The US Debt Ceiling Drama

It ain’t pretty but it is politics and the issues are real. How much money should governments be able to spend for all these sound good programs, the contribute little to the economy and put us all in debt. The US debt to GDP ratio is similar to that of other OECD countries. Something here has to change. What is happening in the US is only part of a larger picture.

Tax cuts under Bush, military spending and the 2008 crisis caused most of the US debt.

Most of the taxpayer’s money invested after the meltdown actually turned a profit, including the 50 billion for the GM bailout. The US economy would probably be much worse off wouldn’t it have been for the stimulus.

On taxes: US taxes are low by both international and US historic standards. Taxes for the rich are lower than they were under Clinton when the economy generated a surplus. This I think refutes the GOP mantra that low taxes for the rich are the solution to all our economic problems.

But you don’t vote in the US, you vote in Germany I think. It is up to the Americans how they wish to run their country. You have no say. Their national debt situation is comparable to that of most OECD countries I believe.

Countries in general have been to ready to borrow money to maintain the lifestyle to which they have become accustomed. Bread a circuses come into it: the politicians must keep the people happy to maintain power, be they rich or poor. Cut taxes for the rich, spend on services for the poor. But the sums don’t add up and something must give.

However, the current issue is an economic one rather than social. In the short-term at least, the US needs to expand its borrowing, if only to cover current obligations. This should be taken as a warning shot, rather than a pivotal point for decision making. Resolve this issue, then worry about how the economy should be fixed. Unfortunately for all, it will likely involve both cuts in spending and tax increases. The worse response, though, is for everybody to dig their heels in and refuse to compromise.

Taxes for the rich = taxes for the middle class = taxes for bus drivers, teachers, secretaries, freelance, paramedics, engineers, chiropractors, social workers, … (and normally everybody who has a job or small business).

“Taxes for the rich = taxes for the middle class = taxes for bus drivers, teachers, secretaries, freelance, paramedics, engineers, chiropractors, social workers, … (and normally everybody who has a job or small business).”


Friedmann. It means that when a goverment says they want to raise the taxes for the rich it usually ends up with the middle class paying more taxes.


phasing out the Bush tax cuts in the US would only raise the tax burden for those making more than 250,000 $ a year, so there would be no higher tax burden for the middle class.

Earning $250,000 a year before taxes and before paying health care for all the family, maybe education for kids, …can’t be considered enough money to be “a rich person” in US, in my view.

In Spain I start trembling every time the Spanish government says “We will raise taxes for rich people”, because it means to pay more taxes in general.

Re. Y2K. It certainly was real, but it was fixed. And because it was fixed before Y2K, nothing bad happened. People mistake the “nothing bad happening” with “there was no problem in the first place”.


that is a very valid point you’re making there.

I think it will be the same with climate change. If ‘we’ manage to fix it before it’s too late, the skeptics will have a field day. “The government wasted all this money on a problem that never really existed!”

@Jamie - It’s not that there wasn’t an issue with y2k. In fact, there were computer systems that needed to be updated both before and after the millennium change. It was just a simple update. The point is that it was mostly a non-event and nowhere near the hyped up catastrophe that all its proponents worked themselves into a lather about. Whatever the few problems were that did crop up were dealt with and we moved on. There was no need for all the doomsaying.

@peter - According to the “experts” on climate change, we can’t “fix” it all we can do is moderate the rate at which it happens. My only point is that I prefer to deal with issues that are real. We can deal with them as they occur. In the 70’s the doomsayers were worried about global cooling…


all you can do is recycle the same worn out deniers’ arguments. Cooling was by no means a consensus view and had much much less science behind it to back it up compared to AGW. Why can’t you just admit that your opposition is as at least as ideology based as what you accuse the other side of.

BTW, have you read the article on the resource issue I posted above? If so what did you think? Sometimes it is a good idea to somewhat diversify your sources beyond the “Heartland Institute”.


You’re right, but the whole Y2K doomsday thing was nothing more than a media circus, whipped up by newspaper columnists with half-baked theories and recourse to very few actual facts. I worked on many Y2K projects in the late 1990s; I never spoke to a single IT colleague who really believed there would be a major problem. A lot of money was spent and it was fixed. For newspaper editors reporting the facts is uninteresting and doesn’t sell their papers; writing sensational stories of food mixers suddenly malfunctioning on the stroke of midnight and launching a frenzied, murderous attack on your family does. The problem is, people believe it.