Debt Ceiling 2023
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Public sentiment:
... Just 26% of Americans adopt McCarthy's position that Congress should allow the government to pay its debts only if the administration agrees to cut federal spending. A broad 65% instead align with Biden's view that the issues of debt payment and federal spending should be handled separately.
Even among Republicans, fewer than half – 48% – support coupling debt payment with cuts in federal spending. ...
... about eight in 10 adults across the political spectrum are concerned about the economic impacts of a default, and being very concerned peaks among Republicans, at 59%.
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I detect a little bias in the phrasing of the question… I wonder how the answers would have looked if you asked “Should the US borrow more money to pay for the debt it has already accrued and can’t pay without making spending cuts?”
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I detect a little bias in the phrasing of the question… I wonder how the answers would have looked if you asked “Should the US borrow more money to pay for the debt it has already accrued and can’t pay without making spending cuts?”
@LuFins-Dad said in Debt Ceiling 2023:
I detect a little bias in the phrasing of the question… I wonder how the answers would have looked if you asked “Should the US borrow more money to pay for the debt it has already accrued and can’t pay without making spending cuts?”
There is also bias in your phrasing, for example, you could have cited "raising taxes" in place of "making spending cuts." It's actually quite lopsided when self-identified conservatives talk only about "spending cuts" as the only alternative to borrowing to deal with the national debt -- they completely overlook the revenue side of the equation, i.e., to raise taxes.
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Of course “cutting spending” in the abstract is quite popular. It sounds like someone else’s sacrifice.
Once you’re specific you find that cuts are generally either unpopular (cut SSA or Medicare) or budgetarily immaterial (zero out “foreign aid”).
"You never know what worse luck your bad luck has saved you from."
-Cormac McCarthy -
Of course “cutting spending” in the abstract is quite popular. It sounds like someone else’s sacrifice.
Once you’re specific you find that cuts are generally either unpopular (cut SSA or Medicare) or budgetarily immaterial (zero out “foreign aid”).
@jon-nyc said in Debt Ceiling 2023:
Of course “cutting spending” in the abstract is quite popular. It sounds like someone else’s sacrifice.
Once you’re specific you find that cuts are generally either unpopular (cut SSA or Medicare) or budgetarily immaterial (zero out “foreign aid”).
Again, a variation of the Penny Plan. Let everybody share in the pain equally. Let Congress then make some hard choices on the allocation of funds.
“Cry havoc and let slip the DOGE of war!”
Those who cheered as J-6 American prisoners were locked in solitary for 18 months without trial, now suddenly fight tooth and nail for foreign terrorists’ "due process". — Buck Sexton
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@jon-nyc said in Debt Ceiling 2023:
Of course “cutting spending” in the abstract is quite popular. It sounds like someone else’s sacrifice.
Once you’re specific you find that cuts are generally either unpopular (cut SSA or Medicare) or budgetarily immaterial (zero out “foreign aid”).
Again, a variation of the Penny Plan. Let everybody share in the pain equally. Let Congress then make some hard choices on the allocation of funds.
@Jolly said in Debt Ceiling 2023:
@jon-nyc said in Debt Ceiling 2023:
Of course “cutting spending” in the abstract is quite popular. It sounds like someone else’s sacrifice.
Once you’re specific you find that cuts are generally either unpopular (cut SSA or Medicare) or budgetarily immaterial (zero out “foreign aid”).
Again, a variation of the Penny Plan. Let everybody share in the pain equally. Let Congress then make some hard choices on the allocation of funds.
The penny has exactly the problem i described. No specifics just a top line number.
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Of course “cutting spending” in the abstract is quite popular. It sounds like someone else’s sacrifice.
Once you’re specific you find that cuts are generally either unpopular (cut SSA or Medicare) or budgetarily immaterial (zero out “foreign aid”).
@jon-nyc said in Debt Ceiling 2023:
Of course “cutting spending” in the abstract is quite popular. It sounds like someone else’s sacrifice.
Once you’re specific you find that cuts are generally either unpopular (cut SSA or Medicare) or budgetarily immaterial (zero out “foreign aid”).
Do you consider moving the retirement age up by 1 year effective 2043 to be a “cut”?
SSA Administrative costs are $6.5 Billion per year. To you doubt that they could cut administrative expenses by $500 Million with no drop in performance and services? I have no doubt they could. I also have no doubt that service would be affected. They are addicted to the public teat…
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Most private retirement accounts have an administrative cost of .30%. SSA is at .60% and at a MUCH higher volume with a much easier mission (2.5% returns). And their administrative overhead outside of payroll is much lower than the private market. I highly doubt Merril Lynch is getting GSA pricing for office furniture, computers, and such…
There was some talk a few decades ago about privatization of SSA, but it was shot down. Fine. Just privatize the administration of the program…
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Most private retirement accounts have an administrative cost of .30%. SSA is at .60% and at a MUCH higher volume with a much easier mission (2.5% returns). And their administrative overhead outside of payroll is much lower than the private market. I highly doubt Merril Lynch is getting GSA pricing for office furniture, computers, and such…
There was some talk a few decades ago about privatization of SSA, but it was shot down. Fine. Just privatize the administration of the program…
@LuFins-Dad said in Debt Ceiling 2023:
Most private retirement accounts have an administrative cost of .30%. SSA is at .60% and at a MUCH higher volume with a much easier mission (2.5% returns).
This CNBC article says .45% "all-in" expense for private 401(k) accounts on average.
As for the SSA, the .60% is the total including the administration of the disability insurance program. Excluding the disability insurance program, the "old age and survivorship insurance" program's administrative cost is only .40%.
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@LuFins-Dad said in Debt Ceiling 2023:
Most private retirement accounts have an administrative cost of .30%. SSA is at .60% and at a MUCH higher volume with a much easier mission (2.5% returns).
This CNBC article says .45% "all-in" expense for private 401(k) accounts on average.
As for the SSA, the .60% is the total including the administration of the disability insurance program. Excluding the disability insurance program, the "old age and survivorship insurance" program's administrative cost is only .40%.
@Axtremus said in Debt Ceiling 2023:
@LuFins-Dad said in Debt Ceiling 2023:
Most private retirement accounts have an administrative cost of .30%. SSA is at .60% and at a MUCH higher volume with a much easier mission (2.5% returns).
This CNBC article says .45% "all-in" expense for private 401(k) accounts on average.
As for the SSA, the .60% is the total including the administration of the disability insurance program. Excluding the disability insurance program, the "old age and survivorship insurance" program's administrative cost is only .40%.
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.45% for a 401K on average AFTER you start adding in ETF fees and such. The basic administrative fees are .37% according to your article. When we shopped retirement plans a few years ago, .30% was the magic number.
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401Ks represent what? 30% of retirement plans? IRA’s run a little lower, I believe…
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Either way, none comes close to the sheer magnitude and volume of the SSA. That volume drives administrating costs down per dollar spent.
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https://www.reuters.com/article/usa-ratings-scope-ratings-idUSKBN2WX00H
Scope Ratings on Friday placed the United States of America’s AA long-term issuer and senior unsecured debt ratings in local and foreign currency under review for a possible downgrade due to longer run risks associated with the misuse of the debt ceiling instrument.
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I don't think that passes constitutional muster. Borrowing money is reserved for congress, and if the executive tries to do that unilaterally that has constitutional problems.
Of course congress has passed all the laws that are requiring the current level of spending, so the executive unilaterally halting spending to prevent breaking the ceiling would have the same constitutional problem.
I suspect the only truly constitutional methods for the executive branch to unilaterally navigate a debt ceiling crisis would be either minting the trillion dollar coins or issue premium bonds (bonds with above-market interest rates that will sell well above face value, since face value is what counts in the debt ceiling limit).
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https://www.politico.com/news/2023/05/14/supreme-court-debt-limit-14th-amendment-00096784
More discussion on the 14th Amendment. Some interesting stuff like whether the Supreme Court would want or touch it at all, whether anyone will buy bonds issued by the Executive Branch (but not authorized by the Legislative Branch), whether anyone will have standing to sue if such bonds are issued, especially if such bonds are sold only to the Federal Reserve.
