Debt Ceiling Impact

[Rogue1677x]

I work for the government and in my agency we haven't heard anything. There was a bit of a sense of urgency last time at a certain point, but not now. Just another day as a pawn in a bigger man's game.

 

[tvguy]

we've seen this situation play out time and time again be it at the federal or state level. it was interesting to me how little my civil service co-workers knew about their own jobs and how the funding was sourced until one of these situations came up. never failed that someone would have a 'no worries-doesn't impact me, i don't work for the feds' until one of us pointed out that our pay was directly funded through federal dollars. i have a friend whose dh was highway patrol and their practice was to always bank any overtime he received throughout the year b/c it never failed that they state they lived in would have some argument over the budget and the essential employees would be required to work for upwards of some significant period of time before they received retroactive pay.

Here in California during one of the shutdowns Golden One credit union fronted state workers with accounts with them the amount of their missed paycheck, and took the money back when the shutdown ended. So I'm sure many of those workers may not have realized they didn't get paid, because the money was in their account.

 

[TLSnell1981]

I always thought since SS is a separate trust fund, payments from it are guaranteed as it isn't subject to annual government appropriations. "Technically" there is still money in social security to send to claimants. ANyone saying that one side or the other is trying to take away SS is simply lying.

I am not necessarily concerned about reaching the debt limit or any type of government shutdown. Though I don't work in government. I know some people may need to furlough which can impact them. That said, I think our overall system is very bloated with so much spending and government waste. Over half of government agencies could probably be shut down and have zero impact on 95% of the population. The political issue is that one side likes to tax and spend and the other side would like to cut tax and reduce spending. Both result in a deficit year over year. Then there are the opinion pieces that argue against one side while completely ignoring that what the other side wants to do is just as bad if not worse.

What?! There's money in the SS lockbox? Totally believe the current workforce has bailed that out for a long while. No such thin as solvent or surplus. That's all I can say without stepping over the line.

 

[dioxide45]

What?! There's money in the SS lockbox? Totally believe the current workforce has bailed that out for a long while. No such thin as solvent or surplus. That's all I can say without stepping over the line.

If you read my post #15, you will see that I follow up to indicate it is all a shell game...

 

[RamblingMad]

Not worried about it.

Here's what happened last time:

https://en.wikipedia.org/wiki/2011_United_States_debt-ceiling_crisis

I'm getting good yields on my T bills as a consequence.

What's funny about this is that the debt ceiling game has been causing treasury bond and bill yields to go up. The interest portion of the debt is going up as both sides argue about spending cuts, so at the end of the day, we'll spend more in interest payments regardless if any cuts go through or not.

Now, I'm avoiding National Park trips in case they get shutdown.

 

[Cannot_Wait_4Disney]

It's a clear cut issue.
The 14th amendment in part says:

“The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned."

It goes on to say what kind of debt is not to be paid.

"But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.”

In any case where a law is in conflict with the constitution, the constitution prevails. The same is true of the debt ceiling. The debt increase was already locked in when it was authorized by the laws that approved the spending. And the 14th amendment, which supersedes any debt limit law in conflict with it, requires those debts paid. Treasury should simply be authorized to keep paying as required by the constitution.

 

[barkley]

Here in California during one of the shutdowns Golden One credit union fronted state workers with accounts with them the amount of their missed paycheck, and took the money back when the shutdown ended. So I'm sure many of those workers may not have realized they didn't get paid, because the money was in their account.

lots of state employees use golden one but individual california counties notoriously have their own employee credit unions that offer perks to entice their employees to utilize them for direct deposit. in the case of my co-workers it wasn't that they found themselves missing paychecks but rather they found that co-workers in identical classifications (supervisor and supervisor of identical classifications of staff but administering different programs of public assistance) were not being subjected to the same cutbacks and threats of involuntary unpaid time off (seasoned staff knew that some programs were reliant on fed funds while others were state and a few select were county-and some chose their job assignments accordingly based on budgetary histories).

 

[LuvOrlando]

In general, it is despicable that when a budget is discussed the FIRST thing opened up to sacrifice are the most vulnerable groups. There is so much garbage in the budget, like the billions going to other countries for starters and all sorts of vanity projects, that most of us would happily see on the chopping block but instead we get narratives about grandmas, the disabled and orphans, it's so messed up. If a household's budget is reduced noone skips on the necessities first so this is totally antics. The whole emotional blackmail dynamic is revolting but this is who leads us and why they routinely score at around 5% approval in polls, pretty sure more people like snakes.

There is no need for this to damage the people in the bullseye, it is simply done for optics.

 

[jo-jo]

But the budget is bloated.

How many of us , just book a trip to Disney and decide we’ll figure out to pay for it later?

I may have crises confused, but wasn’t there a time not to long ago, people were furloughed for a few weeks or so,but then ended up getting back pay.

 

[kymom99]

Not worried about it.

Here's what happened last time:

https://en.wikipedia.org/wiki/2011_United_States_debt-ceiling_crisis

I'm getting good yields on my T bills as a consequence.

What's funny about this is that the debt ceiling game has been causing treasury bond and bill yields to go up. The interest portion of the debt is going up as both sides argue about spending cuts, so at the end of the day, we'll spend more in interest payments regardless if any cuts go through or not.

Now, I'm avoiding National Park trips in case they get shutdown.

It’s my understanding they won’t shut down anything but workers’ pay might be delayed.

 

[kymom99]

But the budget is bloated.

How many of us , just book a trip to Disney and decide we’ll figure out to pay for it later?

I may have crises confused, but wasn’t there a time not to long ago, people were furloughed for a few weeks or so,but then ended up getting back pay.

Yes but that was when they couldn’t pass a budget. This is different.

 

[Christine]

Yes but that was when they couldn’t pass a budget. This is different.

Yes, previous budgets were passed, obligations were authorized. It's nonsensical that we have to fight over raising a ceiling to actually pay for the things that previous Congresses/administrations have approved. The debt ceiling requirement is a statute that was implemented for a particular reason a long time ago. It can be repealed as easily as it was instituted. It's not in the Constitution.

The time to reign in spending is annually during all the budget decisions. Not after you've put the money out there.

 

[JLTraveling]

They will just kick the can down the road a little, or maybe a lot, but the problem will never be solved. The debt ceiling is a good political tool to always have. Someone of course has that tool over consumers with a credit limit on a credit card or line of credit. To say the limit should be to cover all expenditures isn't necessarily a good one. The only thing that has probably kept the government debt where it is today is with the debt ceiling. If it wasn't there, I couldn't imagine where the government debt would be right now. One side always wants to raise it without question and the other always wants to keep it the same. In the end, spending can only go so far. As a country we like to have things, and spending is what politicians do best when they are spending other people's money. The bill will come due at some point, when and what brings us to that point is anyone's guess.

OK, here's the issue with that theory, in my view. The debt limit and the budget have NEVER been tied together. In other words, Congress has never once said, "OK, the debt ceiling is X. That means that in order to avoid hitting it, we can only take on outstanding debts up to that point." Which is a good thing for both sides, because they never would have been able to pass tax cuts or Covid relief or anything else that one or both sides want if they were up against a hard limit. And at this point, the deficit is so high (increased by BOTH parties over such a long time), that it's not something they could start now if they wanted to. Instead, they pass budgets that both sides can agree to and the debt ceiling actually operates as more of an open-ended line of credit, because it can be raised whenever needed.

It's simply not true that one side always wants to raise it without question and the other always wants to keep it the same. The side that is now arguing against raising it, raised it three times under the previous administration without question. And the side that now wants to raise it went along, without question, even though they were very much against the tax cuts that caused the deficit to spiral in the first place.

Regardless of whether you agree with the basic premise or not, this is where we are. Congress spends money as it sees fit. And then the debt limit has to be raised to cover those debts that were already incurred. Much like if you or I bought a car, and then decided we wanted to keep the car but not make the payments. We can argue about how much we should spend on the NEXT car (the upcoming budget for next year), but one side doesn't get to simply refuse to pay for the car we already bought. Make sense?

 

[BlueStarryHat]

I've read this entire thread and there doesn't seem to be a consensus of what might happen, and I find it very confusing. I'll bet a lot of people who are in my situation do also. I hate to admit it, but the emotional blackmail and the scare tactics are working on me and my aunt. I have no appreciable savings because SSI doesn't allow it. They keep you in need, and so here I am. It's frustrating not having a voice or a say in what happens to me, and I feel very much like I'm slipping through the cracks in this fight, while the powers that be have their who can pee higher contest.

 

[jo-jo]

Much like if you or I bought a car, and then decided we wanted to keep the car but not make the payments. We can argue about how much we should spend on the NEXT car (the upcoming budget for next year), but one side doesn't get to simply refuse to pay for the car we already bought. Make sense?

But is seems the next group will say, in order for the car to last, we should buy some good car wax for a trillion dollars. What? Oh and from now on , every person in the family deserves a car.

it just keeps building higher and higher.

 

[LuvOrlando]

I've read this entire thread and there doesn't seem to be a consensus of what might happen, and I find it very confusing. I'll bet a lot of people who are in my situation do also. I hate to admit it, but the emotional blackmail and the scare tactics are working on me and my aunt. I have no appreciable savings because SSI doesn't allow it. They keep you in need, and so here I am. It's frustrating not having a voice or a say in what happens to me, and I feel very much like I'm slipping through the cracks in this fight, while the powers that be have their who can pee higher contest.

@BlueStarryHat maybe it would be a good idea to reach out into your local community to see what food banks, utility support and such might be available to you in the event of an emergency. It is very difficult to sort things out when a person is upset so googling your area & calling a few Churches to ask early on might be the best way to get ahead of it. I'm not sure how it is by you but in the part of PA where we raised our kids the volunteers through local Churches of different denominations were the most active sources for immediate community outreach.

 

[RamblingMad]

But is seems the next group will say, in order for the car to last, we should buy some good car wax for a trillion dollars. What? Oh and from now on , every person in the family deserves a car.

it just keeps building higher and higher.

And Wall Street responds to the uncertainty by pushing up the cost to borrow that debt. It’s a circus.

 

[BlueStarryHat]

@BlueStarryHat maybe it would be a good idea to reach out into your local community to see what food banks, utility support and such might be available to you in the event of an emergency. It is very difficult to sort things out when a person is upset so googling your area & calling a few Churches to ask early on might be the best way to get ahead of it. I'm not sure how it is by you but in the part of PA where we raised our kids the volunteers through local Churches of different denominations were the most active sources for immediate community outreach.

I live pretty close to Camden, New Jersey, where there are many outreach programs and charitable organizations that help people in need. Most of them go by household income-if it comes to that, we wouldn't qualify because all of our money together means we're above their median. I don't know what might be available for immediate need...it's a good suggestion though, so I'll follow it and start checking in to it.

 

[kdonnel]

If past history is any indication, this will result in a government shutdown that will last until at least June 15th.

I am due to visit San Juan, Puerto Rico on June 14th. This will be my third visit, the prior two were during prior government shutdowns.

The majority of touristy things for cruise passengers to to are national parks that will once again be closed during my visit.

 

[Christine]

If past history is any indication, this will result in a government shutdown that will last until at least June 15th.

I am due to visit San Juan, Puerto Rico on June 14th. This will be my third visit, the prior two were during prior government shutdowns.

The majority of touristy things for cruise passengers to to are national parks that will once again be closed during my visit.

Everything I'm seeing at work isn't predicting a shutdown. Most agencies are funded through the end of the fiscal year. There are other things that would be impacted but I didn't see a shutdown as an option. But it could happen later on if they don't come to an agreement.