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New IMF Head Says US Must Raise Debt Limit, or Face 'Nasty Consequences'

timothy posted more than 2 years ago | from the spend-all-you-want-we'll-print-more dept.

The Almighty Buck 932

fysdt writes with this from an article on ABC News: "The International Monetary Fund's new chief foresees 'real nasty consequences' for the U.S. and global economies if the U.S. fails to raise its borrowing limit. Christine Lagarde, the first woman to head the lending institution, said in an interview broadcast Sunday that it would cause interest rates to rise and stock markets to fall. That would threaten an important IMF goal, which is preserving stability in the world economy, she said. The U.S. borrowing limit is $14.3 trillion. Obama administration officials say the U.S. would begin to default without an agreement by Aug. 2."

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The same threats from banks... in 2008. (2, Insightful)

sethstorm (512897) | more than 2 years ago | (#36713466)

How about doing something different, and not simply letting the banks loot another time?

Re:The same threats from banks... in 2008. (1)

Znork (31774) | more than 2 years ago | (#36713526)

According to IMF insiders quoted in this article http://www.guardian.co.uk/business/2011/may/19/imf-pressure-appoint-non-european-head [guardian.co.uk] Lagarde basically is the banks, as far as bailouts are concerned. I've read elsewhere that she tried to get Lehman bailed out as well. We can expect a lot more of irresponsible lending, borrowing and bailouts with this lineup.

Ah, well, at least now that fondling IMF hand on your bum will only be after your wallet.

Re:The same threats from banks... in 2008. (0)

Anonymous Coward | more than 2 years ago | (#36713600)

No kidding? The IMF is the banker's bank: Of the banks, by the banks, for the banks.

Re:The same threats from banks... in 2008. (4, Funny)

ColdWetDog (752185) | more than 2 years ago | (#36713742)

No kidding? The IMF is the banker's bank: Of the banks, by the banks, for the banks.

It seems more like

"One Bank to rule them all, One Bank to find them,
One Bank to bring them all and in the darkness bind them"

Re:The same threats from banks... in 2008. (4, Informative)

Anonymous Coward | more than 2 years ago | (#36713562)

It's not the banks.

It's government debt, eg bonds. Greece's interest rate is like 28%, The US is 2%. Greece's economy has basically gone titsup without default, but they're still expected to default. All the countries that are in trouble their bond rate skyrockets as soon as it looks like the bonds are going to be worthless.

What does the government do with money? It pays government employees (Miltary, Entitlement programs, infrastructure and creditors.) Creditors are other countries/people/businesses, both domestic and foreign. If the US defaults, expect the equivalent of a bank-run on bonds and stocks (equities) to get their money out of the US and into safer places like... Japan or Canada (even if it's only for a short period of time.) Take a look at the price of most of the S&P 500 1 minute before and after the jobs report last friday. So many stocks dropped by 10% for several hours before picking back up, now multiply that in a downward trend, that is what will happen.

Publicly traded companies with stocks worth less than 5$ get delisted, and that means those companies are toast. Companies that are private and those that have physical assets like Apple might survive, but a lot of the service industry does not have physical assets and they are history if the US government defaults. The irony here is that the banks would survive, but they would be calling in their loans, which means 30% interest for you.

Yes it can be doom and gloom, but it's inconceivable that the debt limit doesn't get raised. If by some chance the politicians screw the pooch and don't get it lifted, every last one of them better not be re-elected.

Re:The same threats from banks... in 2008. (1, Flamebait)

elucido (870205) | more than 2 years ago | (#36713764)

It's not the banks.

It's government debt, eg bonds. Greece's interest rate is like 28%, The US is 2%. Greece's economy has basically gone titsup without default, but they're still expected to default. All the countries that are in trouble their bond rate skyrockets as soon as it looks like the bonds are going to be worthless.

What does the government do with money? It pays government employees (Miltary, Entitlement programs, infrastructure and creditors.) Creditors are other countries/people/businesses, both domestic and foreign. If the US defaults, expect the equivalent of a bank-run on bonds and stocks (equities) to get their money out of the US and into safer places like... Japan or Canada (even if it's only for a short period of time.) Take a look at the price of most of the S&P 500 1 minute before and after the jobs report last friday. So many stocks dropped by 10% for several hours before picking back up, now multiply that in a downward trend, that is what will happen.

Publicly traded companies with stocks worth less than 5$ get delisted, and that means those companies are toast. Companies that are private and those that have physical assets like Apple might survive, but a lot of the service industry does not have physical assets and they are history if the US government defaults. The irony here is that the banks would survive, but they would be calling in their loans, which means 30% interest for you.

Yes it can be doom and gloom, but it's inconceivable that the debt limit doesn't get raised. If by some chance the politicians screw the pooch and don't get it lifted, every last one of them better not be re-elected.

It's not the goal of Tea Party Republicans to get re-elected. The majority of them are operatives for the Tea Party, which is controlled by militia operatives. They want to overthrow the US government itself even if it means launching a civil war.

They are deliberately trying to create an economic crisis because that is the best way to trigger a civil war. They already have the guns, they have the organization(militias) built up, they are ready. The sad thing is most American citizens aren't ready for it or don't want it. But when enough American citizens lose their careers, their jobs, and have no government benefits whatsoever to count on, no unemployment, no welfare, no food stamps, no anything, then the militias can give them one last job.

It's a recruitment tactic. The US government uses the same tactic of sanctions when it wants to overthrow a dictator. It's also because the Tea Party militias are tired of funding the government which is trying to investigate and crush them despite the fact that they've infiltrated the US government and control many politicians, there are still FBI agents who want to crush the Tea Part movement or any extremist movement that seeks to violently overthrow the government or cause a civil war.

Re:The same threats from banks... in 2008. (0)

SpongeBob Hitler (1848328) | more than 2 years ago | (#36713830)

It's not the goal of Tea Party Republicans to get re-elected. The majority of them are operatives for the Tea Party, which is controlled by militia operatives. They want to overthrow the US government itself even if it means launching a civil war.

They are deliberately trying to create an economic crisis because that is the best way to trigger a civil war. They already have the guns, they have the organization(militias) built up, they are ready. The sad thing is most American citizens aren't ready for it or don't want it. But when enough American citizens lose their careers, their jobs, and have no government benefits whatsoever to count on, no unemployment, no welfare, no food stamps, no anything, then the militias can give them one last job.

It's a recruitment tactic. The US government uses the same tactic of sanctions when it wants to overthrow a dictator. It's also because the Tea Party militias are tired of funding the government which is trying to investigate and crush them despite the fact that they've infiltrated the US government and control many politicians, there are still FBI agents who want to crush the Tea Part movement or any extremist movement that seeks to violently overthrow the government or cause a civil war.

Well, I have an idea. The Tea Party supporters who don't already live in the Southeastern United States (aka The Confederacy) can all move there and let the people who don't want to be a part of it emigrate to another part of the country. Then, the Southeast can secede from the Union again. I swear, we won't stop you this time!

Re:The same threats from banks... in 2008. (1)

Doctor_Jest (688315) | more than 2 years ago | (#36713838)

Is your tinfoil hat on too tight? I just want to know if it hurts while wearing it.... Remember shiny side out...

Re:The same threats from banks... in 2008. (0)

Anonymous Coward | more than 2 years ago | (#36713590)

Why was parent scored funny? "5,Informative" would have been more appropriate.

Re:The same threats from banks... in 2008. (3, Informative)

fahrbot-bot (874524) | more than 2 years ago | (#36713602)

and not simply letting the banks loot another time

You do realize that the US debt limit has nothing to do with "the banks", right? It has to do with the US being able to pay its obligations to its citizens. Yes, some of those obligations are to banks, but not just US banks, and they are also to other countries. The US has never defaulted on its financial obligations and I'm sure now would be a bad time to start.

This threat isn't from banks this time (-1, Flamebait)

elucido (870205) | more than 2 years ago | (#36713682)

These threats come directly from the Tea Party which is holding President Obama hostage on the budget. They simply do not want Obama to pass a budget. They view the Obama Presidency as illegitimate. They want to overthrow the US government.

Why don't you have a look at what their strategy is:

1. From the FBI https://www.fbi.gov/news/stories/2010/april/sovereigncitizens_041310 [fbi.gov]

2. From a leaked video [godlikeproductions.com] from one of their meetings. [godlikeproductions.com] http://www.godlikeproductions.com/forum1/message1029116/pg1 [godlikeproductions.com]

3. From YouTube () [youtube.com]

4. From one of their

 

Re:The same threats from banks... in 2008. (4, Insightful)

hey! (33014) | more than 2 years ago | (#36713694)

Er... this has almost nothing to do with what happened with the banks in 2008. In fact, it's about as unrelated as it is possible for one looming economic crisis to be to some recently past economic crisis. The fallout from the prior crisis is a major contributing factor, of course, but if there is any issue of "looting", it's going to be we the people, through our elected representatives in Congress, who do it.

This crisis is entirely voluntarily precipitated by our political leadership, albeit with the excuse that they believe *some* crisis is coming sooner or later. We are facing default not because we've spent more than was budgeted, or more than was appropriated, but because we spent money that as budgeted and appropriated but now Congress won't let the Treasury raise the money to pay the people we owe money to as a result.

Only in America (5, Insightful)

Beelzebud (1361137) | more than 2 years ago | (#36713470)

can people expect to wage 2 ground wars, and 1 air war, while giving tax cuts to the wealthy.

Re:Only in America (-1, Flamebait)

Anonymous Coward | more than 2 years ago | (#36713564)

Fuck, only on the internet in 2011 can uninformed trolls STILL be going with the "tax cuts to the wealthy" classist bullshit.

If you tax the hell out of the biggest corporations and wealthiest individuals, what do you think happens? They just throw up their hands and say "You got me this time government!". No, they maintain their profits by cutting costs, hiring less workers and not giving out raises for the ones they have.

Re:Only in America (5, Insightful)

Beelzebud (1361137) | more than 2 years ago | (#36713622)

We've had the tax cuts for going on 10 years, and the jobs situation got WORSE. The tax rate on the wealthiest Americans is at the lowest point since the 50's. Without the security of America, those companies wouldn't even exist in their current form, so spare me the crocodile tears for the million and billionaires. If the middle class can be asked to fight their bullshit wars, the rich should have to fucking pay for it.

Re:Only in America (-1)

Mashiki (184564) | more than 2 years ago | (#36713702)

Odd. I seem to remember that the average unemployment rate during Bush's tenure was between 4 and 7% for the entire 8 years. While under Obama's time, not only has it gone up by an extra 2.5% with poor growth but he's tacked on more debt in his first 3mo, then Bush did in 8.

Here's the thing, it wasn't tax cuts that were the problem. Rather it was government organizations like Freddie and Fannie who were lending to poor prospects, and the feds forcing the banks to do the same. The initial implosion of the housing market created the ripple. And until the US has it's financial straights in order(such as not lending to people who can't afford it), you'll continue to repeat this massive fuck-up.

Re:Only in America (2, Insightful)

Barrinmw (1791848) | more than 2 years ago | (#36713854)

Yeah, because there is never momentum in an economy. It couldn't possibly be that the 2.5% increase in unemployment is from the momentum of the recession that occurred on Bush's watch when Republicans let two major bubbles form in the housing and financial markets. At least under Obama, the hemorrhaging of jobs stopped.

Re:Only in America (2)

genrader (563784) | more than 2 years ago | (#36713640)

Not to mention loopholes created by the richest individuals so that they never have to pay taxes, all while the classist bullshit propaganda idiots can be happy that the "rich" are getting "taxed" at 90%

Eventually, you get caught. (1)

sethstorm (512897) | more than 2 years ago | (#36713758)

The US can go all over the world if it pleases. Jurisdiction won't stop a sufficiently motivated government to handle your sabotage.

Re:Only in America (3, Insightful)

twistedcubic (577194) | more than 2 years ago | (#36713766)

Fool, no one is saying "tax the hell out of the biggest corporations"-- just bring them back to where they were before the unnecessary tax cut. Cutting costs, firing workers, and freezing salaries will happen regardless.

Re:Only in America (5, Insightful)

artor3 (1344997) | more than 2 years ago | (#36713852)

You stupid fucker. You think CEOs pay their employees out of pocket? Hell no. Corporations pay peoples' salaries. Raising taxes on the rich has absolutely no impact on this. But they've drummed their lies into your head enough that you're now afraid to tax them, which is why hedge fund managers pay a lower tax rate than their IT staff, despite earning about 50 times as much.

Re:Only in America (2)

betterunixthanunix (980855) | more than 2 years ago | (#36713864)

...because any of that happened in the 1950s? We are coming out of one of a period of some of the lowest taxes on the wealthy and on corporations since WW2.

Re:Only in America (-1, Troll)

Anonymous Coward | more than 2 years ago | (#36713616)

You forgot $2.6 Trillion being printed or borrowed in the last 2 years for the ONLY purpose being to create jobs. Yep, Obama spent more "creating jobs" in 2 years than all those wars put together over 10 years with no result.

But feel free to be an ignorant liberal and ignore the real massive overspending.

Re:Only in America (4, Informative)

Beelzebud (1361137) | more than 2 years ago | (#36713664)

Included in the 2.6 trillion dollar figure is the Iraq war which Bush kept off the budget, and the TARP program which Bush passed. Nice try, though.

Re:Only in America (5, Interesting)

fahrbot-bot (874524) | more than 2 years ago | (#36713662)

can people expect to wage 2 ground wars, and 1 air war, while giving tax cuts to the wealthy.

Obviously, the wealthy do. I believe this is the first time that the US has participated in an extended war w/o raising tax rates. During WWII, the income tax rate reached 94% on income over $200k, from Income tax in the United States, History of top rates [wikipedia.org] :

  • During World War I, the top rate rose to 77% and the income threshold to be in this top bracket increased to $1,000,000 ($16 million 2007 dollars); after the war, the top rate was scaled down to a low of 24% and the income threshold for paying this rate fell to a low of $100,000 ($1 million 2007 dollars).
  • During the Great Depression and World War II, the top income tax rate rose from pre-war levels. In 1939, the top rate was 75% applied to incomes above $5,000,000 ($75 million 2007 dollars). During 1944 and 1945, the top rate was its all-time high at 94% applied to income above $200,000.

A cartoon: (4, Insightful)

Anonymous Coward | more than 2 years ago | (#36713728)

A relevant cartoon [photobucket.com] .

Expect a Civil War if the US defaults (1)

elucido (870205) | more than 2 years ago | (#36713774)

And that means we could end up with a war at home along with the wars overseas.

I wonder (1)

vikisonline (1917814) | more than 2 years ago | (#36713474)

Does this include the dept of citizens too? Somehow I have a feeling it doesn't

Re:I wonder (2)

vikisonline (1917814) | more than 2 years ago | (#36713498)

Just looked it up. Total debt including citizens is $54 trillion, or $669000 per family. Good luck paying that off... http://www.usdebtclock.org/# [usdebtclock.org]

Re:I wonder (0)

Anonymous Coward | more than 2 years ago | (#36713520)

Cool looking site, but nobody installs flash anymore. I can't see anything it says.

Re:I wonder (1)

kimvette (919543) | more than 2 years ago | (#36713656)

"nobody" meaning you and two other people, plus iDevice users.

Everyone else who uses youtube, yahoo, gaming sites, and so on installs flash. I had flash on my iPhone (Frash - a port of android's flash), until an ios update broke it.

Re:I wonder (1)

cgenman (325138) | more than 2 years ago | (#36713560)

To be fair, some of that is corporate debt. And if they're naturalized humans that keep getting larger and larger slices of the pie, they are going to be shouldering some of this debt burden too.

Re:I wonder (0)

Anonymous Coward | more than 2 years ago | (#36713760)

No worries. US bonds have an AAA rating.

So (0)

Vinegar Joe (998110) | more than 2 years ago | (#36713480)

When is the EU going to put it's house in order......starting with Greece?

Re:So (1)

vlm (69642) | more than 2 years ago | (#36713638)

When is the EU going to put it's house in order......starting with Greece?

Shouldn't Iceland be first? Maybe they haven't rolled over completely to central control like other European states, but they are part of the Schengen, so they kinda count...

Pretty much every country in the EU is slated for economic collapse except Germany. Later this fall, maybe sooner, we will hear about Portugal and Spain.

Re:So (1)

amorsen (7485) | more than 2 years ago | (#36713786)

Iceland is not a problem. Their only problem is that other countries are trying to get the Icelandic government to pay for the losses of the Icelandic banks.

The EU countries are heading for collapse because the European Central Bank is fighting inflation during a recession. Once the stricken countries wise up and leave the Euro, they will recover just like Argentina did after leaving the USD.

File under (0, Flamebait)

headhot (137860) | more than 2 years ago | (#36713484)

No shit Sherlock. The only people who dont seem to understand this are the tea-baggers, but I dont find that particularly surprising, since their total understanding of economics is, "Taxes Bad."

Re:File under (4, Informative)

jo42 (227475) | more than 2 years ago | (#36713510)

"Taxes Bad.", "Spending 10s of billions of dollars in 'wars' killing brown people Good."

Re:File under (0)

Anonymous Coward | more than 2 years ago | (#36713614)

Strawmen even better?

Bongo seems to be doing a fine job firing up wars against brown people.

Re:File under (1)

mamer-retrogamer (556651) | more than 2 years ago | (#36713620)

That's a nice straw man constructed by you and GP.

I disagree with the notion that the only way out of the current U.S. debt mess is to accrue more debt.

Re:File under (1)

CPTBMan (1806926) | more than 2 years ago | (#36713628)

And the only answer for left-wing D-baggers to any problem is RAISE TAXES (and advocate the murder of those who disagree with them).

Re:File under (1)

Anonymous Coward | more than 2 years ago | (#36713746)

You think that's bad? Here's Glorious Leader Obama: "We must spend our way out of this recession". He was also against raising the debt limit in 2006:

"The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. Increasing America’s debt weakens us domestically and internationally. Leadership means that “the buck stops here.” Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better."

So Obama will just have to flip-flop after he flip-flops on the flip-flop! This guy's politics gets better by the day. His recent antic of releasing oil from the SPR is just icing on the cake. Showing true colors of the community organizer elevated to the Presidential office.

Re:File under (1)

Anonymous Coward | more than 2 years ago | (#36713598)

Tea baggers are the only ones? How about sane humans who don't rack up credit card after credit card or economists or don't simply rubber stamp government data? Or maybe anyone who understands that individuals can govern their own affairs? Tell us where you get your impeccable economic logic.

Tea-baggers???? (1)

AliasMarlowe (1042386) | more than 2 years ago | (#36713710)

The only people who dont seem to understand this are the tea-baggers, but I don't find that particularly surprising, since their total understanding of economics is, "Taxes Bad."

WTF have tea-baggers [wikipedia.org] got to do with economics or politics? Is it really true the USA now has a political movement devoted to tea-bagging?

He means Tea Party (-1, Flamebait)

elucido (870205) | more than 2 years ago | (#36713824)

And the Tea Party are a right wing revolutionary group that seeks to coup Obama by using the weak economy as a weapon. They seek to follow the restore American plan and are controlled by militias. Groups like these control the Tea Party:
http://en.wikipedia.org/wiki/Militia_movement_(United_States) [wikipedia.org]
http://en.wikipedia.org/wiki/Hutaree [wikipedia.org]
http://en.wikipedia.org/wiki/Sovereign_citizen_movement [wikipedia.org]

Re:Tea-baggers???? (1)

vlm (69642) | more than 2 years ago | (#36713850)

The only people who dont seem to understand this are the tea-baggers, but I don't find that particularly surprising, since their total understanding of economics is, "Taxes Bad."

WTF have tea-baggers [wikipedia.org] got to do with economics or politics? Is it really true the USA now has a political movement devoted to tea-bagging?

Yes the politicians are the "catchers" and the big corporations are the "pitchers". Note we live in a cultural structure called fascism where the corps and govt have merged, so its kind of ambiguous as to who is who, but if they're "catching" in the media, then they're the politicians and if they're not discussed in the media except by the loyal opposition, they're probably the "pitchers".

Re:File under (0)

Anonymous Coward | more than 2 years ago | (#36713726)

I know it's quite a shot of logic for the easily led such as yourself to understand, but when you have borrowed a ton of money, and you are having a hard time paying it back, do you A. Borrow more money B. Borrow more money and increase your personal spending habits C. Borrow more money, increase your spending habits and offer to pay off everyone elses bad debts. D, Borrow more money, increase spending, offer to pay off bad debts, rob the local liqor store and give the loot away to financial institutions, hire an army of mercs to shoot anyone you have a dispute with, give bigger allowances to everyone in your household, buy some private jets, wire money to foriegn banks.. E. Cut your spending habits.

So, let's just say, what you're calling for is for you to borrow some money, and then to go out and buy 20 multimillion dollar houses, feed caviar to your pets, pay off criminal enterprises to elminate people you don't like and give "charitably" to anyone who looks to be richer than you. . . then, when it comes time to pay off your loans, you say, hey. . . why the hell worry? I'll just borrow some more money and continue living large! You'd be happy that there was no debtors prison anymore and bankruptsy laws, as you'd be royally screwed otherwise.

To decode the Orwellian nature of this issue is to show that to raise the debt ceiling is actually bringing us to default, not the other way around. If Obama was so worried about the soveriegn debt of the United States, he should have drastically cut spending the second he got into office, not tripled the size of government within his first few months in office. It's not "all his fault" of course, as this has been a problem brewing for decades, but I find it interesting that he uses a problem which he helped to create as a weapon against his opposition. The Tea Party, like them or hate them, were screaming at this guy to quit spending, and now all the sudden it's THEIR FAULT because the economic consequences are rearing their head to his policies?!?!?! Really? Then again, if we weren't so obsessed with made for media celebrities we might not have voted for this marketing creation called "Product Obama tm", and actually voted for someone with some economic knowhow, since economic issues are the most pressing in the country. We had people like Ron Paul who ran in 2008, but we so badly wanted the "blackish" guy with the charming smile that made us feel good about ourselves. We wanted a profession speech giver, not someone who actually knew what the hell they were doing. We got what we asked for, and now we blame his opposition for what he helped to cause. Orwellian, indeed.

As for the IMF going along with this, I call conflict of interest. What is the purpose of the IMF? Want to know? Well, I'll tell you. They bail out countries who are about to default. Does the IMF -especially being a European organization- wish to see America escape a default? Nope. More than likely once the debt limit is raised, the people the US Treasury borrows from is the IMF. This is a significant problem, whether you realize it or not. Look at the third world: How do you think they got where they are? Well, at some point they got "bailed out" by the IMF. Along with the loan, the IMF includes harsh terms, such as cutting all social services, raising taxes, imposing a harsh police state, etc. . . Therefore, your golden boy Obama is actually going to give you Greece style austerity at the very least, and at the worst, we'll be the new poster children for Sally Struthers' infomercials to be played in the BRIC nations who actually have an economic clue as to how not to impoverish and destroy their own societies.

Ahhh yes. . . but then again. . . at least "your side won". Happy?

No one reads history books anymore... (2, Informative)

Anonymous Coward | more than 2 years ago | (#36713496)

perhaps we should just run up even more debt insuring we will NEVER be able to be rid of it. I think its a very smart plan to just raise it every time we want more money. That way, we can million dollar bills and have a gallon of milk cost $12billion dollars! Genius!

Eventually... if you cant pay.. you cant pay. It MUST be corrected sometime

banking system must be re-imagined (1)

nido (102070) | more than 2 years ago | (#36713666)

There have only been a few times that the United State's debt was paid off. Economic depression immediately followed.

The problem is that money is borrowed into existance. No new debt == no new money.

Presidential candidate Ron Paul has a good temporary solution for the debt ceiling: start tearing up the bonds that are held by the Federal Reserve. The Fed returns the interest paid on these bonds to the treasury anyways...

Read about this option in Ellen Brown [webofdebt.com] 's recent piece, QE2 Shocker: The Whole $600 Billion Wound Up Offshore [truth-out.org]

Student Loans (0)

Anonymous Coward | more than 2 years ago | (#36713818)

Presidential candidate Ron Paul has a good temporary solution for the debt ceiling: start tearing up the bonds that are held by the Federal Reserve. The Fed returns the interest paid on these bonds to the treasury anyways...

Or, tear up all the Dept of Education student loans!

Awe come on! I can dream, right?

As it is my Social Security, if it's still there, will be going to pay my student loans; which means cat food in my "golden years". And in the meantime, I am living really cheap - new TV? Fuck no! Computer?! Hell no. Car? Nope - I'm even becoming a decent mechanic fixing my own car. Meals out? Uhn't uh. New clothes, nope!

In other words, my personal consumption is as close to zero as it can possible be. Economy needs more consumption to give it a boost? Oh well, I can't do anything about it.

All because I believed that more education is good. I was doing what the economists said to do: job goes overseas, well, go up the food chain. So, I thought, "well, the company is sending these coding jobs overseas I might as well get an MBA and move into management."

STUPID! DUMB IDEA!

The sky is falling...OH NO!!! /sarc (2, Funny)

CPTBMan (1806926) | more than 2 years ago | (#36713506)

It's pathetic how the left (national and international) refuse to admit the fact that the United States pulls in enough revenue each month to service the interest on the debt, which is the only thing that would cause default if not paid. We need to prioritize how we spend the revenue we take in. Servicing the debt comes first followed by the other spending. We won't default if big government spending (i.e. entitlements) isn't paid first. Tax increases on the rich (who already pay way more than their fair share) will not bring down the debt at all if we continue to spend like drunken sailors.

Re:The sky is falling...OH NO!!! /sarc (5, Insightful)

headhot (137860) | more than 2 years ago | (#36713530)

"There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning." Warren Buffet. His tax rate is lower then his secertary. They pay more then the none rich, because they make retardedly huge amounts of money, but for some reason their taxes as a percent of income is much lower then those of the middle class.

Re:The sky is falling...OH NO!!! /sarc (2)

CPTBMan (1806926) | more than 2 years ago | (#36713586)

Not true. I'm middle class and my percentage of taxes is less than 15%. Rich people pay above 30%. That's why it's called a progressive tax system.

Re:The sky is falling...OH NO!!! /sarc (5, Informative)

MrMarket (983874) | more than 2 years ago | (#36713684)

Rich people pay above 30%.

False. Rich people don't make money from wages. They make money from investments, dividends, and bond interest. That's why the super rich pay almost no tax (and why C-levels get paid in stock as opposed to salary). In the US we tax income from work, but we do not tax income from wealth.

Re:The sky is falling...OH NO!!! /sarc (1)

fahrbot-bot (874524) | more than 2 years ago | (#36713770)

False. Rich people don't make money from wages. They make money from investments, dividends, and bond interest. That's why the super rich pay almost no tax.... In the US we tax income from work, but we do not tax income from wealth.

Close. Earnings from investments (et al) are taxed as Capital Gains which, I believe, is currently 15%. As an additional "gotcha" those earnings are taxable even if simply re-invested and/or not redeemed. See: http://en.wikipedia.org/wiki/Capital_gains_tax#United_States [wikipedia.org]

Re:The sky is falling...OH NO!!! /sarc (2)

vlm (69642) | more than 2 years ago | (#36713778)

Not true. I'm middle class and my percentage of taxes is less than 15%. Rich people pay above 30%. That's why it's called a progressive tax system.

Unlikely. My county sales tax is about 5% of the fraction I spend retail, and my property tax alone is about 3% of my gross annual income. And the state got about 4% of my gross annual income. Not counting the feds, or excise or use taxes, I'm already approaching 10%.

Its possible to structure your lifestyle to match the current social engineering tax code, but even then, probably not as low as 15%.

On a big enough scale, its overall a regressive tax system. One of the larger components is vaguely progressive if you stick to wage (not cap gains) income, but that's just for PR reasons, to convince people the overall system is progressive.

Re:The sky is falling...OH NO!!! /sarc (2, Informative)

Anonymous Coward | more than 2 years ago | (#36713652)

Tax increases on the rich (who already pay way more than their fair share)

Care to justify that? Even Warren Buffet one of the richest and most respected financiers on the planet has repeatedly stated that we should cut taxes for the poor, and raise them for the rich;

http://finance.fortune.cnn.com/2010/10/05/buffett-says-cut-taxes-for-the-poor/

Re:The sky is falling...OH NO!!! /sarc (1)

vlm (69642) | more than 2 years ago | (#36713708)

refuse to admit the fact that the United States pulls in enough revenue each month to service the interest on the debt

The facts are that interest rates on that debt are darn near generational lows. In other words going up by a factor of, say, 10 or so, is neither unlikely nor even really all that historically noteworthy. Now going up by a factor of 20 or so, THAT would be historically high.

Also we can't spend 99.9% of revenue on debt payments. That would cause slight problems with everything else the govt is responsible for. Lets say we can afford no more than 10%.

So, as long as less that a hundredth of the revenue is spent on debt payments, when it inevitably goes up by a factor of ten to 10% ... ummmm ... oh oh ...

The "left" "right" thing is just made up to keep people divided, they both agree on looting the populace. Its just that accidentally, momentarily, the left is sorta on the side of the populace. I'm sure they'll rapidly fix that mistake.

Re:The sky is falling...OH NO!!! /sarc (1)

kbolino (920292) | more than 2 years ago | (#36713768)

I concur completely that we can service the debt just fine without changing the debt ceiling. The 14th Amendment requires the integrity of government debt to be beyond question, and I don't think either party in Congress is willing to play with that fire. I'll also concur that this whole "default on the debt" canard is scare-mongering by the left side of the politcal spectrum.

But make no mistake: there are real, serious, and immediate consequences of not raising the limit, and those consequences will rain down upon everyone. The pensioners and soldiers would be the hardest hit, of course, but a sudden drop in spending in a shaky economy would propagate to every industry, especially those with stronger government dependence (basically, any large contractor).

Furthermore, as others will point out, "the rich" are hardly paying "their fair share" if we identify a "fair share" to be a consistent percentage of income. It is those in the middle quantiles who suffer the greatest tax burden, relative to their means. The poor have exemptions and benefits while the rich have deductions and tax shelters. Closing this gap will not by any means make up the deficit (the rich don't have as much money as people think they do), but it will mitigate some of the ill effects of reaching the debt ceiling. Increasing taxes on those who run the businesses, though, can have as equally negative an effect as a drop in government spending, so the right balance has to be struck.

I just don't think any options should be off the table.

deja vu (0)

Anonymous Coward | more than 2 years ago | (#36713508)

Um, what is "Last time *they* did this, WWII!", Alex.

Liberal whine post (0)

Anonymous Coward | more than 2 years ago | (#36713514)

whine whine whine

Cheap theater (5, Interesting)

bradley13 (1118935) | more than 2 years ago | (#36713518)

We all know they are going to raise the debt limit. Every time this comes up, whichever party is in power votes to raise the limit [ritholtz.com] . Whichever party is not in power delays the vote to the last minute, using the occasion for political grandstanding.

It would frankly be wonderful if enough Congresscritters had the chuzpa to not raise the limit. Force some fiscal responsibility, even if it is probably too late. But, no, this is the Congress that still hasn't passed a budget for 2011 - they just gave up, and there is every sign that there will be no official budget for 2012 either.

Re:Cheap theater (1)

CPTBMan (1806926) | more than 2 years ago | (#36713544)

It's sad but you're probably right. The establishment, left and right, could care less about fiscal responsibility.

The problem with "fiscal responsibility" ... (3, Insightful)

khasim (1285) | more than 2 years ago | (#36713618)

Force some fiscal responsibility, even if it is probably too late.

EVERYONE wants lower taxes and reduced spending and "fiscal responsibility".

The problem is that each person has a DIFFERENT idea of what the government should be spending money on (and what programs should be cut) and what should be taxed.

And that doesn't even factor in the ear-marks and riders and other pork that gets attached to garner votes.

Re:The problem with "fiscal responsibility" ... (1, Insightful)

Relayman (1068986) | more than 2 years ago | (#36713840)

I like the Tea Party people like Michele Bachmann who decry government spending but line up for their share of welfare, in the form of farm subsidies in her case.

Re:Cheap theater (1)

Relayman (1068986) | more than 2 years ago | (#36713792)

Sorry, it may not happen this time. Just don't make the Aug. 3 Social Security payment and there will be plenty of money to pay the debt and interest and not default. The right is pointing out that default is not a given, you just have to change your spending priorities.

Re:Cheap theater (1)

dachshund (300733) | more than 2 years ago | (#36713796)

It would frankly be wonderful if enough Congresscritters had the chuzpa to not raise the limit. Force some fiscal responsibility, even if it is probably too late.

The time to force fiscal responsibility is when Congress decides what to spend. All we'll get from a debt-ceiling crash is a temporary crisis, some new ugly precedents, and permanent damage to our economy and national creditworthiness.

(The last point all by itself will undo the benefit of any conceivable spending cuts we could make --- it will become much more expensive to roll over the existing debt, and tax revenues will plummet along as the economy contracts.)

Remember that about a decade ago the Federal budget was balanced. Rather than drive the country off a cliff to solve the problem, it would be more useful to figure out what's changed since that time.

Unless they don't (1)

elucido (870205) | more than 2 years ago | (#36713846)

And the Tea Party certainly does not want the Republican politicians in office to vote on raising the debt limit. The Tea Party politicians lead by Ron Paul of Texas follow the instructions and listen to the militia, not the President of the USA.

They simply don't care if the US defaults because if the US defaults it only will increase their membership and their power. A weak economy helps militias to grow in size and in power. There will be many more revolutionaries the higher unemployment goes, and they want unemployment to be as high as possible so they can has as many recruits as possible.

Woman and French...Do we care? (-1)

Anonymous Coward | more than 2 years ago | (#36713522)

The new chief is a woman and is French. Do you think all of those old mail, white politicians will care what she says? Ha ha ha... we laugh at you while we eat our Freedom Fries.

Blegh (1, Troll)

ModernGeek (601932) | more than 2 years ago | (#36713524)

When are we going to get rid of this garbage money system and get rid of the entire idea of taxation? Just let the government create money when they want to do something. All money is is allocation of resources.

Re:Blegh (0)

Anonymous Coward | more than 2 years ago | (#36713566)

hahahahahahaha

funny troll is funny.

Money allows for humans to exchange their labor (1)

nido (102070) | more than 2 years ago | (#36713720)

All money is is allocation of resources.

The only resource that matters to humans are hands and minds working to solve human's problems. Minerals in the ground are just minerals in the ground, without humans to extract them, or to design & build the machinery that can extract them...

Re:Blegh (0)

Anonymous Coward | more than 2 years ago | (#36713734)

Your actually exactly right. But taxation is still needed to reallocate resources from winners to losers... after all the monopoly game ends when a few players take all the money.

Re:Blegh (3, Interesting)

phantomfive (622387) | more than 2 years ago | (#36713750)

At first I was going to mock your silly idea, but then I thought about it.

Essentially your idea is to have the government extract taxes from people equally by creating inflation, and thus taking money from everyone according to how much they have. It seems like a good idea on the surface, because we get rid of the expense of paying for the IRS, and it's fair: it taxes people according to their wealth.

In practice, it seems there might be obstacles. Countries like Zimbabwe and Brazil have tried similar schemes, and it seems to have had a real negative effect on their economies. Although it would seem fair, ultimately it would not be, because rich are much more capable of putting their money in inflation-protecting schemes, whereas the poor are hurt by constantly rising prices. Given these two considerations, I would be very cautious about moving the entire system over to that method quickly.

Re:Blegh (0)

Anonymous Coward | more than 2 years ago | (#36713802)

Let's go one step further and get rid of money. The only stable system is based on precious metals. Make pennies out of copper and they hold value. Go back to gold and silver in coins and drop paper entirely. It worked for thousands of years.

Fantasy Island Economy (2, Interesting)

glorybe (946151) | more than 2 years ago | (#36713542)

The US has never had any real kind of economy at all. From 1619 until 1860 we lived off of newly discovered resources and slavery. Following the Civil War we survived as a nation by paying starvation wages, using child labor, and substituted wage slaves from the former concept of slavery. Then to make matters worse we began to taper off the rape and pillaging of foreign nations. The idea that all of us must earn our daily bread is so repugnant to the privileged classes that it is not even a consideration. This is not an anti US rant at all. Most nations have existed in a similar mode although the way they exploit and plunder others may have varied in the apparent details. I don't think we are very likely to see the upper classes wanting fair pay and fair rewards for their efforts. Do I think default to outside debtors is a threat to the US? It probably is the smartest of all paths we could take.

Just watch money as debt (0, Troll)

Anonymous Coward | more than 2 years ago | (#36713580)

Central Banks owned by one family (Rothshild) have the private right to create money out of nothing, through fractional reserve banking.

Thus creating:

DEBT
INFLATION
SLAVERY

Collecting debt on money created out of nothing = ponzi scheme.
Giving people lower interest on saving accounts than real inflation (look at shadowstats) = slavery.
Giving people raises based on fake inflation (index = +- 3%) compared to real inflation (10%) = theft.

The Tea Party wants "nasty consequences" (0, Flamebait)

elucido (870205) | more than 2 years ago | (#36713582)

and they aren't fooling anybody. They want a civil war and have all but admitted it. And that is exactly what America will get if the debt ceiling is not raised. In specific and to be fair to the Tea Party they want a revolution. They think if the government does not pay for benefits, social programs, and if the jobs market remains weak, they'll have an easier time recruiting desperate individuals into their militias that are spread across the country. And they are right, the FBI and Homeland security both agree:

The agency warns that an extended economic downturn with real estate foreclosures, unemployment and an inability to obtain credit could foster an environment for extremists to recruit new members who may not have been supportive of these causes in the past.
http://www.huffingtonpost.com/2009/04/14/homeland-security-report_n_186834.html [huffingtonpost.com]

And this isn't the first time the Tea Party formerly known as the American Liberty League attempted to start a civil war. In the 1930s they attempted the business plot. [wikipedia.org] More details on that can be learned by watching this documentary. [youtube.com]

The coup attempt was prevented because General Butler tipped off FDR.
In response to this President FDR created the CIA. The FBI initiated operation COINTELPRO. COINTELPRO became the main counter intelligence operation in the USA with the main mission to prevent a civil war from happening. COINTELPRO has wide spread recognition by those on the left but most on the right don't recognize that COINTELPRO was originally directed at them and who it's directed at is at the discretion of the President and the FBI leadership.

Do any amount of research you want to confirm these facts. Try Googling "American Liberty League", "COINTELPRO", "Business Plot", "Tea Party Movement", and see what you find. Eventually you'll discover the "Guardians of the Free Republic", and other militia's behind the Tea Party who just happen to be from Texas, the same state Ron Paul and Alex Jones happen to be from. The same state President Bush pretended to be from. Why? Because the Tea Party movements headquarters are where the militias are, and Texas is one of those places with lots of militias.

And what is happening now? The FBI is more than likely investigating the Tea Party with as much zeal as they investigated Al Qaeda. The Tea Party is being crushed by the FBI as we speak, but if the US defaults then all hell will break loose. How will the FBI agents trying to prevent civil war be paid? The country will divide into factions, and if that happens, and if it turns violent, the USA itself and the union itself will be divided into factions. Foreign nations will be in a position to invade, or simply flood all sides with weapons and make the civil war long and bloody.

I don't know about you, but I have friends and family here. I do not want a civil war. The Tea Party needs to stop playing games with the global economy. They need to pass a fucking budget ASAP. If the nation defaults there will be nothing anyone can do to prevent a civil war. The unemployment rate will be so high that many people will have nothing to lose by fighting.

Re:The Tea Party wants "nasty consequences" (0)

Anonymous Coward | more than 2 years ago | (#36713756)

This is why I hate liberals. People who want to reduce government spending are attacked with this bullshit.

Well, let me retort. The Liberals want Americans killed by Mexican drug lords with machine guns while using the violence they caused to propose stricter gun laws making it easier to kill off more Americans. Don't believe me? Look up Melson and the ATF. The FBI for the last few years has been giving Mexican drug cartels "stimilus money" so they can buy guns in Arizona. What about gun laws you say? The ATF told the gun stores to sell the guns even though they shouldn't be able to pass a background check. All this came out because a border agent, a US citizen, was killed by one of these guns purchased in this program.

So I ignore you load of bullshit with no evidence, and replace my own that has been proven true. Liberals want US citizens dead and they fund and ignore the current laws to make it happen. Don't trust liberals in power or you will face drug lords with guns while you won't be allowed to own a gun to defend yourself. Liberals want you dead, period.

Re:The Tea Party wants "nasty consequences" (1)

DNS-and-BIND (461968) | more than 2 years ago | (#36713798)

Ok, you realize this is a play right out of Saul Alinsky and Mao Zedong? For those of you who don't know (and who doesn't?) the way it worked was: the people don't realize they're oppressed. They need to be liberated and enjoy the benefits of a socialist government. We, the good guys, need to nudge the people along the holy path to goodness. So, we attack the government, the government attacks back, but we, the good people, make sure we're nowhere around so that the retaliation falls on innocents. These people, having been harmed by our provocations, provide recruits and financing for further revenge-motivated attacks. Repeat, etc. Dividing the country into factions? It's already happened, and it was done by leftists. You didn't see that map after the 2008 election: every state who voted the correct way was labeled "America" and the states who dissented were labeled "Dumbfuckistan".

Doesn't it suck when the enemy learns and uses your own tactics against you?

The only "nasty consequences" require courage (1, Insightful)

scottbomb (1290580) | more than 2 years ago | (#36713588)

The US won't "default" no matter what happens. Enough tax money comes in every day to sustain the interest payments on the debt. The tough decisions politicians need to make are the budget cuts. Obama and the Democrats don't want to cut anything (except for defense). The elephant in the room is all those people on the welfare dole. "Entitlements" account for the vast majority of the budget. Does a millionaire retiree really need that $2000 social security check and medicare? Those programs should be means-tested. Otherwise, they're just Ponzi schemes that are approaching the inevitable demise of more people taking out than putting in.

For those who want to raise taxes, I ask you: When has a tax increase ever created a job? On the contrary, Reagan knew what Kennedy (JFK) knew: tax cuts INCREASES private investment, which increases jobs, which adds more TAXPAYERS to the system. We don't need more taxes, we need more people paying taxes. Obama can sing his class warfare song (rich vs. poor) all he wants but the fact of the matter is, rich people INVEST their money. That creates jobs. Confiscate their money through taxation and that's less money available to invest. It's really quite simple. I'm glad my boss is a millionaire. If he wasn't, I might be unemployed right now.

Re:The only "nasty consequences" require courage (5, Insightful)

genner (694963) | more than 2 years ago | (#36713634)

The US won't "default" no matter what happens. Enough tax money comes in every day to sustain the interest payments on the debt. The tough decisions politicians need to make are the budget cuts. Obama and the Democrats don't want to cut anything (except for defense). The elephant in the room is all those people on the welfare dole. "Entitlements" account for the vast majority of the budget. Does a millionaire retiree really need that $2000 social security check and medicare? Those programs should be means-tested. Otherwise, they're just Ponzi schemes that are approaching the inevitable demise of more people taking out than putting in.

For those who want to raise taxes, I ask you: When has a tax increase ever created a job? On the contrary, Reagan knew what Kennedy (JFK) knew: tax cuts INCREASES private investment, which increases jobs, which adds more TAXPAYERS to the system. We don't need more taxes, we need more people paying taxes. Obama can sing his class warfare song (rich vs. poor) all he wants but the fact of the matter is, rich people INVEST their money. That creates jobs. Confiscate their money through taxation and that's less money available to invest. It's really quite simple. I'm glad my boss is a millionaire. If he wasn't, I might be unemployed right now.

I used to agree with this line of thinking. The problem is the rich aren't investing in US companies. The current tax breaks are creating jobs they just happen to be in China.

Re:The only "nasty consequences" require courage (5, Insightful)

cowboy76Spain (815442) | more than 2 years ago | (#36713782)

tax cuts INCREASES private investment, which increases jobs, which adds more TAXPAYERS to the system.

Oh, the infamous Lafffer curve (too lazy to post a link to wikipedia, check it yourself). Too bad it has not been proved, nobody knows where the optimal point is (why they always assume the optimal point is with LESS taxes, and no with more?), and everything else. But it gives some people a good mantra to repeat and repeat.

As other post has already put, everyone is willing to make sacrifices and cut costs... unless it is in something that benefits them.

At least some people is honest and choses consequently "I want good public services and I'll pay the taxes needed to/I do not want good public services but I want less taxes instead". Others just say"If I pay less taxes then everything will magically solve". With the first people one can try to get to a common point, arguing with the later ones is just a waste of time.

There are consequences to your actions... (0)

Anonymous Coward | more than 2 years ago | (#36713630)

You can only apply a band-aid to our problems for so long. End of the day, just like a family with a high interest credit card that is maxed out, the US will need to figure out a way to pay it off - or default.

The politicians need to quit doing feel-good crap to get reelected and start becoming stewards for our nation - or there won't be much more feel good crap to do.

The IMF can suck the US's sack - they can't tell us what to do. If I were the O'man I would dig my heels in deeper with that kind of junk.

oh no (4, Funny)

phantomfive (622387) | more than 2 years ago | (#36713644)

said in an interview broadcast Sunday that it would cause .... stock markets to fall.

Oh, no! Please don't let the stock market fall! Anything but that! It'll be a tragedy for all the people who've bought non-dividend paying stock at prices far higher than they're worth!

It's been pointed out before, and is worth pointing out again, but US government default is prohibited by the 14th amendment of the constitution [wikipedia.org] . Whether they follow it or not is left to be seen.

Stop Spending! (0)

flyingrobots (704155) | more than 2 years ago | (#36713646)

Not all obligations would stop being fulfilled. There will still be cash flow. Somethings would not receive any money, yes, but we can prioritize our debts, and pay the ones that have the most impact on our government (i.e. interest on debt, bonds, etc). It's what normal people have to do.

So...lets get on with it. We need to stop spending so much money in places that have no value. Leave the debt ceiling where it is and let's face the music now instead of later. Raising taxes will only further DECREASE revenue. That's right, if you drop that gear into 4th while going up a hill, it's only going to stall your engine.

STOP SPENDING! Just stop spending, cut the budget to fit what monies we have.

Re:Stop Spending! (0)

Anonymous Coward | more than 2 years ago | (#36713848)

Sure lets cut the budget. Now we just have to agree on what. How about your pork first?

New IMF Head? (0)

Anonymous Coward | more than 2 years ago | (#36713648)

What happend to Ethon Hunt...?

Hitting the Debt Limit doesn't mean Default (5, Interesting)

billstewart (78916) | more than 2 years ago | (#36713670)

The US Constitution says the government isn't allowed to default on the debt. But the Debt Limit Law isn't in the Constitution - it's just a law that says that Congress doesn't authorize borrowing more than $X, and requires some actions if we hit that limit, including not spending more money than we're taking in. It's questionable whether it really even applies, because Congress has passed a budget law since the last Debt Limit Law update, and that budget says they're going to be spending more than they're taking in so they're going to be in more debt.

So what can the Executive Branch do when they hit the debt limit?

  • - They could stop paying back debts that come due, but that's not only unconstitutional, it's not going to help the deficit problem any.
  • - They could stop paying Federal employees (not sure if that's big enough to help.)
  • - They could stop paying Social Security checks, and try to make the Republicans take most of the blame for your grandma being thrown out on the streets, hoping that the Democratic Party leaders don't get stomped in the next election by upset Democrats.
  • - They could cut all the Republican Party's favorite programs, especially most of the military contracting boondoggles. (Unfortunately, some of those can't be done instantly, especially shutting down the wars, and Obama doesn't want to be accused of losing the wars for political reasons, and he seems to like the TSA and Homeland Security.)
  • - They could declare that the most recent Budget supersedes the older Debt Limit law.
  • - They could close the Washington Monument!

I'm guessing that they'll probably do a combination of politically unpopular spending cuts and Federal pay cuts and try to blame the Republicans, plus the Washington Monument's going to be doomed until there's a solution. I don't think they'll default on the debt, not just because it's unconstitutional, but because it seriously degrades their chances of borrowing any more money in the near future, which they want to be able to do - Obama's threatening that, but I think it's more of a political game of chicken.

Risking my positive karma... (0)

JustinFreid (1723716) | more than 2 years ago | (#36713736)

I think she should be put under house arrest, under round-the-clock watch of armed guards, at her own expense in New York until she changes her tune.

Stop Funding the IMF? (0)

Anonymous Coward | more than 2 years ago | (#36713738)

Here's a way to save some $$$, stop paying into the worthless organization that is the International Monetary Fund.

Another lie (0)

Anonymous Coward | more than 2 years ago | (#36713748)

"Obama administration officials say the U.S. would begin to default without an agreement by Aug. 2.""
The US government will only default if the Treasury is instructed to not pay interest on our current debt with the incoming revenues. This must be done per the 14t amendment:
http://www.nationalreview.com/articles/271329/constitutional-nonsense-debt-john-berlau?page=1

Would would happen is the government would be forced to cut entitlement programs.

Oh They'll Do It (1)

Greyfox (87712) | more than 2 years ago | (#36713804)

Even ignoring the entire world economy collapsing, the political consequences alone would be grave indeed. Stiffing millions of seniors, the most consistent voting block, out of their social security would be a good way to insure your political demise in the next election. That's assuming they wait that long and don't start initiating recalls. There's some question as to how legitimate those would be for Congress, but I bet people would be willing to find out. You'd also likely be stiffing hundreds of thousands of military personnel. That brings its own host of problems, not the least would be pissed off military personnel remembering who you are come election time. Or really just pissed off military personnel remembering who you are, period.

I keep expecting this to turn into some huge political opportunity for Obama. He could use it as an opportunity to bring all our troops home from Iraq and Afghanistan, citing fears that they'd be stranded there if Congress doesn't reach an agreement. Once all our guys are out of Pakistan, no sense in giving them billions of dollars of aid anymore either. If they want to have a revolution and get into a nuclear war with India, that's none of our concern. It'd also provide a good excuse to sell off some of the gold in Ft. Knox, since it's not backing our dollars anymore.

Of course even if he can completely capitalize on it and manage to undo most of the damage wrought by the Bush Administration and its rubberstamp Republican congress in the previous 8 years, President Pailin will just fuck everything within 6 months of taking office in 2016, anyway.

Not surprised she said that (1)

chebucto (992517) | more than 2 years ago | (#36713810)

Given that every other reputable economist from the left to the right has said exactly the same thing.

I'm not an economist myself but my understanding is that US debt is used as a fundamental, secure collateral for many (most?) other financial transactions; reducing confidence in US debt reduces confidence in the underpinnings of huge swaths of the economy.

Add to that the fact that interest rates on new US debt will rise (including debt that is rolled over), raising borrowing costs for the us government considerably.

http://www.economist.com/node/18866851 [economist.com]

http://www.economist.com/node/18928600 [economist.com]

Both sides are unreasonable (1)

the linux geek (799780) | more than 2 years ago | (#36713814)

The Republicans are wrong to assume that cutting spending alone will produce a surplus. Take a lot at this graph.

link [wikimedia.org]

US tax revenue is about $2tn. You aren't going to be able to cut $1.3tn without dipping into mandatory expenditures (social security, healthcare, etc). Defense is big, but not big enough to cover the difference, and there's no realistic way to do massive cuts to defense without resulting in massive unemployment (industries related to the DoD are enormous.) Long-term, the various healthcare programs do need cuts taken out of them, and real tax increases are going to be needed to produce a surplus. Even then, it won't be easy, and I'm unconvinced that either party is willing to take the necessary steps.
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