Consequences of a US default

[Teatownclown]

http://www.cnn.com/2011/POLITICS/07/12/debt.talks/index.html

OK, maybe the Odumba strategy is to turn our patriotic citizens who are still holding out into GOP haters like the rest of us.

[we vs us]

Really. What was the point of that, I mean other than to scare retired people.

Or to actually tell the truth about what a default would mean?

[Gaspar]

Or to actually tell the truth about what a default would mean?

Why would we choose to default?  If the debt ceiling is not raised, it does not mean we default.

It means we have to curtail spending, and recognize priorities.  Entitlements like SS, Medicare, and veterans benefits are entitlements backed by treasuries.  They would be the last thing to ever be affected by spending limits. 

But you know this.

This threat was wrong when Newt used it in the 90's to get Clinton to sign a budget, and it's wrong now!  You don't take advantage of the old or of those who sacrificed too much for this country just for some twisted political gain.

I anticipate that this will backfire on him in a very big way.  I don't think he thought this out.  I think this was frustration on his part.  No one wants to eat the smileburger any more, and he's flustered.

[Gaspar]

http://blogs.marketwatch.com/fundmastery/2011/07/12/the-u-s-treasury-will-not-default/

Despite all the rhetoric and posturing we see in the media and in Washington D.C., it is safe to say categorically that the U.S. Treasury will not default on its debt after August 2nd, even if the debt ceiling is not raised.  Not only will the Treasury be able to pay interest on U.S. debt obligations, but there is money for other essential programs as well.  However, there will be some serious cutting that has to happen because spending clearly exceeds revenues.

[Teatownclown]

^ hope thingy doesn't work....you need to figger on another angle. Like no checks issued and the ire of the co dee's forcing the GOP into their holes.

[Gaspar]

According to Harry Reid, the wold is indeed going to end " Troops will not get paid;  stock market will crash and your holdings devaluated!"

Wow, economic terrorism.

[Townsend]

Well that'd curtail spending.

[Teatownclown]

According to Harry Reid, the wold is indeed going to end " Troops will not get paid;  stock market will crash and your holdings devaluated!"

Wow, economic terrorism.

We're all terrorists if that happens.

"Never before have so few with so much promised to take away so much from so many and then laugh their asses off as the so many with so little vote for the so few with so much."
James Pence

[ZYX]

Seriously, what sacrifices will you be making? 

Other than not being able to have as many clothes, as much food, possibly no vacations, my family wouldn't upsize from our small house, it would be harder for ME to get a job, and that it would be harder for ME to go to college, there really aren't many.

[nathanm]

I heard Boehner on NPR this morning saying he wants to raise the ceiling.

I'm not sure if that's an about face for him but it's sure a different tune I've been hearing on my crazy lefty liberal stations.

Boehner has been relatively reasonable throughout the whole thing, but he's in a bind thanks to the know nothing Tea Partyists.

He is willing to prey on the emotions of the weakest among you.  Debts associated with CURRENT Social Security, Medicare, and Interest payments will not be affected, and he knows it.  This is the most disrespectful thing I think he has ever done.  He assumes you don't know any better, and for the majority of the public he is probably right.

You want to tell me where in the law it differentiates between debt owed to the Social Security Trust Fund and debt owed to the public? You want to tell me how the federal government is going to issue $500 billion in new bonds to retire the ones coming due. It may be a rollover of debt, but we have to issue new debt before we can retire the old debt.

Edited to add: Telling the truth about the likely consequences of the GOP's hostage taking is not "economic terrorism," it's laying all the cards on the table. Which of course you don't want to happen because it makes your side look bad.

[Townsend]

Boehner has been relatively reasonable throughout the whole thing, but he's in a bind thanks to the know nothing Tea Partyists.

My bad.  I grouped 'em all together.

[guido911]

Other than not being able to have as many clothes, as much food, possibly no vacations, my family wouldn't upsize from our small house, it would be harder for ME to get a job, and that it would be harder for ME to go to college, there really aren't many.

I'm not knocking you. I just don't want you to get caught up with the hand-wringing over this debt crisis.  I think what the nation needs in another Y2K-like frenzy.

[we vs us]

So in case you haven't heard, the GOP has staged a "strategic" retreat.  O'Connell suggested that maybe they abandon wrangling over the debt ceiling in entirety and vote to give Obama the sole responsibility for raising.  In exchange for this power he suggested a convoluted Roberts'-Rules-of-Order-style path to allow the GOP to save as much face as possible, all the while making Obama take the heat for raising the ceiling. 

This is a trial balloon and there's no real sense that it can make it through the House, but it's pretty clear that he's making a suggestion that the GOP walk away from the fight entirely, rather than either go for the gusto with Obama's $4T cuts + tax increases or even Biden's negotiated $2T of cuts + increases.  In other words:  if taxes are any part of the solution whatsoever, it's better to walk away from the negotiations entirely than compromise. 

Which leaves me speechless, really.  Does this mean that the leadership knew this was an empty exercise all along?  Does it mean that the GOP caucus is really too fractured to offer any votes at all?  And does it mean we won't raise the ceiling at all anyway (since negotiations are at a stalemate, anyway)? 

I can't get over the level of cynicism this takes.

[we vs us]

Also @Gassy: Heard this on NPR from a Bush I era budget undersecretary who's done some number crunching on the exact amount of pressure this sort of thing would put on the budget.  Meaning, sure, we might not default, but our system would have to immediately have to learn how to deal with 44% less revenue than before.  A sample of his addition:  yes, Social Security checks and medicare bennies and VA bennies could go out, but that would mean that the Pentagon gets NO money at all.  Or you could add some funding to the Pentagon, but the Dept of Education and the Dept of Justice grind to a halt and get NO money.  

This isn't a discount, or starving the beast.  It's depriving the body politic of nearly half of its fighting weight.  Which is still crazy and radical.

http://www.npr.org/2011/07/12/137799686/what-happens-if-we-dont-make-the-debt-ceiling-deadline

EDIT:  here's the link to the study's actual page:

http://www.bipartisanpolicy.org/library/staff-paper/debt-limit-analysis

[carltonplace]

See this one about how Rupert Mudoch's News Corp not only had a $0 tax burden but they also were paid nearly $50 bil by the US?

http://www.npr.org/player/v2/mediaPlayer.html?action=1&t=1&islist=false&id=137811869&m=137811860