Something must be done to either raise the debt ceiling or to prevent financial catastrophe and soon, the deadline is on Aug. 2 and it seems as though some of the Republicans calling the shots on this issue are wagering the financial welfare of evey American in the country when all politicians need to put politics aside and get this done ASAP not for their own benefits but for the country itself cause the consequences are dire and dangerous.
Unemployment is still at 9.2%, The Obama Administration has failed to lead this country by scaring the markets, not even helping create more jobs, make budget plans, among other issues. I don't get why some politicans negotiating over this crisis think this is a game when it's not. The Government needs to wake up and understand what's going on, I'm just getting tired of politicians wagering the financial welfare of every citizen in the U.S. just to satisfy their own interests, needs, and financial welfare.
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"Restriction breeds creativity." - Sheldon Menery on EDH / Commander in Magic: The Gathering
"Cancel Culture is the real reason why everyone's not allowed to have nice things anymore." - Anonymous
"For what will it profit a man if he gains the whole world, and loses his own soul?" - Mark 8:36
"Most men and women will grow up to love their servitude and will never dream of revolution." - Aldous Huxley, Brave New World
"Every life decision is always a risk / reward proposition." - Sanjay Gupta
The politicians know damn well that defaulting will wreck their chances of re-election.
I have no love for Obama, but you have to understand; congress refuses to listen to him. He recently left a meeting with congress, frustrated saying, "He [Reagan] never had to put up with this." (Sorry, no source). He's spent months trying to get Republicans and Democrats to work together. It's not happening. I don't blame Obama, at all. I blame all the congressmen who refuse to back down and...you know, RUN A COUNTRY. Even when it was compromise, or shutting down government, they waited until they had mere HOURS left to do anything.
The politicians know damn well that defaulting will wreck their chances of re-election.
I have no love for Obama, but you have to understand; congress refuses to listen to him. He recently left a meeting with congress, frustrated saying, "He [Reagan] never had to put up with this." (Sorry, no source). He's spent months trying to get Republicans and Democrats to work together. It's not happening. I don't blame Obama, at all. I blame all the congressmen who refuse to back down and...you know, RUN A COUNTRY. Even when it was compromise, or shutting down government, they waited until they had mere HOURS left to do anything.
Republicans and Democrats simply won't agree. It's tragic that Obama is getting a lot of the flak for it when the partisan house and senate won't agree.
Even if the author is silenced, the performance is stopped, the story will not end.
Whether it's a comedy or a tragedy, if there is cheering, the story will continue on.
Just like the many lives.
For the us who are still in it and still in the journey, send warm blessings.
- We will continue to walk down this path until eternity.
I say let the default happen. Whats the worst that will happen? Maybe a reset of our economy? Remember the other thread where almost 90% of the wealth is controled by 1% of the population. Who do you think will take the brunt of an economical collapse? The poor? lol, they are use to it. Remember the bailouts? Seem like a waste of money now huh? Like I said back then, band-aid fixes dont work.
Oh and Obama isnt to blame at all. He has been trying all along. Blame those in Congress.
I say let the default happen. Whats the worst that will happen? Maybe a reset of our economy? Remember the other thread where almost 90% of the wealth is controled by 1% of the population. Who do you think will take the brunt of an economical collapse? The poor? lol, they are use to it. Remember the bailouts? Seem like a waste of money now huh? Like I said back then, band-aid fixes dont work.
Oh and Obama isnt to blame at all. He has been trying all along. Blame those in Congress.
If the government defaults, it isn't just the rich that are going to suffer. If anything, the poor will suffer the worst, because they can't afford to lose any of their money. They gain the most from the government, and if it defaults, they stand to lose everything
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Even if the author is silenced, the performance is stopped, the story will not end.
Whether it's a comedy or a tragedy, if there is cheering, the story will continue on.
Just like the many lives.
For the us who are still in it and still in the journey, send warm blessings.
- We will continue to walk down this path until eternity.
If the government defaults, it isn't just the rich that are going to suffer. If anything, the poor will suffer the worst, because they can't afford to lose any of their money. They gain the most from the government, and if it defaults, they stand to lose everything
And what is going to happen to millions that cant pay? Is the government going to let millions become homeless? Our currency would more or less become worthless. Bartering would become the norm. There would be squatters galore!! Otherwise, chaos!
If the government goes belly up, that means no courts, which means no evictions can be carried out. Everything would work itself out in the long run.
My biggest issue would be education, no schools would be bad for a generation.
1. Debt limit not raised
2. Stock market goes down
3. Our bond rating degraded, interest rates go up
4. Double dip land
5. President pays out social security, pays interest, pays soldiers, and everything else shuts down
Worst Case
1. Debt limit not raised
2. Stock market goes way, way down
3. Our bond rating degraded, interest rates go up
4. Full blown global panic, spiraling us into a depression not seen in generations
5. President still has to pay out ss, pay interest, pay soldiers, and everything gets shut down
My person opinion:
1. Debt limit raised short term
2. Eric Cantor finally shuts up, and Harry Reid actually does something brave
3. A "grand bargain" is had at 11th hour sometime next month
4. Debt limit raised automatically a few times
5. Republican and Democrats lose to some independent party come 2016-2020
I think so far half of #2 seems to have occurred, Cantor and Boehner played good cop/bad cop and stock market is now tanking sending indicators that the market is the real master of the US economy, not the Republicans or the Democrats. I mean Hamilton warned us about this, but everyone thinks Jefferson's so great, why? If anything Franklin is another one, "He who goes a borrowin goes a sorrowin."
Oh well, this generation isn't called the "Boom-er's" for nothing!
Long term, I feel that the Republicans are running out of steam with the Cantors of the world just making stuff worse. Equally, Reid shows us that small states with bad representation and the longevity of a cockroach equally gives us the "government we sort of deserve, if only we were actual inhabitant of that state." I'm more of the opinion moving forward, that the leaders are chosen by an outside council of delegates elected separately or voted on in a populist way.
1. Debt limit not raised
2. Stock market goes way, way down
3. Our bond rating degraded, interest rates go up
4. Full blown global panic, spiraling us into a depression not seen in generations
5. President still has to pay out ss, pay interest, pay soldiers, and everything gets shut down
needs to happen to wake up the nation. Sadly it will be to late for most, but it should fix alot of problems this country has for the next few generations and maybe beyond.
I say let the default happen. Whats the worst that will happen? Maybe a reset of our economy? Remember the other thread where almost 90% of the wealth is controled by 1% of the population. Who do you think will take the brunt of an economical collapse? The poor? lol, they are use to it. Remember the bailouts? Seem like a waste of money now huh? Like I said back then, band-aid fixes dont work.
Oh and Obama isnt to blame at all. He has been trying all along. Blame those in Congress.
worst that could happen? Hmmm let me think? Maybe me and every other person that lives off of social security disability income and medicaid medical insurance being unable to support themselves, or unable to get whatever medication that they happen to need? In which case there will be a surplus of psychiatricly disabled people popping up around the nation without any government assistance who are unable to be put in good psych wards and will likely out number the number of beds in Jails as well (not that Jails are really the best place to put psychiatricly disabled people anyways). The number of annual suicides, murders, and other similar situations will thus dramatically increase alongside this and you can't blame these people because they don't mean to be doing these things as they are clinically disabled people.
And thats just scratching the hypothetical surface of the situation. In otherwords we are looking at a return to society back during the great depression or before.
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"As the size of an explosion increases, the number of social situations it is incapable of solving approaches zero." -- Varsuvius, Order of the Stick
worst that could happen? Hmmm let me think? Maybe me and every other person that lives off of social security disability income and medicaid medical insurance being unable to support themselves, or unable to get whatever medication that they happen to need? In which case there will be a surplus of psychiatricly disabled people popping up around the nation without any government assistance who are unable to be put in good psych wards and will likely out number the number of beds in Jails as well (not that Jails are really the best place to put psychiatricly disabled people anyways). The number of annual suicides, murders, and other similar situations will thus dramatically increase alongside this and you can't blame these people because they don't mean to be doing these things as they are clinically disabled people.
And thats just scratching the hypothetical surface of the situation. In otherwords we are looking at a return to society back during the great depression or before.
I think you underestimate the power of the church and community if/when this would happen. I think you might be surprised at how most would deal with it.
It would be a tragic, eye opening situation to almost everyone.
I think you underestimate the power of the church and community if/when this would happen. I think you might be surprised at how most would deal with it.
It would be a tragic, eye opening situation to almost everyone.
not everyone has a church or a good relationship with their community upon which to draw aid from. I myself only just started going back to church (though fortunately I never stopped staying in touch with that community). That doesn't change the fact that not everyone is so lucky. I think you are over estimating the value of such things. Not to mention that most medical facilities in the country derive income at least in part from government grants.
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"As the size of an explosion increases, the number of social situations it is incapable of solving approaches zero." -- Varsuvius, Order of the Stick
Whatever happens, republicans will do their best to blame it on the Democrats, and thats politics no news their, and as their is an election coming 'soon' (or at least the hype is now) they will try to blame Obama if the can.
The story I heard on the infamously partisan and dangerously liberal NPR was that Obama and Boehner met and hashed out a deal, and then Boehner backed out of it when he couldn't sell it to his constituents (read Tea Party Freshmen).
I find it almost impossible to think that they won't be able to raise the debt ceiling, but look at the parties. The Democrats have never impressed anyone with their organization and unity, and the Republicans are at their most fractured organization level since as long as I can remember. I think that its sensationalism that has the public worried that they could fail to do this however, I'm kind of glad that the politicians are under so much pressure otherwise I don't think they would act as urgently as they need to to get this done.
If the Republicans don't raise the debt limit, they have 0 chance of winning in 2012. I'm pretty sure the public will view this as their fault, so if they want to survive they have to not **** this up.
they will figure something out in time otherwise, they will risk volatile stock market shifts again, and if that happens it more than anything will get one of the sides to cave.
thing of it is it doesn't matter if it gets to aug, 2 or not, more people will show there reaction with wallstreet numbers and that should cause constituents to ramp up the pressure on politicians.
currently the market trends i think are what people are hoping to avoid by an early settlement of the matter, but as long as they keep talking, uncertainty will continue to leave a x factor at play and things will continue to operate as normal but under the could of "the chance of a sudden change" more relevant than usual.
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If Congress screws around and doesn't pass an extension to the debt ceiling, expect the Obama administration to declare the debt ceiling unconstitutional so it can keep operating the federal government. I don't think there's any real risk of the debt ceiling not being raised, though; this is all brinksmanship. The only people who have said the debt ceiling shouldn't be raised are a collection of insignificant freshman Congressman and dark horse idiots like Bachmann.
If Congress screws around and doesn't pass an extension to the debt ceiling, expect the Obama administration to declare the debt ceiling unconstitutional so it can keep operating the federal government. I don't think there's any real risk of the debt ceiling not being raised, though; this is all brinksmanship. The only people who have said the debt ceiling shouldn't be raised are a collection of insignificant freshman Congressman and dark horse idiots like Bachmann.
wait, can Obama actually do that? Last I checked it was only the Supreme Court that can declare something unconstitutional? Also it should be noted that up until about 50 or so years ago (give or take) we were on an entirely different financial system (the Gold Standard). It may be about time to decide if it may not be prudent to switch to a more stable standard than the current system that backs money in a virtual sense instead of a literal sense (i.e. the current standard has no tangible means of financially backing the money that we all use on a day to day basis, so our money literally has absolutely no value outside of a theoretical say so of the government).
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"As the size of an explosion increases, the number of social situations it is incapable of solving approaches zero." -- Varsuvius, Order of the Stick
I don't think we will default but I think whatever plan gets put into place to avoid it will be severely skewed in a very very bad way. The way both sides are pushing doesn't make either look good. I hope we do default but only so the general populous wakes the F up and realizes what a sham everything is.
i really don't think the answer is to go back on the gold standard, our money is backed by aircraft carriers, as the rest of the world is probably all to aware.
More seriously though, its practically impossible for the US to go onto the gold standard without catastrophic inflation or deflation. Simply put, there is far more money in print than there is gold to represent that money. Gold would need to be at something like 3-4 times its current value just to cover all the US dollars in circulation, and that figure is based upon all gold ever mined (not just united states gold). I am not economist so I don't know whether going back to the gold standard causes inflation or deflation, but logically it has to do one or the other, and gigantically.
I wasn't trying to suggest that we go back onto the Gold Standard. I was suggesting that we find a better standard than the one we are currently on. Also it is an incorrect assumption that we back our money with Aircraft Carriers. Our aircraft carriers are backed by our money yes, and our politics are backed by our aircraft carriers. But there is nothing literally speaking that backs our money, nor really the money of most of the rest of the world at that rate.
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"As the size of an explosion increases, the number of social situations it is incapable of solving approaches zero." -- Varsuvius, Order of the Stick
wait, can Obama actually do that? Last I checked it was only the Supreme Court that can declare something unconstitutional?
With any luck, it would never come to that. But...
Short answer: yes.
Long answer: It's not so much declaring it unconstitutional (in the legal sense) as just saying it is, and then ignoring it. By the time any legal fight gets sorted out over whether or not Obama can just ignore it, we'd probably have a debt ceiling in place again.
As for moving away from fiat currencies, I'm not enough of an economist to say whether or not that's a good idea. I can say, however, that I've never read a well-written and well-supported argument in support of returning to commodity money today.
The news media and dem's have played this to a tee and have confused 99% of americans with bad and wrong information.
not raising the debt ceiling does not mean default. that is a stupid and wrong rumor. what it means is that the US cannot borrow money it has to spend what money it actually brings in.
So what happens is that it falls to the executive branch on what to spend money on. The federal government is constantly bringing in money. If we default it means that obama decided not to pay the debt bill which is impossible since that is the first thing that gets paid.
if we actually can't get a plan in place then the US will not default unless obama decides to just not pay it.
The first thing that will happen is that we will stop sending out checks to the armed service and for social security
again only if the president decides not to pay the bill. the US will have a 2.1 trillion dollars to budget out. that is more than enough to cover SS and the debt payment.
this situation is stupid and neither side is willing to give in and really fix the problem. Democrats refuse to address our massive entitlement programs and republicans refuse any tax increases. which i agree in this market is stupid, but surely a deal can be cut to close off loopholes.
since neither side is willing to budget i doubt the problem will get fixed and let the finger pointing begin.
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NPR ran a story a couple days ago about the last time the federal government defaulted on treasury bonds. Back in 1979 due to a computer issue $120 million wasn't paid to bond holders.
That mistake meant interest rates on securities for the federal government went up .6%. That's .6% on $800 billion (the outstanding amount of the Treasury at the time). That adds up to almost $5 billion dollars a year. The guys that studied this event found that six months after the whole snafu this interest rate increase was still there. A $120 million mistake ended up costing the federal government at least $2.5 billion.
Now what will happen today if the federal government deliberately doesn't pay bond holders?
People are so ignorant, you can't blame the current congress... you can't blame Obama, you can't blame Bush... you cant blame any single group. The US has been spending money it didn't have for years and years. When other less developed countries are in extreme amounts of debt to the US we come up with some nonsense plan to help them out even if it hurts us. For example, we canceled a portion of Brazil's debt in exchange for forest protection within Brazil. If the US was some third world country the UN would simply excuse the debt, but because we are a world power we are expected to be able to dig ourselves out of this hole we have ended up in.
When people make statements about X% of the population being unemployed it's nonsense in my opinion. I saw 3 "Now Hiring" signs in windows on my way into work today which is a 10 minute drive. Just because you have a college degree doesn't mean you are above working at a McDonalds. There are jobs out there, people just don't want the ones that are available. They need to put their pride aside, stop mooching off the country and tax payers and take the jobs that they can.
The government isn't the only thing wrong with the country, the citizens are equally responsible for this plummet in the economy.
so what exactly will happen if Congress defaults on the national debt?
They actually simply can't. It's actually impossible to do so, without collapsing the entire economy. The money they owe is to American people. And banks. Retirement funds. And insurance companies.And countries, etc.
It's taking $14 TRILLION DOLLARS out of all those people's pockets. That's like hammering the economy for $14 BILLION DOLLAR erasure in assets from all govt creditors (you & I) EVERY DAY... for almost the NEXT THREE YEARS. It's instantaneously ERASING $14 trillion in assets of MULTIPLE entities: Like multiple financial nuclear bombs going off in tens or hundreds of thousands of separate banks and corporations, and hundreds of millions of separate households all at once.
That's money that banks and humans all count as part of their assets. That you think YOU have, as part of your bank account, part of your portfolio, part of assets of people's 401Ks...
It may technically be a loan to the government. But operationally speaking, they are not really "loans" in the traditioanl sense. Because those bonds are as good as or better than CURRENCY. Buying bonds is really like you put money into a bank account and earning interest.
-
Here's a nice little thought exercise:
What would happen if the US just said "We're INSTANTANEOUSLY printing $14 trillion cash and SIMULTANEOUSLY PAYING ALL GOVT DEBTS (before currency exchange rates can adjust)" Considering the entire annual GDP of the US is close to that amount, and the govt only collects $2 trillion in taxes a year, that number would cause utter chaos and probably collapse multiple world governments.
This thought exercise is actually LESS DRASTIC THAN DEFAULTING on all the debt, and lets you see the order of magnitude of the mayhem that defaulting would cause (instantanous high triple digit inflation). I'd definitely accept overprinting currency and runaway inflation before defaulting on govt debt (since the latter would result in runaway inflation AND far worse additional chaos... but the country obviously can't "counterfeit" itself out of the national debt. It's just TOO MUCH MONEY. That $20 in your pocket wouldn't be worth jack).
What would happen if the US just said "We're INSTANTANEOUSLY printing $14 trillion cash and SIMULTANEOUSLY PAYING ALL GOVT DEBTS (before currency exchange rates can adjust)"
you would see hyperinflation to a degree that we have never seen before. if they were going to do this then it should have been done at 1 trillion.
the problem is it still wouldn't solve the problem. the fact is government spends to much money and our system needs to be reformed so that future generations do not face the same problem that we do now.
that is impossible with the current set of politicians. they are the largest collection of morons in history. people speak about the stupidity of joe public there is only one thing dummer. politcians in washington DC.
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Unemployment is still at 9.2%, The Obama Administration has failed to lead this country by scaring the markets, not even helping create more jobs, make budget plans, among other issues. I don't get why some politicans negotiating over this crisis think this is a game when it's not. The Government needs to wake up and understand what's going on, I'm just getting tired of politicians wagering the financial welfare of every citizen in the U.S. just to satisfy their own interests, needs, and financial welfare.
"Restriction breeds creativity." - Sheldon Menery on EDH / Commander in Magic: The Gathering
"Cancel Culture is the real reason why everyone's not allowed to have nice things anymore." - Anonymous
"For what will it profit a man if he gains the whole world, and loses his own soul?" - Mark 8:36
"Most men and women will grow up to love their servitude and will never dream of revolution." - Aldous Huxley, Brave New World
"Every life decision is always a risk / reward proposition." - Sanjay Gupta
I have no love for Obama, but you have to understand; congress refuses to listen to him. He recently left a meeting with congress, frustrated saying, "He [Reagan] never had to put up with this." (Sorry, no source). He's spent months trying to get Republicans and Democrats to work together. It's not happening. I don't blame Obama, at all. I blame all the congressmen who refuse to back down and...you know, RUN A COUNTRY. Even when it was compromise, or shutting down government, they waited until they had mere HOURS left to do anything.
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Republicans and Democrats simply won't agree. It's tragic that Obama is getting a lot of the flak for it when the partisan house and senate won't agree.
Imagine anyone that has bonds or investments in the government. Put them in the poor house.
kind of like that except a billion times worse
Whether it's a comedy or a tragedy, if there is cheering, the story will continue on.
Just like the many lives.
For the us who are still in it and still in the journey, send warm blessings.
- We will continue to walk down this path until eternity.
Oh and Obama isnt to blame at all. He has been trying all along. Blame those in Congress.
If the government defaults, it isn't just the rich that are going to suffer. If anything, the poor will suffer the worst, because they can't afford to lose any of their money. They gain the most from the government, and if it defaults, they stand to lose everything
Whether it's a comedy or a tragedy, if there is cheering, the story will continue on.
Just like the many lives.
For the us who are still in it and still in the journey, send warm blessings.
- We will continue to walk down this path until eternity.
And what is going to happen to millions that cant pay? Is the government going to let millions become homeless? Our currency would more or less become worthless. Bartering would become the norm. There would be squatters galore!! Otherwise, chaos!
If the government goes belly up, that means no courts, which means no evictions can be carried out. Everything would work itself out in the long run.
My biggest issue would be education, no schools would be bad for a generation.
1. Debt limit not raised
2. Stock market goes down
3. Our bond rating degraded, interest rates go up
4. Double dip land
5. President pays out social security, pays interest, pays soldiers, and everything else shuts down
Worst Case
1. Debt limit not raised
2. Stock market goes way, way down
3. Our bond rating degraded, interest rates go up
4. Full blown global panic, spiraling us into a depression not seen in generations
5. President still has to pay out ss, pay interest, pay soldiers, and everything gets shut down
My person opinion:
1. Debt limit raised short term
2. Eric Cantor finally shuts up, and Harry Reid actually does something brave
3. A "grand bargain" is had at 11th hour sometime next month
4. Debt limit raised automatically a few times
5. Republican and Democrats lose to some independent party come 2016-2020
I think so far half of #2 seems to have occurred, Cantor and Boehner played good cop/bad cop and stock market is now tanking sending indicators that the market is the real master of the US economy, not the Republicans or the Democrats. I mean Hamilton warned us about this, but everyone thinks Jefferson's so great, why? If anything Franklin is another one, "He who goes a borrowin goes a sorrowin."
Oh well, this generation isn't called the "Boom-er's" for nothing!
Long term, I feel that the Republicans are running out of steam with the Cantors of the world just making stuff worse. Equally, Reid shows us that small states with bad representation and the longevity of a cockroach equally gives us the "government we sort of deserve, if only we were actual inhabitant of that state." I'm more of the opinion moving forward, that the leaders are chosen by an outside council of delegates elected separately or voted on in a populist way.
Ambition must be made to counteract ambition.
Individualities may form communities, but it is institutions alone that can create a nation.
Nothing succeeds like the appearance of success.
Here is my principle: Taxes shall be levied according to ability to pay. That is the only American principle.
needs to happen to wake up the nation. Sadly it will be to late for most, but it should fix alot of problems this country has for the next few generations and maybe beyond.
worst that could happen? Hmmm let me think? Maybe me and every other person that lives off of social security disability income and medicaid medical insurance being unable to support themselves, or unable to get whatever medication that they happen to need? In which case there will be a surplus of psychiatricly disabled people popping up around the nation without any government assistance who are unable to be put in good psych wards and will likely out number the number of beds in Jails as well (not that Jails are really the best place to put psychiatricly disabled people anyways). The number of annual suicides, murders, and other similar situations will thus dramatically increase alongside this and you can't blame these people because they don't mean to be doing these things as they are clinically disabled people.
And thats just scratching the hypothetical surface of the situation. In otherwords we are looking at a return to society back during the great depression or before.
I think you underestimate the power of the church and community if/when this would happen. I think you might be surprised at how most would deal with it.
It would be a tragic, eye opening situation to almost everyone.
not everyone has a church or a good relationship with their community upon which to draw aid from. I myself only just started going back to church (though fortunately I never stopped staying in touch with that community). That doesn't change the fact that not everyone is so lucky. I think you are over estimating the value of such things. Not to mention that most medical facilities in the country derive income at least in part from government grants.
The story I heard on the infamously partisan and dangerously liberal NPR was that Obama and Boehner met and hashed out a deal, and then Boehner backed out of it when he couldn't sell it to his constituents (read Tea Party Freshmen).
I find it almost impossible to think that they won't be able to raise the debt ceiling, but look at the parties. The Democrats have never impressed anyone with their organization and unity, and the Republicans are at their most fractured organization level since as long as I can remember. I think that its sensationalism that has the public worried that they could fail to do this however, I'm kind of glad that the politicians are under so much pressure otherwise I don't think they would act as urgently as they need to to get this done.
If the Republicans don't raise the debt limit, they have 0 chance of winning in 2012. I'm pretty sure the public will view this as their fault, so if they want to survive they have to not **** this up.
thing of it is it doesn't matter if it gets to aug, 2 or not, more people will show there reaction with wallstreet numbers and that should cause constituents to ramp up the pressure on politicians.
currently the market trends i think are what people are hoping to avoid by an early settlement of the matter, but as long as they keep talking, uncertainty will continue to leave a x factor at play and things will continue to operate as normal but under the could of "the chance of a sudden change" more relevant than usual.
Twitter- RogueSource.
Decks: "Name one! I probably got it built In one of these boxes."
---------------------------------------------------
Vintage will rise again! Buy a Mox today!
---------------------------------------------------
[I]Some call it dig through time, when really your digging through CRAP!
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EDH:
UBGThe MimeoplasmUBG
wait, can Obama actually do that? Last I checked it was only the Supreme Court that can declare something unconstitutional? Also it should be noted that up until about 50 or so years ago (give or take) we were on an entirely different financial system (the Gold Standard). It may be about time to decide if it may not be prudent to switch to a more stable standard than the current system that backs money in a virtual sense instead of a literal sense (i.e. the current standard has no tangible means of financially backing the money that we all use on a day to day basis, so our money literally has absolutely no value outside of a theoretical say so of the government).
More seriously though, its practically impossible for the US to go onto the gold standard without catastrophic inflation or deflation. Simply put, there is far more money in print than there is gold to represent that money. Gold would need to be at something like 3-4 times its current value just to cover all the US dollars in circulation, and that figure is based upon all gold ever mined (not just united states gold). I am not economist so I don't know whether going back to the gold standard causes inflation or deflation, but logically it has to do one or the other, and gigantically.
With any luck, it would never come to that. But...
Short answer: yes.
Long answer: It's not so much declaring it unconstitutional (in the legal sense) as just saying it is, and then ignoring it. By the time any legal fight gets sorted out over whether or not Obama can just ignore it, we'd probably have a debt ceiling in place again.
The New Republic had a decent piece on this a month or so back.
As for moving away from fiat currencies, I'm not enough of an economist to say whether or not that's a good idea. I can say, however, that I've never read a well-written and well-supported argument in support of returning to commodity money today.
EDH:
UBGThe MimeoplasmUBG
not raising the debt ceiling does not mean default. that is a stupid and wrong rumor. what it means is that the US cannot borrow money it has to spend what money it actually brings in.
So what happens is that it falls to the executive branch on what to spend money on. The federal government is constantly bringing in money. If we default it means that obama decided not to pay the debt bill which is impossible since that is the first thing that gets paid.
if we actually can't get a plan in place then the US will not default unless obama decides to just not pay it.
again only if the president decides not to pay the bill. the US will have a 2.1 trillion dollars to budget out. that is more than enough to cover SS and the debt payment.
this situation is stupid and neither side is willing to give in and really fix the problem. Democrats refuse to address our massive entitlement programs and republicans refuse any tax increases. which i agree in this market is stupid, but surely a deal can be cut to close off loopholes.
since neither side is willing to budget i doubt the problem will get fixed and let the finger pointing begin.
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That mistake meant interest rates on securities for the federal government went up .6%. That's .6% on $800 billion (the outstanding amount of the Treasury at the time). That adds up to almost $5 billion dollars a year. The guys that studied this event found that six months after the whole snafu this interest rate increase was still there. A $120 million mistake ended up costing the federal government at least $2.5 billion.
Now what will happen today if the federal government deliberately doesn't pay bond holders?
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When people make statements about X% of the population being unemployed it's nonsense in my opinion. I saw 3 "Now Hiring" signs in windows on my way into work today which is a 10 minute drive. Just because you have a college degree doesn't mean you are above working at a McDonalds. There are jobs out there, people just don't want the ones that are available. They need to put their pride aside, stop mooching off the country and tax payers and take the jobs that they can.
The government isn't the only thing wrong with the country, the citizens are equally responsible for this plummet in the economy.
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It's taking $14 TRILLION DOLLARS out of all those people's pockets. That's like hammering the economy for $14 BILLION DOLLAR erasure in assets from all govt creditors (you & I) EVERY DAY... for almost the NEXT THREE YEARS. It's instantaneously ERASING $14 trillion in assets of MULTIPLE entities: Like multiple financial nuclear bombs going off in tens or hundreds of thousands of separate banks and corporations, and hundreds of millions of separate households all at once.
That's money that banks and humans all count as part of their assets. That you think YOU have, as part of your bank account, part of your portfolio, part of assets of people's 401Ks...
It may technically be a loan to the government. But operationally speaking, they are not really "loans" in the traditioanl sense. Because those bonds are as good as or better than CURRENCY. Buying bonds is really like you put money into a bank account and earning interest.
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Here's a nice little thought exercise:
What would happen if the US just said "We're INSTANTANEOUSLY printing $14 trillion cash and SIMULTANEOUSLY PAYING ALL GOVT DEBTS (before currency exchange rates can adjust)" Considering the entire annual GDP of the US is close to that amount, and the govt only collects $2 trillion in taxes a year, that number would cause utter chaos and probably collapse multiple world governments.
This thought exercise is actually LESS DRASTIC THAN DEFAULTING on all the debt, and lets you see the order of magnitude of the mayhem that defaulting would cause (instantanous high triple digit inflation). I'd definitely accept overprinting currency and runaway inflation before defaulting on govt debt (since the latter would result in runaway inflation AND far worse additional chaos... but the country obviously can't "counterfeit" itself out of the national debt. It's just TOO MUCH MONEY. That $20 in your pocket wouldn't be worth jack).
you would see hyperinflation to a degree that we have never seen before. if they were going to do this then it should have been done at 1 trillion.
the problem is it still wouldn't solve the problem. the fact is government spends to much money and our system needs to be reformed so that future generations do not face the same problem that we do now.
that is impossible with the current set of politicians. they are the largest collection of morons in history. people speak about the stupidity of joe public there is only one thing dummer. politcians in washington DC.
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Thanks to Nex3 for the avatar visit ye old sig and avatar forum