Debt Ceiling Questions: Is the budget meaningless?

[wizardwatson]

So I'm reading about this "debt ceiling" question. The White House apparently is saying that not raising the debt ceiling in a timely manner, may cause U.S. to default on interest payments on the debt. Saying it would be "Economic Armeggedon" if the limit was not raised.

So answer me someone please. Are these payments not factored into the budget? And what is the meaning of passing a "balanced budget" if we keep the amount we can borrow/print open-ended? Isn't the budget essentially meaningless if the U.S. has an open-ended borrowing mechanism.

It just seems to me that the budget in general is a farce. In my house if I balance my budget but still require more "credit" to pay my bills, I would say I did not in fact balance my budget. Thoughts?

[wizardwatson]

http://www.msnbc.msn.com/id/42536397/ns/business-eye_on_the_economy/


According to a recent NBC/Wall Street Journal poll, only 16 percent of voters said Congress should raise the debt ceiling, while some 46 percent said they were opposed. When told that would mean the U.S. could default on its debt, 32 percent supported raising the limit. But 62 percent said they opposed lifting the cap even if it meant the Treasury would not making good on its debt payments.

Apparently, 62% of Americans prefer Economic Armeggedon to going further into debt.

[wizardwatson]

Ron Paul as usual answers my question for me.

http://www.lewrockwell.com/paul/paul706.html


If the new Congress gives in to establishment pressure and media alarmism about “shutting down the government” by voting to increase the debt ceiling once again, you will know that the status quo has prevailed. You will know that Congress, despite the rhetoric of the midterm elections, is doing business as usual. You will know that the simple notion of balancing the budget, by limiting federal spending to federal revenue, remains a shallow and laughable campaign platitude. - Ron Paul 11/30/10

[eduardo89]

I still don't understand how not raising the debt ceiling would lead to default? The government takes in much more than debt repayments are

[specsaregood]

Ron Paul as usual answers my question for me.

http://www.lewrockwell.com/paul/paul706.html

Or in Dr. Paul's otherwords: everytime they extend the debt "ceiling" we are essentially defaulting.

[tangent4ronpaul]

I still don't understand how not raising the debt ceiling would lead to default? The government takes in much more than debt repayments are

It's a matter of priorities:
Medicaid and Medicare payments trump paying interest
Social Security trumps paying the interest
Buying bombs to drop on brown people trumps paying the interest
Studying the mating habits of crawdads trumps paying the interest

You have to keep your priorities in order.

If they are not able to raise the debt limit, under the pretext of paying the interest and avoiding "financial Armageddon", then they won't be able to fund things vital to the national interest like the transsexual washboard band festival.