Consequences of a US default

[nathanm]

How can this Congress explain to their constituents that trillions of dollars in new debt is good for our economy? How can they explain that they think it's fair to force our children, our grandchildren, our great grandchildren to finance this debt through higher taxes? That's what it will have to be. Why is it right to increase our nation's dependence on foreign creditors?

They should explain this. Maybe they can convince the public they're right. I doubt it. Because most Americans know that increasing debt is the last thing we should be doing. After all, the Baby Boomers are about to retire. Under the circumstances, any credible economist would tell you we should be reducing debt, not increasing it.  This legislation will weaken our country.

You do realize we control the money supply, right? 15 trillion dollars of debt is worth exactly what we say it is and no more. And why should I care if foreigners buy our debt? It's nothing more than a representation of all the stuff they've sent to us over the years. If they didn't buy our debt instruments, they'd just have actual dollar bills (or their electronic equivalent), which is essentially the same thing, just without interest.

We are no longer on the gold standard and no longer have fixed exchange rates. As long as we don't go stupid and start borrowing in someone else's currency, it's not the big problem everyone makes it out to be.

Austerity is more of a tax on future generations as the debt is. The growth that is proposed that we forego is a significant cost to them. Choosing to be Japan was one of the worst decisions we could have made for our future.

[Conan71]

You do realize we control the money supply, right? 15 trillion dollars of debt is worth exactly what we say it is and no more. And why should I care if foreigners buy our debt? It's nothing more than a representation of all the stuff they've sent to us over the years. If they didn't buy our debt instruments, they'd just have actual dollar bills (or their electronic equivalent), which is essentially the same thing, just without interest.

We are no longer on the gold standard and no longer have fixed exchange rates. As long as we don't go stupid and start borrowing in someone else's currency, it's not the big problem everyone makes it out to be.

Austerity is more of a tax on future generations as the debt is. The growth that is proposed that we forego is a significant cost to them. Choosing to be Japan was one of the worst decisions we could have made for our future.

So it's just a big game of Monopoly!!!  Right on!!!

[nathanm]

So it's just a big game of Monopoly!!!  Right on!!!

Pretty much. But we insist on acting like we're still on the gold standard, so here we are arguing about whether or not we should let foreigners give us more stuff in exchange for essentially nothing. They export goods, we export green paper. They can complain about having too much green paper, but what are they going to do, stop sending us stuff? To whom would they sell their stuff? The non-manufacturing Europeans are flat out of capacity for more debt. The Chinese want to be exporters.

The rest of the BRIC bloc is still a long way from being a market big enough to prop up the exporting economies. Hell, they all want to be exporting economies. That's simply not possible.

[heironymouspasparagus]

It IS Monopoly game.  Literally, figuratively, spiritually, and any other way you want to call it.  There is NO other way to play this game though.  All the KRMG "buy gold" advertisements to the contrary, there aren't enough ounces of gold (or any other 'precious' metal) to prop up the world's economy.  There have only been about $ 5 trillion worth of gold mined in the history of the world (at today's prices).  Wouldn't be much of an economy with so little available. 

[Gaspar]

You do realize we control the money supply, right? 15 trillion dollars of debt is worth exactly what we say it is and no more. And why should I care if foreigners buy our debt? It's nothing more than a representation of all the stuff they've sent to us over the years. If they didn't buy our debt instruments, they'd just have actual dollar bills (or their electronic equivalent), which is essentially the same thing, just without interest.

We are no longer on the gold standard and no longer have fixed exchange rates. As long as we don't go stupid and start borrowing in someone else's currency, it's not the big problem everyone makes it out to be.

Austerity is more of a tax on future generations as the debt is. The growth that is proposed that we forego is a significant cost to them. Choosing to be Japan was one of the worst decisions we could have made for our future.

Oh poop!  My bad, these were not my words. . .

How can this Congress explain to their constituents that trillions of dollars in new debt is good for our economy? How can they explain that they think it's fair to force our children, our grandchildren, our great grandchildren to finance this debt through higher taxes? That's what it will have to be. Why is it right to increase our nation's dependence on foreign creditors?

They should explain this. Maybe they can convince the public they're right. I doubt it. Because most Americans know that increasing debt is the last thing we should be doing. After all, the Baby Boomers are about to retire. Under the circumstances, any credible economist would tell you we should be reducing debt, not increasing it.  This legislation will weaken our country.

That was Harry Reid on the floor of the Senate in 2006 when we needed to bump up the debt ceiling.  I suppose I was channeling Democrats again.

[nathanm]

I've repeatedly said that the only way I'm aligned with the Democrats on this issue is that the debt ceiling needs to be raised.

[Gaspar]

I've repeatedly said that the only way I'm aligned with the Democrats on this issue is that the debt ceiling needs to be raised.

There is nothing wrong with being a Democrat. 

I understand where you are coming from though.  You are more aligned with the philosophy and personality of President Obama, not necessarily his party. 

I have serious doubts that this "push" liberalism will survive the next election though.  The "Change You Can Believe In" mantra has become "Change You Can Step In."

President Obama has forced his party into a corner by leading from behind.  Rather than the boldness they were accustomed to with Clinton and Bush, they are now forced to be the ones leading, while he simply offers the pen.  Anyone can tell you (and it's the primary reason for an executive branch) that it's hard to get things done by committee!

I am happy that you are an independent thinker, even though your choice in deity may be problematic.

[nathanm]

I understand where you are coming from though.  You are more aligned with the philosophy and personality of President Obama, not necessarily his party. 

LOL, no. Obama is far too deferent to special interests for my taste. I don't defend him, I defend sanity. As in, it's insane to call someone who governs somewhere to the right of Nixon a socialist or whatever the epithet du jour is, so I try to inject some reality into the discussion.

The closest I usually come to defending Obama is when I'm either in agreement with a particular policy or when people complain that he isn't as much of a leftist as someone thought he was going to be. In the first case, I defend the policy, while in the second I point out that he has done almost exactly what he said he was going to do. He promised incrementalism, just with high flying language. And that's by and large what we've gotten.

[Red Arrow]

There is nothing wrong with being a Democrat. 

?

[Red Arrow]

As in, it's insane to call someone who governs somewhere to the right of Nixon a socialist or whatever the epithet du jour is, so I try to inject some reality into the discussion.

Are you dyslexic?

[nathanm]

Are you dyslexic?

Nixon was about --><-- that close to expanding Medicare to cover everyone. As I recall, he also put price controls back into effect, among many other things that people today would consider pinko. When someone is talking about cutting Social Security and Medicare, it's hard for me to call them a leftist, much less a socialist.

Obama is an incrementalist. He did health care, but in the most business-friendly way possible: Giving the health insurance companies a captive audience.

[Red Arrow]

Nixon was about --><-- that close to expanding Medicare to cover everyone. As I recall, he also put price controls back into effect, among many other things that people today would consider pinko.

Nixon did a lot of things I didn't care for but the Democratic alternatives were worse.  I'll never forgive him for the 55 MPH speed limit.  The withdrawal from Viet Nam was good though.  In spite of some of the things Nixon did, to call Obama potentially to the right of Nixon is still pushing a bit.

[we vs us]

Nixon did a lot of things I didn't care for but the Democratic alternatives were worse.  I'll never forgive him for the 55 MPH speed limit.  The withdrawal from Viet Nam was good though.  In spite of some of the things Nixon did, to call Obama potentially to the right of Nixon is still pushing a bit.

Oh, you'd be surprised.  Nixon may have had an autocratic heart, but a lot of his policy was the equivalent of the modern day Dems.  If you get out there and look, you'll be stunned at how far the goalposts have moved in 40 years. 

And Nathan's right on the money.  Obama's center-right as far as Democratic politics go, which is what makes the "ZOMGSOCIALISM!" thing such a headscratcher.  Anyone with even a rudimentary grasp of history would be able to tell you that without hesitation.  But:  people really DON'T have a rudimentary grasp of history, and there's a huge, moneyed constituency out there with a vested interest in making sure that Obama is seen as a firebreathing redistributionist.  It also helps that in times of protracted economic distress -- which we're definitely in -- people are just naturally freaked out. 

[Red Arrow]

Obama's center-right as far as Democratic politics go,

Maybe, maybe not.  I'm sure from your perspective he is.  I'll agree that Nixon would not fit the Teaparty stereotype.

[we vs us]

Maybe, maybe not.  I'm sure from your perspective he is.  I'll agree that Nixon would not fit the Teaparty stereotype.

Not even from my perspective. He's been president now long enough for you to compare his record with the record of people like Nixon and Clinton and Reagan, all the way back to FDR, etc.  Especially regarding the content of his achievements and the compromises he's made, he's solidly center right. 

There's no political left left in our country, currently.  Sure, there's Bernie Sanders, and a few vocal Dem senators, but as an organized force -- outside the netroots -- it's dead in the water.  On a personal level, this is why I'm disappointed in Obama.  I believed he was going to articulate a compelling version of progressivism for the 21st century.  He very much did NOT do that, and has instead played inside ball, worked in many cases without explaining himself, and all around NOT marketing a vision of anything.