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CR89er
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Funny and easy to understand, unless you’re a Washington politician! 
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Jeanne_S
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Isn’t that the truth!Funny and easy to understand, unless you’re a Washington politician!
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stinkcat_14
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Actually, we could pay off our national debt rather easily.
canadafreepress.com/index.php/article/52490
canadafreepress.com/index.php/article/52490
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tjones80
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What does this have to do with Catholic Social Justice?
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buffalo
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A lot.
Wealth Migration 1995 - 2009
Code:
See the map......- As a result of the 2010 census, the nine no-income tax states have gained 8 congressional seats, while the nine highest tax states have lost 5 seats.
- In 2009 alone, New York state lost $3.2 billion dollars in Adjusted Gross Income due to taxpayers leaving the state. - IRS Division of Statistics
- Over the last 10 years, the nine no-income tax states have created 2.6 million more jobs than the nine highest tax states. - Bureau of Labor Statistics
- Over the last 10 years, Florida has gained $63 billion dollars in Adjusted Gross Income due to taxpayers moving into the state. - IRS Division of Statistics
- The Congressional Budget Office projects the federal government will run a deficit every year until 2084 under current policies. - Congressional Budget Office
- The Congressional Budget Office projects the federal government debt to GDP ratio will hit 700% by 2080 under current policies. - Congressional Budget Office
- Ten years ago the United States ranked 1st in wealth per adult, by 2010 it had fallen to 7th. - Credit Suisse
- The US Postal service lost over $5 billion dollars in Fiscal Year 2011. - USPS
- 48.5% percent of US households receives some form of government welfare (food stamps, Medicaid or cash welfare). - US Census 2010
- US federal debt has increased by 50% or $5 trillion dollars since Barack Obama took office. - Congressional Budget Office
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Spider42
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I appreciate humor, but we must remember that we Catholics have an obligation to the truth. The video explanation of the debt limit above might be funny, but it is wildly misleading about what the debt ceiling actually is.Funny and easy to understand, unless you’re a Washington politician!
Ultimately, the US Congress controls the US budget. The US government can’t spend money unless the expenditures are codified in law. The president has some influence, he or she can veto any bill, including the budget. But Congress even has the ability to override that.
So the spending done by any US administration is actually a law it is following. Further, the constitution expressly requires the president to protect the faith and credit of the US. Discretionary control by the president is remarkably small. Even a line item veto for budgets would appear to require a change to the US constituion (see Clinton v. City of New York, with the decision based on the Presentment Clause of the constitution).
So, if we return to the analogy in the video, there are actually three parties, and two conversations. Let’s call them the folks with the checkbook, the book keeper, and the bank.
The conversation shown would be between the bank and the book keeper, and it is, in reality, very different. The ‘bank’ would love to loan the US government more money. Treasury bills are hovering right around 2%, meaning that investors are actually willing to pay the US government for the loan, not the other way around! This is because the interest rates are right around inflation. Loaning the US government money right now is only slightly better than sticking money under a mattress - but it is considered a ‘safe’ place to put money where you won’t lose any.
The debt limit is a different conversation. The bookkeeper is going to the checkbook holders and saying, ‘you know all those checks you required me to mail out by law, your revenue isn’t enough to cover them, I need your permission to go to the bank for a loan’.
This is why businesses and investors freak out at the very idea that the answer can ever be ‘no’. The big reason that t-bills have such low returns is that investors take it as a given that the US government isn’t a bunch of bad check writing deadbeats. They can look to the US constitution and see that the country’s chief administrator is required, by law, to protect faith and credit, etc. But if US Congress decides to become bad check dead beats, investors will have to change they way they do business with the US government.
There is, clearly, some correlation between US spending and debt and Catholic Social teaching. Look at the two big explosions in US debt in the last 50 years. US debt surged during the Reagan administration. A big driver of this was a huge expanse in military spending. The Vatican did warn the US about the perils of military escalation at that time. Likewise, top tax brackets where cut dramatically. As deficits started to balloon, things like payroll taxes were reapeatedly increased (people forget that, as a matter of historical record, Reagan signed tax increases 7 of his 8 years in office). This is a move towards a more regressive tax system, which, again Rome and the local princes have repeatedly warned about.
The other huge explosion in debt was during the Bush administration. With some similar drivers. Two wars were started, and no effort was made to pay for them at all. They were overwhelmingly financed via debt. And taxes on the wealthy were dropped to post WW-II lows at the same time.
But the connection is loose at best. Consider, the US spends more per US citizen on public money for health care than Canada, and has done so for decades. But Canada’s spending is for care for all its citizens and the larger US spending is for a much smaller subset of ours. For many years, the Church and the local princes have pointed out that there is a fundamental problem with the US’s system and outlook for health care. The Canadian system, while not perfect, is much closer to what the Church recommends. If we were to try to directly equate money to morality, we might just look at the US’s much larger per capita spending we might erroneously conclude that the US is better prioritizing this particular area of social justice teaching.
The Magisterium has written extensively about this general subject in recent years, and the pope brought it up repeatedly during his visit to the US and in regular statements directed at the US (like the latest New Years message). As always, I would strongly recommend all Catholics to hear what the authentic teachers, the apostles, have to say. But be forewarned, they Church has a very different take than some of the messages above. Still, we are required to at least dutifully try to bring our hearts and minds into communion with the Magisterium (Lumen Gentium #25).
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JimG
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Does the Magisterium really teach that it is necessary for the U.S. government to continue to spend more than it takes in? Forever? Does the Magisterium teach that the debt bomb must expand until it explodes?
The government is not going to default on the debt. It will pay interest on government bonds.
What is needed is to reduce the amount of spending to match the amount of income.
And Congress has control of how much the government spends. It needs to seriously try to match spending to income.
The government is not going to default on the debt. It will pay interest on government bonds.
What is needed is to reduce the amount of spending to match the amount of income.
And Congress has control of how much the government spends. It needs to seriously try to match spending to income.
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buffalo
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The Senate has not passed the budget in several years. How are we spending money then? Have they just ignored the Constitution?
The first Iraq war - The cost of the war to the United States was calculated by the U.S. Congress to be $61.1 billion.[153] About $52 billion of that amount was paid by other countries: $36 billion by Kuwait, Saudi Arabia and other Arab states of the Persian Gulf; $16 billion by Germany and Japan (which sent no combat forces due to their constitutions). About 25% of Saudi Arabia’s contribution was paid in the form of in-kind services to the troops, such as food and transportation.[153] U.S. troops represented about 74% of the combined force, and the global cost was therefore higher.
Show me where Catholic Social Teaching says we should just give money to the poor without having them earn it in some way? It is better to teach them how to fish, rather than fish for them.
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Spider42
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Again, my obligation is to truth. The Senate has failed to pass a “budget resolution”, this is actually a seperate parlimentary action from the budget proper. The reason for this was not that the Senate was lazy or remiss, but that the House has special responsibilities on the budget. Also, though this particular parlimentary action cannot be filibustered, the Senate rules allow unlimited debate, which the minority party has used to stop this conventional parlimentary action from receiving a vote. If you are actually interested in all the legal mechanisms we can review them, but the US government has, most assuredly, not been operating without a budget.
What is different is that, because of ongoing partisan brinkmanship, etc., the budget has been achieved through atypical legislation rather than more conventional means. For example, both the Senate and the House just passed the “Budget Control Act” (to end the latest debt ceiling crisis) and the president signed it into law. If there is ever a legal gap for an actual budget, the government shuts down. We don’t know precisely what happens if/when Congress refuses to adjust the debt ceiling, it has never happened. But most legal scholars agree that it would create a constitutional crisis.
I’m sorry, I thought that the context was obvious. I should have been clearer. I was referring to the second Bush administration, when total US debt roughly doubled in 8 years. Neither the Iraq war or the war in Afghanistan was handled ‘in budget’ until the Obama administration. For better or worse, this was a significant break with US tradition, as was cutting taxes on the rich during a time of war. If we use Congress’ calculations, the total cost of those two wars is about $1.4 trillion dollars to date and still climbing, but the true cost to US taxpayers is actually quite a bit higher (which the CBO even notes in it’s reports). And, if we are using Congress’ estimates, the wars and tax cuts on top earners were, combined, the lion’s share of the explosion in debt under the second Bush’s administration. Though, to be fair, that administration also oversaw a larger growth in discrentionary spending (the Plan D medicare drug benefit was also unfunded, and over a decade was projected to add many billions of dollars in debt, though it became funded, actually paid for, when it was revised under the Affordable Care Act passed under the Obama administration).
The flippant answer would be Matthew 19:21:
But this is a very important subject, not one to take flippantly at all. What you are expressing is a seeming variant of a Puritan/Protestant belief, a concept of ‘the deserving poor’. In broad strokes, we Catholics reject this because we are biblical literalists. For us, Jesus was God and his earthly instructions were/are divine. The problem for us with concepts like “earning” and “deserving” is that they require judging. Jesus instructs us not to judge in the Beatitudes and we Catholics put the Beatitudes at special status (CCC1716).
The Universal Catechism sums this up very succinctly:
2445 is truncated for space, but the paragraphs above are extensively cross referenced to Holy Scripture in the printed Catechism.
These teachings are very spiritually challenging, so the Church has taught extensively on the subject. A good place to start would be here:
usccb.org/beliefs-and-teachings/what-we-believe/catholic-social-teaching/
Many parishes also periodically offer programs to help parishioners properly develop their moral conscience in this area. You could talk to your pastor to see if your parish or diocese has such a program.
These teachings are so central to Catholic Gospel (literally, ‘Good News’) that is our mission, I am not completely comfortable debating or instructing in this area.
However, again, in terms of basic truth, I must point out that services to the poor have virtually no meaningful impact on the US budget or deficit. They are a miniscule slice of the pie. We already spend far less than other industrialized nations and slashing things like Medicaid, food stamps, and foreign aid to zero would have no appreciable impact on our deficit.
If we look at the objective evidence (actual budgets, actual policies, actual results), the Church’s recommendations would dramatically reduce US debt, not increase it.
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ProVobis
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Seems like the banks should have been asking these questions before. Unless they were all caught up in the housing bubble which gave illusions of forever rising collateral. This wasn’t always a (revenue - expenses) sort of thing as portrayed in the video.
Same applies to the U.S. debt. It appears that in 1914 they began to see the U.S. as a forever rising asset so they created the Federal Reserve System.
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zz912
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The same investors that didn’t see the dot-com bubble about to burst, the housing bubble about to burst, and the debt bubble that is expanding vastly right now???
If the debt limit is not increased, the US will have to make decisions about which things to pay with the money coming in. The first that it will have to pay is the interest on the debt, b/c it is constitutionally required to do so. So it will NOT default on the debt. So investors won’t be stuck hanging out to dry. What will change is that other expenditures that have been approved won’t be made, but this is NOT default. There is no obligation for the US to spend money.
This is disingenous at the very least. Military spending went up under Reagan, but welfare/social program spending went up just as much, if not more. Same for under Bush. Spending went out of control in social program spending. Only giving defense spending as an example is deceptive.
Well this is also why our bishops are only protected by the Holy Spirit when speaking about faith and morals. Comparing the US healthcare system to the Canadian system is like comparing a top of the line auto today vs a 72 Chevelle. Of course our system costs more (of what we can see), because we have much more services, drugs, technologies, and other benefits that simply aren’t available in Canada. There is a reason that the Dr’s offices here in Florida fill up in spring with Canadians, who are willing to pay cash to be seen before they head home where they have “free” healthcare.
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buffalo
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Your claim is the Senate does not need to actually approve the budget? Why bother to send it over in the first place? Not operating without a budget? I am unclear.
2nd Iraq war - 18 months of debate in Congress before they voted to fund it. So they voted to appropriate funds without accounting for them?
Please define poor or deserving poor. When a guy pulls up to a soup kitchen in an Escalade wearing a designer suit with lots of jewelry is he poor? How does one make that determination? When someone applies for welfare should we check to see if they qualify or just cut them checks because they show up with their hand out?
Should we buy their phones, TV’s, cars, etc? Where should the line be drawn?
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buffalo
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The banks were coerced by Congress to increase home ownership.
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ProVobis
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Congress, through the repeal of Glass Steagall, gave them the ability to use Fed money for purposes other than lending, including betting against the same entities which they lent money too. Sure formula for a conflict of interest and a complete bank collapse. Seems like only Jim Cramer warned about this in 2002.
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ProVobis
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I wouldn’t mind seeing this either. But do realize real estate prices would plummeting. As would asset-backed securities.
The IMF tried the same thing with gold several years ago. But that only meant the their supply of it got depleted. Then they were left without collateral.
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Spider42
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There are many fine questions and points, but there is no way that I have time to properly address them all. So please forgive me if the following leaves the impression that I am not giving anyone’s posts proper consideration.
If we took the Church advice and spent more on peace and less on war, modelled our health care system in a more Catholic spirit, and took heed on socially just economic development, we would be in dramatically better economic shape.
This isn’t a pipe dream, it’s recent history. At the end of the Clinton administration the budget was at a surplus and there were concerns that we might be paying our debt down too quickly. This was accomplished without dismantling our social safety net. The following 8 years we focussed on policies that increase income inequality and waged expensive wars and that left a national debt that had doubled in size and structural deficits that will take some serious effort to fix (note that the Ryan Budget, while decimating social services, does not even claim to stop deficit spending for decades, and that claim is based on some very optimistic forecasts of economic growth). The Vatican pointed out it did not agree with these policies even as we enacted them.
The financial sector knew it was peddling garbage, it even profited from that knowledge at it’s own customers’ expense. That is why the Church’s position is that unregulated capitolism is at odds with the natural law.
See the document “Toward Reforming the International Financial and Monetary Systems in the Context of Global Public Authority” from the Pontifical Council for Justice and Peace (Oct 2011)
budget.senate.gov/democratic/index.cfm/budgetresolution?p=fiscal-year-2013
That is why the government has not shut down. What the Senate has failed to do is pass a “Budget Resolution” which is a legislation required to be a “concurrent resolution”. You can see the definition of that here:
senate.gov/reference/glossary_term/concurrent_resolution.htm
It’s not actually legislation that is sent to the President. The point of this procedure is that both houses agree to certain broad things so that budget legislation can be more readily reconciled at the end of the process. Since the two chambers can’t agree and because the minority party won’t permit the Senate to act unilaterally, this step has not occurred throughout the Obama administration. Recently, this failure has become political fodder, but I think that is more than a bit misleading and disengenous. If you are the party preventing something from occuring, it seems a tad immoral to publicly criticize your opposition for not overcoming your obstructionism.
These subprime mortgages defaulted at, by far, the highest rate and led the overall collapse. These are mortages that could not have been made under the conditions outlined by Congress in laws intended to promote certain types of home ownership.
Not at all. The Church teaches moral obligations and makes recommendations on how to meet them. Currently we spend about as much on our military as all the other nations on earth combined. We spend the most per citizien on public health care, covering the smallest percentage with some of the poorest outcomes. And, we have the highest level of income inequality since the gilded age.
If we took the Church advice and spent more on peace and less on war, modelled our health care system in a more Catholic spirit, and took heed on socially just economic development, we would be in dramatically better economic shape.
This isn’t a pipe dream, it’s recent history. At the end of the Clinton administration the budget was at a surplus and there were concerns that we might be paying our debt down too quickly. This was accomplished without dismantling our social safety net. The following 8 years we focussed on policies that increase income inequality and waged expensive wars and that left a national debt that had doubled in size and structural deficits that will take some serious effort to fix (note that the Ryan Budget, while decimating social services, does not even claim to stop deficit spending for decades, and that claim is based on some very optimistic forecasts of economic growth). The Vatican pointed out it did not agree with these policies even as we enacted them.
Individuals may have been clueless in regardless to both, but certainly not professional investors. I, myself, mathmatically predicted both and I was far from alone. The problem in both bubbles, though far more so in the housing bubble, was not stupidity, but criminality and immorality.
The financial sector knew it was peddling garbage, it even profited from that knowledge at it’s own customers’ expense. That is why the Church’s position is that unregulated capitolism is at odds with the natural law.
See the document “Toward Reforming the International Financial and Monetary Systems in the Context of Global Public Authority” from the Pontifical Council for Justice and Peace (Oct 2011)
I’m sorry, that is not legally correct. The president/executive branch has no unilateral authority to either increase revenue or ignore budgetary spending items (again, see Clinton v. New York City, which invalidated the line item veto on precisely these grounds). Yes, there is a constitutional obligation for the president to uphold full faith and credit, but the consitution does not give the president the right to break legally passed budget laws to do so. If it did, the debt limit would not be legally binding on the president to begin with. Some people argued just that, that the administration should simply ignore the limit and meet it’s legal obligations, but the Treasury and the Justice Department both publicly disagreed, as did the White House. The nation’s purse strings remain Congress’ domain.
My obligation is simply to truth. There is no reason to presume malice on my part. I’m relying on CBO records and data sources typically used by economists and investors. If you have alternate facts to present, feel free to do so, I would be happy to consider them.
No, my claim is that the Senate has approved a budget:
budget.senate.gov/democratic/index.cfm/budgetresolution?p=fiscal-year-2013
That is why the government has not shut down. What the Senate has failed to do is pass a “Budget Resolution” which is a legislation required to be a “concurrent resolution”. You can see the definition of that here:
senate.gov/reference/glossary_term/concurrent_resolution.htm
It’s not actually legislation that is sent to the President. The point of this procedure is that both houses agree to certain broad things so that budget legislation can be more readily reconciled at the end of the process. Since the two chambers can’t agree and because the minority party won’t permit the Senate to act unilaterally, this step has not occurred throughout the Obama administration. Recently, this failure has become political fodder, but I think that is more than a bit misleading and disengenous. If you are the party preventing something from occuring, it seems a tad immoral to publicly criticize your opposition for not overcoming your obstructionism.
Not remotely. Banks had no obligation from Congress to pass out NANI (no assets, no income) $500K+ mortgages to anyone who would take one. They did so because they were profitably sellling the mortgages as AAA investment instruments on the global market.
These subprime mortgages defaulted at, by far, the highest rate and led the overall collapse. These are mortages that could not have been made under the conditions outlined by Congress in laws intended to promote certain types of home ownership.
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buffalo
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It was repealed in what year?
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buffalo
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Indeed, obstructing something objectionable is a good thing.
Now the Congress puts back in place a law that borrowers should be checked for ability to pay.
No problem with Church position on unregulated capitalism. What is your opinion of distributism?
You - these are mortages that could not have been made under the conditions outlined by Congress in laws intended to promote certain types of home ownership. Source?
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stinkcat_14
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That is a funny one. It had nothing to do with excessive risk taking.
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