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Mama_Cakes's avatar

Chatting with my American partner about the government shutdown; is this about right (details inside)

Asked by Mama_Cakes (11154points) October 11th, 2013

I asked her more about it. Her thoughts:

Basically Congress has to vote to authorize the U.S. to be able to borrow more money in order to pay their bills (i.e., “raise the debt ceiling.”) Otherwise, we don’t have enough. Our government is out of control with spending. Republicans have enough votes that they refused to vote to raise the debt ceiling unless they also include a provision to postpone implementation of Obamacare. They have been trying to get rid of Obamacare and have voted on it 41 times now since it was passed. Obama and the Democrats won’t budge on Obamacare. So, we don’t have enough money to fund the government and it has been shut down until Congress votes to borrow more. If it goes to October 17, we start defaulting on our payments and the shit will really hit the fan.

The truth is, Obamacare is not the problem. Congress is the problem. We need to cut spending. Obamacare is a way to cut spending, but is a huge distraction from legitimate reform. Congress does not want to really cut spending because each of them owes their job to special interests that receive government funding. They won’t vote to cut funding to the special interests that put them in office. It’s ridiculous.

We need to reform the way the lobbying is done and the way that campaigns are financed in this country. We need to cut spending all over the place.

We subsidize oil companies that have record profits with our tax dollars. We subsidize huge agricultural companies. We need to cut stuff like that back some. We spend the most on National Defense. We need to cut that budget some. All kinds of cuts could be made.

They don’t have to be cut completely, but a percentage could be cut from almost everywhere.

Basically, what Snider did in Michigan needs to be done across the country.

It pissed everyone off, but we have a balanced budget now.

What happened to Greece will happen to us if we keep this up.

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16 Answers

ARE_you_kidding_me's avatar

Basically…yes in a nutshell.

zenvelo's avatar

No, there are a lot of statements presented in that as facts, when they’re really opinions.

Our government is out of control with spending. Actually, as a percent of the economy, federal spending has gone down. And our current spending rates are very close to revenue, we are not increasing the deficit on current expenditures.

Republicans have enough votes that they refused to vote to raise the debt ceiling unless they also include a provision to postpone implementation of Obamacare. It’s Affordable Health Care, not Obama care. And it actually will save money when fully implemented; right now we spend millions and billions on people without health insurance. There are votes in the house right now to pass a clean funding resolution and raise the debt ceiling now without holding health care hostage.

And comparisons to Greece are not at all correct Greece is in a much different economic place than we are.

ARE_you_kidding_me's avatar

@zenvelo Some opinions in there also.

Mama_Cakes's avatar

@zenvelo, her words:

And it’s the “Affordable Care Act” not “Affordable Health Care.” It’s quite debatable whether it will increase or decrease spending in the long run. I support the Affordable Care Act. I think it’s a necessary step toward reforming our health care system.

No matter the improvements that have been made on spending, if it were close to revenue we wouldn’t be needing to raise the debt ceiling, so that is B.S. We still have to pay back what we borrowed in the past with interest. We pay more in interest on borrowed money that we do on current spending.

In fact, I will have to check my facts but I believe we pay more in interest on borrowed money than we collect in taxes. And that is a pretty scary situation if you think about it. It’s like owing more in credit card interest than you earn in income and still having to pay your monthly bills on top of it. So what do you do? You keep borrowing more I guess.

Jaxk's avatar


Sounds like you have a lot of opinions you want to be facts. The current deficit for this year is about $700 billion. Smaller than last year but still higher than any other administration in history. The projection for the future never balance and our debt continues to grow at a phenomenal rate.

rojo's avatar

@Jaxk so is everything else, Dow Jones, Nasdaq, executive paychecks, military spending, material costs, labor costs (ok, maybe not in the private sector), population,.
Don’t get me wrong, I agree that there is a lot of waste and that costs should be reduced and while I cannot say I am for a balanced budget, I would surely like to see a much lower difference in income and expenditure. Where we would have differences would be in what needs to be cut and how much. But, you know what? WE could probably be big boys and sit down and come up with a workable solution unlike the bought off corporate whores who are presently in charge.

Mama_Cakes's avatar


I checked my facts and was wrong about current interest payments being more than other spending. Current interest payments are about 6% of total current spending.

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bolwerk's avatar

The overall account is basically wrong. For one, it conflates the shutdown and the debt ceiling. The Republikans refused to finance the government, effectively shutting it down; thus far, they have not forbidden the government from borrowing to meet its obligations, though they are threatening to do so. In fact, they have even allowed new obligations to be created – they passed a bill explicitly saying government employees will get back pay.

There is nothing about the U.S. that can make it like Greece. Greece doesn’t control its own monetary policy. The U.S. borrows in a currency it controls itself, and can always create more money to meet its obligations, as its obligations are expressed in dollars. The U.S. defaulting on its debt is by nature a question of refusal to pay, not inability to pay.

ETpro's avatar

@Jaxk The Federal Deficit actually is dropping faster than it even has before in the nation’s history. It’s just that it grew so huge thanks to the Bush Great Recession that even shrinking rapidly, it’s still big. But we are on track to eliminating it unless Republicans, in their hissey fit over a Black Democrat being president, keep sabotaging the US economy.

susanc's avatar

Just a word about Greece. According to Michael Lewis, author of a book about the international financial crisis called Boomerang, Greece’s government so admires individuality/personal freedom that it fails to collect income taxes, so it has no money in its bank account. Our IRS actually functions, after a fashion, though it makes a lot of individual mistakes.
That’s the difference between us and them. Says Michael Lewis.

Jaxk's avatar


Wow, you’re a true believer, I’ll give you that. Obama exploded the deficit to $1.2 trillion and held it there for 4 years. Now we have been able to drop it to $700 billion and you want to brag about that. I’m not sure how you relate this irresponsibility to his being black but if your contention is that being black makes you fiscally irresponsible, I’ll simply disagree. It’s his ideology that makes him fiscally irresponsible.

bolwerk's avatar

@Jaxk: what problem do you think the deficit is creating?

Jaxk's avatar


The most obvious problem is the payment on that debt robs us of money we could use for other purposes. The interest rate on our debt is at historical lows yet even near zero the debt consumes a major part of our budget rearing half a trillion annually just to pay the ineterest. It is a ticking time bomb. Interest rates are slowly rising and that is unlikely to stop. Even a modest project of interest rates could easily quadruple our payment at the current level. A rise in interest rates not only increases our payment but also increases our deficit which affects our interest rate and so on. It’s a death spiral. That is exactly what happened with Greece. The higher the debt, the higher the interest rate.

Less obvious is the balance of trade debt. As we pay more for imports than we get from exports, we directly ship our money overseas. That is extracted from our economy to fuel theirs. If you take money out of our economy it slows. The result is more debt and a slower economy. Kinda like we have today.

ETpro's avatar

@Jaxk We could have not invested in winning WWII. What should we care if Hitler won, aside from the fact he planned to exterminate everyone who was not a blond, blue-eyed paragon of Aryan perfection. We could have avoided the post-war boom by refusing to invest in the Marshal Plan, or research, or education, or infrastructure. That’s not to say deficits do not matter. But just as you do not drastically hike taxes in a weak economy, you also don’t drastically cut spending and investment.

Greece is a ridiculous comparison with the US economy, and you know it.

I do agree that the trade imbalance is a problem. We’re slowly reducing it. We’re a net energy exporter now for the first time in decades, and we are bringing manufacturing back onshore faster than we are off-shoring it. These are positive signs, but I’d love to see more.

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