they want to hear from the Debt Vigilantes.

Yes, they are stating flat out that not extending the debt ceiling would spook the bond (and some say equity) markets. However, they ALSO always state that the Federal Gubmint must ALSO get its debt under control. They will NOT buy the debt the Gubmint is selling - have you seen the uptick in the 'G Fund' rates?

We have to raise the debt ceiling - but, more importantly, we can no longer spend 40% more than revenue. That has to stop NOW.
 
By the way...

Has anyone noticed that the Spender in Chief has actually not spent as much since the 'Debt Increase Crisis' started. Too funny, since conservatives started holding him to some form of budget (since no budget has been passed for over two years), the Administration has trimmed its spending in both May and June. I don't think this Administration has never done that.

This Administration has trimmed $77 Billion from last year's May and June spending. And, they were on their way to exceeding their glorious FY2010 expenditures. Wow, that projects to a $460 Billion dollar annualized spending cut.

What was the trimmed spending.

Anyone miss it.

Fat...
 
Yup, the Gubmint has been 'investing' your pension - in much the same fashion that they have been 'investing' the 12% of gross pay into Social Security.
.
Based on reports from previous administrations, it is reasonable to conclude that there is very little money, if any, in a retirement fund for future retirement payments to be paid to federal employees. As with Social Security, the fund is essentially full of "IOU's" from the government as the money is spent as it comes in to pay for current government expenses.

...

Bluntly, the money contributed by federal employees has already been spent. Chances are, if the administration decides not to issue Social Security payments, federal retirees won't get paid either. Paying former federal employees while not issuing Social Security checks to millions of Americans would be unpopular.​
.
Ouch, this is going to hurt.

A lot...
 
Boghie said:
SilverBird,

Many folks are hearing only what they want to hear from the Debt Vigilantes.

Yes, they are stating flat out that not extending the debt ceiling would spook the bond (and some say equity) markets. However, they ALSO always state that the Federal Gubmint must ALSO get its debt under control. They will NOT buy the debt the Gubmint is selling - have you seen the uptick in the 'G Fund' rates?

We have to raise the debt ceiling - but, more importantly, we can no longer spend 40% more than revenue. That has to stop NOW.
Click to expand...

Spot On!
Why Wall Street doesn't seem worried about default

The CEO of a big bank says a U.S. default could be catastrophic for the economy. The head of the Federal Reserve warns of chaos. And a credit rating agency threatens to take away the country's coveted triple-A status.The response on Wall Street: So what?​

http://news.yahoo.com/why-wall-street-doesnt-seem-worried-default-210513921.html
 
Silverbird said:
two major strikes on that credit score.
Click to expand...

Well, let's hope the next pitch is a good one and we connect because if not it's 3 strikes and we're out, at the ole ball game (insert money for ball), and good luck, thanks for playing.
 
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