Study suggests the US debt ceiling could bind by the middle of February
46 replies, posted
[url]http://www.reuters.com/article/2013/01/07/us-usa-fiscal-debt-idUSBRE9060UM20130107[/url]
[quote=Reuters]The United States may run out of tools to avoid a default as early as February 15, piling more pressure on lawmakers and the Obama administration to resolve their fiscal battles, a study found on Monday.
The U.S. Treasury in late December began shuffling funds in order to keep paying the government's bills, buying time for lawmakers to raise the $16.4 trillion legal limit on the nation's debt. It confirmed the ceiling was scraped on December 31.
Treasury Secretary Timothy Geithner predicted the maneuvers -- which include pausing some investments in federal pension and health benefit funds -- would normally buy the government about two months before the debt limit became binding.
Possible delays in the tax filing season could extend that time further, as the government would get more time to refund taxes, Geithner said at the time.
But the Bipartisan Policy Center, a Washington-based think-tank, said the Treasury may run out of funds between February 15 and March 1, based on an analysis of the government's daily and monthly cash flows.
"It will be difficult for Treasury to get beyond the March 1 date in our judgment," Steve Bell, senior director of the Center's Economic Policy Project, said in a statement.
The Center said it assumes taxes will be filed as scheduled.
In years past, Congress has periodically raised the debt ceiling without much fuss to take into account the budget deficits from its decisions on taxes and spending.
But the limit has become a hostage in the high-stakes fiscal battle roiling the U.S. capital, with Republicans refusing to raise it unless Democrats agree to deep spending cuts to tame the ballooning national debt.
The Bipartisan Policy Center said the Treasury has fewer tools now to stave off a default than it did in the summer of 2011, when battles over raising the debt ceiling pushed the United States to the brink of default and hit its credit rating.
At the time, the Treasury's tools lasted roughly three months, from May until early August.
If the government runs out of cash, it may have to choose between making interest payments on its debt, refunding taxes, or making payments for Medicare and Medicaid -- all due in late February and early March.[/quote]
This is ridiculous. I go back to school right before the earliest this could happen. What would that mean for us students and people who are graduating?
[QUOTE=AmericanInfantry;39135656]This is ridiculous. I go back to school right before the earliest this could happen. What would that mean for us students and people who are graduating?[/QUOTE]
better party extra hard
Why don't they just tear down the ceiling? I bet most people could survive the winter weather without it.
[QUOTE=AJisAwesome15;39135672]better party extra hard[/QUOTE]
No reason to party. I'd be out of an education, out of a future job.
Sweden sure does look nice right now...
Oh yeah, I'm sure the crisis will come this time! Yep, just like the last two times.
Don't get worked up about this shit. They don't let it happen.
[QUOTE=King Tiger;39135781]Oh yeah, I'm sure the crisis will come this time! Yep, just like the last two times.
Don't get worked up about this shit. They don't let it happen.[/QUOTE]
If they wouldn't let it happen, explain how we don't have many tools and solutions to this now.
What do you propose, O King of Idiocy?
[QUOTE=AmericanInfantry;39135693]No reason to party. I'd be out of an education, out of a future job.
Sweden sure does look nice right now...[/QUOTE]
Don't worry man, You are welcome over here. Bring umbrellas
[QUOTE=AmericanInfantry;39135834]If they wouldn't let it happen, explain how we don't have many tools and solutions to this now.
What do you propose, O King of Idiocy?[/QUOTE]
OK you're right it's going to hit in February. Prepare for imminent collapse.
[QUOTE=King Tiger;39135920]OK you're right it's going to hit in February. Prepare for imminent collapse.[/QUOTE]
I know you think what you are saying should be taken sarcastically. It really shouldn't. Each and every one of these near misses that we've had, really have been near misses. It only takes one serious fuck-up to send us over the edge, and if there nothing can convince you that the government isn't all it's cracked up to be, so be it. Just keep it to yourself. The rest of us are going to act like adults and prepare ourselves for economic issues.
[QUOTE=King Tiger;39135781]Oh yeah, I'm sure the crisis will come this time! Yep, just like the last two times.
Don't get worked up about this shit. They don't let it happen.[/QUOTE]
They still haven't solved it yet, they're just wanking around and then delaying the inevitable at the last second.
You're still 16.4 trillion in the hole.
Kick the can down the road long enough, and soon you will run out of pavement and be kicked into oncoming traffic.
[QUOTE=AmericanInfantry;39135693]I'd be out of an education, out of a future job.[/QUOTE]
Why?
[QUOTE=valkery;39136098]I know you think what you are saying should be taken sarcastically. It really shouldn't. Each and every one of these near misses that we've had, really have been near misses. It only takes one serious fuck-up to send us over the edge, and if there nothing can convince you that the government isn't all it's cracked up to be, so be it. Just keep it to yourself. The rest of us are going to act like adults and prepare ourselves for economic issues.[/QUOTE]
What are these near misses you speak of? And why would we be sent "over the edge"?
[editline]7th January 2013[/editline]
I think that people believe "fiscal cliff" and "debt ceiling" are synonyms for economic collapse and they don't know what they really are.
[QUOTE=POLOPOZOZO;39136287]Why?[/QUOTE]
I'm not sure, I think the hypothetical lack of money would be a big cause of either.
I'm just overreacting and thinking of what could happen at this point, but this situation deeply worries me.
[QUOTE=AmericanInfantry;39135693]No reason to party. I'd be out of an education, out of a future job.
Sweden sure does look nice right now...[/QUOTE]
----------> the joke
O.O <---ur head
So wait, can someone explain to me what exactly happens when we default? Prices for everything in the U.S. would rise, right? And we go back into a recession? But how bad could it get?
shame that we couldn't
like
consume less than we produce or something
[QUOTE=cccritical;39136752]shame that we couldn't
like
consume less than we produce or something[/QUOTE]
are you suggesting we overturn the entire school of economics
[QUOTE=AmericanInfantry;39135656]This is ridiculous. I go back to school right before the earliest this could happen. What would that mean for us students and people who are graduating?[/QUOTE]
It wouldn't affect your school until next year. At least from a funding perspective. from a moral perspective, it will be shit, for the teachers at least, as they'll go into "fight for my job" mode.
What about that trillion dollar coin?
Maybe we can solve this debt issue by creating more government subsidized programs and by raising the wages of federal employees
[QUOTE=Ltp0wer;39137855]Maybe we can solve this debt issue by creating more government subsidized programs and by raising the wages of federal employees[/QUOTE]
The only way to make money is to spend money! I like your thinking!
[QUOTE=MuTAnT;39137873]The only way to make money is to spend money! I like your thinking![/QUOTE]
Damn right! And these subsidies create JOBS! It would also help to make sure we bailout any company that is failing in the free-market, to ensure the preservation of JOBS. I mean, it's not the company's fault. Nor is it the fault of the labor unions who drive the wages up to levels that are unsustainable, so we better bail them out as well.
Will this start world war 3 if the US falls into a great depression?
[QUOTE=BCell;39138103]Will this start world war 3 if the US falls into a great depression?[/QUOTE]
Maybe if we default on our loans. I hear screwing over other nations like that can cause wars.
[editline]7th January 2013[/editline]
[QUOTE=MuTAnT;39136127]You're still 16.4 trillion in the hole.[/QUOTE]
More like up the hole and around the corner.
[QUOTE=Kartoffel;39138144]Maybe if we default on our loans. I hear screwing over other nations like that can cause wars.
[editline]7th January 2013[/editline]
More like up the hole and around the corner.[/QUOTE]
So whose money did the US borrowed from?
[QUOTE=BCell;39138160]So whose money did the US borrowed from?[/QUOTE]
China, I think. I could be wrong, I'm no economist.
[QUOTE=BCell;39138160]So whose money did the US borrowed from?[/QUOTE]
As far as I know, mostly China. Don't quote me on that though.
[QUOTE=BCell;39138160]So whose money did the US borrowed from?[/QUOTE]
Wikipedia says public debt is held by:
[quote]Debt held by the public includes Treasury securities held by investors outside the federal government, including that held by individuals, corporations, the Federal Reserve System and foreign, state and local governments.[/quote]
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