Paulson: US should boost debt limit

[BrAinPaiNt]

LINK (http://news.yahoo.com/s/ap/20070730/ap_on_go_ca_st_pe/debt_limit_3)



By JEANNINE AVERSA, AP Economics Writer Mon Jul 30, 4:46 PM ET

WASHINGTON - Treasury Secretary Henry Paulson on Monday said the United States may be unable to pay its bills this fall unless Congress raises the government's borrowing authority, now capped at $8.965 trillion.

Paulson, in a letter to lawmakers, estimated the government is likely to bump into the statutory debt limit in early October.

"Accordingly, I am writing to request that Congress raise the statutory debt limit as soon as possible," Paulson wrote. He did not say how much more borrowing authority the Bush administration needs.

Congress has already boosted the statutory debt limit several times during President Bush's tenure. The last time Congress upped the government's borrowing authority was in March 2006 when it agreed to raise the debt ceiling by $781 billion.

Boosting the debt limit is more a matter of politics than economics.

Economists doubt Congress will refuse to raise the limit. A federal default is considered unimaginable because it would rattle bond markets, force interest rates higher and shake the economy.

Democrats have blasted the administration for ratcheting up the government's borrowing needs, while they deal with bloated budget deficits; they contend the greater borrowing needs show Bush's fiscal mismanagement.

The administration, however, has defended the increases as essential to pay for wars in Iraq and Afghanistan and to cover other costs to keep the United States secure.

In the past, Treasury has resorted to numerous accounting maneuvers to pay its bills while the government waited for Congress to expand its borrowing authority. Paulson argued against being forced to use such measures, saying they "would create unnecessary uncertainty for the financial markets and result in costs to the government." Such actions, he said. "should be reserved only for extraordinary circumstances, and should be avoided."

Separately, the government expects to borrow $73 billion in the July-to-September quarter, which would be more than previously forecast, the Treasury Department said.

The new estimate is $31 billion higher than a projection made in April. The department partly blamed increased government spending for the new, larger quarterly borrowing projection. It comes as the department considers the government's financing needs, which it does on a quarterly basis.

[jterrell]

good thing the current Repubs are so fiscally friggin responsible huh?

:mad:

[BrAinPaiNt]

good thing the current Repubs are so fiscally friggin responsible huh?

:mad:

I doubt you would find many republicans that claim bush is a conservative as far as spending goes.

[Danny White]

I doubt you would find many republicans that claim bush is a conservative as far as spending goes.

You hit the nail on the head there!

[Eric_Boyer]

I doubt you would find many republicans that claim bush is a conservative as far as spending goes.

no they wouldn't.

but is it too much to ask that they admit the writing was on the wall in 1999?

When we had the chance to pay off a portion fo this debt - Bush bought a presidency instead. He campaigned on the notion that American's deserved to get this surplus back - and the bots ate it up.

[BrAinPaiNt]

no they wouldn't.

but is it too much to ask that they admit the writing was on the wall in 1999?

When we had the chance to pay off a portion fo this debt - Bush bought a presidency instead. He campaigned on the notion that American's deserved to get this surplus back - and the bots ate it up.

Hey. Just because it took some of us longer to catch on to Bush's sneaky ways does not mean you can come in here and make us feel bad. ;)

[Eric_Boyer]

Hey. Just because it took some of us longer to catch on to Bush's sneaky ways does not mean you can come in here and make us feel bad. ;)

Buck up. You hated Bush back then too.

You were just one of those lesser of two evils guys. At least you recognized evil! Cajun though he was looking at an Angel.

[BrAinPaiNt]

Buck up. You hated Bush back then too.

You were just one of those lesser of two evils guys. At least you recognized evil! Cajun though he was looking at an Angel.

Although I was never as bad as some of the others in backing W...I still did vote for him that first time. :(

[CowboyJeff]

You'd think Ted Kennedy was running the financial aspects of the country. Jeez!!!

[AtlCB]

no they wouldn't.

but is it too much to ask that they admit the writing was on the wall in 1999?

When we had the chance to pay off a portion fo this debt - Bush bought a presidency instead. He campaigned on the notion that American's deserved to get this surplus back - and the bots ate it up.The problem isn't the tax cuts; it's the out of control spending. Bush spends more money than most Democrats.

[CowboyJeff]

The problem isn't the tax cuts; it's the out of control spending. Bush spends more money than most Democrats.

You got that right. Bush spends money like a drunken sailor. Whoda thunk Clinton/Gore would be more fiscally responsible than Bush/Cheney. WOW. Either way, both the "Tax and Spend" Democrats and "Borrow And Spend" Republicans need a good *** kicking!!! The elimination of the line item veto ruined good fiscal policy.

[Mavs Man]

The problem isn't the tax cuts; it's the out of control spending. Bush spends more money than most Democrats.

On the nosey!

[Mavs Man]

You got that right. Bush spends money like a drunken sailor. Whoda thunk Clinton/Gore would be more fiscally responsible than Bush/Cheney. WOW. Either way, both the "Tax and Spend" Democrats and "Borrow And Spend" Republicans need a good *** kicking!!! The elimination of the line item veto ruined good fiscal policy.

You ain't kidding. :(

[AtlCB]

You got that right. Bush spends money like a drunken sailor. Whoda thunk Clinton/Gore would be more fiscally responsible than Bush/Cheney. WOW. Either way, both the "Tax and Spend" Democrats and "Borrow And Spend" Republicans need a good *** kicking!!! The elimination of the line item veto ruined good fiscal policy.I couldn't have said that better myself.

[jterrell]

I couldn't have said that better myself.

How can both dem and repub voters agree on this but our dufus elected officials not.

:bang2:

[Crown Royal]

Screw it - default and rebuild. Better than just delaying the inevitable.

[Vintage]

Screw it - default and rebuild. Better than just delaying the inevitable.


Default would crash the market.

No way we do that.

[AtlCB]

How can both dem and repub voters agree on this but our dufus elected officials not.

:bang2:The party out of power always trumpets the balance budget. Only the contract with America Republicans ever tried to do anything about it (the Balanced Budget Amendment). Unfortunately, the politicians who adhered to the contract did their three terms and are out of politics. You still have a few hypocrites who signed it and are still in office. As a whole, politicians simply give it lip service and do nothing when they are in power. I'd love to see another move like we saw in the 90's from one of these two parties. After butting heads for a while, I thought Clinton and the Republican Congress worked extremely well to get the country on the right track.

[CowboyJeff]

The party out of power always trumpets the balance budget. Only the contract with America Republicans ever tried to do anything about it (the Balanced Budget Amendment). Unfortunately, the politicians who adhered to the contract did their three terms and are out of politics. You still have a few hypocrites who signed it and are still in office. As a whole, politicians simply give it lip service and do nothing when they are in power. I'd love to see another move like we saw in the 90's from one of these two parties. After butting heads for a while, I thought Clinton and the Republican Congress worked extremely well to get the country on the right track.

That's because not much got done. :laugh2:

[AtlCB]

That's because not much got done. :laugh2:Can you think of a better situation for the economy? :D

[Eric_Boyer]

The problem isn't the tax cuts; it's the out of control spending. Bush spends more money than most Democrats.

I don't necessarily disagree but I see a direct correlation between spending and our method of taxation. Notice in the table below how little change was made in spending between 1790 and 1910 - $5 per person vs $8 per person.

1913 was a banner year for statists. They did away with the idea that taxes had to be uniform across the board and also implemented a central bank leaving the gold standard.

Year-----Population-----Federal Spending--Federal Spending per capita
1790-----4 million------- $18 million----------$5
1910-----92 million------$694 million---------$8
1940-----142 million-----$9 billion------------$63
1950-----161 million-----$43 billion----------$267
1960-----189 million-----$92 billion----------$487
1970-----213 million-----$196 billion--------$920
1980-----237 million-----$591 billion--------$2,494
1990-----259 million-----$1 trillion-----------$3,861
2000-----291 million-----$2 trillion-----------$6,873
2006-----300 million-----$3 trillion-----------$10,000


We are now at a point where 50% of us pay 96% of income taxes. How do you control spending when half of eligible voters don't directly pay for the programs they support?

We need to go back and correct those things that undermined a form of government designed to protect individual liberty.

[CowboyJeff]

Can you think of a better situation for the economy? :D

It's a trade off: the economy versus national security.