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Acknowledged. But why would you even risk a large abrupt shock to the economy. Surely you dont think the former is totally harmless.
Acknowledged. But why would you even risk a large abrupt shock to the economy. Surely you dont think the former is totally harmless.
even with all the news hype about a "crisis", 90-day T-bills are still yielding 0 percent, meaning anyone buying those bonds today is willing to do so knowing they'll get paid sometime soon after Aug 2, and without interest
no one is worried about the government's ability to pay, although MSNBC, CNN, and FOX will talk about it all day long because the fear gets people to watch for a few minutes in between checking their friends' Facebook statuses - not easy to make money when your news network was designed for 20th century media
not saying default's a good thing, but the insane spending that began as soon as GWB took office, and has kept going with Obama has already created tremendous damage that some kind of meaningful, bold action is necessary
It would create worldwide panic and a definite decline in the value of the dollar. The dollar could even become virtually worthless as people try to get out of it. No one would lend us money and no one in this country would have access to any kind of capital. That would then create a massive depression that could last a long time.
To default would be the worst possible move right now. The best is to raise the debt ceiling and start cutting spending. It's really the only option.
Its a default. The united states has never defaulted before. It will rebound but any nation that defaults has to go to D. A default means the government doesnt currently have the ability to pay those that finance its debt. A ratings agency has no choice but to at least temporarily lower a rating to D if the government isnt making payments.
What exactly would happen after a default depends on the specific monetary situation of the united states as it relates to other currencies. But there will be months of pain if it happens, the end result would be hard to predict even for a financial guru. A default for no reason is pointless, thats why it wont happen. For all the blustering and boldness neither side will default.
Thanks for contributing.
I would take months or even a year or so of pain if it ment that we could end this lunacy. But I understand their are those that can't take another hit without drowning.
What are you talking about. its like you think a default is necessary to bring down our debt. Its counter productive. When you have debts, wouldnt the responsible thing to do be to pay off your debts?
Republicans want $2 trillion in cuts to the debt or they wont raise the debt limit. Obama wants $4 trillion in cuts to the debt and wants to raise it. How is his proposal not better...?
Thanks for contributing.
I would take months or even a year or so of pain if it ment that we could end this lunacy. But I understand their are those that can't take another hit without drowning.
What are you talking about. its like you think a default is necessary to bring down our debt. Its counter productive. When you have debts, wouldnt the responsible thing to do be to pay off your debts?
Republicans want $2 trillion in cuts to the debt or they wont raise the debt limit. Obama wants $4 trillion in cuts to the debt and wants to raise it. How is his proposal not better...?
On the contrary, I'm not convinced that we would automatically default. That's the reason behind my original op. I want to understand.
I'm not sure what's more insulting. The fact that you insinuating that I'm an idiot or the fact that you knew enough about that song to look it up?
I'm not sure what's more insulting. The fact that you insinuating that I'm an idiot or the fact that you knew enough about that song to look it up?
Chill Gramps, all was meant in good intentions. If idiocy is based on what we know, we are all idiots, and I am not suggesting we are. I am glad you asked the questions and we are getting some positive feedback from those who know or can speculate on the subject. Pour me a drink & I will stay around and kick the table leg.
It would create worldwide panic and a definite decline in the value of the dollar. The dollar could even become virtually worthless as people try to get out of it. No one would lend us money and no one in this country would have access to any kind of capital. That would then create a massive depression that could last a long time.
To default would be the worst possible move right now. The best is to raise the debt ceiling and start cutting spending. It's really the only option.
Again, refer to the conversation we just had. The treasury isnt actually broke and the effect of an artificial default wont be the same as if the united states didnt have enough money to make payments.
I agree, it should be raised. And i agree it would be the worst possible move to not raise it, it would be pointless. But your the-end-is-neigh approach to economics and politics is annoying.
I'm not sure what's more insulting. The fact that you insinuating that I'm an idiot or the fact that you knew enough about that song to look it up?
Chill Gramps, all was meant in good intentions. If idiocy is based on what we know, we are all idiots, and I am not suggesting we are. I am glad you asked the questions and we are getting some positive feedback from those who know or can speculate on the subject. Pour me a drink & I will stay around and kick the table leg.
It would create worldwide panic and a definite decline in the value of the dollar. The dollar could even become virtually worthless as people try to get out of it. No one would lend us money and no one in this country would have access to any kind of capital. That would then create a massive depression that could last a long time.
To default would be the worst possible move right now. The best is to raise the debt ceiling and start cutting spending. It's really the only option.
Again, refer to the conversation we just had. The treasury isnt actually broke and the effect of an artificial default wont be the same as if the united states didnt have enough money to make payments.
I agree, it should be raised. And i agree it would be the worst possible move to not raise it, it would be pointless. But your the-end-is-neigh approach to economics and politics is annoying.
What do you mean by artificial default? If the treasury isn't making the payments that it's obligated to make (I mean actual payments and not just interest) then that means some of its creditors aren't getting their money back (technically a default). That would create a situation where creditors may no longer believe they will get their money back and they may decide to sell off their dollars. If that happens then the situation I outlined could happen.
What sacrifies do you think we can make?
Are we going to make drastic cuts to military and every entitlement program, implement all those changes in full in two weeks, and then collect enough savings from the time those are implemented until august 2nd to run the government on a budget surplus for the rest of the year?
I can understand not knowing the niceties of it but the general numbers simply make not raising the debt limit impossible. It has to be raised.
But being unwilling to spend more and being financially insolvent are two totally different things. Our credit rating will drop because the rating agency has to drop it if we default. But creditors and investors know the money is still there and they will be paid in due time. There will still be a shock, but not the same shock as if the treasury was actually broke.
By artificial default i mean one created by our refusal to borrow more rather than our inability to pay and lack of capital. The markets will respond very differently to those two different events. Like the other guy said, 90 day treasury bonds are still yielding 0%. People still think its a safe bet because in reality it is.
Again, refer to the conversation we just had. The treasury isnt actually broke and the effect of an artificial default wont be the same as if the united states didnt have enough money to make payments.
I agree, it should be raised. And i agree it would be the worst possible move to not raise it, it would be pointless. But your the-end-is-neigh approach to economics and politics is annoying.
What do you mean by artificial default? If the treasury isn't making the payments that it's obligated to make (I mean actual payments and not just interest) then that means some of its creditors aren't getting their money back (technically a default). That would create a situation where creditors may no longer believe they will get their money back and they may decide to sell off their dollars. If that happens then the situation I outlined could happen.
But being unwilling to spend more and being financially insolvent are two totally different things. Our credit rating will drop because the rating agency has to drop it if we default. But creditors and investors know the money is still there and they will be paid in due time. There will still be a shock, but not the same shock as if the treasury was actually broke.
By artificial default i mean one created by our refusal to borrow more rather than our inability to pay and lack of capital. The markets will respond very differently to those two different events. Like the other guy said, 90 day treasury bonds are still yielding 0%. People still think its a safe bet because in reality it is.
What sacrifies do you think we can make?
Are we going to make drastic cuts to military and every entitlement program, implement all those changes in full in two weeks, and then collect enough savings from the time those are implemented until august 2nd to run the government on a budget surplus for the rest of the year?
I can understand not knowing the niceties of it but the general numbers simply make not raising the debt limit impossible. It has to be raised.
It can't be that black n white. If it was we wouldn't have elected officials advocating not raising it.