Let the nation default?

[Flopper]

We wont default unless someone does something unconstitutional.....If we dont raise the debt ceiling we will have to cut spending and not make NEW SPENDING....that the real rub that irritates progressives.

But see, that's my point. We haven't worked within a BUDGET for the last 5 years. We are STILL operating under George Bush's final budget (on a continuing resolution) because Obama issued orders to Harry Reid to NOT allow a budget to come to the floor of the Senate for a vote - which he hasn't. The House has sent a budget (without fail - because it's their JOBS) and again, Harry Reid will NOT vote on any of them.

Now, we have reached (yet again) the ceiling of the 5 year old budget and in order to continue spending OUR money, they need more.

That's why my question goes unanswered: What EXACTLY happens IF we default?

My take on it is that ABSOLUTELY NOTHING happens. The "fear" from those in "gubmit" is that we - the American people - will FINALLY figure out that these fools in DC are ROYALLY SCREWING US and have been for years and years.....

The Senate passed it's 2014 budget on March 23, 2013. Since the House and Senate committees do not have an agreed on a unitized budget bill, neither House nor Senate has voted on it and thus there is no approved budget.

 

[RandallFlagg]

We wont default unless someone does something unconstitutional.....If we dont raise the debt ceiling we will have to cut spending and not make NEW SPENDING....that the real rub that irritates progressives.

But see, that's my point. We haven't worked within a BUDGET for the last 5 years. We are STILL operating under George Bush's final budget (on a continuing resolution) because Obama issued orders to Harry Reid to NOT allow a budget to come to the floor of the Senate for a vote - which he hasn't. The House has sent a budget (without fail - because it's their JOBS) and again, Harry Reid will NOT vote on any of them.

Now, we have reached (yet again) the ceiling of the 5 year old budget and in order to continue spending OUR money, they need more.

That's why my question goes unanswered: What EXACTLY happens IF we default?

My take on it is that ABSOLUTELY NOTHING happens. The "fear" from those in "gubmit" is that we - the American people - will FINALLY figure out that these fools in DC are ROYALLY SCREWING US and have been for years and years.....

The Senate passed it's 2014 budget on March 23, 2013. Since the House and Senate committees do not have an agreed on a unitized budget bill, neither House nor Senate has voted on it and thus there is no approved budget.

And there hasn't been for the last 5 years. Just a continuing resolution. Why? Is "OZ" and it's high "wizard" so worried about the American people finding out exactly where OUR money goes that they choose to violate the Constitution repeatedly?

 

[Flopper]

But see, that's my point. We haven't worked within a BUDGET for the last 5 years. We are STILL operating under George Bush's final budget (on a continuing resolution) because Obama issued orders to Harry Reid to NOT allow a budget to come to the floor of the Senate for a vote - which he hasn't. The House has sent a budget (without fail - because it's their JOBS) and again, Harry Reid will NOT vote on any of them.

Now, we have reached (yet again) the ceiling of the 5 year old budget and in order to continue spending OUR money, they need more.

That's why my question goes unanswered: What EXACTLY happens IF we default?

My take on it is that ABSOLUTELY NOTHING happens. The "fear" from those in "gubmit" is that we - the American people - will FINALLY figure out that these fools in DC are ROYALLY SCREWING US and have been for years and years.....

The Senate passed it's 2014 budget on March 23, 2013. Since the House and Senate committees do not have an agreed on a unitized budget bill, neither House nor Senate has voted on it and thus there is no approved budget.

And there hasn't been for the last 5 years. Just a continuing resolution. Why? Is "OZ" and it's high "wizard" so worried about the American people finding out exactly where OUR money goes that they choose to violate the Constitution repeatedly?

Until House and Senate committees agree on a budget, then there is nothing to vote on. The Senate is not going to vote on a House Budget with no resolution of differences. That's how the federal budget process works.

 

[RandallFlagg]

The Senate passed it's 2014 budget on March 23, 2013. Since the House and Senate committees do not have an agreed on a unitized budget bill, neither House nor Senate has voted on it and thus there is no approved budget.

And there hasn't been for the last 5 years. Just a continuing resolution. Why? Is "OZ" and it's high "wizard" so worried about the American people finding out exactly where OUR money goes that they choose to violate the Constitution repeatedly?

Until House and Senate committees agree on a budget, then there is nothing to vote on. The Senate is not going to vote on a House Budget with no resolution of differences. That's how the federal budget process works.

For 5 years!?!?! Nope. Ain't buying it.

 

[KissMy]

Poll: Do You Want to Give Obama 100% Control of Spending?

 

[Rebelitarian]

The American Dream Film-Full Length




The Money Masters.

[ame=http://www.youtube.com/watch?v=H56FUHgqRNE]The Money Masters - Full-Length (3hrs 19m) - YouTube[/ame]

 

[kaz]

It is not a matter of being able to meet our obligations but whether we choose to do so.

First, that isn't consistent with what they said when they downgraded us. The primary points were our deficits and debt as a percent of GDP.

Second, there's no discussion of not paying the interest on our debt. We have $2T a year in tax money coming in, more than ample to service our debt, and by the 14th amendment we have to pay it first. The debate is that democrats are arguing that not sending welfare checks out is a "default."

S&P made it pretty clear that one of the reason for downgrade was the ineffectiveness of American political parties.

"More broadly, the downgrade reflects our view that the effectiveness,
stability, and predictability of American policymaking and political
institutions have weakened at a time of ongoing fiscal and economic
challenges to a degree more than we envisioned when we assigned a
negative outlook to the rating on April 18, 2011."
S&P | United States of America Long-Term Rating Lowered To 'AA+' Due To Political Risks, Rising Debt Burden; Outlook Negative | Americas

This quote doesn't say what you said. It just says our policy makers are stupid. That doesn't contradict either of us. But no where did it say what you did, that policymakers would chose to not pay debt or not make an agreement to cause that to happen. Also, I said what they said when they downgraded us, you quoted their affirmation of the downgrade.

Yes, we do have the revenue to service our debt. However, servicing debt is not the only obligation the government has.

Bam, this is the game.

You say we're going to "default."

I point out that we're not going to default on our debt, we have revenue to cover it. Oh no, you say, you understand we're going to service our debt, not paying welfare payments is defaulting too, so you can use the word default. I say that's not why you're using it, you want to imply that we're going to default on our debt.

You are yet another liberal proving me right. You're saying we're going to default on welfare payments, not debt, but they are going to downgrade us, which they would not do for not making welfare payments, only for not defaulting on our debt.

Flopper is just talking out of both sides of his mouth...

 

[RKMBrown]

Catastrophe... that like the end of the world or something?

It won't happen, can't happen, we have tons of money to pay interest on the debt. A default could only happen by order from the president. However, it would be an order that is not implemented. The president would be removed from office if he ever gave such an order.

Selective default is against the law. Treasurer is liable & can be fired or jailed. Treasury will follow the law & allocate the funds accordingly. There will be a default on market debt instruments without a new law passed by congress & signed by the president reallocating funds.

ARTICLE VI. TERMINATION FOR CAUSE AND OTHER REMEDIES

Section 6.1 General Events of Default.

In the event that either:
(a) any representation, warranty, certification, assurance or any other statement of fact contained in this Agreement or the Application of the Participating State including, but not limited to, the Assurances (Non-Construction) contained as part of the Application, or any representation or warranty set forth in any document, report, certificate, financial statement or instrument now or hereafter delivered to Treasury in connection with this Agreement, is found to be inaccurate, false, incomplete or misleading when
made, in any material respect;
or
(b) the Participating State materially fails to observe, comply with, meet or perform any term, covenant, agreement or other provision contained in this Agreement including, but not limited to, the Participating State’s failure to submit complete and timely quarterly reports or annual reports, or the Participating State ceases to use the Allocated Funds to undertake the activities authorized in Annex 1 attached hereto;

Treasury, in its sole discretion, may find the Participating State to be in default.

Section 6.2 Discretionary Remedies.

If Treasury finds the Participating State to be in default under Section 6.1 of this Agreement, Treasury may, in its sole discretion, take any one or more of the following actions, subject to Section 6.6 of this Agreement:

(a) withhold Disbursements pending the Participating State’s correction of the default;
or
(b) wholly or partly reduce, suspend, or terminate the commitment of Treasury to make Disbursements to the Participating State under this Agreement, whereupon the commitment of Treasury to make Disbursements to the Participating State under this Agreement will be reduced, suspended, or terminated, as the case may be.

Section 6.3 Specific Events of Default

In the event of a Treasury Inspector General audit finding of either:
(a) intentional or reckless misuse of Allocated Funds by the Participating State;
or
(b) the Participating State having intentionally made misstatements in any report issued to Treasury under the Act; Treasury shall find the Participating State to be in default.

Section 6.4 Mandatory Remedies.

If Treasury finds the Participating State to be in default under Section 6.3 of this Agreement, Treasury shall take the following actions:
(a) in the case of an event of default under Section 6.3(a), recoup any misused Allocated Funds that have been disbursed to the Participating State;
or
(b) in the case of an event of default under Section 6.3(b), terminate the commitment of Treasury to make Disbursements to the Participating State under this Agreement, and find the State ineligible to receive any additional funds under the Act, whereupon the commitment of Treasury to make Disbursements to the Participating State under this Agreement will be terminated and the State will be ineligible to receive any additional funds under the Act.

Subject -> Verb

I'm gonna guess that a Participating State is not the federal government. More likely this set of laws apply to the States themselves, such as the Texas.

 

[Flopper]

First, that isn't consistent with what they said when they downgraded us. The primary points were our deficits and debt as a percent of GDP.

Second, there's no discussion of not paying the interest on our debt. We have $2T a year in tax money coming in, more than ample to service our debt, and by the 14th amendment we have to pay it first. The debate is that democrats are arguing that not sending welfare checks out is a "default."

S&P made it pretty clear that one of the reason for downgrade was the ineffectiveness of American political parties.

"More broadly, the downgrade reflects our view that the effectiveness,
stability, and predictability of American policymaking and political
institutions have weakened at a time of ongoing fiscal and economic
challenges to a degree more than we envisioned when we assigned a
negative outlook to the rating on April 18, 2011."
S&P | United States of America Long-Term Rating Lowered To 'AA+' Due To Political Risks, Rising Debt Burden; Outlook Negative | Americas

This quote doesn't say what you said. It just says our policy makers are stupid. That doesn't contradict either of us. But no where did it say what you did, that policymakers would chose to not pay debt or not make an agreement to cause that to happen. Also, I said what they said when they downgraded us, you quoted their affirmation of the downgrade.

Yes, we do have the revenue to service our debt. However, servicing debt is not the only obligation the government has.

Bam, this is the game.

You say we're going to "default."

I point out that we're not going to default on our debt, we have revenue to cover it. Oh no, you say, you understand we're going to service our debt, not paying welfare payments is defaulting too, so you can use the word default. I say that's not why you're using it, you want to imply that we're going to default on our debt.

You are yet another liberal proving me right. You're saying we're going to default on welfare payments, not debt, but they are going to downgrade us, which they would not do for not making welfare payments, only for not defaulting on our debt.

Flopper is just talking out of both sides of his mouth...

Where did I say we would default on our debt? Nowhere. In fact, I think it's very unlikely. It is more likely we would default on other obligations.

 

[kaz]

S&P made it pretty clear that one of the reason for downgrade was the ineffectiveness of American political parties.

"More broadly, the downgrade reflects our view that the effectiveness,
stability, and predictability of American policymaking and political
institutions have weakened at a time of ongoing fiscal and economic
challenges to a degree more than we envisioned when we assigned a
negative outlook to the rating on April 18, 2011."
S&P | United States of America Long-Term Rating Lowered To 'AA+' Due To Political Risks, Rising Debt Burden; Outlook Negative | Americas

This quote doesn't say what you said. It just says our policy makers are stupid. That doesn't contradict either of us. But no where did it say what you did, that policymakers would chose to not pay debt or not make an agreement to cause that to happen. Also, I said what they said when they downgraded us, you quoted their affirmation of the downgrade.

Yes, we do have the revenue to service our debt. However, servicing debt is not the only obligation the government has.

Bam, this is the game.

You say we're going to "default."

I point out that we're not going to default on our debt, we have revenue to cover it. Oh no, you say, you understand we're going to service our debt, not paying welfare payments is defaulting too, so you can use the word default. I say that's not why you're using it, you want to imply that we're going to default on our debt.

You are yet another liberal proving me right. You're saying we're going to default on welfare payments, not debt, but they are going to downgrade us, which they would not do for not making welfare payments, only for not defaulting on our debt.

Flopper is just talking out of both sides of his mouth...

Where did I say we would default on our debt? Nowhere. In fact, I think it's very unlikely. It is more likely we would default on other obligations.

You are arguing the downgrade, which they would do for debt. They did not and would not downgrade us for not sending out welfare checks and you provided no such evidence that they would.

 

[kaz]

S&P made it pretty clear that one of the reason for downgrade was the ineffectiveness of American political parties.

"More broadly, the downgrade reflects our view that the effectiveness,
stability, and predictability of American policymaking and political
institutions have weakened at a time of ongoing fiscal and economic
challenges to a degree more than we envisioned when we assigned a
negative outlook to the rating on April 18, 2011."
S&P | United States of America Long-Term Rating Lowered To 'AA+' Due To Political Risks, Rising Debt Burden; Outlook Negative | Americas

Yes, we do have the revenue to service our debt. However, servicing debt is not the only obligation the government has. Laws passed by congress has obligated the government to provide a multitude of services. When the congress doesn't act on either the budget or the debt ceiling, then the administration must decide which obligations are to be met and which aren't. Congress by lack of action chooses to let the administration make the decisions and the administration chooses what obligations are to be met.

Seriously, Flopper, you are saying wow, they might not send out welfare checks like social security, let's downgrade their debt? But wait, you're not saying we would fail to make debt payments. But that's why they downgraded our debt. Say what?

As I said, you're talking out of both sides of your mouth. When you figure out what your argument is, let me know. Maybe you and Toro can huddle because he can't figure out what he's actually saying either on this.

 

[KissMy]

Catastrophe... that like the end of the world or something?

It won't happen, can't happen, we have tons of money to pay interest on the debt. A default could only happen by order from the president. However, it would be an order that is not implemented. The president would be removed from office if he ever gave such an order.

Selective default is against the law. Treasurer is liable & can be fired or jailed. Treasury will follow the law & allocate the funds accordingly. There will be a default on market debt instruments without a new law passed by congress & signed by the president reallocating funds.

ARTICLE VI. TERMINATION FOR CAUSE AND OTHER REMEDIES

Section 6.1 General Events of Default.

In the event that either:
(a) any representation, warranty, certification, assurance or any other statement of fact contained in this Agreement or the Application of the Participating State including, but not limited to, the Assurances (Non-Construction) contained as part of the Application, or any representation or warranty set forth in any document, report, certificate, financial statement or instrument now or hereafter delivered to Treasury in connection with this Agreement, is found to be inaccurate, false, incomplete or misleading when
made, in any material respect;
or
(b) the Participating State materially fails to observe, comply with, meet or perform any term, covenant, agreement or other provision contained in this Agreement including, but not limited to, the Participating State’s failure to submit complete and timely quarterly reports or annual reports, or the Participating State ceases to use the Allocated Funds to undertake the activities authorized in Annex 1 attached hereto;

Treasury, in its sole discretion, may find the Participating State to be in default.

Section 6.2 Discretionary Remedies.

If Treasury finds the Participating State to be in default under Section 6.1 of this Agreement, Treasury may, in its sole discretion, take any one or more of the following actions, subject to Section 6.6 of this Agreement:

(a) withhold Disbursements pending the Participating State’s correction of the default;
or
(b) wholly or partly reduce, suspend, or terminate the commitment of Treasury to make Disbursements to the Participating State under this Agreement, whereupon the commitment of Treasury to make Disbursements to the Participating State under this Agreement will be reduced, suspended, or terminated, as the case may be.

Section 6.3 Specific Events of Default

In the event of a Treasury Inspector General audit finding of either:
(a) intentional or reckless misuse of Allocated Funds by the Participating State;
or
(b) the Participating State having intentionally made misstatements in any report issued to Treasury under the Act; Treasury shall find the Participating State to be in default.

Section 6.4 Mandatory Remedies.

If Treasury finds the Participating State to be in default under Section 6.3 of this Agreement, Treasury shall take the following actions:
(a) in the case of an event of default under Section 6.3(a), recoup any misused Allocated Funds that have been disbursed to the Participating State;
or
(b) in the case of an event of default under Section 6.3(b), terminate the commitment of Treasury to make Disbursements to the Participating State under this Agreement, and find the State ineligible to receive any additional funds under the Act, whereupon the commitment of Treasury to make Disbursements to the Participating State under this Agreement will be terminated and the State will be ineligible to receive any additional funds under the Act.

Subject -> Verb

I'm gonna guess that a Participating State is not the federal government. More likely this set of laws apply to the States themselves, such as the Texas.

So you want Treasury to decide? What if they decide to pay all Welfare, Foodstamps, Unemployment, Obamacare & none to bonds?

 

[RKMBrown]

Selective default is against the law. Treasurer is liable & can be fired or jailed. Treasury will follow the law & allocate the funds accordingly. There will be a default on market debt instruments without a new law passed by congress & signed by the president reallocating funds.

ARTICLE VI. TERMINATION FOR CAUSE AND OTHER REMEDIES

Section 6.1 General Events of Default.

In the event that either:
(a) any representation, warranty, certification, assurance or any other statement of fact contained in this Agreement or the Application of the Participating State including, but not limited to, the Assurances (Non-Construction) contained as part of the Application, or any representation or warranty set forth in any document, report, certificate, financial statement or instrument now or hereafter delivered to Treasury in connection with this Agreement, is found to be inaccurate, false, incomplete or misleading when
made, in any material respect;
or
(b) the Participating State materially fails to observe, comply with, meet or perform any term, covenant, agreement or other provision contained in this Agreement including, but not limited to, the Participating State’s failure to submit complete and timely quarterly reports or annual reports, or the Participating State ceases to use the Allocated Funds to undertake the activities authorized in Annex 1 attached hereto;

Treasury, in its sole discretion, may find the Participating State to be in default.

Section 6.2 Discretionary Remedies.

If Treasury finds the Participating State to be in default under Section 6.1 of this Agreement, Treasury may, in its sole discretion, take any one or more of the following actions, subject to Section 6.6 of this Agreement:

(a) withhold Disbursements pending the Participating State’s correction of the default;
or
(b) wholly or partly reduce, suspend, or terminate the commitment of Treasury to make Disbursements to the Participating State under this Agreement, whereupon the commitment of Treasury to make Disbursements to the Participating State under this Agreement will be reduced, suspended, or terminated, as the case may be.

Section 6.3 Specific Events of Default

In the event of a Treasury Inspector General audit finding of either:
(a) intentional or reckless misuse of Allocated Funds by the Participating State;
or
(b) the Participating State having intentionally made misstatements in any report issued to Treasury under the Act; Treasury shall find the Participating State to be in default.

Section 6.4 Mandatory Remedies.

If Treasury finds the Participating State to be in default under Section 6.3 of this Agreement, Treasury shall take the following actions:
(a) in the case of an event of default under Section 6.3(a), recoup any misused Allocated Funds that have been disbursed to the Participating State;
or
(b) in the case of an event of default under Section 6.3(b), terminate the commitment of Treasury to make Disbursements to the Participating State under this Agreement, and find the State ineligible to receive any additional funds under the Act, whereupon the commitment of Treasury to make Disbursements to the Participating State under this Agreement will be terminated and the State will be ineligible to receive any additional funds under the Act.

Subject -> Verb

I'm gonna guess that a Participating State is not the federal government. More likely this set of laws apply to the States themselves, such as the Texas.

So you want Treasury to decide? What if they decide to pay all Welfare, Foodstamps, Unemployment, Obamacare & none to bonds?

I believe it's the duty of the Executive Branch to identify the priority order when the revenue + borrowing does not sufficiently fund the approved spending for discretionary items. Yell if I'm wrong.

 

[RKMBrown]

At any rate... discretionary is separated into military (active) and non-military. Non-discretionary (mandatory) items is SS/Medicare/Medicaid, Federal and Military retirement, Unemployment, SNAP, ... So most of retirement stuff and welfare is mandatory. The rest discretionary.

So I suppose Obama could cut the military up or boot the TSA.

 

[RKMBrown]

As a matter of fact, as I posted just yesterday on this thread, I sold every last share of stock I owned at 4 PM Eastern time, Monday of this week.

Guess you lost money today. Hehe

The DOW went up by .2%.

Yeah, i'm going to lose a lot of sleep about having missed out on that!

The pain is lessoned somewhat by the fact that I missed out on the 1.5% DROP in the DOW yesterday.

Dow up another 2.18% today... he he.. I'll yell when I'm out or better yet why don't you tell me when you are getting back in so I know when to sell.

 

[KissMy]

The United States defaulted on some Treasury bills in April 1979 we paid a steep price for stiffing bondholders, because the interest rates doubled. They went from 8% to 16% & it took 8 long years before rates came back down to 8%. This would destroy the US economy if it happened today. Yet we now are intentionally going to default. Bondholders will certainly be more pissed about that than they were for the mistake in 1979.

 

[RKMBrown]

Rofl tears. You are so funny. Everything you said is a lie. But it is funny.

The 79 thing was a technical error in processing. The rates of the time did not double because of the error.

 

[LittleNipper]

The United States defaulted on some Treasury bills in April 1979 we paid a steep price for stiffing bondholders, because the interest rates doubled. They went from 8% to 16% & it took 8 long years before rates came back down to 8%. This would destroy the US economy if it happened today. Yet we now are intentionally going to default. Bondholders will certainly be more pissed about that than they were for the mistake in 1979.

Do you realize that that would mean that you'd actually make money with money in a bank account. Right now the interest earned on even a money market account is barely 1%. I remember when money market accounts were earning well over 10%. Sorry, if interest rates go up that is not always a bad thing.

 

[HenryBHough]

I fondly recall personally financing the sale of some real estate at 23% back in those days. A 20-year note at 23% per year! Damn fools could have refinanced a couple of years later at about 8% but couldn't get off their asses and the cash kept on rolling in!

They used to get specially-purchased very high quality Christmas cards from me. Didn't mind spending their money on them.....

 

[KissMy]

FT: Raise your hand if you know how the Treasury’s payment systems work… Anyone?