On that last occasion, more than 65% of voters turned down an amendment that would have raised the interest-rate ceiling to 17%.
In its latest incarnation, the interest-rate ceiling on consumer loans is restricted to 5% above the Federal Reserve's discount rate the amount the Fed charges banks for overnight loans.
If Congress imposes a hard budget constraint on itself by refusing to raise the debt ceiling and establishes Social Security and interest on the debt as priority must-pays out of revenues before any other programs may be funded, it would require total other, non-priority spending to be reduced not quite one-third on average during the next ten years.
The new bill would raise the debt ceiling and permit the Fed to pay interest on reserves immediately.
There will be no ceiling on how much of this low-interest-rate money banks can borrow from the Bank of England.
If an agreement is reached on lifting the U.S. debt ceiling, prices could pull back, but buying interest under the market will limit the downside for gold prices, market watchers said.
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In the end, it's in the long-term interest of the United States economy that we remove the debt ceiling from this process that creates uncertainty, harms economic growth, does damage to the middle class, puts a stranglehold on markets.
The value of the U.S. dollar, and its effect on the price of gold, for 2013 will be largely influenced by the upcoming second round of Fiscal Cliff decisions related to spending cuts, the impending Debt Ceiling decision and further Federal Reserve actions related to interest rates in response to the ongoing, sluggish economic recovery.
Washington has said repeatedly that in such a case that the debt ceiling was not raised further, it would continue paying interest on bond payments first and foremost.
It was considered the supportable ceiling for sovereign debt in the old days of higher interest, but current 100% levels of debt to GDP require low interest rates or the sovereign goes into default.
To make absolutely sure, I intend to introduce legislation that would require the Treasury to make interest payments on our debt its first priority in the event that the debt ceiling is not raised.
First of all, a six-month extension of the debt ceiling might not be enough to avoid a credit downgrade and the higher interest rates that all Americans would have to pay as a result.
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Hitting the debt ceiling would leave the U.S. unable to borrow money to pay interest on what it already owes investors or to fund new spending.
The U.S. Treasury will give priority to making interest payments to holders of government bonds if lawmakers fail to reach an agreement to raise the debt ceiling, according to an administration official.
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The consequences, as Secretary Geithner and many others, including the Speaker of the House, Senator Minority Leader, Congressman Ryan have pointed out, the consequences of not -- of failing to raise the debt ceiling would be Armageddon-like in terms of the economy on -- the impact on interest rates, on job creation, on growth would be devastating.
Not raising the debt ceiling would restore the value of cash in the bank -as banks would have to raise the interest rates they pay savers.
If in the process of preserving those cash flows, the politicians who get them block the raising of the debt ceiling, we could experience a sell-off in U.S. government securities which would raise interest rates here and could put the brakes on economic growth globally.
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