U.S. Hits Debt Limit After Senators Put Off Raising Ceiling

[tuvor]

The federal government reached its $7.4 trillion debt ceiling yesterday, forcing Treasury Secretary John W. Snow to delay contributing to one of the federal employees' pension systems to avoid running out of cash and possibly defaulting on government debt.

The situation will probably be temporary, as it has in the past. Congressional leaders said that when they return for a lame-duck session after the election, they will raise the debt ceiling to allow the government to borrow the money it needs to pay its bills. At that point, any overdue contributions to the pension fund would be paid, with interest.

Snow has pleaded with Congress since Aug. 2 to raise the debt limit, but Senate Republican leaders -- whose aides said they were worried about the possible political backlash -- adjourned for the campaign this week without acting on Snow's request. The Treasury secretary repeated his plea yesterday in a letter to Senate Majority Leader Bill Frist (R-Tenn.), appealing to his "commitment to maintaining the full faith and credit of the U.S. government."

"Given the current projections, it is imperative that the Congress take action to increase the debt limit by mid-November, at which time all of our previously used prudent and legal actions to avoid breaching the statutory debt limit will be exhausted," Snow wrote.

http://story.news.yahoo.com/news?tmpl=story&cid=1802&e=2&u=/washpost/a32985_2004oct14

[opihimoimoi]

1. These Pubs always playing politics with our financial responsibilities.

Just like Newt...these guys are gonna burn.

[Born Free]

6. after the eelctions they can blame Kerry

watch out, here we go, wait till after the election so they can blame it on Kerry.

[physioex]

2. So much for the idea.....

Of "Fiscal Conservatism" we know who the REAL Tax and Spenders are.....

[aquart]

3. I knew BushCo would default. I knew it.

Today he steals from the pension fund. Tomorrow the pensions will be gone and he'll default. That's a flat guarantee if that man is put back into the White House.

Welcome to America, the third world country.

[ogradda]

4. i have a question

if we raise the ceiling on the debt we get to borrow, right? what happens if no one will loan us the money? or do we know for sure we can just keep borrowing money?

[ogradda]

5. *sigh*

never mind i guess every one went to bed i'll ask tomorrow :)

[tuvor]

7. Kick!

[ogradda]

11. thanks for the kick

i've been wondering about this :)

[htuttle]

8. I'm no expert, but...

I believe the borrowing happens in the form of treasury bond sales and such. If they don't sell enough bonds to cover everything, they'd basically have to either resort to printing money outright (which would negatively affect the dollar and further depress bond sales, leading to sort of a vicious circle), or default on the debt (Katy bar the door!).

Bad either way.

[ogradda]

10. what happens if we default on the debt?

does anybody know? is it like if a person does it you declare bankruptcy? can a country do that?

[opihimoimoi]

12. Newt tried this on Clinton, didn't work. The Gov't shut down. Things came

to a halt.

Newt had to give in as Clinton called his bluff. Soon after Newt resigned in disgrace for that and also his role in the elections where the Dems kicked ass.

[fob]

9. I posted a dupe of this, sorry, so here's my commentary...

-snip-

Snow has pleaded with Congress since Aug. 2 to raise the debt limit, but Senate Republican leaders -- whose aides said they were worried about the possible political backlash -- adjourned for the campaign this week without acting on Snow's request. The Treasury secretary repeated his plea yesterday in a letter to Senate Majority Leader Bill Frist (R-Tenn.), appealing to his "commitment to maintaining the full faith and credit of the U.S. government."

-snip-

The federal government regularly sells Treasury bonds to finance the difference between the amount of money it collects in taxes each year and the amount it spends.

-end snips-

Read that last paragraph again. With Bill Clinton's surplus, no need to sell T-bonds, no way to sell off America to foreign countries. bush*s plan all along was to MAKE SURE to create a deficit to keep the Saudi's et al able to "buy America". This is the only way they could possibly launder all the money they've been stealing.

:tinfoilhat: