looks like the ceiling will need to be raised again. How long can this continue?

WASHINGTON, July 30 (Reuters) - U.S. Treasury Secretary Henry Paulson said on Monday the government will hit an $8.965-trillion ceiling on its ability to borrow in early October and asked Congress to raise it.

"The actions that are available to the Treasury department to take in order to avoid breaching the statutory debt limit would create unnecessary uncertainty for the financial markets and result in costs to the government," Paulson said in a letter sent to Senate Majority Leader Harry Reid and made public by the Treasury.

"These actions should be reserved only for extraordinary circumstances, and should be avoided," Paulson said.

LINK

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I'd like to see that too, but you know they'll only raise the phony limit anyway.
What I'd REALLY like to see is Congress' salaries keyed to their performance on the economy.

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Not a day goes by that I don't see something that reinforces my belief that people are idiots.

Until the American people actually start to care about it, or until the dollar comes crashing down.

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Sam

Even if the economy DOES come crashing down, the Democrats will blame the Republicans and the Republicans will blame the Democrats and the idiot sheep will stay as off-balance as they usually are.

Or both sides can blame the terrorists.

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Not a day goes by that I don't see something that reinforces my belief that people are idiots.

Like many, I have long been frustrated by the seemingly endless growth in the national debt. I finally realized that I really did not know much about the dynamics of debt and money in general, so I decided to do a little background reading.

There is an intricate dance between money and debt. One cannot exist without the other. In pre-civilized societies, people exchanged physical goods and services directly; a basket of apples in exchange for a pair of shoes, etc. As societies expanded and trade began with people in distant communities, people adopted precious metals and gems that had a fixed value and could be easily moved long distances. Gold was particularly popular. Banks and treasuries were set up where gold could be stored and protected and lent to others for a fee. Then, it was found that instead of physically moving the gold to facilitate a trade, the bank could issue a note that would be honored by groups of banks. It was then that banks realized that they could issue more notes than they had gold to back them as long as long as the recipients believed the notes were "as good as gold." Rulers and governments quickly adopted this system, because it allowed them to literally create wealth out of thin air. Eventually, the governments decided to go off the gold standard, so they could not be forced to cover all the notes (money) they produce. At this point the value of money was tied to public trust in the system rather than anything of material intrinsic value.

Now, take out your wallet or purse and pull out the money it contains. It will consist of some metal coins and pieces of paper with special printing. In itself, the metal is worth a tiny fraction of the wealth it represents. The paper is worth even less. They are really only government issued IOUs backed entirely by little more than the trust that others will honor the printed face value.

Now comes the rub. Over the past few decades, the U.S. has gone from being a creditor nation to becoming the world's biggest debtor nation. To say that we are in debt up to our eyeballs is no exaggeration. Our IOUs (money and other debt instruments) are becoming increasingly suspect by other contries. Some are becoming nervous and beginning to cut back on their purchase of our debt wondering if the U.S. economy is becoming a hollow shell.

The act of raising the upper limit on our national debt is interpreted by some that the U.S. has lost the discipline critical to back its currency, pay its bills and live within its means. There are two ways to cut the national debt, raise taxes and reduce spending. Each is painful. However, the alternative is eventual economic collapse.

I think that the commentators are right, they will have to raise the borrowing limit or the government will collapse. But frankly, if the Neocons want their interventionist foreign policy, they have to raise taxes. The US can't support its militiary extensions at the very low rates of tax you pay. But I doubt even the democrats will want to raise taxes that much.

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There is no need to raise taxes. They are too high right now. The Federal government has taken in more revenue after Bush cut the rates down than they did before, so it would stupid to raise them.

The issue is spending, period. Too many pork projects, too many entitlement programs, and too much foreign intervention.

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Sam

And don't forget to add waste. Incredible, mind-bogglingly huge amounts of wasted money.

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Not a day goes by that I don't see something that reinforces my belief that people are idiots.

I say I'm only responsible for the portion of the debt that occurred in my work-taxpayer life-span. I don't think I should have to pay for something I didn't create or at least that's the argument people make. Oh and I didn't sign on for that foreign intervention stuff either. I demand a refund and a tax break from now on.

that's funny, the debt was actually decreased this year by $200 billion. say thanks to the large portion of Democrat pork. here here to a President who is not willing to pass any bill w/ pork.