Let the nation default?

[Flopper]

The nation does not really have to default. The nation has an enormous income. It merely has to prioritize. But, as Jack Lew said to Chris Wallace today, this regime will not prioritize.

It's sort of like if you maxed out your credit card and the bank refused to up your credit balance. You have a good job, you can pay your bills, you might not go out for dinner three nights a week, you might not throw that catered party, but you can pay your bills.

That's the position of the government. To imagine that if we cannot borrow more money, we can't pay any of the bills is plain silly. It's like saying that the entire country has no income, no one is paying taxes, no tariffs or fees are being collected. There's no income. In actuality there is plenty of income.

Yea, but there is this little thing called insolvency.

Edit: The UK have laws about it.

United Kingdom insolvency law - Wikipedia, the free encyclopedia

If the US government is insolvent, it doesn't have enough income to pay it's obligations and it is bankrupt. The US is not insolvent. It merely has to cut down on the frills a tiny bit. No more 100 million dollar vacations for instance. That 300 million the US is giving to the Syrian terrorists, that gets scratched off the list. Likewise another 300 million to Palestinians. Egypt is getting 250 million.

Then there are the parties, junkets, bonuses (for doing an ordinary job) and the useless studies like how fast a shrimp can run on a treadmill. Government waste costs 16 Billion dollars a year.

Government Spending Waste: 25 Wasteful Items - Business Insider

There there are 160 agencies that duplicate the work of other agencies wasting billions more.
GAO finds billions in wasteful, duplicative federal spending - The Hill's RegWatch

In reality, we cannot continue to borrow money just to pay the interest on the money we borrowed last time while we fritter away our income. No one can. No person, no business, no country can.

Actually, it's more than a tiny bit. Preventing the government from borrowing to meet its obligations would require all discretionary spending, such as for defense, education, housing and other annual appropriations, to stop, according to the Congressional Research Service. Most of the outlays for mandatory programs, such as Social Security, also would have to be halted, while taxes would need to rise to ensure the government had money to spend. Deep spending cuts and tax hikes would throw the economy into recession.

As of Oct 17th, the federal government will have about 30 billion dollars of cash on hand. That isn't enough because the government spends as much as $60 billion per day. How long the government could avoid defaulting would depend on how agile the administration is at raising cash by cutting spending to pay obligations coming due. Eventually, the government would be faced with either violating the law by not preforming some mandatory function or defaulting. At that point they would probably default. However before that happened financial markets would be in crisis mode and the country would be heading into a recession.

 

[KissMy]

I kinda think they are going to let this happen.

It's a scorched earth thing.

Not raising the debt ceiling is not necessarily a default on debt but it may cause enough fear for a credit downgrade, a big economic hit & job loss. But if they do actually default on debt we will become Greece overnight. Credit rating trashed, interest rates will skyrocket, the global financial system will seize up, enormously huge economic hit greater than the great depression, everything loses value, 30% unemployment & massive extremely violent riots.

 

[TakeAStepBack]

Default is inevitable. The sooner we get through with it, the sooner we can begin demanding responsibility from our government, and try to salvage some of the wealth the government is squandering rapidly.. The longer this drags out, the harder the fall.

With that said, politicians are too concerned abotu the next election to allow it to happen. Essentially, they do not want to be in the hot seat when the music stops...and it WILL stop. It's a mathematical certainty.

 

[zeke]

I kinda think they are going to let this happen.

It's a scorched earth thing.

Not raising the debt ceiling is not necessarily a default on debt but it may cause enough fear for a credit downgrade & big economic hit & job loss. But if they do actually default on debt we will become Greece overnight. Credit rating trashed, huge economic hit, everything loses value, massive unemployment & riots.

The repubs on this site don't seem to believe that. For some strange reason. Of course the earth is only 6 thousand years old, man made global warming isn't real and they aren't really racist. Well maybe a little bit. But not racist toward Obama.

 

[TooTall]

We have a partial govt. shutdown because Boehner refuses to let the House vote on the Senate bills.

If we have a debt default, it will be for the same reason.

no, it more the responsibility of the dems and obama because their ego is tied to obamacare

The ACA stands. You want it removed, vote enough people in to the Senate and House to remove it. Otherwise, the hell with all of you. If we cave on this, what will your next demand be? You don't cave to extortion.

My next demand will be a balanced budget amendment and prison term for the Senate Majority Leader of any party that fails to pass a budget.

 

[kaz]

I kinda think they are going to let this happen.

It's a scorched earth thing.

What a partisan hack you are.

 

[Flopper]

I kinda think they are going to let this happen.

It's a scorched earth thing.

Not raising the debt ceiling is not necessarily a default on debt but it may cause enough fear for a credit downgrade, a big economic hit & job loss. But if they do actually default on debt we will become Greece overnight. Credit rating trashed, interest rates will skyrocket, the global financial system will seize up, enormously huge economic hit greater than the great depression, everything loses value, 30% unemployment & massive extremely violent riots.

Each day that passes without a resolution, pressure on congress from the financial community will rise. It appears now that Boehner is looking for the democrats to give him something so he can call a vote and end this thing. He can't just throw the towel in. He has to have something from the democrats.

 

[KissMy]

Default is inevitable. The sooner we get through with it, the sooner we can begin demanding responsibility from our government, and try to salvage some of the wealth the government is squandering rapidly.. The longer this drags out, the harder the fall.

With that said, politicians are too concerned abotu the next election to allow it to happen. Essentially, they do not want to be in the hot seat when the music stops...and it WILL stop. It's a mathematical certainty.

Default is not a certainty. Sequester & improving economy are rapidly closing the debt gap. We have a very real chance of keeping or improving every ones current standard of living. But a default will greatly lower everyone's living standards, not just the poor & working class. Great wars have been fought over much less. None of us have ever lived through the misery of a world war.

 

[TakeAStepBack]

Default is inevitable. The sooner we get through with it, the sooner we can begin demanding responsibility from our government, and try to salvage some of the wealth the government is squandering rapidly.. The longer this drags out, the harder the fall.

With that said, politicians are too concerned abotu the next election to allow it to happen. Essentially, they do not want to be in the hot seat when the music stops...and it WILL stop. It's a mathematical certainty.

Default is not a certainty. Sequester & improving economy are rapidly closing the debt gap. We have a very real chance of keeping or improving every ones current standard of living. But a default will greatly lower everyone's living standards, not just the poor & working class. Great wars have been fought over much less. None of us have ever lived through the misery of a world war.

Default, is most definitely certain. Maybe not now, but this path we've stuck to and will stick to will lead to it regardless.

The debt gap is closing? The economy is improving? Laughable.
That's just nonsense. Even the CBO reports show that debt and deficits will continue to grow in the future under the current federal weight. People will not remain confident forever with a mounting debt. There will be a catalyst at soem point that will have us jump off. Unless people want printed money to cover past debt on money. Which is also silly and laughable.

 

[TooTall]

Yea, but there is this little thing called insolvency.

Edit: The UK have laws about it.

United Kingdom insolvency law - Wikipedia, the free encyclopedia

If the US government is insolvent, it doesn't have enough income to pay it's obligations and it is bankrupt. The US is not insolvent. It merely has to cut down on the frills a tiny bit. No more 100 million dollar vacations for instance. That 300 million the US is giving to the Syrian terrorists, that gets scratched off the list. Likewise another 300 million to Palestinians. Egypt is getting 250 million.

Then there are the parties, junkets, bonuses (for doing an ordinary job) and the useless studies like how fast a shrimp can run on a treadmill. Government waste costs 16 Billion dollars a year.

Government Spending Waste: 25 Wasteful Items - Business Insider

There there are 160 agencies that duplicate the work of other agencies wasting billions more.
GAO finds billions in wasteful, duplicative federal spending - The Hill's RegWatch

In reality, we cannot continue to borrow money just to pay the interest on the money we borrowed last time while we fritter away our income. No one can. No person, no business, no country can.

Actually, it's more than a tiny bit. Preventing the government from borrowing to meet its obligations would require all discretionary spending, such as for defense, education, housing and other annual appropriations, to stop, according to the Congressional Research Service. Most of the outlays for mandatory programs, such as Social Security, also would have to be halted, while taxes would need to rise to ensure the government had money to spend. Deep spending cuts and tax hikes would throw the economy into recession.

As of Oct 17th, the federal government will have about 30 billion dollars of cash on hand. That isn't enough because the government spends as much as $60 billion per day. How long the government could avoid defaulting would depend on how agile the administration is at raising cash by cutting spending to pay obligations coming due. Eventually, the government would be faced with either violating the law by not preforming some mandatory function or defaulting. At that point they would probably default. However before that happened financial markets would be in crisis mode and the country would be heading into a recession.

Perhaps you can correct my math, but I get $60 billion a day times 365 days comes to $21.9 trillion a year. I don't think your figures are even close.

 

[hunarcy]

should democrats let the nation default on its debt if the republicans refuse to allow them to negotiate about obamacare?

The Democrats don't control the House.

They can't force Boehner to submit a clean bill for a vote.

They COULD approave all the bills that have been sent up to fund the government and then negotiate about Obamacare.

 

[KissMy]

Default is inevitable. The sooner we get through with it, the sooner we can begin demanding responsibility from our government, and try to salvage some of the wealth the government is squandering rapidly.. The longer this drags out, the harder the fall.

With that said, politicians are too concerned abotu the next election to allow it to happen. Essentially, they do not want to be in the hot seat when the music stops...and it WILL stop. It's a mathematical certainty.

Default is not a certainty. Sequester & improving economy are rapidly closing the debt gap. We have a very real chance of keeping or improving every ones current standard of living. But a default will greatly lower everyone's living standards, not just the poor & working class. Great wars have been fought over much less. None of us have ever lived through the misery of a world war.

Default, is most definitely certain. Maybe not now, but this path we've stuck to and will stick to will lead to it regardless.

The debt gap is closing? The economy is improving? Laughable.
That's just nonsense. Even the CBO reports show that debt and deficits will continue to grow in the future under the current federal weight. People will not remain confident forever with a mounting debt. There will be a catalyst at soem point that will have us jump off. Unless people want printed money to cover past debt on money. Which is also silly and laughable.

The good thing is that most of the rest of the world is in deeper shit than we currently are. So we are making it even with the Federal Reserve sitting on massive bond purchases at near zero interest (ie: sterilized / monitized debt).

It ain't very pretty but the slow improvement in debt, jobs & economy is real. If it wasn't, Gold would be at $2,000.

Deficit Gap Is Getting Smaller

The Percent of People Employed is Slowly Improving

 

[RandallFlagg]

should democrats let the nation default on its debt if the republicans refuse to allow them to negotiate about obamacare?

The Democrats don't control the House.

They can't force Boehner to submit a clean bill for a vote.

No more than we can force Reid to vote on ANY-fucking-THING the House passes.


As bad and scary as a default sounds, look around.
Every single year we have to raise this fucking debt ceiling just so we can borrow more money to pay the interest on our other loans.

It is completely unsustainable

I'm with you here. Harry Reid has been a "Little Napolean" from day one. He has refused to allow a vote on a budget from the day OBarry took office. Hell, we are STILL operating on George Bush's final budget nearly 5 YEARS after Georgie left office!

On the shutdown? I would like to see it shutdown for at LEAST 6 months. The longer we can keep these dogs at bay in Washington, the happier it makes me.

I mean seriously, other that OBarry trying to scare the hell out of women and children (which is about all he is good for) what adverse effect has it had on anyone? No National Parks? Big deal.

 

[Vox]

Default is inevitable. The sooner we get through with it, the sooner we can begin demanding responsibility from our government, and try to salvage some of the wealth the government is squandering rapidly.. The longer this drags out, the harder the fall.

With that said, politicians are too concerned abotu the next election to allow it to happen. Essentially, they do not want to be in the hot seat when the music stops...and it WILL stop. It's a mathematical certainty.

Default is not a certainty. Sequester & improving economy are rapidly closing the debt gap. We have a very real chance of keeping or improving every ones current standard of living. But a default will greatly lower everyone's living standards, not just the poor & working class. Great wars have been fought over much less. None of us have ever lived through the misery of a world war.

that is the answer. cut the spending. the gap narrowed, but it is a big stretch to say it is closing as it is a big stretch to say economy is improving.
It is NOT.

 

[QuickHitCurepon]

The US government is not insolvent and can pay its bills.

I wouldn't count on that, if I were you. Buy U.S. war bonds. Or just stick your head between your knees.

The House Republicans are doing their best to not pay our bills.

But not being able to and choosing not to are two different things.

If we declare bankruptcy, we'll all be trading wooden nickels.

 

[RandallFlagg]

Default is inevitable. The sooner we get through with it, the sooner we can begin demanding responsibility from our government, and try to salvage some of the wealth the government is squandering rapidly.. The longer this drags out, the harder the fall.

With that said, politicians are too concerned abotu the next election to allow it to happen. Essentially, they do not want to be in the hot seat when the music stops...and it WILL stop. It's a mathematical certainty.

Default is not a certainty. Sequester & improving economy are rapidly closing the debt gap. We have a very real chance of keeping or improving every ones current standard of living. But a default will greatly lower everyone's living standards, not just the poor & working class. Great wars have been fought over much less. None of us have ever lived through the misery of a world war.

that is the answer. cut the spending. the gap narrowed, but it is a big stretch to say it is closing as it is a big stretch to say economy is improving.
It is NOT.

Agreed. Anyone who believes that this economy is "improving" is drinking the kool-aid of OBarry. There are just as many people unemployed now as there were 2 years ago. Difference? They have given up looking and are living off Uncle Barry.

 

[kaz]

There is no reason the government would default except by choice because tax revenues coming in are more than ample to pay the debt payments.

However, given that Obama is actually intentionally doing things to cause pain, he probably won't make the payments to further his propaganda campaign against Republicans.

However, I do not agree that would be catastrophic. The left like to say that, but the market hasn't melted down over the government shut down and even if debt payments weren't made, it's not like the Greece situation where we couldn't make payments. And everyone who wants the debt payments also wants us to deal with our deficits.

This is the Y2K computer meltdown all over again. Remember the meltdown ... that didn't happen.

 

[Chris]

 

[Chris]

Default is not a certainty. Sequester & improving economy are rapidly closing the debt gap. We have a very real chance of keeping or improving every ones current standard of living. But a default will greatly lower everyone's living standards, not just the poor & working class. Great wars have been fought over much less. None of us have ever lived through the misery of a world war.

that is the answer. cut the spending. the gap narrowed, but it is a big stretch to say it is closing as it is a big stretch to say economy is improving.
It is NOT.

Agreed. Anyone who believes that this economy is "improving" is drinking the kool-aid of OBarry. There are just as many people unemployed now as there were 2 years ago. Difference? They have given up looking and are living off Uncle Barry.

Maybe you should try to get a job.

The Fortune 500 just recorded record profits.

 

[TakeAStepBack]

This is a race to the bottom, folks. Anyway you slice it up, eventually the day of reckoning will come. The government, at some point, is destined to default on its obligations. It's either that, or they hyperinflate. Or they run tyrannical protectionsit measures in order to pay creditors.

Who is the biggest buyer currently of US monetized debt?