I recently spoke to someone regarding 401k plans.  This is her field of work.  She said that many companies have rules for withdrawing money.  If you are currently working for a company and you have a 401k through your employer, then your employer actually makes the rules regarding withdrawals.  In many cases (perhaps most), you are not allowed to simply withdraw money.

She said that the employers do this because they don’t want you dipping into retirement savings.  This rationale tells me one thing: the nanny state is everywhere, not just in government.  These companies that don’t allow regular withdrawals will only allow you to take “hardship withdrawals”.  You have to have a good reason according to the company’s policy.  For example, you may have to show that your house is being foreclosed on or that you have unusually high medical bills.

You actually have to submit an application and provide documentation for your hardship.  If you are allowed to withdraw money, then you will still owe a 10% penalty (tax) to the government, along with any income taxes.

This is supposed to be your money in your account.  Obviously that is not the case, especially when you are working for an employer that has these rules.

This makes me rethink my 401k strategy.  I have been an advocate of contributing, but only up to the employer match.  I don’t think it makes sense to contribute any more than this, especially when you are locking up your money.  Any additional money would be better put into a Roth IRA (where you can at least withdraw your principle), a brokerage account, gold, silver, real estate, or any number of things.

Now I wonder if people should contribute at all, depending on your employer’s rules.  I always thought that if the government were to try some kind of an additional tax or confiscation on retirement plans that there might be enough warning to withdraw some of your money.  Apparently, many people would not be able to withdraw any money if they wanted to, at least for those under the age of 59 and a half.

I think your decision should depend on your situation.  If you already have a lot of money in a 401k and you don’t have a lot of liquid assets, you might consider cutting back your contribution, even if it means missing out on an employer match.  If you have a lot in the way of liquid assets and little in retirement accounts, then perhaps contributing to your 401k plan and getting a match would be beneficial.

It is not only a good idea to diversify your investments, it is a good idea to diversify where and how you hold them.

As a libertarian, I am strongly in favor of not raising the debt ceiling at all.  It would force the federal government to cut spending by about 40%.  While this would be a tough short-term adjustment for many, it would be highly beneficial in the long run.  It would mean that government would spend 40% less in the next year and hopefully it would continue.  It would mean that there would be an extra $1.6 trillion for the private sector to have instead of the government.  It would mean a much better economy in the long run.

This is why I believe that the debt ceiling will be raised.  My bet is that it will happen before the August 2 deadline, but if not, it will still be done before there are any major cuts or any major defaults (like interest payments or Social Security checks).

I heard John Boehner on Sean Hannity’s radio show yesterday.  The guy is even worse than I thought (Boehner that is).  I don’t much care for Sean Hannity, but one could say that his core listeners are at least somewhat fiscally conservative.  For this reason, I figured Boehner would at least put on a show for his target audience.  But he couldn’t guarantee that there would be no tax hikes.

Then he started talking about some plan that would cut $1.1 trillion over the next ten years.  Hannity asked him how much of it would be in the next fiscal year.  Boehner said it would be $30 billion.  This is a joke.  That is less than 2% of just the yearly deficit.  To top it off, it looks like even this amount is a phony cut.  It would be a cut in the projected spending, which is of course higher than the previous year. In other words, Boehner wants to cut a deal that would make essentially no cuts in the next budget.  This is the only period that Boehner and this Congress can control right now.  They can’t make cuts on behalf of any Congress 10 years from now or even 2 years from now.

I was getting a haircut yesterday and it is always amusing to listen to conversations in a barbershop.  There was an older guy who said he figured he would get a haircut before Obama took away his Social Security checks.  Then he criticized Obama for not wanting a balanced budget amendment.  Then he said that there are 536 clowns in DC that can’t work together.  He said they should be able to get along and make a deal.

He used the number 536.  He is counting 435 House members, 100 Senators, and 1 President.  He should have said 535.  Ron Paul should not be included with this group.

This guy, unfortunately, is like the typical American.  He says in one breath that he wants a balanced budget.  Then he says they should work together for a deal.  For anyone who wants a balanced budget, they should not want a deal.  For anyone who wants a balanced budget, there is only one thing to advocate in this case: DO NOTHING!

This is why it is a joke that so many of these politicians are talking about a balanced budget amendment as part of a deal.  If you want a balanced budget right now, simply do nothing.  Just don’t raise the debt ceiling and the budget will have to be balanced.

As I pointed out the other day, even if the politicians didn’t want a balanced budget right now but really wanted spending cuts, then just raise the debt ceiling by a smaller amount.  If next year’s deficit is projected to be $1.5 trillion, you could raise the debt ceiling by $100 billion each month for the next year.  This would force a cut of $300 billion from the projection.  I am not in favor of this, but I am just pointing out how easy it is for the Republicans in the House to cut spending if they really want to.  If the Senate rejects it or Obama vetoes it, then the ceiling will not get raised.

The Republicans in DC are a bunch of frauds.  Ron Paul is an exception.  Even most of the Tea Party politicians will sell out.  If you are a libertarian, you should be an advocate of doing nothing.  This will cut spending drastically.  Any Republican (or anyone else) who supports raising the debt ceiling is not really worth your support.

This whole debate is a good thing.  The debt ceiling will get raised, but it is serving as a good educational vehicle for the American people.  More people are realizing that the politicians are not on their side.  More people are realizing that the politicians are serving themselves first.  More people are getting fed up with big government.  As time goes on, hopefully more people will withdraw their consent from government.  The empire will come crashing down.  Don’t be in the way when it does.

Something bad is going to happen in the economy.  The Fed has more than tripled the monetary base since the fall of 2008.  Meanwhile, the federal government is running deficits of $1.5 trillion per year with the national debt now exceeding $14 trillion.  The government is trying its Keynesian tricks of spending its way out of a crisis.

Not only did the government not allow the full correction to take place from the recession that started a few years ago, but it is continuing to make things worse.  With all of the money creation and huge government spending, it is only distorting the market and misallocating resources.  The more this happens, the worse the future recession/ depression will be.

Something will have to give eventually.  The Fed may go to QE3 (more digital money printing) in which case we are more likely to get rising prices.  The big excess reserves held by banks have helped keep price inflation low.  The low velocity (high demand for money) has also helped counteract the inflationary policies of the Fed.  But if the Fed creates enough new money out of thin air, it will eventually send prices soaring to the sky.

If the Fed slows down or stops its money creation, we are more likely to get another recession (if the previous one ever actually ended).  If the government does not try hard to stop it, this will be a deep recession.  It will be worse than 1981/ 1982 because there has been far more damage done this time around.  This scenario is actually our best case scenario in realistic terms.

The other possibility is a repeat of stagflation of the 1970’s, although I would expect this time around would be even worse.  The previous malinvestment is huge and it all needs to be flushed out.  We could see this scenario where the Fed creates new money, although at a much slower pace than we have seen in the last few years.  It would be enough to raise prices significantly but it would not be enough to send the economy into a boom phase.  We would see price inflation over 10%, while economic growth would be very low or even negative.

If the inflation scenario plays out, then there will eventually be a crash anyway, so that is the worst case scenario.  The absolute worst case would be if the Fed did not stop and we went into hyperinflation.  That could be a very dangerous scenario given our high division of labor society that uses U.S. dollars as money.

There is one final scenario that is possible, but highly unlikely.  We could see some huge technological breakthrough that makes our lives significantly better and easier.  It would have to be really big to overcome the massive malinvestment that has previously occurred.  In this case, it is technically possible to have a correction but still have positive growth due to the explosiveness of the free market.  But again, I give this a very low probability because it would have to be a huge breakthrough to overcome the massive government spending and distortion that has already taken place.

In conclusion, this economy will suffer some hard times ahead.  I am optimistic that we will eventually turn towards liberty and less government.  When this happens, we will see what happens when 21st century technology meets a truly free market.  Things will change very quickly at that point and it will be mostly for the better.

The issue of the debt ceiling is still the top national news.  August 2 is supposedly the date that the ceiling has to be raised or else all chaos breaks loose.  In actuality, the chaos would be happening mostly in DC where the politicians would actually have to drastically cut federal spending.  This is why we are not likely to see this happen.

There are rumors of all kinds of different plans being worked up.  It is hard to know what is true and what isn’t.  As we get closer to August 2 with no deal, there is reason for slight optimism (from a libertarian point of view).  However, I am not naive.  Most of these politicians want the debt ceiling raised.  Right now, they are posturing for their constituents.  Republicans know that they will be in trouble with the voters if they allow tax increases.  Democrats know that they will be in trouble if they don’t demagogue the issue and play class warfare.

For all we know, there may already be a back room deal that is worked up.  Again, it is hard to tell who is telling the truth.

If the Republicans in DC actually wanted to cut spending, there would be no debate at this point.  They don’t have to do anything.  They can just do nothing and the debt ceiling won’t be raised.  Then the spending cuts would have to come unless Obama tried to declare himself dictator.  Instead, the Republicans are pushing for the phony balanced budget amendment.  Amendments to the Constitution are very difficult to get passed and it would take years.  If the Republicans really want a balanced budget, they just have to not raise the debt ceiling (do nothing) and the budget would be balanced.

Even if Republicans argued that they want a balanced budget in the future, but it would be too difficult to do it all at once now, they could still cut spending by just raising the debt ceiling a very small amount each month.  They could agree to raise the ceiling by $50 billion each month for the next year.  This would be $600 billion for the year.  This would force a cut of almost $1 trillion.  Why don’t they do that?

I am not in favor of the debt ceiling being raised at all, but I used the above example just to show how easy it would be for the Republican majority in the House to cut spending.  They can pick any amount they want and raise the ceiling by the difference with the projected deficit.

The problem here, for anyone facing reality, is that the Republicans just aren’t that interested in substantial cuts.  They will say they are to appease their constituents, but words don’t mean much, especially when coming from politicians.

Approximately two-thirds of the federal budget is made up of military, Social Security, Medicare, and Medicaid.  These are the sacred cows.  Politicians don’t want to touch them.  If none of these are touched, it is impossible to balance the budget, even if all other spending were completely eliminated.  This just shows how far off things are.

The Tea Party agrees on their dislike of Obama and Obamacare.  They generally agree that taxes should not go any higher.  Beyond that, there is not much agreement.  As a group, they are not demanding specific cuts in spending.

Only two things will cause a dramatic cut in federal spending.  It will either be the laws of economics or angry voters.  There are some angry voters, but most of them are not calling for significant cuts.  About half of the American people say they don’t want the debt ceiling raised.  But a majority of this group do not understand the consequences.  This would mean drastic cuts in just about everything.  This is what I favor, but there is only a small minority who really want to see an end to all of the unconstitutional federal programs.  Until these demands come, or until the government officially goes broke or destroys the currency, then the debt ceiling will get raised.

Earlier this week, I wrote a piece explaining why I am skeptical on the idea of repudiating government debt owed to the Federal Reserve.  Ron Paul suggested the idea and Lew Rockwell backed it.  These two guys are libertarian heroes and I immensely respect their opinions.  I rarely disagree with Ron Paul on issues of any significance, particularly when it comes to monetary matters.  With all of that said, I am disagreeing with his suggestion to repudiate the debt owed to the Fed.

I was having this discussion with a libertarian friend of mine.  I was saying that I thought the idea was inflationary.  I pointed out Ron Paul’s position that he figures that the Fed will not withdraw this money that it has artificially created.

I think this idea is also counterproductive.  If the debt ceiling does not get raised (which I think it will), then it will force the government to cut spending drastically.  That is what I favor.  That is what the economy needs.  We need for the government to spend less so that we have more.  If this debt to the Fed is repudiated, it will give the government more room to spend money without raising the debt ceiling right now.  Why would I favor that?  I would much rather see government spending cut.

But here is the even more important point regarding this issue.  My friend and I talked through this issue and this example will really illustrate why this is a bad idea for libertarians to support.  Let’s say that the government takes this idea and repudiates most of the debt that is owed to the Federal Reserve.  Let’s say this lowers the national debt to $13 trillion.  The limit is currently just under $14.3 trillion.

Now the Congress can continue to spend money as it has been doing.  It will use current tax collections to fund spending and any difference is added to the debt.  Now the Fed comes along with QE3 and buys this government debt to fund the extra spending.  Now, in the matter of less than a year, the national debt is back up to the ceiling of around $14.3 trillion.  The Fed now owns another $1.3 trillion in government debt.  The government can just repeat the process and repudiate this debt and bring the national debt back to $13 trillion.

Are you starting to see the problem here?  The Fed can keep buying government bonds to fund the excess spending and the government can keep repudiating the debt.  It would be the same thing as the Fed just printing up a bunch of money and handing it over to Congress to spend.  It doesn’t raise the debt because it is all done through inflation.

If the government did not want to officially repudiate debt, there is another strategy that could be used (not that I’m trying to give any ideas here).  The Fed could buy other assets and turn them over to Congress.  The Fed typically buys U.S. government debt, but the rules have changed and the Fed can actually buy anything it wants.  In 2008, it bought “toxic assets” from the failing banks.

The Fed could buy some stocks, land, art, or whatever.  It would create money out of thin air to buy these things, just as it does with government debt.  Then it could take the stocks or land or whatever and “give” it to the government.  The government could then sell it back into the market and use the proceeds to fund excess spending.  No matter how it is done, it is highly inflationary.

I hope I have illustrated why this idea of repudiating government debt owed to the Fed should not be such a great idea for libertarians.  It allows the government to continue its reckless spending without raising the debt limit and it could also be highly inflationary, especially if they were to repeat the process in the future.  I might favor the idea if it goes hand in hand with abolishing the Fed.

This post has more to do with investing than libertarianism, but I thought some people might benefit from it.  I am an advocate of imitating the permanent portfolio as described by Harry Browne in his book Fail Safe Investing.  This should be your core holding, making up at least 50% of your portfolio.  I also tell people that it is ok to speculate as long as you understand the risks and that you could easily lose money.

A few years ago, I decided to speculate a little.  I bought a few shares of Apple stock when it was less than $100.  At that time, everyone I knew who owned a Mac computer loved it.  I did not have one at the time, but I own one now.  The operating system seems much better than Windows.  The only thing Apple that I owned at the time was an iPod.

I knew that Apple had something going.  They are an innovative company.  We can see that now, not just with computers, but also iPods, iPhones, and iPads.  I figured that they would start taking a substantial share of the market away from Microsoft with computers, plus all of the potential profits from the other products.  So with all of that in mind, I bought some shares for speculation.

Usually mistakes are made on the buy side of an investment.  In this case, it wasn’t.  My mistake was on the sell side.  The stock went up quickly after I bought it.  I can’t remember the exact return, but it was something close to 50%.  I sold all of my shares.  I even thought that I would buy back on another dip.

Here is the problem.  There wasn’t really another dip.  The stock has been way up for the last couple of years.  I would have about a 400% return right now if I had held it.  Of course, there was no way to know for sure.  Usually it is a wise thing to take profits.

In this case, I did not stick to my plan.  I was buying the stock for its long-term outlook.  I thought it had huge potential, not just a year into the future, but for many years.  The company has very popular products and it is constantly innovating.  I should have stuck to my plan, which when I bought the shares was to hold them for a substantial period of time.

Again, it is hard to kick myself too much for taking profits, especially when I have lost money with other speculations.  But the lost opportunity was big.  Here is what I should have done, not knowing what would happen at the time.  I should have sold off half of my shares and let the other half ride.  It is a little messy for reporting capital gains, but I should have dealt with it.

One place where investors often get into trouble is when they have an “all or nothing” attitude.  If you are not sure whether to sell stock in a particular company, then sell half.  You also don’t have to go for broke when buying something.  Just dip your toe in.  Give yourself an opportunity to make a decent profit while limiting your potential losses.

This story has little to do with Apple itself.  Whether it is a good buy now, I have know idea.  It is still a great company with a lot more potential, but maybe we will see that big dip that I’ve been waiting for.

When I write about investing, I generally try to make it applicable to a variety of people.  Everyone’s situation is different, but I like to offer advice that could potentially be helpful to anyone.  So often, I will read or listen to something on investing and it seems to apply to people with lots of money.  I really find this to be the case when the topic comes up about investing overseas.  To buy real estate outside of your country and to set up a foreign bank account, you usually need a substantial amount of money to make it worth it.

The reality is that most people do not have a lot of money.  Even the average middle class person living in the U.S. does not have a lot of money, particularly outside of real estate and retirement funds.  So for this post, I would like to offer some advice for people with a real limited amount of money.

First, although I believe that price inflation will get worse due to the government’s reckless policies of massive spending and massive debt, I think it is important to have some liquidity in the form of money.  Whether it is cash, a checking account, a savings account, or whatever, it is important to have some money available for emergency expenses.  If you don’t have at least a couple of thousand dollars to your name, there is no point on reading up on investment advice unless it is just an interesting topic to you.  Because if you don’t have much money to your name, then investing it well won’t make much of a difference.

If you have almost no money, you should not be worried about investing.  You should be worried about increasing your income, paying down debt, and spending less.

If you have a little money saved up and don’t know where to start, I have a couple of simple recommendations.  First, you could buy one-ounce silver eagle coins.  You can check with your local coin dealer or look on the internet.  You can buy these on Ebay too.  With the current price of silver, you should be able to buy a one ounce coin for just over $40.

My second recommendation, and perhaps better one, is something that I recommend for everyone to do if you can.  If you have some extra space where you live, buy things that you need that don’t spoil.  You can buy certain grocery items like bottled water and canned foods.  You can buy soap, toothpaste, shampoo, razor blades, toilet paper, kleenex, paper towels, etc.  Make a list of things that you use.  You obviously can’t stock up on milk, but there are many things that you can buy that will last for a year or more.

When you go shopping, look for those particular things that are on sale.  If it is “buy one get one free” or if there is any kind of a sale from the regular price, buy it.  Buy enough to last you at least a couple of months or more.

When it comes to storage, be creative.  Look in your closets and see if there is any room up high.  You can always add some shelving.  If you have limited space, then you might want to stock up on razor blades and toothpaste before you start buying bulkier items like paper towel.

So why do I recommend this strategy?  Because things aren’t going to get any cheaper.  The Fed has tripled the monetary base in the last three years.  There is potential for huge price inflation.  If this analysis turns out to be wrong, then the worst case scenario is that you use up the items that you bought. As long as you aren’t buying an electronic item, then there is a very good chance that the price of the product won’t be any lower one year from now.

You can start this strategy by stocking up on some 100-watt light bulbs.  Our limited, constitutional, federal government decided to ban these under the conservative presidency of George W. Bush.  The ban will go into effect in less than 6 months.

Ron Paul has suggested that one way Congress could avoid raising the debt ceiling is to repudiate the debt owed to the Federal Reserve.  Since the Fed “owns” approximately $1.6 trillion in government debt, this could simply be wiped away and it would give the federal government more breathing room without raising the debt limit.

Robert Murphy wrote an interesting analysis on this subject.  Lew Rockwell responded.  Robert Murphy then responded to these comments by Rockwell.  It is interesting to see the varying opinions from two of my favorite libertarians.  These are two of the biggest heavyweights you can get when it comes to libertarianism and Austrian economics.

It is very difficult for me to disagree with Ron Paul and Lew Rockwell because I have so much respect for them.  But with this issue, I am having a hard time being convinced.  I question my own opinion because it is not something that the mainstream media and the establishment favor, so how bad can the idea be?

I completely understand Ron Paul’s point on this.  He is saying that the Fed will not sell off this debt anyway, so why act like it is debt.  But there are a couple of reasons that I am skeptical of this plan.

First, it actually gives an “out” for the Congress and Obama.  It would essentially kick the can down the road some more.  It would give up to $1.6 trillion in breathing room without having to raise the debt limit.  Personally, I am going to sit back and enjoy the next couple of weeks.  I am hoping that they fail to raise the ceiling and that government will actually have to be cut, although I am not counting on it.

Second, I question if this strategy would be inflationary.  Regardless of whether raising the reserve requirement is “stealing” from the banks (see the discussions on the links above), it is still not the same thing as withdrawing the money.

If the Fed creates new money to buy government debt, it is still inflating even if the money goes as excess reserves to the banks.  The effects are far less because it is not being exponentially grown through the fractional reserve process.  But the money is still there and available, even if not for loans.

The best thing to happen with this $1.6 trillion would be for the Fed to sell it and reduce the money supply by that amount.  This would have a far greater effect on our economy as it would help to keep prices down and it would help liquidate all of the malinvestment.

This whole discussion just shows all of the accounting gimmicks that take place regarding monetary policy and I think that is part of Ron Paul’s point.  He is probably suggesting this just to bring attention to the issue, especially when he knows that it is not likely to happen.

With that said, I am a skeptical libertarian on this strategy.  It would let the Congress of the hook.  I would rather see no increase in the debt limit and watch the federal government be forced into making massive cuts in spending.  If we are going to suggest repudiating government debt, I would start with all of the other debt first as it would most certainly not be inflationary.

With Ron Paul announcing that he will not seek re-election to his congressional seat, some are speculating that this opens him up for a third-party run.  I am not sure what the consequences would be regarding ballot access if he changed from being a Republican to another party.

I have thought from the beginning that he should run outside of the Republican Party.  Specifically, I think he should run for the Libertarian Party’s nomination.  He would most surely get it and the party is already well established which would make it easier for ballot access.  With the vast amount of money he has already raised, getting on all of the state ballots would not be that challenging and expensive relative to what past Libertarian candidates have had to deal with.

While I think there has been a slight mood shift in the Republican Party, most Republicans outside of the Ron Paul circles are still mostly pro-war.  While many are against Libya and some have even soured on Afghanistan, it is hard not to be skeptical and think that it is mainly because Obama is in charge and not a Republican.  Because of this sentiment, I think it will be hard for Ron Paul to win the Republican nomination.  He will probably do better than many expect and he will probably change some more minds, but I am doubtful that it will be enough.

Imagine on the other hand if he runs as a Libertarian.  This wouldn’t have worked for him in 2007/2008. He was virtually unknown then, at least outside of his district and outside of the libertarian community.  Now that he has name recognition and hundreds of thousands of highly-dedicated supporters, he would still raise many millions of dollars operating outside of the Republican Party.

If someone like Mitt Romney gets the Republican nomination, it would make Paul’s run as a Libertarian offer a real choice for people.  If someone like Michele Bachmann were to get the nomination, it would make a third-party run a little harder because of her fiscally conservative rhetoric.  Even though she is a statist, it would be more challenging to paint her and Obama as being cut from the same cloth.

Now I am wondering if there is any way that Paul can participate in all of the early debates, just as he is doing, and then drop out at the last minute and announce he will seek the Libertarian Party’s nomination instead.  This would give him public exposure in the debates before seeking a third-party run.  I don’t think this is his plan at all, but it is an interesting speculation.

I like that Paul has decided not to seek re-election for Congress.  He will deserve the break, assuming he doesn’t win the presidency.  This will also allow him to focus all of his efforts on this presidential run and he can also speak freely, not that that has ever been an issue for him before.

Regardless of what he decides, it is important to support him and advocate his pro-liberty positions.  I don’t think it is necessary to elect a pro-liberty person to get real change.  The most important thing is to educate others on the benefits of liberty and that is just what Ron Paul has been doing and will continue to do.

Earlier in the week, Obama said that he cannot guarantee that Social Security checks will go out on August 3 if the issue of the debt ceiling is not resolved.  When he says “resolved”, he means having Congress agree to raising the ceiling.

Actually, if you listen to the video on the link, it is not just Social Security checks that are at issue.  As Obama said, there are other checks that the government issues.  As per his example, there are checks for veterans and checks for people on disability.  But since all of the headlines have focused on Social Security, let’s focus on this.

This statement by Obama can only backfire on him and it seems it already has with his poll numbers.  Of course, he is right not to guarantee anything, but obviously that is not his line of thinking here.  He is simply trying to scare people into supporting an increase in the debt ceiling.  He may have thought he was using a smart political tactic, but it was actually quite idiotic of him.

If he really wants to be a one-term president, the surest way to do that is to not have Social Security checks go out on August 3.  He could try to blame it on Congress, but the facts just don’t support him and I think if it did happen (even though it won’t), enough people would realize that checks could still be issued without an increase in the debt ceiling.

This goes along with the same statements we have been hearing about how the U.S. government will default if the debt ceiling is not raised.  This is false too.  The government still has over $2 trillion a year in tax collections.  It is actually about $200 billion per month right now.  This means that the federal government would still have $200 billion per month at its disposal.  This is more than enough to pay the interest on the debt and issue Social Security checks.

Of course, there would have to be drastic cuts in most other areas.  The military would be drastically cut. The wars might have to come to an end.  Many departments might have to be shut down like education, labor, housing, agriculture, etc.  The federal war on drugs might have to stop.  Foreign aid might have to stop.  This all sounds like heaven to a libertarian.

This is why the debt ceiling will be raised.  I don’t know if they will come up with more accounting gimmicks.  I don’t know if thugs like Mitch McConnell will hand over dictatorial powers to the president to raise the limit himself.  I don’t know if they will come up with some last minute plan with some phony cuts, most of which take place years down the road when it won’t matter.

The point is that politicians are not going to give up all, or even a portion of, their precious government programs.  The only way they will give them up is if the general population demands it.  There is not enough pressure right now.  The Tea Party does not want taxes raised, but the Tea Party in general does not offer significant specific cuts in government spending other than repealing Obamacare.

In conclusion, the debt ceiling will get increased at some point.  We might see some fireworks before it happens.  We could only hope for a government shutdown, but don’t count on it.  The debt ceiling will not go up because of Obama’s fear tactics of scaring senior citizens.  It will go up because politicians want to spend money and keep people dependent on government.