Reasoned Answers, Please: What Happens If US Defaults?

[D1B]

As I understand, the proposal, if passed by congress and approved by the President, would authorize the President to lift the debt ceiling, in three steps, between now and the 2012 election, without any concomitant agreement to cut spending.

From the Republican perspective, this would prevent the US from defaulting on its obligations, while making deficit reduction the principal issue of the 2012 campaign. The goal is to hang the blame for the deficit on the President, since he would essentially being the one to raise the debt ceiling, three times, without receiving (or needing) Republican support to do so.

The Republicans hope to see the election of a deficit-cutting Republican who will work with their majority in the House to cut the deficit beginning in Jan. 2013.

My thought is once the President signs this proposal (does he really have an option?), he has to get serious about deficit reduction, or he risks a one-term presidency.

Tman, the hippies were right.

[BDKJMU]

Interest rates take a major hike, inflation takes charge, old folks get evicted from rentals because their SS does not come on time, global recession.

And the Republican tea-bagger movement will end up with most of the blame with the exception of the already identified partisan shills that make up 40% of the voting public.

The result will be another wild swing back towards the Dems in congress, opening the door for even more do nothing but quarrel amongst themselves while the remains of the Repubs boycott everything.

SS trust fund has a large surplus now. Most years of its existence it has taken in more than it has paid out. Failing to raise the debt ceiling would have zero effect on the Trust Fund. Thats an Obama scare tactic.

[BDKJMU]

If the national debt and interest on it continue to skyrocket, what will happen will be far worse than a default from not raising the debt ceiling.

The question should be,
"Reasoned Answers, Please: What Happens If the US doesn't drastically cut spending now and reaches a point where it can no longer pay the interest on the debt along with all its other obligations?"

[D1B]

If the national debt and interest on it continue to skyrocket, what will happen will be far worse than a default from not raising the debt ceiling.

The question should be,
"Reasoned Answers, Please: What Happens If the US doesn't drastically cut spending now and reaches a point where it can no longer pay the interest on the debt along with all its other obligations?"

Tman and SuperHornet's world.

A society based on overconsumption is doomed from the beginning. Fuck it, I hope it's a disaster. Its the only way we learn.

Capitalism, meet Charles Darwin.

[bluehenbillk]

What this "crisis" really spotlights is that we have some of the most completely inept idiots in America in charge in Washington, and we have no one to blame but ourselves because we sent these people there, Democrat & Republican.

How hard is it to make these cuts? We could put together two dozen people on this site & get it done in 2 weeks. Have your 1st meeting & ask every member to come back in a few days with $1 trillion in cuts identified. You put them all up on a board and start slashing. Seriously, you wonder if any of these yahoos have run successful businesses before.

We're the fattest country in the world & we've lived fat for quite a while. If cutting entitlement programs entirely or partially is the answer, if raising taxes on the rixch or closing loopholes is the answer, if federal departments get budgets reduced, if unnecessary federal funded programs get 100% chopped, then so be it.

Waiting just makes the inevitable reality we'll have to face just exponentially worse.

The saddest part...there seems to be more talks & negotiating going on in the NFL lockout than there is Washington D.C.

[JoltinJoe]

What this "crisis" really spotlights is that we have some of the most completely inept idiots in America in charge in Washington, and we have no one to blame but ourselves because we sent these people there, Democrat & Republican.

How hard is it to make these cuts? We could put together two dozen people on this site & get it done in 2 weeks. Have your 1st meeting & ask every member to come back in a few days with $1 trillion in cuts identified. You put them all up on a board and start slashing. Seriously, you wonder if any of these yahoos have run successful businesses before.

We're the fattest country in the world & we've lived fat for quite a while. If cutting entitlement programs entirely or partially is the answer, if raising taxes on the rixch or closing loopholes is the answer, if federal departments get budgets reduced, if unnecessary federal funded programs get 100% chopped, then so be it.

Waiting just makes the inevitable reality we'll have to face just exponentially worse.

The saddest part...there seems to be more talks & negotiating going on in the NFL lockout than there is Washington D.C.

But you are overlooking the need for congressmen to pander for votes. You cut some group's special interest, you lose their support. Oh, and I'll support your special interest if you support mine. So nothing gets cut.

12 guys on this board who don't care about pandering, and only care about doing what's best, could definitely get this done. But ...

[bluehenbillk]

Here's a good analysis of what happens, and it ain't pretty:

http://money.msn.com/mutual-fund/us-def ... watch.aspx" onclick="window.open(this.href);return false;

[Grizalltheway]

Here's a good analysis of what happens, and it ain't pretty:

http://money.msn.com/mutual-fund/us-def ... watch.aspx" onclick="window.open(this.href);return false;

And then you have Michelle Tardmann trying to convince everyone that it's no big deal, and Obama's just using scare tactics to get the limit raised. Stupid gash.

[Cap'n Cat]

New revenue streams and cut corporate welfare (oil - obscene profits, yet sucking on public tit) and the military. As well, many govt programs have outlived their usefulness and no longer deliver returns - Head Start, for example. Thousands of those, probably, and not all Donk-inspired.

Companies need to learn that you reinvest profits to make the business grow, not rely on tax credits and such so profits can, instead, be hoarded and paid out to execs.

We have fvcked our way into a bad corner.

[BDKJMU]

"GOP Debt Ceiling Ace in the Hole: Obama’s Birthday Bash
by KEITH KOFFLER on JULY 14, 2011, 12:09 PM
Oh boy, this is going to look bad.

The Republicans may not realize it, but they have an extra point of leverage in the debt ceiling talks: Barack Obama’s birthday.

It’s on Aug. 4. The president is turning 50. He’s decided to have a quiet celebration with family and a few close friends.

NOT.

Instead, the president is planning an extravagant fundraising bash Aug. 3 at the Aragon Ballroom in Chicago, including a birthday concert teeming with celebrities and – for couples contributing $35,800 – a private dinner with the president. All this just one day after the government is scheduled to run out of cash!............................"
http://www.whitehousedossier.com/2011/0 ... hday-bash/" onclick="window.open(this.href);return false;

Prime example of how Obama is out of touch to plan this for Aug 3rd.

[BDKJMU]

"President Obama abruptly walks out of debt ceiling talks

President Barack Obama abruptly walked out of a stormy debt-limit meeting with congressional leaders Wednesday, a dramatic setback to the already shaky negotiations.

“He shoved back and said ‘I’ll see you tomorrow’ and walked out,” House Majority Leader Eric Cantor (R-Va.) told reporters in the Capitol after the meeting.

On a day when the Moody’s rating agency warned that American debt could be downgraded, the White House talks blew up amid a new round of sniping between Obama and Cantor, who are fast becoming bitter enemies.

When Cantor said the two sides were too far apart to get a deal that could pass the House by the Treasury Department’s Aug. 2 deadline — and that he would consider moving a short-term debt-limit increase alongside smaller spending cuts — Obama began to lecture him.

“Eric, don’t call my bluff,” the president said, warning Cantor that he would take his case “to the American people.” He told Cantor that no other president — not Ronald Reagan, the president said — would sit through such negotiations."................."

http://www.politico.com/news/stories/07 ... z1S7DRGq8o" onclick="window.open(this.href);return false;

I'd call Obama's bluff. I'd go ahead and pass a shirt term extension and dare Obama to veto it. The blame will fall on Obama.

[kalm]

Republicans voted to raise the debt ceiling 7 times under Bush. The last three Republican administrations grew the debt by an average of 12%. Republicans are deficit hawks when they can hang it on the Dems. But they're really no different when it comes to spending. They're playing politics and doing it quite well.

http://en.wikipedia.org/wiki/National_d ... tial_terms" onclick="window.open(this.href);return false;

[expandspanos]

I wouldn't say it's an IF, but a WHEN.. they way they are spending money we don't have on multiple wars for year after year after year.

There are going to be tons of defaults though, as the entire world goes into debt.. we all owe the bankers big time, they are our new owners, as planned.

[Col Hogan]

Republicans voted to raise the debt ceiling 7 times under Bush. The last three Republican administrations grew the debt by an average of 12%. Republicans are deficit hawks when they can hang it on the Dems. But they're really no different when it comes to spending. They're playing politics and doing it quite well.

http://en.wikipedia.org/wiki/National_d ... tial_terms" onclick="window.open(this.href);return false;

And the democrats in the current administration blah blah blah...

Each side is as bad as the other...I'm sick of the Republican house members playing this deadly game of chicken...if they were my kids I'd slap them silly...

I'm sick of the liberal democrats with their "not on the back of the poor"...the poor don't pay taxes, they just take (remember, 49% aof all Americans ultimately pay no taxes at the end of the year)

I'm sick of the special interests and their radio ads here in DC...saying cut spending...but don't cut my program...

I agree with Cap'n Cat...

We have fvcked our way into a bad corner.

About time we get out...otherwise, I gotta buy a lot more beans and bullets before the fecal matter hits the overhead oscillating machine...

[BDKJMU]

Republicans voted to raise the debt ceiling 7 times under Bush. The last three Republican administrations grew the debt by an average of 12%. Republicans are deficit hawks when they can hang it on the Dems. But they're really no different when it comes to spending. They're playing politics and doing it quite well.

http://en.wikipedia.org/wiki/National_d ... tial_terms" onclick="window.open(this.href);return false;

BS.
The National Debt stood at $10.626 trillion the day Mr. Obama was inaugurated.

Now it stands at about 14.5 trillion.
http://www.usdebtclock.org/" onclick="window.open(this.href);return false;

At the current pace it will be around 17 billion on Obama's last day in office Jan 2013. That will be an increase of about 65%.

12% to 65% is night an day. If the debt was only increasing a couple % a year/12% total under Obama like you state it has been on avg under the last 3 Republican admins then we wouldn't be having this arguement now. A couple % a year isn't going to bring out deficit hawks out of the woodwork. A double digit increase per year will.

Obama has taken the republicans fiscal irresponsibility and pumped it up on steroids. He's taken what was a trickle and turned it into a torrent. He's taken what was a slow walk towards an economic cliff and turned it into a full sprint.

[Grizalltheway]

Republicans voted to raise the debt ceiling 7 times under Bush. The last three Republican administrations grew the debt by an average of 12%. Republicans are deficit hawks when they can hang it on the Dems. But they're really no different when it comes to spending. They're playing politics and doing it quite well.

http://en.wikipedia.org/wiki/National_d ... tial_terms" onclick="window.open(this.href);return false;

BS.
The National Debt stood at $10.626 trillion the day Mr. Obama was inaugurated.

Now it stands at about 14.5 trillion.
http://www.usdebtclock.org/" onclick="window.open(this.href);return false;

At the current pace it will be around 17 billion on Obama's last day in office Jan 2013. That will be an increase of about 65%.

12% to 65% is night an day. If the debt was only increasing a couple % a year/12% total under Obama like you state it has been on avg under the last 3 Republican admins then we wouldn't be having this arguement now. A couple % a year isn't going to bring out deficit hawks out of the woodwork. A double digit increase per year will.

Obama has taken the republicans fiscal irresponsibility and pumped it up on steroids. He's taken what was a trickle and turned it into a torrent. He's taken what was a slow walk towards an economic cliff and turned it into a full sprint.

It needs to be cut, but there's no point in defaulting before we go about doing that. Repubs are trying to score political points with this whole thing just as much as the Dems are. You're one of the few fucks on here that won't admit that.

[grizzaholic]

Republicans voted to raise the debt ceiling 7 times under Bush. The last three Republican administrations grew the debt by an average of 12%. Republicans are deficit hawks when they can hang it on the Dems. But they're really no different when it comes to spending. They're playing politics and doing it quite well.

http://en.wikipedia.org/wiki/National_d ... tial_terms" onclick="window.open(this.href);return false;

BS.
The National Debt stood at $10.626 trillion the day Mr. Obama was inaugurated.

Now it stands at about 14.5 trillion.
http://www.usdebtclock.org/" onclick="window.open(this.href);return false;

At the current pace it will be around 17 billion on Obama's last day in office Jan 2013. That will be an increase of about 65%.

Actually that is 90%+ of a CUT....which is a good thing..right?

[SDHornet]

Here's a good analysis of what happens, and it ain't pretty:

http://money.msn.com/mutual-fund/us-def ... watch.aspx" onclick="window.open(this.href);return false;

When they say interest rates on houses, cars, credit cards, etc will be impacted, they are referring to new loan agreements right? I mean so long as you are locked into an interest rate will that loan be affected? I’m also curious as to why gold wouldn’t be a safe haven. I mean it’s freakin’ gold for fuck sake.

[SDHornet]

Also I saw on the news that a default would mean the gov would have to make a 44% cut to spending to essentially right the ship. I assume it would be too late by that point?

[Cap'n Cat]

BS.
The National Debt stood at $10.626 trillion the day Mr. Obama was inaugurated.

Now it stands at about 14.5 trillion.
http://www.usdebtclock.org/" onclick="window.open(this.href);return false;

At the current pace it will be around 17 billion on Obama's last day in office Jan 2013. That will be an increase of about 65%.

12% to 65% is night an day. If the debt was only increasing a couple % a year/12% total under Obama like you state it has been on avg under the last 3 Republican admins then we wouldn't be having this arguement now. A couple % a year isn't going to bring out deficit hawks out of the woodwork. A double digit increase per year will.

Obama has taken the republicans fiscal irresponsibility and pumped it up on steroids. He's taken what was a trickle and turned it into a torrent. He's taken what was a slow walk towards an economic cliff and turned it into a full sprint.

It needs to be cut, but there's no point in defaulting before we go about doing that. Repubs are trying to score political points with this whole thing just as much as the Dems are. You're one of the few fucks on here that won't admit that.

Word.

[ASUMountaineer]

"President Obama abruptly walks out of debt ceiling talks

President Barack Obama abruptly walked out of a stormy debt-limit meeting with congressional leaders Wednesday, a dramatic setback to the already shaky negotiations.

“He shoved back and said ‘I’ll see you tomorrow’ and walked out,” House Majority Leader Eric Cantor (R-Va.) told reporters in the Capitol after the meeting.

On a day when the Moody’s rating agency warned that American debt could be downgraded, the White House talks blew up amid a new round of sniping between Obama and Cantor, who are fast becoming bitter enemies.

When Cantor said the two sides were too far apart to get a deal that could pass the House by the Treasury Department’s Aug. 2 deadline — and that he would consider moving a short-term debt-limit increase alongside smaller spending cuts — Obama began to lecture him.

“Eric, don’t call my bluff,” the president said, warning Cantor that he would take his case “to the American people.” He told Cantor that no other president — not Ronald Reagan, the president said — would sit through such negotiations."................."

http://www.politico.com/news/stories/07 ... z1S7DRGq8o" onclick="window.open(this.href);return false;

I'd call Obama's bluff. I'd go ahead and pass a shirt term extension and dare Obama to veto it. The blame will fall on Obama.

They should have called his bluff when he proposed $4 trillion in cuts and $1 trillion in increased revenue. How is that a bad deal, especially with all of the entitlement cuts included. That was Obama's bluff, and they should have called him on it immediately. Unfortunately, they thought they could pander and get more...now, they both are losing and taking us down with them.

[bluehenbillk]

Here's a good analysis of what happens, and it ain't pretty:

http://money.msn.com/mutual-fund/us-def ... watch.aspx" onclick="window.open(this.href);return false;

When they say interest rates on houses, cars, credit cards, etc will be impacted, they are referring to new loan agreements right? I mean so long as you are locked into an interest rate will that loan be affected? I’m also curious as to why gold wouldn’t be a safe haven. I mean it’s freakin’ gold for **** sake.

I believe it's due to currency devaluation. Yea, you can hold onto gold but when you want to unload it...what are you going to get?? Don't quote me on that - but it's my best logical guess.

[Grizalltheway]

When they say interest rates on houses, cars, credit cards, etc will be impacted, they are referring to new loan agreements right? I mean so long as you are locked into an interest rate will that loan be affected? I’m also curious as to why gold wouldn’t be a safe haven. I mean it’s freakin’ gold for **** sake.

Don't quote me on that

[BDKJMU]

Also I saw on the news that a default would mean the gov would have to make a 44% cut to spending to essentially right the ship. I assume it would be too late by that point?

That shows you how the govt is spending WAY too much $. Govt would have to cut spending by over 40% just to balance the budget.

Prime example of how we need a balanced budget amendment. Local govts have to balance their budgets. States have to balance theirs. Your household has to balance yours. Why should the fed be any different?

That's one area where I wouldn't have a problem with tax increases- as soon as a Balanced Budget Amendment to the Constitution was passed.

[Ibanez]

New revenue streams and cut corporate welfare (oil - obscene profits, yet sucking on public tit) and the military. As well, many govt programs have outlived their usefulness and no longer deliver returns - Head Start, for example. Thousands of those, probably, and not all Donk-inspired.

Companies need to learn that you reinvest profits to make the business grow, not rely on tax credits and such so profits can, instead, be hoarded and paid out to execs.

We have fvcked our way into a bad corner.

I've said it time and time again. These politicians DO NOT CARE about what we really think. They are "sticking tothier guns" as the ship sinks. They block out all the noise from the crew (American public) and are going straight for the iceberg. Lobbying groups have taken too much control of the politicians for far too long and these politico's are more worried about their career as a "public servant" than they are about taking a chance and doing the right thing. The right thing involves cuts, sacrifice and hard times for us all. I would much rather the majority step up, put thier "campaign promises" aside (b/c they are bullshit and moot talking points) and do the right thing. Regardless of the outcome, they can run for re-election stating that they've made the difficult choice and truly care about the USA. But we all know that will not happen because.

We could possibly be heading to tougher times, similiar to the early 1930's. Is Obama the next Hoover? I don't know. But I do know that if this ship sinks, Obama is out. He let it go on his watch.