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Post by Deleted on Jul 29, 2011 14:58:41 GMT -5
It is unavoidable. Obama said that if a bill was not passed that we WOULD default, even though our cash flow more than covers our debt service. people keep saying this, as if it were the most crucial thing. but it isn't. the most crucial thing is meeting your commitment to the people that draw a pension from you. at a minimum, it is co-equal with interest payments. so then it becomes a cash flow issue. one of the companies i run received $2,000 this week. we have payroll today. i can guarantee you it is more than $2k. it doesn't matter SHIT whether you can service your debt on paper. what matters is whether you have the cash flow to do it (assuming you have no credit). Sounds like a major problem I suggest prioritizing what has to be paid, versus what you want to be paid. Debt and interest first....active duty military 2nd, retired military 3rd, social security 4th, etc Hard decisions....and some people WILL draw the short straw. The credit cards are maxxed.....something has to give
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skweet
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Post by skweet on Jul 29, 2011 15:20:06 GMT -5
[people keep saying this, as if it were the most crucial thing. but it isn't. the most crucial thing is meeting your commitment to the people that draw a pension from you. at a minimum, it is co-equal with interest payments. so then it becomes a cash flow issue.] How do you reason this statement? Stockholders have the greatest potential for return and therefore take place at the end of the line. Pensioners and contract-holders take limited risk and get a fair return by betting their time or service on the success of the entity's endeavor. Creditor's take low return on their risked capital because of the assurance of being paid first. To change this order, is to through capitalism in chaos.
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jkapp
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Post by jkapp on Jul 29, 2011 15:34:49 GMT -5
It is unavoidable. Obama said that if a bill was not passed that we WOULD default, even though our cash flow more than covers our debt service. people keep saying this, as if it were the most crucial thing. but it isn't. the most crucial thing is meeting your commitment to the people that draw a pension from you. at a minimum, it is co-equal with interest payments. so then it becomes a cash flow issue. one of the companies i run received $2,000 this week. we have payroll today. i can guarantee you it is more than $2k. it doesn't matter SHIT whether you can service your debt on paper. what matters is whether you have the cash flow to do it (assuming you have no credit). And I bet your company has to borrow to make payroll...and then pay that loan off once the cash flow catches up. Unfortunately, all we seem to get from government is the borrowing part - the paying back portion doesn't seem to be happening and it will only get worse unless government is FORCED to cut spending. And that could mean lesser benefit payments...if it's not going to come from one place it has to come from another - and that's the part that elected officials can't seem to get through their thick skulls.
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djAdvocate
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Post by djAdvocate on Jul 29, 2011 15:42:35 GMT -5
[people keep saying this, as if it were the most crucial thing. but it isn't. the most crucial thing is meeting your commitment to the people that draw a pension from you. at a minimum, it is co-equal with interest payments. so then it becomes a cash flow issue.] How do you reason this statement? because i have dealt with a business that has no lines of credit for (18) months now. i know precisely how it works.
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djAdvocate
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Post by djAdvocate on Jul 29, 2011 15:43:28 GMT -5
people keep saying this, as if it were the most crucial thing. but it isn't. the most crucial thing is meeting your commitment to the people that draw a pension from you. at a minimum, it is co-equal with interest payments. so then it becomes a cash flow issue. one of the companies i run received $2,000 this week. we have payroll today. i can guarantee you it is more than $2k. it doesn't matter SHIT whether you can service your debt on paper. what matters is whether you have the cash flow to do it (assuming you have no credit). And I bet your company has to borrow to make payroll... borrow? no. we don't borrow to make payroll. none of the companies do.
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Post by Deleted on Jul 29, 2011 15:44:01 GMT -5
The republican theory "Starve the Beast" is designed to control spending by cutting taxes until it creates a fiscal crisis that would force the government to cut spending.
You cut taxes. Both companies & tax payers have more money left after taxes. They spend the money (& the government collects taxes on that). Companies have more left & that gives them options. Tax payers have more left & that gives them more options. The government has more money because they are collecting more. As tax payers spend more companies sell more & hire more people (who pay taxes). It's pretty simple & mostly common sense. Just like raising taxes on business & tax payers does the exact opposite. (both companies & people spend LESS when they have LESS & growth slows down).
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djAdvocate
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Post by djAdvocate on Jul 29, 2011 15:44:43 GMT -5
[people keep saying this, as if it were the most crucial thing. but it isn't. the most crucial thing is meeting your commitment to the people that draw a pension from you. at a minimum, it is co-equal with interest payments. so then it becomes a cash flow issue.] How do you reason this statement? Stockholders have the greatest potential for return and therefore take place at the end of the line. Pensioners and contract-holders take limited risk and get a fair return by betting their time or service on the success of the entity's endeavor. Creditor's take low return on their risked capital because of the assurance of being paid first. To change this order, is to through capitalism in chaos. the 14th amendment ensures that this order is not going to be maintained.
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djAdvocate
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Post by djAdvocate on Jul 29, 2011 15:45:12 GMT -5
A BUSINESS with no credit for a year and a half? How does that work? What industry are they in? Buying inventory must be hell. no inventory. it is a service business.
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skweet
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Post by skweet on Jul 29, 2011 15:45:34 GMT -5
[because i have dealt with a business that has no lines of credit for (18) months now. i know precisely how it works.] And they don't have to worry about ever getting any more lines of credit. How will the bankruptcy court judge the fact that they have been paying their contracts, and defaulting on their debts?
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skweet
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Post by skweet on Jul 29, 2011 15:46:02 GMT -5
[because i have dealt with a business that has no lines of credit for (18) months now. i know precisely how it works.] And they don't have to worry about ever getting any more lines of credit. How will the bankruptcy court judge the fact that they have been paying their contracts, and defaulting on their debts?
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skweet
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Post by skweet on Jul 29, 2011 15:57:04 GMT -5
"the 14th amendment ensures that this order is not going to be maintained."
The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.
I shall not question the pensions for services in suppressing insurection or rebellion. I shall question that general pensions, in a corporation, are anywhere near as important debt service.
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skweet
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Post by skweet on Jul 29, 2011 16:03:55 GMT -5
We will be downgraded, because the President said we WOULD default, if a bill wasn't passed. That means that he considers it a possibility that under a circumstance we would not make our debt service payments, even though we have plenty of cash flow. He would choose to default, instead of other choices (painful as they may be). What is to say that we increase the debt ceiling, and he decides to default anyway? I think we would have, even, averted a downgrade if he, just, took Bill Clinton's advice, and simply said, "we will make our debt payments, no matter what, even if we have to invoke the 14th amendment to do it." Of course, he wouldn't actually have to invoke the 14th amendment until well-into his second term, if not the next President's term.
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zipity
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Post by zipity on Jul 29, 2011 17:27:29 GMT -5
Last week Boehner accused the president of moving the goal post because he adding tax increases after they had basically agreed on a deal. I would say that not increasing the debt ceiling now is another example of moving the goal posts. The budget was already argued out and like it or not signed into law back on April 15th. If you wanted to decrease spending that was the time to do it. Now, budget in place, you want to not increase the debt ceiling to pay for the approved budget. THAT is moving the goal posts. Cutting the budget is a good thing and with the 2012 budget needing to be worked on, this is the time to dig into its provisions and slash and burn. But that needs to be done as part of the budget negotiations not as part of the debt ceiling talks. In fact, if we had one person with a brain in Washington, the negotiations should have started with "open your copy of (congress or the president's) budget to page X, cut paragraph 3 and we'll give you paragraph 6 on page Y." Then all this useless squabble would have been actually working toward delivering a budget that's do in 60 days anyway.
What doesn't make sense to me is borrowing money to help pay off our debts...that's like borrowing money from a HELOC to pay off a credit card, and then keep using the credit card.
Actually, congress approving a budget and having that budget signed by the president when it will require borrowing 40+ cents on the dollar doesn't make sense. Floating new bonds to pay off old ones has been going on for a long time.
we're facing a downgrade because we are asking for the 6th credit card. Want to instill confidence in our ability to repay debt, we will have to demonstrate spending discipline. We don't tax too little, we spend too much.
No we're facing the downgrade because we're about to default on payments we owe. If the parties in DC could work together to put a plan in place without defaulting we could maintain our credit rating. Cutting spending should be part of the budget discussion, not part of the debt ceiling. Remember this money was already approved and spent, we ate the meal now we need to pay the bill. Going on a diet tomorrow doesn't change the cost of tonight's meal.
Flawed premises mean flawed conclusions. I find it hard to believe that fingers can type something so patently ridiculous without twitching in their own form of laughter. Imagine trying to pass a tax cut today. Easy? Of course it's not.
Not so flawed when you remember that DC cut taxes by $850 billion in December. When was the last tax increase?
As to whether starve the beast will work, that's academic. It will never be tried in real life.
What? This is real life. Taxes have been cut to their lowest point in many, many years. This is exactly the outcome the Bush tax cuts were designed to deliver.
The ironic thing is that most of the liberals were screaming about the high spending then but are defending it now.
Now, most liberals and independents are screaming for the republican house to let us pay our bills. For some reason pubs and the tea party seem to think making cuts now will lesson our need to raise the debt ceiling by Tuesday.
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Post by BeenThere...DoneThat... on Jul 29, 2011 17:53:42 GMT -5
>>> The budget was already argued out and like it or not signed into law back on April 15th. If you wanted to decrease spending that was the time to do it. Now, budget in place, you want to not increase the debt ceiling to pay for the approved budget. <<< ...why didn't they raised the debt ceiling in April, then? iow, why leave it until now to "finish the job" done in April?
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zipity
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Post by zipity on Jul 29, 2011 18:38:57 GMT -5
the most crucial thing is meeting your commitment to the people that draw a pension from you. at a minimum, it is co-equal with interest payments. so then it becomes a cash flow issue.
You're kidding right, pensions and other entitlements like SS and Medicare are on the same peg which falls somewhere below the bond holders who may possibly loan you more money if you pay them on time.
why didn't they raised the debt ceiling in April, then?
real good question since they hit the debt ceiling in May. Idiot Reid was asked to pass it back in December but for some reason didn't get around to it.
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