Poll: 71% of Americans oppose raising debt ceiling, 51% support military cuts

[Dokkie]

Some 71 percent of those surveyed oppose increasing the borrowing authority, the focus of a brewing political battle over federal spending. Only 18 percent support an increase.

..

Only 24 percent say the country can afford to cut back on education spending, a likely Republican target, and 21 percent support cuts to law enforcement.

With the Pentagon fighting wars in Afghanistan and Iraq, 51 percent supported cutbacks to military spending.

Less than half, 45 percent, support an expected Republican effort to pare environmental enforcement.

Some 53 percent support cutting the budgets of financial regulators like the Securities and Exchange Commission, in spite of the widespread consensus that a lax regulatory atmosphere contributed to the devastating financial crisis of 2007-2009.

And 47 percent support cutbacks to national parks, which were shuttered for several weeks during the budget battles of 1995 and 1996.

Expensive benefit programs that account for nearly half of all federal spending enjoy widespread support, the poll found. Only 20 percent supported paring Social Security retirement benefits while a mere 23 supported cutbacks to the Medicare health-insurance program.

Some 73 percent support scaling back foreign aid and 65 percent support cutting back on tax collection.


http://www.reuters.com/article/idUSTRE70B38620110112

[RUMMYisFROSTED]

1. 100% take nasty dumps.

30% have matches handy
29% open a window
41% say "Something wrong, honey?"

[xchrom]

2. The status quo can't have that.

The hive mind will be feeding Pravda their stories.

[sadbear]

3. This is a product of today's MSM

Americans have no freakin' clue anymore.

[Drale]

4. FUCK THE PEOPLE

Who want cuts to the national parks and education. FUCK THEM SO HARD!

[Canuckistanian]

5. And do those 71% realize what happens if the ceiling ISN'T raised?

No. Of course not. That would mean they were INFORMED.

Look, nobody LIKES raising the debt ceiling. But the alternative is horrifying.

[Johonny]

12. +1

[Statistical]

18. Why is it horrifying? The govt needs to cut expenditures to match revenue.

What is horrifying about that?

[BzaDem]

20. That is extremely simplistic and totally wrong thinking. The time to balance the budget is not in a

recession. The government is the OPPOSITE of a business -- it needs to go MORE into debt in a recession, and pay down the debt it incurred afterwards.

What would happen if we actually followed your proposal in a recession? Well, the recession implies less tax revenue simply due to the business cycle. Furthermore, the recession implies higher demand for social spending in the form of automatic stabilizers (unemployment insurance, food stamps, welfare, state aid, etc). What you would have us do is severely cut social spending (to reflect lower revenue) solely because of flukes in the business cycle -- at a time where demand for social spending dramatically increases.

The government needs to smooth out aggregate demand by raising the troughs in bad times (by deficit spending) and lower the peaks in good times (running a surplus). You would have us do the exact opposite -- you would have us make the troughs even DEEPER than the business cycle already made them. You would have the government contract at the exact moment it needs to dramatically expand.

So not only would your proposal result in needless suffering on a massive scale (due to withdrawal of social spending at the exact moment when it is needed the most) -- it would reduce consumer demand, forcing most business to start firing people. What does firing people do? Reduce demand even more, causing businesses to fire more people. It is a vicious cycle that hurts the economy more and more with each passing day. (See Hoover, 1929-1932 and ensuing great depression.)

[Thunderstruck]

26. The debt ceiling will be raised despite the results of this poll or any other. n/t

[BzaDem]

27. Oh I know -- I'm just disputing the notion that it is somehow appropriate to balance the budget in a

recession.

[Statistical]

30. If you want to take economics. US GDP is in expansion.

There is no recession in technical terms. The need for extreme deficit spending is to counteract the gap in private spending when GDP declines. In a perfect system GDP declines 5%, US govt ramps up deficit spending by 5% of GDP. Net-net no change in aggregate demand and the cycle is averted.

Real world it is a little more complicated (due to the speed of money) but same principle holds true. GDP is back in expansion.

So
a) the need for extreme and unsustainable deficits is over.
b) nobody said anything about balanced budget. We can deficit spend over $800B without raising the cap this year.

[BzaDem]

32. What is the current short term interest rate?

It is 0%.

Why? Because business are not taking the increased economic activity and investing it in hiring. They are giving it to the government (through banks). Until that changes, and interest rates can rise above 0, the increase in GDP does not matter. (See post 31.)

[Statistical]

35. What would short term rate be without the fed buying couple trillion in treasuries?

You can pretend the Fed isn't artificially keeping rates low. How much of a discount is fed applying? Hard to say but the yield on 12 month treasury has already started to climb higher. Even with the unprecedented intervention by the fed we are seeing rising rates.

"Because business are not taking the increased economic activity and investing it in hiring"
Actually they are. Private payroll expanded in 2010. Maybe not as much as you would like but it did. There are roughly 2 million more people working in Dec 2010 compared to Dec 2011.

Once again nobody is saying balance the budget in 2011. $800B is an unprecedented deficit relative to GDP.

[BzaDem]

38. Your post confuses cause and effect of the interest rate.

The cause of the interest rate being low is a net desire by the economy to save. (Desired savings of the private economy exceeds desired investment.)

When that happens, there are two choices for what we do with excess savings over investment.

Choice one is to put it in a barn and burn it down. That is essentially what you are proposing.
Choice two is to put the money back in the economy, and keep doing so until there is no excess desired savings over investment.

"Actually they are. Private payroll expanded in 2010."

Oh sure -- I didn't mean to suggest that no business is hiring. I am simply stating that the NET desire to invest and higher is LOWER than the net desire to save. That excess can be either burned or recycled back into the economy.

This entire problem is caused by the fed not being able to lower interest rates to around -6%. If the Fed could do this, it would, and people would stop holding onto money (i.e. buying our bonds) and instead invest it. But since the fed can't actually do that, it has to do things like buying hundreds of billions of long term bonds. That is a response to the needed low rate -- not the cause of it.

[CLANG]

41. And the very media reporting this story refuses to educate.

[onenote]

6. Very dubious looking results

As described below, half of the sample was asked about raising the debt ceiling without any discussion of the consequences and the other half was asked with some explanation given (see below). The results defy reason, imo. Specifically, exactly the same number opposed whether or not they got an explanation. The only change was that 11 percent of those who didn't get an explanation said they were unsure, while only 9 percent were unsure with an explanation. I am very skeptical of such a small difference in the results of a poll on a topic such as this. Moreover, I am even more skeptical that only 1 percent on those polled would say that they didn't and that such amount would be the same with or without explanation. That just defies logic.


Q4 & Q5 were split so that half the sample was asked the question without additional information
and half the sample was asked with additional information.
Q4. I am going to tell you about the US’ debt situation. At the moment, the US is $13.9 trillion dollars in
debt. The current debt ‘ceiling’, or limit set by Congress is $14.3 trillion. It is likely that we will hit this
ceiling this spring.
Congress will soon vote on whether or not to raise this debt ceiling. Do you personally favor or oppose
increasing the US’ debt limit?
Without
explanation of
consequences*
Favor Oppose Unsure DK/NS
17 71 11 1
With
explanation*

19 71 9 1
Total 18 71 10 1
* Explanation of Consequences:
As you may know, not raising the debt limit would damage the US’ sovereign debt rating, which is like our
credit rating: it would seriously damage our credibility abroad,

[The Magistrate]

7. '71% Confess Crippling Economic Illiteracy' Is the Real Head-Line, Sir

[TheKentuckian]

11. That is what I'm saying!

[gratuitous]

8. Yeah, scale back foreign aid

We're just totally overburdened by that $10 billion squandered every year. Roughly equivalent to a month in Iraq and Afghanistan, now entering its 10th Smash Season! Oh, and 65% support cutting back on tax collection. Yeah, that's the ticket: Quit collecting taxes!

Can't anyone make the simple point that if the U.S. defaults on its debt, your U.S. Savings Bonds could be worthless? Republicans want to steal your Savings Bonds! Too complicated? Too subtle?

[Dokkie]

9. this makes no sense

why does it have to be an either or? The US should raise the debt limit or default on their loans. How about we cut some military spending or some other program? or even cut some programs, and borrow a little? or even more radical, only pay out our foreign creditors and stiff the Federal reserve on the interest and maybe even principle of the loan owed to them? the country is like a family whose breadwinner are out of work for 1yr but they still insist of keeping the Porsche. Its called a debt LIMIT for a reason and its time we start taking it seriously

[gratuitous]

10. We took it seriously about 10 years ago

When, in the aftermath of the Clinton administration, we were running budget surpluses. But the lure of all that money going to pay off our debt was too much for the Republicans to resist, and we were treated to the Bush tax cuts, enacted by a single vote when Dick Cheney broke a 50-50 tie in the Senate. We then proceeded to indulge the commander-in-chief in two ruinously expensive, elective wars of choice halfway around the globe without any means to pay for it. Deficits skyrocketed, in fact broke all previous records (set during the Reagan years), but the Republicans who controlled the government blithely told us that "deficits don't matter; Reagan proved that."

Now, we're back to taking our national debt seriously again when the Democrats are running things. Purely a coincidence, I'm sure. And the very same Republicans who spent federal dollars like sailors on shore leave from 2001-2007 are the same Republicans who now think that fiscal austerity is the ticket for American prosperity. And the key to that austerity is . . . an extension of lower tax rates for the wealthy.

Things that make you go, "Hmmmmm."

[pa28]

13. They also favor balancing the budget by taxing the wealthy.

Unfortunately that's not even an option so the 71% had better be careful what they wish for. I wonder how many of them have government jobs, rely on government contracts, take Social Security or receive Medicare benefits?

[quaker bill]

14. Few apparently get where the money is

You would not change the deficit in any measurable way by laying off all the financial regulators. There just aren't that many of them.

You could dump all foriegn aid, and make almost no change at all. People imagine we are spending lots of money on this, but we aren't and haven't done so in 30 years. Even before the Reagan cuts, it was not all that much money in the total picture.

Environmental enforcement, you gotta be kidding me. There are 4 federal environmental enforcement officers for the clean water act for the entire state of Florida, some 18 million people. Lay them all off and there would be no discernable change in the deficit.

Aside from the recent stimulus, little in the way of education funding actually comes from the feds, most of it is local taxes.

Defense, now we are talking, there is actually some money in that.

Tax collection is something you actually need, given the entitlements stay untouchable, not only that but there will need to be more taxes collected.

[Imajika]

15. Most probably only support cuts they don't think will effect them...

Virtually none of the 71% have any clue what not raising the debt ceiling would mean - and a large number will get their news from Fox and right wing talkers and therefore STILL not know what not raising the debt ceiling would mean.

"Some 53 percent support cutting the budgets of financial regulators like the Securities and Exchange Commission, in spite of the widespread consensus that a lax regulatory atmosphere contributed to the devastating financial crisis of 2007-2009."

Why on earth is this question even asked? Maybe to show how little people know? America does not have a problem with regulators eating up our budget.

There was a poll that was circulating out of California once that asked a bunch of questions. An overwhelming majority believed something MUST be done about the deficit - and done NOW. Then on to the particulars, that same majority opposed raising any taxes and ALSO a majority opposed cutting virtually anything (I believe the only thing people were willing to cut was prisons and corrections.

[MadHound]

16. I would fit into both of those categories,

I really don't want to see this country take the Soviet style of ending our empire.

Oh, and how about taxing the wealthy at pre-Reagan rates.

[Statistical]

17. I favor both.

Don't raise debt ceiling.
Cut military spending significantly. Cut other areas in smaller amounts. Even a 15% across the board cut would only put as back at 2007 spending levels. It would require a 27% cut to federal expenditures to get us back to FY 2000 expenditures.

[BzaDem]

19. Do you realize what happens if we don't raise the debt ceiling? It would result in a default on our

debt.

Our deficit last year was around 1.5 trillion (largely due to the business cycle -- lower revenue because of the recession, plus higher social spending due to automatic stabilizers like unemployment insurance/food stamps/state aid/etc).

You could ELIMINATE the following ALL department of defense spending, FBI counterterrorism spending, the Homeland Security department, all of NASA, and the department of Veterans affairs/Veterans pensions, and that still wouldn't cover the gap (and we would therefore default).

A default on our debt would not only cause a financial crisis and ensuing depression MUCH worse than what we just went through -- it would result in a permanent tax (meaning less money for social spending) reflecting the default risk that our politicians will all go insane.

[Statistical]

21. Not true.

The FY 2011 deficit is roughly $1.2 trillion. $1200B. We have about $300B left on debt ceiling so that leaves $900B inbalance. Treasury is currently holding about $300B in cash. So that is $500B in spending that needs to be cut.

Cut DOD 20%. That is $140B.
US govt is still holding a stake in GM, Chrysler, and AIG worth ~ $140B. Sell it this year.

That leaves $220B in general spending cuts. US federal expenditures for 2011 are projected to be $3.2 trillion. $220 is an across the board 6% cut. Heavy but hardly impossible. Or better yet raise revenue by $220B. Taxes on the rich.

[BzaDem]

22. Except cash on hand/amount left on debt ceiling/AIG sale/auto sales are ONE TIME events.

Let's assume the deficit is only 1.2 trillion. The cash the treasury is holding and the amount left on the debt ceiling is completely irrelevant -- even your numbers were completely accurate, it would only be a one time fix that wouldn't be there the next year. Your auto/AIG sale would also be one time benefits only -- we can't sell those companies every year.

So we would need to reduce the deficit by 1.2 trillion for future years. Do you realize what kind of across the board cut that would be -- for absolutely no reason?

But even if your numbers DID work out, do you realize what that would do to the economy? Hoover tried what you are talking about from 1929-1932 -- and the economy didn't react very well. Actually, FDR tried it as well in 1938 -- and that caused a depression within a depression (after previous year over year growth).

[Statistical]

24. Nobody said never raise debt ceiling. We can raise it slightly for future years.

At least it shows a willingness to not just spend with reckless abandon. The FY 2012 deficit is projected to be "only" $900B not $1.2 trillion. With a little work we could get that down to say $700B (have long term goal to cut DOD by 70% over next decade). Raise debt ceiling to $15T flat as part of the FY 2012 budget process.

[BzaDem]

25. Except right now, it is absolutely reckless not to pass another 900 billion dollar stimulus.

In a recession, spending needs to go up. Not down. The government is not a business -- it is the opposite of a business. It needs to do exactly the opposite of what businesses do in various types of economies (in terms of its balance sheet). The government is the only entity that can fill in the troughs and peaks of the business cycle.

[Statistical]

28. The recession has already peaked by any metric you can consider.

Economic activity is increasing.

It would have been reckless to cut back in 2008 or even 2009 but we are now in 2011. Any cuts likely wouldn't go into effect until late 2011 and even then we are talking about less than 3% of GDP.

"The government is the only entity that can fill in the troughs and peaks of the business cycle."
Agreed and we are past the peak of the through so the amount the govt is filling should also decline.

[BzaDem]

31. The key question is: where are the results of this "economic activity" going?

Right now, corporate profits are soaring. But what do they do with corporate profits? They stick it in the bank. What do banks do with the money? They buy US bonds. In other words, corporations are literally shoveling money to the US government, saying "you spend it! I don't want to risk it. I'd rather get my safe rate of return through you."

When corporations are trying as hard as they possibly can (through banks) to shovel money to the US government (due to fear of investing anywhere else), it is insane not to send the money back out into the economy. Doing anything else would be like going out and destroying physical capital for no reason.

The moment we can start moving towards budget balance is the moment interest rates can safely rise above 0%. That signals that companies are no longer taking corporate profits and buying US bonds with them (through banks) -- instead, they would be investing in the private economy, without further aid. Right now, interest rates should really be something like -6% according to standard interest rate formulas (but obviously the Fed can't set them below 0). The time to change is not when some artificial metric like GDP turns around -- it is when interest rates turn around (signaling a functioning economy, where businesses use their money to hire people rather than shovel to the US treasury).

[Statistical]

33. $800B is still a LOT of deficit spending. Hell that level isn't even allowed in the EU.

It violates deficit to GDP ratios. $800B is what we could deficit spend without raising the debt ceiling a single dollar.

[BzaDem]

36. If corporations are trying to send 1.2 billion to the US government through bank reserves

but we only spend 800 billion of that money, we are destroying 400 billion of economic activity/jobs for no reason.

The amount the government needs to spend is the amount of money used to buy bonds. If we spend less than that, we are destroying economic activity. If we spend one dollar less than that, we are destroying one dollar of economic activity. Same with 400 billion or 800 billion.

In a good economy, corporations do not send money to the government to banks -- they invest it in capital and labor. At that point, the government needs to reduce its debt.

The tipping point is when companies stop sending money to the government and instead send money to the private economy (i.e. when interest rates can go above 0%). Anything other than this is destroying the results of economic activity for no reason.

[Statistical]

37. Interest rates are above 0%, and rising even with the pressure of the Fed QE and QE2. n/t

The corporations $1.9 T balance sheet isn't the net increase for a year. Their cash on books increased by "only" $700B for 2010. So if you want to consider that money they have taken out of the economy (which is imperfect because banks did show private loan growth so it isn't like 100% of that is going into T-bonds) the amount taken out is <= $700B. If we assume 2011 is similar or slightly lower that still doesn't call for spending $1.2 trillion. We can "only" spend $800B we don't have and still have positive acceleration of money.

[BzaDem]

39. Not short term rates, which is what matters. Business capital goes to banks, which buy short term

bonds. This is a symptom of the economy's net desire to save (i.e. investment - savings, instead of being 0 like normal, is below 0). Short term interest rates are 0, but this is misleading, since they physically can't below 0 even if demand is way below 0. Short term rates would optimally be -6 right now, which would mean we wouldn't need to deficit spend.

But we can't set short term interest rates to -6, so deficit spending is the only alternative.

[Dokkie]

34. Nonsense

see the govt in a recession taxes the rich and spend that money which they were unwilling to spend. What we have now is govt giving tax cuts to the rich and borrowing money in order to pay for programs. This is not how its done, you cannot be cutting taxes in the middle of 4 wars and expect to have enough funds to repay your debts.

71% of Americans have spoken and he should for once listen to the people

[BzaDem]

40. No, your post goes directly against Keynesian economics. Debt was MUCH worse during WW2

(as a percentage of GDP), and they were easily reduced to normal levels later.

[Statistical]

23. delete

[rucky]

29. Surprised that many people even know what the debt ceiling is. n/t

[mmonk]

42. I agree on military cuts and disagree on the debt ceiling because

the tax cuts are the problem. Polls mean nothing much in this country about what should be done. This country is the most propagandized outside the state of North Korea. I hold out little hope for this backwater.