A status I just saw on what raising the debt limit means

[Maraya1969]

Raising the debt ceiling means taking out another loan so you can put it in your bank so you can pay your house mortgage. If you don't put the money in the bank you are going to lose your house. If you take out the loan you have the money and the wherewithal to pay it back.

So do you borrow the money to put it in the bank or not?

[ejpoeta]

1. raising the debt ceiling is to pay bills we already OWE MONEY FOR!!!!

the thing that gets me is that the fucking republicans ran up this debt and now are trying to act like this debt ceiling increase is for NEW debt obama wants... when it is for the debt the republicans already took out!!

[dkf]

2. Someday the bank isn't going to lend you money or if it does it will charge sub prime rates.

Knowing that do you want to keep on depending on the bank to pay your mortgage?

Do you suggest people buy a $500,000 house even if their income can't support it and have them use their credit cards in perpetuity for the extra?

[Maraya1969]

5. So the answer is not to default of your mortgage right now!!!

[dkf]

6. Obviously we need to raise it now but we also need to figure out how to make it work.

[OHdem10]

3. We borrowed from China, Japan , Saudi Arabia and Mexico to

pay for both wars the Medicare Drug Bill and the GWB Taxcuts.
Then Obama borrowed to pay for stimulus to keep us from
going over the brink., etc.

We are paying off these loans. That is where the money
is going. The Tea Party put out some theory that we are
simply increasing our Credit Card Loan so we can "spend more".

No we have Maxed Out. WE MUST USE THIS to Pay our bills.

[jtuck004]

4. Uh, taking out a loan to pay another loan is perhaps the stupidest thing imaginable.

(in most cases).

There is a reason it lowers your credit rating.

If you aren't bringing in enough to pay your bills, it's time to reduce your expenses.

The reasons were are in trouble is because we have masked our loss in income (ie wealth-creating jobs such as those in manufacturing) with a huge debt bubble created by continually raising the prices of housing to pay people to build more
houses then inflating their price and borrowing money to build more homes...

Then that whole Ponzi scheme came crashing down around us.

The conversation needs to be how we grow jobs that pay a living wage, (as opposed to the near 49% of total job growth being low-wage service industry serf jobs), not how to reduce our security and wealth by borrowing more money to pay the greedy bastards in the financial sector.

[fivepennies]

7. The stupidist thing imaginable

is central banking with a debt based currency. That's the ponzi scheme.

Sadly, its the only thing we can imagine and it taints every aspect of our lives.

[Maraya1969]

10. I specified that there was plenty of money to pay the loan off.

And if you are about to default on your mortgage and someone offers you a loan to pay for you you'd better take the money.

[jtuck004]

13. Take a look at the numbers - over half of the loans restructured to

avoid exactly what is described above wound up going belly up in the past two years.

The only workable solution is enough income to pay for the existing loan, and that isn't happening.

Ask the 675,000+ homeowners who are in foreclosure but have not made a payment in two years. The banks are so backed up and full of assets they can't sell there are not enough resources to go get the houses that are in default.

And there are another 5 to 7 million expected to be foreclosed on in the pipeline.

[Yo_Mama]

8. You don't

I don't think your analogy is all that good, but let me in some distress advise borrowers who might be thinking of doing this not to take out a loan to pay another loan.

It's going to cost you more in the long run. If you can't pay the mortgage you have the option to deal with the creditor, see if you can scrabble up some more income, sell, do a short sale, or do a Deed In Lieu.

If you can't pay the mortgage borrowing money will not allow you to do so in the long run, so if you want to save the house, borrowing money to keep the mortgage current is still the worst of all possible options.

[JDPriestly]

9. We used to make a tiny profit by borrowing money at 0% from one

credit card at a very low rate and putting it in a savings account that paid a higher rate. We reliably paid our credit card off without any interest at the right time.

So, yes, if you can keep interest rates from going up on your mortgage debt by raising the debt ceiling it makes a lot of sense.

But you still have to keep your finances in order so that you can pay the debt you have taken on in a timely fashion. If you don't keep your finances in order then you might be unable to pay back the money you borrowed and the interest you earned won't cover it.

Nowadays, the credit card companies don't let you borrow money in the way we were doing. They probably realized what people were doing.

But the purpose of raising the debt ceiling (and we can do that because ours is the major currency and we are a reliable, safe country into which to put money), is to keep interest rates on our national debt low by reassuring creditors that we will pay it.

So the author of this little status does not understand what is going on.

[Maraya1969]

11. I don't think the status was meant for accountants. It was meant for the people

who think raising the debt ceiling means we will have more debt.

[Maraya1969]

12. I don't think the status was meant for accountants. It was meant for the people

who think raising the debt ceiling means we will have more debt.