Reasoned Answers, Please: What Happens If US Defaults?

[Cap'n Cat]

Worldwide economic shockwave and collapse or just a bunch of SMFH's and another day in paradise?

Discuss.

[Purple For Life]

My cynical self says as long as people keep showing up to do this I'm still going to do this and collect my

[Wedgebuster]

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.

[bluehenbillk]

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.

A lot right with that - granted it's a worst-case scenario but the hell with the recession, you could pull out the "D" word - meaning get ready for the 2nd great depression. The interest that we'd have to pay on our debt jumps, meaning the debt we're racking up multiplies even faster - dollar loses all kind of value & most likely it's standing as the world's currency & inflation & unemployment start to tick up quickly.

I'm not a fan of either of the two political parties - shut up & do something.

[Grizalltheway]

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.

A lot right with that - granted it's a worst-case scenario but the hell with the recession, you could pull out the "D" word - meaning get ready for the 2nd great depression. The interest that we'd have to pay on our debt jumps, meaning the debt we're racking up multiplies even faster - dollar loses all kind of value & most likely it's standing as the world's currency & inflation & unemployment start to tick up quickly.

I'm not a fan of either of the two political parties - shut up & do something.

Yep. We're on a sinking ship, and these egotistical fucks are arguing about what kind of bucket to use.

[TheDancinMonarch]

I'm not a fan of either of the two political parties - shut up & do something.

They can't, or more accurately, won't. They'd rather keep looking for a political advantage while the country swirls down the drain.

[SDHornet]

Anyone know the specifics of that so call “back door” option McConnel (sp?) proposed?

[bluehenbillk]

Anyone know the specifics of that so call “back door” option McConnel (sp?) proposed?

All I heard is that it involves female interns....

[JoltinJoe]

Anyone know the specifics of that so call “back door” option McConnel (sp?) proposed?

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.

[Cap'n Cat]

Nagging feeling The Roman Catholic Church has something to do with it all.

[houndawg]

Anyone know the specifics of that so call “back door” option McConnel (sp?) proposed?

All I heard is that it involves female interns....

Doubtful.


Female interns would be found in the Democrat version....

[bulldog10jw]

All I heard is that it involves female interns....

Doubtful.


Female interns would be found in the Democrat version....

Barney Frank disagrees.

[JoltinJoe]

Worldwide economic shockwave and collapse or just a bunch of SMFH's and another day in paradise?

Discuss.

Since it has never happened before, no one can say for sure. However, the consequences one of the world's largest debtors (and its MOST credit-worthy one) defaulting are likely to be devastating.

If the US defaults, continuing to pay your own obligations is potentially a futile gesture.

[bluehenbillk]

Worldwide economic shockwave and collapse or just a bunch of SMFH's and another day in paradise?

Discuss.

Since it has never happened before, no one can say for sure. However, the consequences one of the world's largest debtors (and its MOST credit-worthy one) defaulting are likely to be devastating.

If the US defaults, continuing to pay your own obligations is potentially a futile gesture.

Well...it hasn't happened with the USA before. But if you want some good parallels I give you: Greece, Italy, Portugal & Ireland. All of which have been devauled by Moody's and have sent those countries into chaos. If it happens in the US - multiply those shockwaves for here alone & then multiply it exponentially when you see the tsunami (good word choice - tsumami) hit the rest of the world markets.

To make it simple, spend all your cash, take all your money out of stocks & bonds and buy gold?

[JoltinJoe]

Since it has never happened before, no one can say for sure. However, the consequences one of the world's largest debtors (and its MOST credit-worthy one) defaulting are likely to be devastating.

If the US defaults, continuing to pay your own obligations is potentially a futile gesture.

Well...it hasn't happened with the USA before. But if you want some good parallels I give you: Greece, Italy, Portugal & Ireland. All of which have been devauled by Moody's and have sent those countries into chaos. If it happens in the US - multiply those shockwaves for here alone & then multiply it exponentially when you see the tsunami (good word choice - tsumami) hit the rest of the world markets.

To make it simple, spend all your cash, take all your money out of stocks & bonds and buy gold?

Yea, I would say spend all your cash. I would say place it in gold. Incidentally, gold is currently trending at all time highs. And who has the world' most gold? The US, by three times over the next nation (although Ron Paul wants to audit its holdings to see if the government is being honest about its holdings).

[OL FU]

Nagging feeling The Roman Catholic Church has something to do with it all.

You made it five posts with reasoned answers

[JoltinJoe]

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[Cap'n Cat]

Nagging feeling The Roman Catholic Church has something to do with it all.

You made it five posts with reasoned answers

[Ivytalk]

I don't think it will reach that point in the "parade of horribles," as the game of chicken will end and a deal that covers both paerties' asses without addressing the underlying problems will be cut before August 2.

If the unthinkable happens, both Joe and Wedgie make some valid points. China will also call in some big financial chits, which won't help matters.

[Cap'n Cat]

We are the next Mexico............................

[Ivytalk]

We are the next Mexico............................

Not unless gazillions of unemployed Americans start streaming across the Rio Grande to take Mexican jobs!

"Hey, gringo, that's Jose's tomato farm! He don't need no stinkin' pickers! So pees off!"

[travelinman67]

Anyone know the specifics of that so call “back door” option McConnel (sp?) proposed?

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.

[JoltinJoe]

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.

You know what they say. Tough times make the man.

And only Nixon could go to China.

Pres. Obama has no choice. If he gets tough on reducing the deficit, people will believe him that it has to be done (because its contrary to his political instincts), and he has a chance to win a second term and a legacy as the President who restored fiscal sanity in Washington. If he doesn't, he's a one-term failure.

[CID1990]

The Dems lost the House for a reason.

They need to stop putting significant tax hikes on the table. They know that the GOP side is not going to go for it, and that is why they tried it, so they could say the GOP is walking away.They have not passed a budget in what? Three years? Not going to fool the independent voters on this one.

They might THINK that the GOP will take the blame for a default, but they need to think again. All they are doing now is trying to position themselves to look like the good guys in the event of a no-deal, because they do not have a budget plan.

[JohnStOnge]

I don't know. I don't think the US will default on its debt at this point even if the deadline passes. But I think it will hit a wall sooner or later if it doesn't change its paradigm with respect to the role(s) of the national government.