US with problems to raise the debt ceiling... again

[stompix]

The $3.5T bill isn't finalized yet, but last I heard it removes crypto's exemption from the wash sale and constructive sale rules, at least.

Seems like indeed, both bills come with nothing good for crypto in the current format.

Not even going to pretend I completely understand the taxation on the second, the construction sale rule, but for the wash sales rule I don't think the impact will be that big, I'm a bit surprised poeple quote it as something happening on a large scale. You need to sell now at a loss to offset future gains but in this crypto market, I see this strategy backfiring at you easily, one pump in the few seconds you need to sell and then rebuy and you've ended with a bigger loss than you could gain from tax avoidance, and even then future gains caused by a bull run might totally offset it.

Anyhow, even if it's a common strategy or not terminating the exemption isn't for sure a good thing, let's wait and see, I have a feeling they have a lot of stupid ideas on the sidelines, far worse.

As for the debt, is anyone genuinely surprised by what seems to be the outcome now?

[1714974854]

1714974854

[o_e_l_e_o]

And everybody knows all of this, so the threat of default just isn't very good leverage.

It's pretty much no leverage at all. Each side is only interested in delaying while they can plausibly blame it on the other side. As long as the Dems can continue to blame the GOP for threatening to filibuster, then they will do so to score political points. As long as the GOP can continue to blame the Dems for not using budget reconciliation, then they will do so to score political points. The GOP say the Dems are reckless for spending trillions in these bills. The Dems say the GOP are reckless for spending trillions during Trump's presidency.

The media are as much to blame for this, instead of just reporting "Both sides as bad as each other".

Anyway, we've passed legislation to raise the ceiling by $480 billion, which will last us less than 2 months, thanks to 61-38 vote and 11 Republicans allowing it pass. So check back in again at the end of November, when we get to do all this nonsense again.

[LUCKMCFLY]

Now Biden just wants to borrow trillions of dollars and then spend a large portion of that on the least productive sectors of the American economy. It's like putting all that money in a black hole. Unless Democrats come up with a more unbiased plan. I think this is going to be a dangerous event that has a dangerous impact on developing economies around the world that will also be affected if the US government doesn't act on interest rates that will boost confidence. This is what they did, which is taxing the rich people in their country and big companies.

I do not know very well the economic policy of the USA, but from the little that I have heard they are having serious problems, I have read comments from people who affirm that 10 years ago with 100 USD you could buy many more things than now, and this is a total consequence of inflation, I have seen how some news indicates that the FED is unable to give more makeup to the country's accounts and they have also taken into account that the crypto economy is an option that if or if they should take it, all this speaks that it is a country that despite the fact that its main currency is the dollar and the dollar has a global hegemony, the debt is increasing, but as the USA also has debtors, when collecting from other countries, that internal debt is much easier to driving, until now is what I have interpreted from the USA, although I know that internally the problems have not diminished, quite the opposite.

[DrBeer]

Now Biden just wants to borrow trillions of dollars and then spend a large portion of that on the least productive sectors of the American economy. It's like putting all that money in a black hole. Unless Democrats come up with a more unbiased plan. I think this is going to be a dangerous event that has a dangerous impact on developing economies around the world that will also be affected if the US government doesn't act on interest rates that will boost confidence. This is what they did, which is taxing the rich people in their country and big companies.

Such a decision is more like sabotage than a search for a solution to a difficult situation. Throwing money into ineffective areas is not a good idea, but to be honest, disgusting. It's like putting out a fire by throwing coal at it ...
Given the growing crisis in China, it would be more correct for the United States to think about transferring production from China to the United States. organization of workplaces, etc. Moreover, now, when there is an understanding that any crisis in China has an extremely negative impact on a large number of American companies. Well, for the growing confrontation between the United States and China, this will play into the hands of the United States, and a new problem for China

[o_e_l_e_o]

I have read comments from people who affirm that 10 years ago with 100 USD you could buy many more things than now, and this is a total consequence of inflation

This is not unique to the US by any means.

I have seen how some news indicates that the FED is unable to give more makeup to the country's accounts

Where did you read this? The Fed's balance sheet is continuing to increase at record pace.

and they have also taken into account that the crypto economy is an option that if or if they should take it

The US government will never consider cryptocurrency as a viable option to replace fiat, pretty much ever. Everything they do regarding debt ceilings and printing more dollars and issuing fake credit would all be impossible with bitcoin. They are not about to give away the only thing that props the entire government up.

but as the USA also has debtors, when collecting from other countries

Debt held by foreign governments, businesses and investors accounts for only around 25% of the debt. The majority is held by various pension and mutual funds and by social security.

[PrimeNumber7]

The game theory of the situation prohibits a default of more than a couple of weeks at the absolute most, and any default at all is always unlikely. If a default happened, very quickly the "bodies would start to pile up", so to speak, and the pressure would just continually build for the ceiling to be raised. Everybody would be running around with their hair on fire, with the temperature going up and up and the fire spreading more and more, and there'd really be no way to end it except for raising the debt ceiling. In this sort of situation, it's certain that either 10 Republicans would flip or all 50 Democrats would kill the filibuster: raising the ceiling is a foregone conclusion, one way or another. And everybody knows all of this, so the threat of default just isn't very good leverage.

Democrats have the ability to raise the debt ceiling via reconciliation with a simple majority vote. Senate rules limit the number of times reconciliation can be used, and Democrats want to use it for their $5.5 trillion spending bill. The senate rules can be changed with a majority vote, but doing so would be more difficult than getting the votes to vote for the crazy reconciliation bill currently being proposed. Raising the debt ceiling via reconciliation would also mean the bill would need to raise the ceiling to a certain limit rather than the debt incurred prior to a date, and would also mean that Republicans would be able to force Democrats to vote on amendments that take stances on things they don’t want to take stances on.

McConnell got the messaging wrong on the debt ceiling this time around. He has since made it clear that he will not deliver any votes to raise the debt ceiling in the future (he had trouble getting 10 votes to vote this time around). It is, or should be clear that Democrats need to raise the debt ceiling via reconciliation as a longer term solution.

Once the US defaults on its debt, meaning it doesn’t pay interest and/or principal of treasury securities on time, it cannot be reversed. In theory, the treasury could issue securities late at night in order to pay for interest and principal of bonds it needs to redeem that day. So a “default” of 4 hours would not actually be a default.   

[perryxi2]

Now Biden just wants to borrow trillions of dollars and then spend a large portion of that on the least productive sectors of the American economy. It's like putting all that money in a black hole. Unless Democrats come up with a more unbiased plan. I think this is going to be a dangerous event that has a dangerous impact on developing economies around the world that will also be affected if the US government doesn't act on interest rates that will boost confidence. This is what they did, which is taxing the rich people in their country and big companies.

[Sithara007]

Now Biden just wants to borrow trillions of dollars and then spend a large portion of that on the least productive sectors of the American economy. It's like putting all that money in a black hole. Unless Democrats come up with a more unbiased plan. I think this is going to be a dangerous event that has a dangerous impact on developing economies around the world that will also be affected if the US government doesn't act on interest rates that will boost confidence. This is what they did, which is taxing the rich people in their country and big companies.

Another $5-$6 trillion to the US federal debt will destroy the economy in the long term. Republicans are worried about the default, but they should have been more aggressive. Anyway, the American people opted for this, when they gave the Democrats (+Murkowski) a majority in the senate. The uber rich will be insulated from any tax increase, as they have infinite number of loopholes available at their disposal. On the other hand, the middle class will witness the erosion in their wealth and a higher tax cut from their salaries.

[o_e_l_e_o]

Republicans are worried about the default, but they should have been more aggressive.

No they aren't. They don't actually care about the debt ceiling or the deficit (which explains why the Republican presidents have racked up higher deficits and more debt over the past 40 years than Democratic presidents). They care about scoring political points and winning elections, that's all.

The uber rich will be insulated from any tax increase, as they have infinite number of loopholes available at their disposal.

The uber rich are insulated from tax increases because of Trumps tax cuts, which overwhelmingly benefited the uber rich, and which will run until at least 2025.

By no means are the Dems blameless here, but painting this entirely as the fault of the Dems and suggesting the Republicans are the party of "fiscal responsibility" is incorrect at best and outright laughable at worst.

[PrimeNumber7]

They care about scoring political points and winning elections, that's all.

You can say that about every politician, and every political party.

No they[Republicans] aren't. They don't actually care about the debt ceiling or the deficit (which explains why the Republican presidents have racked up higher deficits and more debt over the past 40 years than Democratic presidents).

There are obviously external circumstances that do not necessarily reflect if one party cares about the deficit more than the other party. A recession for example usually means it is appropriate to have temporarily increased deficits in order to attempt to overcome the recession and get the economy growing again. Similarly, the country being at war means that it must spend a lot more money on said war than it otherwise would. Reagan for example had to overcome the economic mess left by Carter and spent heavily to win the Cold War. HW Bush had to protect American interests in the Middle East. W Bush had the war on terror and the economic mess caused by 9/11. Trump had to deal with the economic mess left by Obama, and had to deal with Covid.

Clinton saw budget surpluses due to the Republican congress, and because demographics meant social security saw huge surpluses. Obama gave money to politically favored groups and made attempts to get people to rely on government welfare.

The uber rich will be insulated from any tax increase, as they have infinite number of loopholes available at their disposal.

The uber rich are insulated from tax increases because of Trumps tax cuts, which overwhelmingly benefited the uber rich, and which will run until at least 2025.

The uber-rich generally will not benefit from lower tax rates because they are able to delay realizing income, possibly forever. They can also more easily take advantage of tax loopholes that are more politically feasible to exist when there are higher tax breaks, and are politically easy to close when tax rates are lower.

[o_e_l_e_o]

You can say that about every politician, and every political party.

I wouldn't say every politician in every political party, but certainly the vast majority in the two major parties, yes.

There are obviously external circumstances that do not necessarily reflect if one party cares about the deficit more than the other party.

And Obama had to deal with the largest financial crisis since the Great Depression, and Trump's deficit was growing exponentially long before COVID hit.

Clinton saw budget surpluses due to the Republican congress

That will be the same Republican congress which voted unanimously against the 1993 budget reconciliation bill which was largely responsible for achieving a surplus?

As I said above, both sides have to take responsibility here, and efforts by some to try to pin all this on Biden or the Dems are hilariously wrong.

[Webetcoins]

^It is obvious that republicans are worse when it comes to deficit, they had the biggest increases during their time, each time they were in charge for the past 30+ years, they have always done worse financially, and the moment a democrat becomes a president they start to care about fiscal responsibility, this has been a tactic for over 4 decades now and never changed. However as democrat people (I am not from usa, but if I was I would be a progressive democrat) we have to realize that we are closer to middle more than we are to left.

It means that when you have people like Sinema who end up getting more donations from republicans than democrats, do we really call the senate as house majority for democrats? It is obvious that we still have 2 democrats with sinema and manchin who are republicans, they have a (D) side of their name, but they are obvious republicans.

Biden was literally asking for war just 20 years ago, he now bombed Syria I believe a few times (you can google where he bombed) and got out of Afghanistan as well with absolutely no change at all, 20 years, nearly 20 trillion dollars, over 3 billion dollars spent per day, and they got absolutely nothing to show for, the same people they fought against are now in charge once again, if nothing was changing then why did they even got in? All in all yes Republicans are worse if you ask me, but that doesn't mean democrats are good, it just beats they are less shit.