The United States Debt Limit Explained – (CR) Heritage Foundation

What’s happening as the congress raises the debt ceiling explained in a very easy to understand and short video. Congress will consider rasing the debt ceiling on our borrowing streak for the 78th time in less than a hundred years and as the debt goes up so does the interest on the debt. No one in their right mind would do this, but Congress does because it’s not their personal money or debt and it allows them to continue to spend and remain in power.

25 thoughts on “The United States Debt Limit Explained – (CR) Heritage Foundation

  1. Exactly. And they failed to mention that US dollars (even though its a
    reserve currency) are for purchasing US goods in the US economy, even if a
    foreign entity holds the bonds/cash…………Its not cash for their
    country, it cash to be used in the country it was created.

  2. The FED turns the interest over to the treasury on a yearly basis……..So
    the treasury benefits when the FED holds the bonds since the treasury
    doesn’t recieve the interest back when private holders have the bonds.

  3. People have been claiming the public debt was a problem ever since Reagan
    blew up the debt……..But exactly what issues have been brought to bare?
    No rapid inflation, no default, nothing. Because the US, as a currency
    issuer with a large economy does not operate like a household or state
    budget. Yes, it would have been an issue before Nixon fundamentally changed
    the monetary system, But now people are applying the rules of an old system
    to a new, different system.

  4. The debt ceiling DOES NOT allow the government to spend more money, it
    allows the government to PAY FOR THE THINGS it has already spent money on.
    The comparison here would be that every time Steve gets the bill for the
    credit card he takes a vote on whether or not he should PAY it. OF COURSE
    HE NEEDS TO PAY IT, he already SPENT it. There should be no vote on this
    issue.

  5. Yeah okay, ive been on a vacation to brazil for 24 days so i might have
    missed some huge changes in American politics. BUT cell phones are a
    important part of todays working force. A cell phone is something you need
    if you are working for a serious company. Most companies even gives you a
    cell phone becuse of it. But okay lets skip the working phone. A cell phone
    in today’s society is cheaper than a normal connected home phone. Think in
    long term, its not like they are getting iPhones.

  6. Well the people who brought us to this level are well us we don’t get to
    walk away we let them do this and now we have to suffer the consequence.
    When over half the country doesn’t vote and half of the ones who do don’t
    know jackshit about the people they are voting for except they would like
    to have a beer with them well this is what happens.

  7. You left out the part where Steve lost the Presidency to Ronald who then
    cut the HOA fees in half and hired four more security guards. Then,
    believing that the rules protecting the pool and the clubhouse were
    overburdensome, Ronald scrapped the regulations protecting them. Then, he
    GAVE the pool table to a private company, hired a private firm to provide
    security, and let trailers (cheep goods) into the neighborhood. Then, he
    started whining about the debt and wants to close the pool.

  8. nice try bruno ..we don’t print currency ..meaning the gvt does not print
    money…the ngo fed does that and lends the bux to treasury ..there is
    where the debt comes from… you have no clue how fiat currency works …

  9. I think it’s the other way ’round Duggy – the US Treasury – Bureau of
    Minting and Engraving prints and coins our money, then distributes it to
    the Central Bank (FED) who in turn distributes it to the other Fed. Reserve
    Banks. etc. Right?

  10. If the amount of bonds sold by the government fall, then the amount of
    money created by the Federal Reserve Bank will definitely be reduced,
    causing a shrink in money supply and jacking up interest rates.
    Consequently, costs of borrowing rise and less investments become
    profitable, while the amount of money in the hands of people is reduced. Of
    course, the government pays its dues. However, this occurs at the cost of
    massive reduction in spending and investments, and exacerbates the rate of
    unemployment. At the same time, reduction of social security and benefits
    will not actually cause people to be able to retrain and get employed, but
    rather relegate them to poverty and also contract spending because they’re
    simply the ones who spend more as a proportion of marginal income on the
    economy. Net effect being a gargantuan reduction in aggregate demand and
    long-run capital flight, carelessly cutting debt will only cause a
    depression unprecedented in the history of America. If you really want to
    end the debt problem, then 1. Abolish congress’ power to set the debt
    ceiling because this allows it to tell the President “We’re surprised you
    spent more than we allowed you to spend” even though Congress is the one
    that tells the President how much to spend (so congress causes the debt
    problem anyway) and 2. Destroy insolvent banks that inflate the economy
    through asset purchases rather than actual investment and come up with a
    method of banking that doesn’t rely on debt and I.O.U.s.

  11. How about eliminating Homeland Security and put the money in schools,
    instead of taking money from schools to Homeland Security? Just a
    simplified suggestion.

  12. What a reasonable seeming video… What it glosses over is:

    1. We don’t have a single person (steve) running things, instead we have a
    multi branch government with checks and balances on representatives
    behaviors.
    2. We have a guiding body of laws that would make what steve does here
    illegal
    3. Comparing public spending to maintenance on a new pool trivializes the
    actually important things we use public spending for
    4. Tax burdens are not apportioned the same way that HOA fees are
    5. Government is a compromise between competing interests, a HOA is based
    on the common interests of the owners
    6. The gated housing estate in this example has a lot of infrastructure and
    services provided for it that aren’t addressed.
    7. The benefits of the HOA are probably more equally realized by the
    members of the association than are the benefits of civilization
    8. The gated community doesn’t have a separate functional economy
    9. The gated community doesn’t print it’s own money
    10. The HOA in this example is congress, and in our system congress passes
    the budget into law – and the president (steve) is required by law to
    execute that budget.

    etc, etc, etc…

    A better example would be someone already in a gated community puts up a
    big fence around their house and decides they don’t want to pay the HOA
    fees anymore because they’ll figure out how to do for themselves all that
    stuff the HOA used to do for them, and it will be cheaper for that person
    to only worry about themselves so it’s better for them to do this even
    though it’s worse for everyone else. And, of course, another difference is
    that if you did this in a real HOA you’d be sued and you’d loose because
    you have obligations to the other owners. But actually doing this in the US
    simply means you’re for “freedom” and “liberty” and not letting the
    “bloated/evil” government “steal” (i.e. tax) your money for things you
    don’t like – and that doesn’t make you selfish or someone ignoring your
    obligations to the others in your association, it simply makes you a
    Tea-Party Republican. 

  13. This does not fix that fact that every dollar “make” we are borrowing from
    the federal Reserve with promise of interest. Even if we payed all our
    money into pay off the debt is is mathematically impossible for us to pay
    it off since for every $90 dollars currently in circulation we owe $100.
    If we print more money we will just owe even more. The first step has to
    hugely reform out economic structure and replace the private banks that
    currently unconstitutionally print and restore the power to our senate.
    Even then cutting programs would not be enough large tax increases and
    program cuts would be nessary to even have a chance of paying the debt off.

  14. Borrowing was necessary when our money was precious metal coins, But that
    has not been the case since the early 1800’s. Now the government keeps
    borrowing. The government does not need to borrow. It could seek to bring
    the economy to equilibrium and create its own money without interest. What
    a scam

  15. once again. govts buying credit with credit. the exact thing they tell
    people not to do and this is how all these countries grow in debt. god were
    fucking stupid

  16. So we’re basically fucked into debt we will never be able to get out of.
    Sounds a whole lot like the American way to spend. Oh but wait, when the
    bubble bursts we can just bail out the banks that gave out loans left and
    right that made no sense. None of this shit makes any sense!! Yet
    corporations keep expecting to make more and more money to show investors
    they are profitable. Greed will ruin this world. Question is, what’s coming
    first? Greed or the great war to end all worlds?

  17. The story ended with Ron Paul not winning the election. The residents only
    understand one thing: the storm is not here yet so the party can still go
    on.

  18. Hey there! Have you considered – Charzippity? (should be on google have a
    look)? Ive heard some amazing things about it and my work buddy got amazing
    money with it.

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