Would you raise the interest rate on your own mortgage or credit card?

[kaz]

It had to do with the political disfunction that increased the odds an interest payment would not be made on time. Ergo, it had more to do with debt ceiling.

Which would not be an issue if it were not for our spending levels. And if you read their statement on the downgrade, their main points were deficit spending and total debt as a percent of GDP, which are not addressed by raising the ceiling.

The issue for the ratings agencies is the deficit, not spending levels per se. If taxes were higher, deficits would be lower and the ratings agencies. For example, Germany has much higher taxes than America and has a higher rating. And the ratings agencies don't buy this nonsense that increasing taxes doesn't decrease the deficit. Saying that it is only spending and not taxes at all demonstrates the political disfunction S&P cited.

You said it was the ceiling, I said it was spending. Now you're sort of changing to taxes on the fly and making it sound like that was your original argument. You said, "Ergo, it had more to do with debt ceiling." I don't object to changing your mind, I just want to point out that you are.

As for taxes, I concede your point in theory, they could raise taxes. However, the reality is that with our massive deficits, no tax increase would work because tax increases would have to be so large they would dramatically stifle economic growth and cut revenue.

I think your argument on another post was better. If we held spending and grew the economy, then deficits would become more manageable. But we can't grow the economy fast enough to cover our current debt load as well as the soaring spending. And now we're going down the Obamacare path as well. We're headed for an iceberg.

 

[itfitzme]

It's true. We can't afford a dime of new debt, regardless of how fast the economy grows.

"liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate... it will purge the rottenness out of the system."

Of course we can afford more debt regardless of how fast the economy grows.

What matters is not the absolute debt but the debt relative to output. If the debt is growing at 4% and nominal GDP is increasing at 6%, then the financial condition of the country is improving. An increase in the debt may not be the optimal outcome but we can certainly afford it if its growing less fast than the nominal output of the economy.

The one thing everyone who is not named Krugman agrees upon is that our current debt is unsustainable, even Krugman agreed with it when Bush was president. We might be able to pretend we can handle the debt, but we cannot, and we need to start making plans based on the reality that we cannot, even if those plans mean increasing the debt now.

How is it not sustainable? What is this magical mechanism that makes it unsustainable. I keep asking this question and no one, not even you, have presented anything.

The only thing that is a problem is that at some point, revenues equals interest payments. At that point, it's hard to accumulate more without increasing revenues. But, that is simply not borrowing more, which is the current drive, to not borrow more.

So other than the inability to borrow more, what is this mechanism that makes it unsustainable?

 

[itfitzme]

Which would not be an issue if it were not for our spending levels. And if you read their statement on the downgrade, their main points were deficit spending and total debt as a percent of GDP, which are not addressed by raising the ceiling.

The issue for the ratings agencies is the deficit, not spending levels per se. If taxes were higher, deficits would be lower and the ratings agencies. For example, Germany has much higher taxes than America and has a higher rating. And the ratings agencies don't buy this nonsense that increasing taxes doesn't decrease the deficit. Saying that it is only spending and not taxes at all demonstrates the political disfunction S&P cited.

You said it was the ceiling, I said it was spending. Now you're sort of changing to taxes on the fly and making it sound like that was your original argument. You said, "Ergo, it had more to do with debt ceiling." I don't object to changing your mind, I just want to point out that you are.

As for taxes, I concede your point in theory, they could raise taxes. However, the reality is that with our massive deficits, no tax increase would work because tax increases would have to be so large they would dramatically stifle economic growth and cut revenue.

I think your argument on another post was better. If we held spending and grew the economy, then deficits would become more manageable. But we can't grow the economy fast enough to cover our current debt load as well as the soaring spending. And now we're going down the Obamacare path as well. We're headed for an iceberg.

You are correct on the rate of change to taxes being an issue. And, that has been the issue for thirty years, the failure to match taxes with increased revenues.

The rest is pure speculation.

 

[Quantum Windbag]

I learn so much by taking something specific that someone says and researching it. Invariably, the likes of KAZ turn out to be completely wrong. How is it that they can be so completely wrong when it is so simple to just go look it up?

I will tell you how. They experience their world, not through their eyes and ears, but through their feelings. They organize it according to "I like it/don't like it". So, when they like the conclusion that they reach, they believe it must be true because it is what they like. It is the hallmark of stupidity.

No wonder Wall Street sucks, I'm an MBA in finance who spent most of my career in the financial services industry. At GE and in New York.

Still waiting for your explanation how we can't pay debt when tax revenue is greater than debt payments by a large margin.

Go ask the Treasury Department. I posted the link. It seems to be that, in fact, the revenue minus the statutory obligations isn't enough to cover the debt payments.

I have to believe the Treasury Department when they say so.

Here, I pulled it forward.

Well, apparently you are full of shit.

Introduction: 6 Consequences if the Debt Ceiling Isn't Raised - US News & World Report

“Congress has until around August 2 to raise the legal limit on debt, or the United States will risk going into default, according to the U.S. Treasury Department”

http://www.nytimes.com/2013/09/26/bu...ober.html?_r=0

“The Treasury has handed Congress an urgent deadline: Oct. 17.” “On that day, unless Congress were to raise the debt ceiling, the Treasury would have only $30 billion cash on hand, putting the United States on the precipice of an unprecedented default, the department said on Wednesday.”

Debt Limit
Debt Limit

“Failing to increase the debt limit would have catastrophic economic consequences. It would cause the government to default on its legal obligations – an unprecedented event in American history. That would precipitate another financial crisis and threaten the jobs and savings of everyday Americans – putting the United States right back in a deep economic hole, just as the country is recovering from the recent recession. “

That's what I got.

The Treasury Department is run by politicians. Think about that for a minute, then consider how much weight you want to put on their talking points.

As far as the credit rating goes, the only thing that matters is paying off the interest rate. No one, not even Treasury, is saying we don't have enough for that.

Now, let us deal with the rest of it. Statutory obligations includes everything in the budget, not just the programs you are worried about. The last time I checked the numbers there was plenty of money to continue sending out SS and welfare checks, and, worst case scenario, the government can delay paying Medicare a few weeks.

As far as I know, no one is saying we can meet all the statutory obligations if we don't raise the debt ceiling. However, those statutory obligations include things like the Denali Commission in Alaska, which is so useless that it recently recommended to Congress that it be dissolved. Everything the government pays for is, by law, statutory, so an argument that we won't be able to pay all of the obligations is meant solely to scare people.

Roughly 40% of government workers will be laid off because we won't be able to meet our statutory obligations to pay them. That leaves 60% of the government functioning, which should be enough to cover the basic needs, despite the way Obama tries to scare you about the danger of not giving him everything he wants.

 

[itfitzme]

No wonder Wall Street sucks, I'm an MBA in finance who spent most of my career in the financial services industry. At GE and in New York.

Still waiting for your explanation how we can't pay debt when tax revenue is greater than debt payments by a large margin.

Go ask the Treasury Department. I posted the link. It seems to be that, in fact, the revenue minus the statutory obligations isn't enough to cover the debt payments.

I have to believe the Treasury Department when they say so.

Here, I pulled it forward.

Well, apparently you are full of shit.

Introduction: 6 Consequences if the Debt Ceiling Isn't Raised - US News & World Report

“Congress has until around August 2 to raise the legal limit on debt, or the United States will risk going into default, according to the U.S. Treasury Department”

http://www.nytimes.com/2013/09/26/bu...ober.html?_r=0

“The Treasury has handed Congress an urgent deadline: Oct. 17.” “On that day, unless Congress were to raise the debt ceiling, the Treasury would have only $30 billion cash on hand, putting the United States on the precipice of an unprecedented default, the department said on Wednesday.”

Debt Limit
Debt Limit

“Failing to increase the debt limit would have catastrophic economic consequences. It would cause the government to default on its legal obligations – an unprecedented event in American history. That would precipitate another financial crisis and threaten the jobs and savings of everyday Americans – putting the United States right back in a deep economic hole, just as the country is recovering from the recent recession. “

That's what I got.

The Treasury Department is run by politicians. Think about that for a minute, then consider how much weight you want to put on their talking points.

As far as the credit rating goes, the only thing that matters is paying off the interest rate. No one, not even Treasury, is saying we don't have enough for that.

Now, let us deal with the rest of it. Statutory obligations includes everything in the budget, not just the programs you are worried about. The last time I checked the numbers there was plenty of money to continue sending out SS and welfare checks, and, worst case scenario, the government can delay paying Medicare a few weeks.

As far as I know, no one is saying we can meet all the statutory obligations if we don't raise the debt ceiling. However, those statutory obligations include things like the Denali Commission in Alaska, which is so useless that it recently recommended to Congress that it be dissolved. Everything the government pays for is, by law, statutory, so an argument that we won't be able to pay all of the obligations is meant solely to scare people.

Roughly 40% of government workers will be laid off because we won't be able to meet our statutory obligations to pay them. That leaves 60% of the government functioning, which should be enough to cover the basic needs, despite the way Obama tries to scare you about the danger of not giving him everything he wants.

Really, you are going with the "it's run by politicians" bull shit? I take it you're in the BEA and BLS are lying about the GDP and Unemployment rate clan too?

Everyone is lying? Is that your stance on things?

Excuse my silliness for believing the Treasury Department over .... you....

 

[Quantum Windbag]

What are you talking about?

The answers are

1) No one would raise the interest rate on their mortgage or credit card.

2) Right.

3) This is apparently true, that not raising the debt ceiling will result in
a) the US gov't defaulting on it's obligations.
b) The markets demanding a higher rate on t-bills.

4) No.

So, it appears that you are the one that makes stupid look like Einstein. Especially given that a) you said nothing of substance and b) your wrong about what you didn't manage to say.

Are those the answers?

1. There are actually situations where a higher interest rate is the right choice.
2. There have been multiple time in history when the debt ceiling wasn't raised that did not result in a decrease in the credit rating. In fact, the only decrease we ever had was the result of not dealing with long term debt, not for not raising the debt ceiling.
3. Not being able to borrow money does not mean that the US government will not be able to pay its bills. The government gets money every single day, it will still have more than enough to pay off the only thing that really matters, and over half of non defense related employees will still get a paycheck.
4. Our interest rate is going to go up even if we raise the debt ceiling, everyone knows that.

Do you want to join the official "Make stupid look like Einstein" club? All you have to do is repeat your idiotic babbling.

Your point being what? That the credit rating is guaranteed to remain in place and that the interest cannot possibly be raised? Currently, it does appear that the markets will respond by downgrading the US credit and raising the interest rate. Seeing as you don't speak for the markets, your personal opinion doesn't mean much.

The government may get money every day but that doesn't mean it will meet it's debt obligations. If you bother to go look it up, the Treasury Department has made it perfectly clear that it must pay the non-discretionary obligations first and will not have sufficient funds to make payment of the full debt obligations.

So, seeing as the Treasury Department is the one that pays the bills, I do think that their opinion takes precedence over yours. See how that works, "Einstein"?


Along with the previously presented information, I find;

"If Congress fails to increase the debt limit, the government would have to stop, limit, or delay
payments on a broad range of legal obligations, including Social Security and Medicare benefits,
military salaries, interest on the national debt, tax refunds, and many other commitments."

If you have other information, then present it. Because as far as I can tell, the Treasury Department would be the final authority on it.

The markets are scarfing up bonds at negative interest rates despite the credit downgrade. The markets have zip to do with the credit rating.

Seriously dude, keep posting, it is amusing.

 

[Quantum Windbag]

Of course we can afford more debt regardless of how fast the economy grows.

What matters is not the absolute debt but the debt relative to output. If the debt is growing at 4% and nominal GDP is increasing at 6%, then the financial condition of the country is improving. An increase in the debt may not be the optimal outcome but we can certainly afford it if its growing less fast than the nominal output of the economy.

The one thing everyone who is not named Krugman agrees upon is that our current debt is unsustainable, even Krugman agreed with it when Bush was president. We might be able to pretend we can handle the debt, but we cannot, and we need to start making plans based on the reality that we cannot, even if those plans mean increasing the debt now.

How is it not sustainable? What is this magical mechanism that makes it unsustainable. I keep asking this question and no one, not even you, have presented anything.

The only thing that is a problem is that at some point, revenues equals interest payments. At that point, it's hard to accumulate more without increasing revenues. But, that is simply not borrowing more, which is the current drive, to not borrow more.

So other than the inability to borrow more, what is this mechanism that makes it unsustainable?

There is nothing magical about it unless you think math is magic. If you do, I can't talk to you.

 

[itfitzme]

Secretary Lew Warns Of Dangers Of Debt Limit Delay In Speech To The Economic Club Of Washington


"Recalling the damage caused in 2011 by the drawn-out debate in Congress over raising the nation’s debt limit, Secretary Lew cautioned that repeating the same mistake this time around could once again disrupt financial markets and roll back economic progress. In remarks to The Economic Club of Washington​, D.C. yesterday, Lew warned that the 2011 debate fundamentally changed the stakes as leaders in Congress – for the first time ever - held a debate “over whether the United States should voluntarily default on its obligations.” Though Congress ultimately raised the debt limit, Lew noted that the brinksmanship “led to business uncertainty, a drop in consumer confidence, and the first ever downgrade of the nation’s AAA credit rating."

 

[itfitzme]

The one thing everyone who is not named Krugman agrees upon is that our current debt is unsustainable, even Krugman agreed with it when Bush was president. We might be able to pretend we can handle the debt, but we cannot, and we need to start making plans based on the reality that we cannot, even if those plans mean increasing the debt now.

How is it not sustainable? What is this magical mechanism that makes it unsustainable. I keep asking this question and no one, not even you, have presented anything.

The only thing that is a problem is that at some point, revenues equals interest payments. At that point, it's hard to accumulate more without increasing revenues. But, that is simply not borrowing more, which is the current drive, to not borrow more.

So other than the inability to borrow more, what is this mechanism that makes it unsustainable?

There is nothing magical about it unless you think math is magic. If you do, I can't talk to you.

You have presented nothing here. All you have is a "it's obvious". So what is the mechanism? The flow of funds? Something real except some vague image and feeling you can't seem to express.

Hey, I'm not saying it isn't, just that you haven't demonstrated shit.

Perhaps that's why you 'can't talk", because you have nothing to describe...

 

[Quantum Windbag]

Go ask the Treasury Department. I posted the link. It seems to be that, in fact, the revenue minus the statutory obligations isn't enough to cover the debt payments.

I have to believe the Treasury Department when they say so.

Here, I pulled it forward.

That's what I got.

The Treasury Department is run by politicians. Think about that for a minute, then consider how much weight you want to put on their talking points.

As far as the credit rating goes, the only thing that matters is paying off the interest rate. No one, not even Treasury, is saying we don't have enough for that.

Now, let us deal with the rest of it. Statutory obligations includes everything in the budget, not just the programs you are worried about. The last time I checked the numbers there was plenty of money to continue sending out SS and welfare checks, and, worst case scenario, the government can delay paying Medicare a few weeks.

As far as I know, no one is saying we can meet all the statutory obligations if we don't raise the debt ceiling. However, those statutory obligations include things like the Denali Commission in Alaska, which is so useless that it recently recommended to Congress that it be dissolved. Everything the government pays for is, by law, statutory, so an argument that we won't be able to pay all of the obligations is meant solely to scare people.

Roughly 40% of government workers will be laid off because we won't be able to meet our statutory obligations to pay them. That leaves 60% of the government functioning, which should be enough to cover the basic needs, despite the way Obama tries to scare you about the danger of not giving him everything he wants.

Really, you are going with the "it's run by politicians" bull shit? I take it you're in the BEA and BLS are lying about the GDP and Unemployment rate clan too?

Everyone is lying? Is that your stance on things?

Excuse my silliness for believing the Treasury Department over .... you....

From Wiki

Born in New York City, Lew received his A.B. from Harvard College and his J.D. from Georgetown University Law Center. Lew began his career as a legislative assistant to Representative Joe Moakley and as a senior policy adviser to former House Speaker Tip O'Neill. Lew then worked as an attorney in private practice before working as a deputy in Boston's office of management and budget. In 1993, he began work for the Clinton Administration as Special Assistant to the President. In 1994 Lew served as Associate Director for Legislative Affairs and Deputy Director of the Office of Management and Budget, where he served as Director of that agency from 1998 to 2001 and from 2010 to 2012. After leaving the Clinton Administration, Lew worked as the Executive Vice President for Operations at New York University from 2001 to 2006, and as the COO at Citigroup from 2006 to 2008. Lew then served as the first Deputy Secretary of State for Management and Resources, from 2009 to 2010.

Sounds like a politician to me.

And, for the record, everyone lies.

If you want to prove me wrong, enjoy trying to find the exception.

 

[itfitzme]

Are those the answers?

1. There are actually situations where a higher interest rate is the right choice.
2. There have been multiple time in history when the debt ceiling wasn't raised that did not result in a decrease in the credit rating. In fact, the only decrease we ever had was the result of not dealing with long term debt, not for not raising the debt ceiling.
3. Not being able to borrow money does not mean that the US government will not be able to pay its bills. The government gets money every single day, it will still have more than enough to pay off the only thing that really matters, and over half of non defense related employees will still get a paycheck.
4. Our interest rate is going to go up even if we raise the debt ceiling, everyone knows that.

Do you want to join the official "Make stupid look like Einstein" club? All you have to do is repeat your idiotic babbling.

Your point being what? That the credit rating is guaranteed to remain in place and that the interest cannot possibly be raised? Currently, it does appear that the markets will respond by downgrading the US credit and raising the interest rate. Seeing as you don't speak for the markets, your personal opinion doesn't mean much.

The government may get money every day but that doesn't mean it will meet it's debt obligations. If you bother to go look it up, the Treasury Department has made it perfectly clear that it must pay the non-discretionary obligations first and will not have sufficient funds to make payment of the full debt obligations.

So, seeing as the Treasury Department is the one that pays the bills, I do think that their opinion takes precedence over yours. See how that works, "Einstein"?


Along with the previously presented information, I find;

"If Congress fails to increase the debt limit, the government would have to stop, limit, or delay
payments on a broad range of legal obligations, including Social Security and Medicare benefits,
military salaries, interest on the national debt, tax refunds, and many other commitments."

If you have other information, then present it. Because as far as I can tell, the Treasury Department would be the final authority on it.

The markets are scarfing up bonds at negative interest rates despite the credit downgrade. The markets have zip to do with the credit rating.

Seriously dude, keep posting, it is amusing.

No one said that the markets won't buy the bonds. They remain the least risky and best long term in-spite of the downgrade. But that doesn't change the point of the increase in perceived risk, increase in rate, and effects on the market.

All you have is your unqualified opinion.

Why should I give a shit about your opinion? Go talk to your mommy.

 

[Quantum Windbag]

How is it not sustainable? What is this magical mechanism that makes it unsustainable. I keep asking this question and no one, not even you, have presented anything.

The only thing that is a problem is that at some point, revenues equals interest payments. At that point, it's hard to accumulate more without increasing revenues. But, that is simply not borrowing more, which is the current drive, to not borrow more.

So other than the inability to borrow more, what is this mechanism that makes it unsustainable?

There is nothing magical about it unless you think math is magic. If you do, I can't talk to you.

You have presented nothing here. All you have is a "it's obvious". So what is the mechanism? The flow of funds? Something real except some vague image and feeling you can't seem to express.

Hey, I'm not saying it isn't, just that you haven't demonstrated shit.

Perhaps that's why you 'can't talk", because you have nothing to describe...

Wait a second here, you asked me what the magical mechanism is that makes debt unsustainable, and then berate me for pointing out that math is n't magic?

I was wrong, you make the OP look like Einstein.

Tell you what, though, feel free to post an argument about why I am wrong, and I will slaughter it.

 

[itfitzme]

The Treasury Department is run by politicians. Think about that for a minute, then consider how much weight you want to put on their talking points.

As far as the credit rating goes, the only thing that matters is paying off the interest rate. No one, not even Treasury, is saying we don't have enough for that.

Now, let us deal with the rest of it. Statutory obligations includes everything in the budget, not just the programs you are worried about. The last time I checked the numbers there was plenty of money to continue sending out SS and welfare checks, and, worst case scenario, the government can delay paying Medicare a few weeks.

As far as I know, no one is saying we can meet all the statutory obligations if we don't raise the debt ceiling. However, those statutory obligations include things like the Denali Commission in Alaska, which is so useless that it recently recommended to Congress that it be dissolved. Everything the government pays for is, by law, statutory, so an argument that we won't be able to pay all of the obligations is meant solely to scare people.

Roughly 40% of government workers will be laid off because we won't be able to meet our statutory obligations to pay them. That leaves 60% of the government functioning, which should be enough to cover the basic needs, despite the way Obama tries to scare you about the danger of not giving him everything he wants.

Really, you are going with the "it's run by politicians" bull shit? I take it you're in the BEA and BLS are lying about the GDP and Unemployment rate clan too?

Everyone is lying? Is that your stance on things?

Excuse my silliness for believing the Treasury Department over .... you....

From Wiki

Born in New York City, Lew received his A.B. from Harvard College and his J.D. from Georgetown University Law Center. Lew began his career as a legislative assistant to Representative Joe Moakley and as a senior policy adviser to former House Speaker Tip O'Neill. Lew then worked as an attorney in private practice before working as a deputy in Boston's office of management and budget. In 1993, he began work for the Clinton Administration as Special Assistant to the President. In 1994 Lew served as Associate Director for Legislative Affairs and Deputy Director of the Office of Management and Budget, where he served as Director of that agency from 1998 to 2001 and from 2010 to 2012. After leaving the Clinton Administration, Lew worked as the Executive Vice President for Operations at New York University from 2001 to 2006, and as the COO at Citigroup from 2006 to 2008. Lew then served as the first Deputy Secretary of State for Management and Resources, from 2009 to 2010.

Sounds like a politician to me.

And, for the record, everyone lies.

If you want to prove me wrong, enjoy trying to find the exception.

So? I'm sure you hear lots of voices in your head. It has nothing to do with reality and your personal opinion isn't worth the bits and bytes it's recorded in.

You keep mistaking your own self love for credentials.

 

[itfitzme]

There is nothing magical about it unless you think math is magic. If you do, I can't talk to you.

You have presented nothing here. All you have is a "it's obvious". So what is the mechanism? The flow of funds? Something real except some vague image and feeling you can't seem to express.

Hey, I'm not saying it isn't, just that you haven't demonstrated shit.

Perhaps that's why you 'can't talk", because you have nothing to describe...

Wait a second here, you asked me what the magical mechanism is that makes debt unsustainable, and then berate me for pointing out that math is n't magic?

I was wrong, you make the OP look like Einstein.

Uh, what is the mechanism, Einstein? Cuz your opinion that it isn't just magical thinking in your own mind is meaningless. You have yet to present a) objective evidence b) accounting or c) economic deductive reasoning.

Are you completely incapable of understanding the difference between some vague feeling you have followed by a vague statement and an actual description of physical reality? Really? Because I am honestly in disbelief if you really don't get the difference.

 

[Derideo_Te]

Go ask the Treasury Department. I posted the link. It seems to be that, in fact, the revenue minus the statutory obligations isn't enough to cover the debt payments.

I have to believe the Treasury Department when they say so.

Here, I pulled it forward.

That's what I got.

The Treasury Department is run by politicians. Think about that for a minute, then consider how much weight you want to put on their talking points.

As far as the credit rating goes, the only thing that matters is paying off the interest rate. No one, not even Treasury, is saying we don't have enough for that.

Now, let us deal with the rest of it. Statutory obligations includes everything in the budget, not just the programs you are worried about. The last time I checked the numbers there was plenty of money to continue sending out SS and welfare checks, and, worst case scenario, the government can delay paying Medicare a few weeks.

As far as I know, no one is saying we can meet all the statutory obligations if we don't raise the debt ceiling. However, those statutory obligations include things like the Denali Commission in Alaska, which is so useless that it recently recommended to Congress that it be dissolved. Everything the government pays for is, by law, statutory, so an argument that we won't be able to pay all of the obligations is meant solely to scare people.

Roughly 40% of government workers will be laid off because we won't be able to meet our statutory obligations to pay them. That leaves 60% of the government functioning, which should be enough to cover the basic needs, despite the way Obama tries to scare you about the danger of not giving him everything he wants.

Really, you are going with the "it's run by politicians" bull shit? I take it you're in the BEA and BLS are lying about the GDP and Unemployment rate clan too?

Everyone is lying? Is that your stance on things?

Excuse my silliness for believing the Treasury Department over .... you....

Interesting how they cannot provide a single credible source to dispute those that you have posted. Instead they spout nonsensical allegations that have no basis in reality. It is little wonder that I have lost all patience with those who prefer mindless rhetoric to hard facts.

 

[Quantum Windbag]

Your point being what? That the credit rating is guaranteed to remain in place and that the interest cannot possibly be raised? Currently, it does appear that the markets will respond by downgrading the US credit and raising the interest rate. Seeing as you don't speak for the markets, your personal opinion doesn't mean much.

The government may get money every day but that doesn't mean it will meet it's debt obligations. If you bother to go look it up, the Treasury Department has made it perfectly clear that it must pay the non-discretionary obligations first and will not have sufficient funds to make payment of the full debt obligations.

So, seeing as the Treasury Department is the one that pays the bills, I do think that their opinion takes precedence over yours. See how that works, "Einstein"?


Along with the previously presented information, I find;

"If Congress fails to increase the debt limit, the government would have to stop, limit, or delay
payments on a broad range of legal obligations, including Social Security and Medicare benefits,
military salaries, interest on the national debt, tax refunds, and many other commitments."

If you have other information, then present it. Because as far as I can tell, the Treasury Department would be the final authority on it.

The markets are scarfing up bonds at negative interest rates despite the credit downgrade. The markets have zip to do with the credit rating.

Seriously dude, keep posting, it is amusing.

No one said that the markets won't buy the bonds. They remain the least risky and best long term in-spite of the downgrade. But that doesn't change the point of the increase in perceived risk, increase in rate, and effects on the market.

All you have is your unqualified opinion.

Why should I give a shit about your opinion? Go talk to your mommy.

The interest rate on bonds is going to go up no, the only question is when.

Until you get that fundamental fact through your partisan stupidity, there is no sense even trying to adress your points because you are assuming that the cause is actually the result.

 

[itfitzme]

Really, I honestly am in utter disbelief at the mind-numbing and meaningless opinions lacking in any substance.

 

[Quantum Windbag]

You have presented nothing here. All you have is a "it's obvious". So what is the mechanism? The flow of funds? Something real except some vague image and feeling you can't seem to express.

Hey, I'm not saying it isn't, just that you haven't demonstrated shit.

Perhaps that's why you 'can't talk", because you have nothing to describe...

Wait a second here, you asked me what the magical mechanism is that makes debt unsustainable, and then berate me for pointing out that math is n't magic?

I was wrong, you make the OP look like Einstein.

Uh, what is the mechanism, Einstein? Cuz your opinion that it isn't just magical thinking in your own mind is meaningless. You have yet to present a) objective evidence b) accounting or c) economic deductive reasoning.

Are you completely incapable of understanding the difference between some vague feeling you have followed by a vague statement and an actual description of physical reality? Really? Because I am honestly in disbelief if you really don't get the difference.

Like I said, feel free to post an argument that the debt load is not a problem despite the fact that the OMB, the CBO, Obama, the Treasury Department, and every economist not named Krugman, says it is. Asking me to explain the mechanism of that is like asking me to explain the mechanism behind Oxygen.

 

[itfitzme]

The markets are scarfing up bonds at negative interest rates despite the credit downgrade. The markets have zip to do with the credit rating.

Seriously dude, keep posting, it is amusing.

No one said that the markets won't buy the bonds. They remain the least risky and best long term in-spite of the downgrade. But that doesn't change the point of the increase in perceived risk, increase in rate, and effects on the market.

All you have is your unqualified opinion.

Why should I give a shit about your opinion? Go talk to your mommy.

The interest rate on bonds is going to go up no, the only question is when.

Until you get that fundamental fact through your partisan stupidity, there is no sense even trying to adress your points because you are assuming that the cause is actually the result.

Dude, pointing out that the interest rates fluctuate eventually isn't meaningful. Guess what, they go up and down for multiple causes. So? It doesn't prove anything.

I've been expecting you to post data on the interest rates and the last downgrade and debt limit crisis, showing that they didn't go up. Better yet, went down.

I can tell you that, due to the last debt limit crisis. Somewhere, buried in photobucket, I have a graph that shows the effect of the last debt limit crisis on the stock market. It did have an effect.

So, why should we believe that interest rates won't?

 

[itfitzme]

"Four days later, on August 5, the credit-rating agency Standard & Poor's downgraded the credit rating of US government bond for the first time in the country's history. Markets around the world as well as the three major indexes in the US then experienced their most volatile week since the 2008 financial crisis with the Dow Jones Industrial Average plunging for 635 points (or 5.6%) in one day.

Yields on US Treasuries, however, dropped as investors, anxious over the dismal prospects of the US economic future and the ongoing European sovereign-debt crisis, fled into the safety of US government bonds and bonds of other safe haven economies.[3]

Moody's and Fitch, however, have retained America's credit rating at AAA. The Government Accountability Office (GAO) estimated that the delay in raising the debt ceiling increased government borrowing costs by $1.3 billion in 2011 and also pointed to unestimated higher costs in later years.[4]"

There we go. Demand increases due to stock market volatility and rates fall.

So, what if the government actually defaults?

Are investors going to react the same?