First, the facts.
- October 16: U.S. national debt is $16,747,370,534,090.62.
- Then they raise the debt ceiling.
- October 18, at 3pm: U.S. debt is at $17,075,590,107,963.57.
That’s a $300+ billion increase, in two days. It’ll continue (albeit, at a slower pace). It moves the U.S. mathematically closer to its coming default, and the added interest will cost taxpayers (especially if interest rates rise in the future).
Now, here’s what Obama said during the shutdown. October 3:
I want to spend a little time on this. It’s something called raising the debt ceiling. And it’s got a lousy name, so a lot of people end up thinking, I don’t know, I don’t think we should raise our debt ceiling, because it sounds like we’re raising our debt. But that’s not what this is about.
It doesn’t cost taxpayers a single dime. It doesn’t grow our deficits by a single dime…it’s not something that raises our debt.
Or, October 8:
…it’s called raising the debt ceiling, I think a lot of Americans think it’s raising our debt. It is not raising our debt. This does not add a dime to our debt.
‘Nuff said.
Actually, it’s the literal truth. Raising the DC doesn’t raise the debt. It ALLOWS them to raise the debt.
That doesn’t make O a better person, or his policies any less insane, but he’s not technically lying.
You misunderstand, Sir. That wasn’t an increase in debt. That was an error in reporting due to the government shutdown.
It’s all the Republicans’ fault. Or maybe Bush’s.
Eric Hines
Heh 🙂 Well, MSNBC did run a banner saying ‘GOP flubs Obamacare launch’.
And now, Dear Leader wants to “Negotiate” with Congress over the Amnesty Bill. i.e. He’s going to shut down the Government again unless Congress legalizes 20 Million new Democrat voters.
“Technically” means you’re pleading a technicality. To concede the technicality, which of course I do, is not to concede the point.
Picture this. Barry calls up the credit card company and says “I need to borrow another $1500 for a new computer. I have the online order queued up here, but can you raise my limit $1500, so my card won’t be refused? You should have no problem with it, you’re not raising my debt by one dime.”
Even if Barry isn’t lying in a fine-grained technical sense, he’s lying in the moral sense. Raising his debt limit *is* raising his debt, morally speaking, because raising his debt is the one and only reason he needs a limit increase, and is what he’ll be doing directly upon getting it.
For Barry to tell the card company “You should have no problem with it, you’re not raising my debt by one dime” is deception. Because he’s counting on the company to *not* rationally perceive the situation.
Anytime you’re counting on someone to stupidly not perceive what is really happening, you’re deceiving them.
ILC, I don’t think your credit card analogy is quite right. Raising the debt ceiling allows us to make payments we’ve already promised to make.
Your analogy doesn’t work because it’s not a case of “I have the online order queued up here.” That implies you haven’t yet agreed to pay for it. But in this case, Congress HAS already legally agreed to those expenditures.
So to use the credit card analogy, if I’ve promised to pay people more money than I actually have, then I’m in debt. If I then take out a new credit card to make those paymenst, I haven’t increased my debt — I’ve merely transferred it to the credit card company.
Thus taking out the credit card (or borrowing to pay expenditures already legally mandated by Congress) doesn’t increase debt.
“Promised”, like, “I promised my mom I’d buy her a house for her retirement” or “I promised my daughter I’d buy her a pony.”
Because you can’t afford to keep the promise without taking on vast debt, it was a crazy promise that you should not keep, and should not expect others to pay for or lend you money for.
…but not made them. We’re still talking about future spending. It can’t be equated with “paying bills” (which implies past spending), as Obama keeps trying to do.
True, for your example. But that is not the situation here. The U.S. situation is that we really, officially are taking out additional debt. Our national debt actually is increasing, as Obama borrows and spends. It’s already $300 billion higher than it was two days ago. The government’s own web site (that I linked), says so.
Yes, it does. Just look at the national debt figures I posted. Today at 3pm, it said $17.076 trillion. Two days ago, it didn’t; it said $16.747 trillion.
I know where you’re coming from. I am sure that you explain things to me in good faith, but…what you’re explaining is not true. You’ve been misled.
Here is a crucial point. Really think about the following.
IF our future spending promises should be treated as debts…*then they would be accounted for, in the national debt*. And, reflecting that, our national debt would officially be somewhere in the hundreds of trillions.
But they aren’t, so they aren’t. You see, our politicians want to have it both ways. Obama wants to spend, spend, spend. So he does two contradictory things.
1) On the one hand, he pushes the lie that our future spending promises are “bills to be paid”, or “debt that we already owe” and so are not increasing. (Which, btw, is false on its own terms; the projected future costs of Obamacare and all entitlements increase almost annually.)
2) On the other hand, he and Congress and the CBO and the Treasury department *refuse to count that same future spending as debt*. Because, if they accounted for it as official debt, that would blow the debt figures out from $17 trillion, to $100 or $200 trillion. Such honesty would make them look very bad. It would give the U.S. the highest official debt-to-GDP ratio in the world.
I say, bullhockey.
– If, on the one hand, our future spending promises are debt that we owe, they should be counted as such – meaning we should present our national debt honestly as $100 trillion or $200 trillion, or whatever that number is.
– If, on the other hand, our national debt is only the official debt instruments that total around $17 trillion – *which is the official view of the U.S. Treasury and Congressional Budget Office* – then no, our future spending promises are not “bills to be paid”. We really don’t owe them, probably won’t be able to pay them, and probably shouldn’t try. And Obama knows all that, but he means to give people a different idea – which is lying.
Thank you for your comment. These points are worth discussing.
Rtm, don’t you think there should be some way to, uh, convince Government to NOT spend or promise to spend more than it has or is likely to have?
Normally a “budget” is NOT made in order to guarantee payment of promises made but rather to allocate future resources. Of course, this wasn’t a “budget” but rather a “continuing resolution,” which meant the two houses Congress didn’t have to negotiate at all, just go with what was done before (with a few automatic increases, of course).
I’d like to see the feds sell some of those onerous-to-operate national parks to the states in which they are located. The feds do not seem capable of rational governance of those parks, and maybe the cash they received would help… to pay even more to their cronies. But at least they’d save all that expense of park care.
“I promised my daughter I’d buy her a pony.”
No, it’s not that kind of promise. Rather, it’s the kind of promise where Congress passed a law saying the gov’t would make the payment and the payment is now legally due. These aren’t future payments; we’re not in danger of default until the payments are due; we don’t need to raise the debt ceiling until the payment is due.
I will give you this much: Obama is misleading when it comes to using the word “debt,” which has two possible meanings: money borrowed by the Treasury (which will go up when the debt ceiling increases) vs. “the amount we owe” (which is determined by Congress in its spending/taxation decisions and unaffected by the debt ceiling).
And since “debt” in this context = the “debt” in “debt ceiling,” Obama is using the wrong meaning of the word. But I did find it intriguing that your credit card analogy, when followed to its logical conclusion, does imply that Obama is not being dishonest (per my previous post).
Yes it is; just the Congressional equivalent. People make verbal or written promises about what they’re going to pay you or buy you at such-and-such a time that approaches; Congress passes laws. It’s still NOT past spending and, as such, NOT debt.
I’ll reiterate that the CBO and the Treasury treat our spending promises (money that hasn’t actually been spent yet) officially as not debt. Which means Obama is wrong to do otherwise.
And there is no way he could not know it. Which means, deceptive intent.
Incorrect.
rtm, put it this way: What part of the U.S. national debt rising to $17.076 trillion, from $16.747 trillion, do you not understand? That’s a $300 billion increase. It is not like shuffling your debt from one card to another. It is, rather, your *total* debt rising, as you buy stuff you can’t afford and have to call the card company for repeated limit increases.
“What part of the U.S. national debt rising to $17.076 trillion, from $16.747 trillion, do you not understand?”
I understand that exactly, as I indicated when I said Obama was being misleading with the way he played with the multiple definitions of “debt.”
It remains true, however, that your credit card analogy does not work when you are taking out a credit card to make payments on obligations that are now due (because that’s a shifting of debt, not an increase), just as the Treasury is borrowing to make payments on obligations that are now due.
In other words, your credit card analogy actually masks Obama deception rather revealing it.
Perhaps we should define what you mean by “due now”. Due, as in – Accounts Payable?
This is a key point of confusion (that Obama aims to spread). Future spending promises, even when mandated by Congress as a law, are not Accounts Payable. And accordingly, are not counted in the national debt by Treasury.
And I don’t propose running out on any current Accounts Payable. But it wasn’t necessary to raise the debt ceiling, to pay them. It wasn’t necessary to borrow any more money, to pay them. The U.S. has some $3 trillion in tax revenue per year. That is enough to cover its current Accounts Payable, as all other spending is lowered to avoid further borrowing.
The issue is that ***future*** spending – the set of spending plans that you would have otherwise turned into Accounts Payable in the next month, or next week, or even the next day (whatever) – could not be fully covered. Then Obama (or more likely the Treasury, since he never decides anything) would have to pick and choose what to under-spend; running the budget and spending on a strictly balanced, income/outgo basis like Napoleon did, in his strongest period.
And that, to Democrats, is a fate worse than death. Hence, the deceptions and demagoguery with which they’ve obfuscated this issue.
The correct credit (or personal finance) analogy would be this:
1) You have an income, which you keep overspending.
2) You’ve borrowed up to your credit card limit.
3) You also owe the tax accountant $150 for the appointment last week. That isn’t credit card debt; it’s Accounts Payable. But you want to try to pay it from your credit card.
4) You call the company for a limit increase. They say, no you’ve had too many. To which you respond, “But I’m trying to pay my bills!” (Obama). Which is senseless, because actually you are *not* trying to pay your bills; borrowing money isn’t paying bills, it’s only shifting them around. They hang up on you.
5) Then you suck it up and pay your $150 Accounts Payable from current income. Then cut your spending way back, so that you don’t add any more debt or Accounts Payable that you can’t strictly afford.
In other words: Bills which are Accounts Payable in the actual, Accounting 101 sense of the term, are indeed debt. But, given your income that does cover them (after reducing or under-spending your budget), there is still no reason for you to borrow to pay them (asking the card company for a limit increase).
But again, (5) to Democrats is worse than death. So, they do all this obfuscation.
In this case, Obama got the limit increase…didn’t pay the bill from current income…didn’t cut back on any spending, present or future…and raised the national debt. Then called it “paying our bills”.
It’s more like this:
1) You have an income, which you keep overspending.
2) You’ve borrowed up to your credit card limit.
3) You also your accountant, your plumber, and your doctor $100 each, which the law requires you to pay.
4) You call the company for a limit increase. They say, no you’ve had too many. To which you respond, “But I’m trying to pay my bills!” (Obama). Which makes complete sense, because you are trading bills that are due now for a new bill that will be due later. Not a complete solution, but one that keeps you from defaulting.
5) You can’t suck it up and pay all your legally mandated expenses because your current income won’t cover them. But the law demands that you pay them (just as the president is obligated to pay the expenses Congress has mandated). So you go into default.
6)Unless the credit card company changes its mind, gives the extra money, and thus allowing you to pay off the obligations the law requires you to pay. You have not increased your debt (as “debt” is understood in the personal finance/credit card analogy); you’ve merely shifted it around.
That’s why I say the credit card analogy, thought through, will misdirect people into thinking Obama was being honest.
Your (5) -(6) are where you go wrong.
As to (5): The Treasury could have certainly paid its *actual, existing* Accounts Payable from its income (tax revenue). But it would have meant cutbacks to the next day’s/week’s/month’s spending, the things that would have otherwise become the next set of Accounts Payable. A fate worse, to Democrats, than defaulting on the Treasury Bond.
As to (6): Given what a spendthrift you are (in the example – not you personally), the credit card company isn’t obligated to help you pay off any of your other obligations – and they probably should not.
A question to rtm; does the behavior you describe become psychotically irresponsible on the second, third, or twenty-fourth go-around?
And to build on that point, at what go-around is the credit-card company acting stupidly by giving you the increase?
Two questions:
What is the difference between “‘actual existing’ Accounts Payable” and the spending obligations that Congress has passed into law that are coming due now?
And by what authority can Obama ignore Congress’s constitutional authority and refuse to pay tomorrow’s Congressionally mandated spending?
North Dallas Thirty: when income is expected to increase over the long term, it can be perfectly rational to rollover your loans. Businesses do it all the time. For individuals it’s less rational, because as they get older they approach a period of their lives they’re no longer working and their income is not expected to increase over the long term.
Really, though, this back-and-forth with ILC is about whether his credit card analogy is more or less likely to make people think Obama is lying about increasing the debt. Less, it seems to me, which is not ILC’s intent.
The first is simply the concept that Congress is unable to make a law that it cannot repeal. Yesterday’s Congress may have hiked food stamps tenfold, but that does not prevent today’s from slashing them a hundredfold.
The second is simply that if Obama can ignore immigration, marriage, criminal, and other laws that Congress has duly passed without any constitutional repercussions, it seems ludicrous to argue that he cannot exercise that same power to prioritize spending.
“That are coming due now”… That’s the hazy point, isn’t it?
There is some point where a spending -plan- flips into being an actual payment, disbursement or Account Payable. I call it “future spending” before the magic flip, and “past spending” after the flip. I do it because “now”, the present moment, is very small slice of time. “That are coming due now” – But what could you mean? Do you mean spending plans that will flip over to actual spending, in a coming period that you feel is very very short – but that, really, is still the future? Or do you mean spending plans that *did* just flip over? It’s one or the other. And it makes all the difference.
I believe it’s called “reality”. If Congress mandates the spending, but the money simply isn’t there, then it can’t be spent. See Congress about adjusting to reality; make major concessions to get bipartisan consensus; lead your own party every bit as ‘hard’ as you would want Boehner to lead the other.
Which is what Obama should have done. As NDT suggested indirectly: Congress is constitutionally able to change any law and make new spending plans, at any time.
Indeed.
And tell us what would happen to a business that has for decades missed revenue projections, borrowed more than it earned, and then chose not to even create a budget for its spending for half a decade?
If you want to compare government to business, be my guest. It brings up even better questions as to why the incompetent Obama and his Obama Party want to impose on business rules and regulations that they themselves are incapable of meeting.
he’s not technically lying.
By the definition used in my church, yeah, he’s lying.
Speaking of Lies : http://obamalies.net/list-of-lies
The sad truth is that the Conservatives have not a clue how to explain to the American People that Obama is a bold faced liar.
It’s quite simple really. The debt is exploding because Obama-Reid-Pelosi-McCain won and Ted Cruz lost.
Which is what littlelettermike, SonicFrog et. al. were rooting for.
mike, thanks for the link. I’d never seen that site before. (I figured someone else had probably used “ObamaLies” before, but I had no idea who.)
So you agree he is…and you still voted for him twice, why? To punish “conservatives”?
ILC, maybe Obama’s excellent fiscal stewardship and commitment to pragmatic, non-partisan cooperation that won him over.
Sure, let’s stick with the “technicality” argument. Let’s jam it down his throat, then. Since raising the debt ceiling doesn’t add a dime to the debt, then there is no reason to RAISE said debt ceiling, is there?
I mean, unless Obama intends (and we all know he does) to increase the debt the picosecond the ceiling is raised, it’s not a problem. And if it IS a problem, maybe Obama should be more open and honest, and less deceitful.
That’s pretty much right. Lifting the debt ceiling basically is just entering the amount you’ve already spent into the government check register and give the government to OK to pay the bills for that higher amount.
Wrong.
First, if you are going to argue (or approvingly cite) what is true “technically”, then no, you don’t also get to argue what is true “basically” (i.e., non-technically or by purpose/effect/meaning). No having it both ways. Along those lines and second, take a course in personal finance…learn what writing checks and operating a check register actually means. Hint: Your credit card (borrowing) has nothing to do with it.
If we’re going to argue “basically” (rather than “technically”): Then lifting the debt ceiling is taking on additional debt to obtain cash for the next round of deficit spending, bringing us closer to default. Is “basically”, i.e., by purpose/effect/meaning.
Also – More for rtm, but for anyone who thinks “Congress passed a law saying the gov’t would make the payment and the payment is now legally due…”
Guess what? CONGRESS ALSO PASSED A LAW SAYING THE TREASURY CAN’T BORROW BEYOND limit X. What about that law? Where is your admirable concern for the laws Congress has passed, regarding that? It, too, is “settled law.”
But that law can be changed, you say? (As it just was.) Well then, so can the others (the budget/spending). Why are the law modifications that Democrats demand always, only to enable more spending? Never to reduce it?
[Deleted – Just too far off topic; a kind of spam, really.]
Learn to run a business. When I pay any bill, be it for a credit card or for purchasing supplies, you have to document that by entering it into what Quickbooks has since 2000 and up to 2009 (the version I am on now). In fact, every bit of money I bring in, through a cash sale, or via a payment make on a customer invoice, ends up on the Check Register in Quickbooks, which is the main window into your balance sheet for your business..
I realize technically a check register is different from a balance sheet, or account ledger, which is what they call it in WAVE online accounting, which I’ll be using for my second business.. But I use the term “check register” because that is what Intuit’s Quickbooks has been calling it since I started running my business in 2000. In the few times I’ve had to deal with my bank about account balance issues, I’ve referred to my Quickbooks account balance as my “Check Register”, and they knew exactly what I was talking about with out question or quibble. If you have a problem with the terminology, talk to Intuit and the banks. But I’m guessing they know more about managing finances than you. If they are fine with calling it a check register, so am I.
Grrr….
Learn to run a business. When I pay any bill, be it for a credit card or for purchasing supplies, you have to document that by entering it into what Quickbooks has since 2000 and up to 2009 (the version I am on now) calls a “Check Register”.
Well. That’s something.
So, which is it? Are you going to keep arguing on what’s “technically” true, then? (The literal mechanics of things.) Or on what’s “basically” true? (The purpose/effect/meaning of those mechanics.) Remember, you don’t get to switch back and forth to put over a wrong conclusion. At least, not around me.
Enough of the hair splitting.
If I buy something for my from the supply house on credit, then decide when the bill is due at the end of the month, and then realize… Oh dear, I’ve spent more money this month than I should have! I don’t refuse to enter the charge into my Quisckbooks Check Register (balance sheet to make you happy) and pretend that I have actually saved myself money. Cause I haven’t. And the new debt is still there, even if I delay entering it for a day, or a week.The debt is there whether I wish to acknowledge it or not. If I chose not to, I’m not in business for very long.
The shutdown and debt ceiling showdown was going to end sooner or later. If they would have gone over the deadline and say we were still in stand-off mode, it’s going to end sooner or later. And when it does, the correct up-to-date expense outlays will have been accounted for.
Just more of your hair-splitting, an argument with zero intellectual honesty.
…then it is past spending (though very recent), giving you an Account Payable. I already explained/answered about the Accounts Payable part of the balance sheet; how they are debts but NOT ones that require new and additional borrowing (debt instruments) from the credit card, bank or bond market to cover them, as they can be covered from current income by simply under-spending your next (immediate future) purchases or budget periods, especially when your ongoing income is $3 trillion a year. See comments 12, 14, 19.
The fact is this: Raising the debt ceiling led, causally, to the raising of our national debt by $328 billion in 2 days. And it’s not temporary, just to “pay bills”. The debt will rise still more in weeks to come, though at a slower pace. The Treasury’s own web site gives the numbers. Those numbers are incontrovertible ***FACT***. But Obama told people that our national debt would not rise by “a dime”, if the debt ceiling were raised. And, if he has a normal-functioning brain, then Obama had to have known (when saying it) that he was misleading people. A.k.a. lying.
Now, keep defending Obama.
Seriously. $328 BILLION, the national debt went up the day after they raised the debt ceiling.
$328 BILLION. And that adds several billion to the annual deficit from here on, for ongoing debt service costs.
But Obama was telling people it “doesn’t cost taxpayers a single dime. It doesn’t grow our deficits by a single dime…it’s not something that raises our debt.”
That’s what you’re defending.