Let the nation default?

[Political Junky]

Anyone want to support this guy's theory?

GOP congressman: U.S. default would ?bring stability to the world markets? - Salon.com


While experts continue to describe a possible U.S. default in calamitous terms, one Republican congressman isn’t nearly so worried.

“I think, personally, it would bring stability to world markets,” Florida Congressman Ted Yoho told the Washington Post. ”I think we need to have that moment where we realize [we’re] going broke.”
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[Hoffstra]

If the USA is unable to pay even $1 of its obligations, our interest rates will jump, world markets will fall, and the the USA will enter a new Great Recession.

The world relies on the USA being a stone of financial reliability and integrity.

If that dies, all bets are off. I'm glad I moved my 401K into the stable income fund cause this shit might get VERY bad.

 

[Hoffstra]

This is what Reagan thought of the idea of letting the USA default:

"Unfortunately, Congress consistently brings the government to the edge of default before facing its responsibility. This brinkmanship threatens the holders of government bonds and those who rely on Social Security and veterans benefits. Interest rates would skyrocket, instability would occur in financial markets, and the federal deficit would soar. The United States has a special responsibility to itself and the world to meet its obligations. It means we have a well-earned reputation for reliability and credibility -- two things that set us apart from much of the world."

 

[Toro]

wrong.

not paying ANY of our financial obligations, means default.

even if we pay the interest on the debt but can't pay our other obligations, we are in default.

default is a financial term and refers to financial instruments. you're redefining it so you can use is as a political term. and you are only doing that to provide a false connotation. the idea that spending money is a financial obligation is ridiculous. the only reason to do that is to mislead and scare

But that is what they do with all terminology - in order to confuse and redefine known subject, matters, areas, to fit their agenda.
they will substitute right for left, socialist for social and vice verse, in order to advance their agenda - the ownership of the personal freedom and totalitarian grip on power.

A default occurs when any liability is not paid. That is not a redefinition.

However, not all defaults are equal. Not paying interest on our bonds has a very different effect than not paying a defense contractor.

 

[Toro]

Anyone want to support this guy's theory?

GOP congressman: U.S. default would ?bring stability to the world markets? - Salon.com


While experts continue to describe a possible U.S. default in calamitous terms, one Republican congressman isn’t nearly so worried.

“I think, personally, it would bring stability to world markets,” Florida Congressman Ted Yoho told the Washington Post. ”I think we need to have that moment where we realize [we’re] going broke.”
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He's wrong. If he's talking about defaulting on our debt, he's a fucking moron. The only scenario where that would be true would be if a default caused all parties to come to the table a few days after the default and come to an agreement which dramatically cut spending and probably raised taxes some. But that's it. Markets HATE uncertainty.

 

[Toro]

We will not default. More boogey man stuff from Obama.

Now he's pushing granny off the cliff

-Geaux

we will default if we don't raise the debt ceiling.

Treasury doesn't have the power to prioritize paying our debts over other spending.

Actually, they can. And they probably would pay the interest.

 

[Toro]

Another stupid reply

What did you expect from Chris?

Einstein: The definition of insanity is doing the same thing and expecting a different result.

But you're right of course. Profits have been high because of cost cutting, which is why they are up when the economy is not improving.

Apparently this guy has never heard the word: Divestiture. So, what the hell, here is the definition: Disposition or sale of an asset by a company. A company will often divest an asset which is not performing well, which is not vital to the company's core business, or which is worth more to a potential buyer or as a separate entity than as part of the company.

This is what is happening with a large number of Fortune 500 companies in the US - cutting the fat here and doing business where it is profitable.

This guy is apparently unable to grasp the idea that companies are going to make profits IN SPITE of our government's incompetence.

Profits relative to GDP are at highs not seen for 80 years.

This is one reason why there is a backlash against the right. Capital has done very well over the past 20 years. Labor has not.

 

[blackhawk]

Lets just keep doing what we have been doing just keep raising the debt ceiling and going deeper,and deeper,and deeper and deeper in debt whats another 17 trillion in debt hell that's pocket change.

 

[Toro]

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.

If the default on the debt occurred, and it dragged out, I believe the results could be catastrophic. It wouldn't be for the first few days or weeks as the market believes the parties will eventually come to a deal. But, when they suddenly come to realize interest isn't being paid, you could have a repeat of Lehman. The Fed would them get involved in an even bigger way. US Treasury securities are the lynchpin of the global financial system.

But maybe I'm wrong, I don't know.

 

[Toro]

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?

That's nonsense. There is no reason they must default on the debt. The British Empire ran a deficit for probably 100 years with no issue. The problem is not a deficit per se. The problem is teh deficit in regard to the rest of the economy. And here we are pushing the limit.
But if somehow by some miracle Obama woke up and said The deficit is too high. We need to cut it in half in the next 2 years, and then actually did that, we could go on foreever.

The deficit has gone from 10% of GDP to about 4%. I agree that it should be reduced further, but I'm betting most people here don't know it has shrunk that dramatically.

 

[Toro]

If someone calls you and threatens to ruin your credit, if you don't do what they want you to do, they can be arrested for extortion.

So can the FBI arrest House Republicans for extortion?

“The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure,” he said. “It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Leadership means that ‘the buck stops here.’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt and a failure of leadership. Americans deserve better. I therefore intend to oppose the effort to increase America’s debt limit.”

It should be noted that in 2006, every single Democrat Senator voted against raising the debt ceiling, including Senator Obama.

 

[Political Junky]

Shutdown Voting Math Fails To Add Up | 90.5 WESA

<excerpt>
First, the numbers: There are currently 432 members of the House. So 217 "yes" votes make a majority.

Democratic leader Nancy Pelosi has a letter bearing the name of 195 Democrats ready to vote yes, meaning any combination of 22 votes drawn from the five Democrats who didn't sign the letter, and the 232 House Republicans, gets to that threshold.

So are there 22?

According to several media tallies, the answer is: probably yes.

The Washington Post has a list of 19 Republicans who have indicated they are yes votes and three leaning yes. The Huffington Post's list has 23 Republicans ready to vote yes.

But these lists only capture those Republicans either brave enough or foolish enough to say publicly they will do something the Tea Party faction of their party opposes, without there being any definite vote in the offing. New York GOP Rep. Peter King argues that should a clean bill actually be brought to the floor, that would be the signal for other Republicans to jump on the bandwagon, resulting in as many as 150 Republican yes votes.

Of course, "whip" counts by media organizations are probably not the most reliable way to gauge the prospects of legislation. And a statement of intention isn't the same as an actual vote. Then again, Boehner and his top leaders have shown their inability to count votes, too (think "Plan B" on the fiscal cliff deal; farm bill; transportation spending bill).

And it's exactly that proven inability to assess, let alone control, his own caucus, that lets Boehner's critics challenge his conclusion. President Obama, for one, was quick with a response Monday: prove it.

"Call a vote right now and let's see what happens," Obama said.

 

[Vandalshandle]

As of 4 PM Atlantic time today, I don't give a rat's ass what the republicans do. I sold every stock I own. I plan to buy them all back at bargain prices after the Tea party suceeds in causing another recession.

Wow!

Sold BOTH of them?

No, Henry. I sold $92,000 worth. That was all I had left after cashing out 80% of my investments in 2008, right before the Bush recession, and parking it all into certificates of deposit. Thanks to democratic party produced Medicare and Social Security, plus living frugally with no debt (I even pay cash for cars), I'll never have to work again.

You?

 

[kaz]

default is a financial term and refers to financial instruments. you're redefining it so you can use is as a political term. and you are only doing that to provide a false connotation. the idea that spending money is a financial obligation is ridiculous. the only reason to do that is to mislead and scare

But that is what they do with all terminology - in order to confuse and redefine known subject, matters, areas, to fit their agenda.
they will substitute right for left, socialist for social and vice verse, in order to advance their agenda - the ownership of the personal freedom and totalitarian grip on power.

A default occurs when any liability is not paid. That is not a redefinition.

However, not all defaults are equal. Not paying interest on our bonds has a very different effect than not paying a defense contractor.

You restated what I already said. A distinction without a difference.

You didn't address the point. The point is the implication of why he's saying it that way and what he's trying to imply.

 

[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.

If the default on the debt occurred, and it dragged out, I believe the results could be catastrophic. It wouldn't be for the first few days or weeks as the market believes the parties will eventually come to a deal. But, when they suddenly come to realize interest isn't being paid, you could have a repeat of Lehman. The Fed would them get involved in an even bigger way. US Treasury securities are the lynchpin of the global financial system.

But maybe I'm wrong, I don't know.

The market generally acts in the reverse of what you describe, they react then calm down. They don't generally stay calm then react. It's because investors expect risk adjusted returns, it's the risk part of the equation.

BTW, people who operate in markets also follow the news.

 

[Hoffstra]

yes, defaulting on treasuries, bonds, and interest is different than not paying a DOD or DOT contractor.

but not paying the bills is not paying the bills, and the world will see it as a default and the USA losing its financial integrity & reliability.

 

[KissMy]

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.

If the default on the debt occurred, and it dragged out, I believe the results could be catastrophic. It wouldn't be for the first few days or weeks as the market believes the parties will eventually come to a deal. But, when they suddenly come to realize interest isn't being paid, you could have a repeat of Lehman. The Fed would them get involved in an even bigger way. US Treasury securities are the lynchpin of the global financial system.

But maybe I'm wrong, I don't know.

The market generally acts in the reverse of what you describe, they react then calm down. They don't generally stay calm then react. It's because investors expect risk adjusted returns, it's the risk part of the equation.

BTW, people who operate in markets also follow the news.

The market will react in waves. First it will be from fear & shock. Then a missed payment will cause a leveraged business or bank to fail. That leverage will amplify ripples as they move through every market in the planet. Bank runs & stock selling will destroy the global economy.

 

[KissMy]

yes, defaulting on treasuries, bonds, and interest is different than not paying a DOD or DOT contractor.

but not paying the bills is not paying the bills, and the world will see it as a default and the USA losing its financial integrity & reliability.

A missed payment to a large leveraged defense contractor will cause a big problem.

 

[Political Junky]

yes, defaulting on treasuries, bonds, and interest is different than not paying a DOD or DOT contractor.

but not paying the bills is not paying the bills, and the world will see it as a default and the USA losing its financial integrity & reliability.

And those with $trilions offshore will be in the catbird's seat.

 

[ScienceRocks]

yes, defaulting on treasuries, bonds, and interest is different than not paying a DOD or DOT contractor.

but not paying the bills is not paying the bills, and the world will see it as a default and the USA losing its financial integrity & reliability.

And those with $trilions offshore will be in the catbird's seat.

Most powerful nations have large corporations that can make, supply and innovate.

If we didn't have those = we wouldn't be more then a third world country.