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Author Topic:   United States Debt Default
Straggler
Member (Idle past 82 days)
Posts: 10285
From: London England
Joined: 09-30-2006


Message 1 of 209 (624057)
07-15-2011 3:38 PM


Is the United States going to default on it's debt and plunge the global financial system into a crisis of never-seen-before proportions?

I don't really understand the intricacies of this at all. Can anyone explain:

Why this has come to a head now?
What is likely to happen?
What could happen (worst case but reasonably possible scenario)?
What are the consequences?
Who can we blame?


Replies to this message:
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 Message 3 by jar, posted 07-15-2011 4:15 PM Straggler has responded
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AZPaul3
Member
Posts: 4854
From: Phoenix
Joined: 11-06-2006
Member Rating: 4.8


Message 2 of 209 (624059)
07-15-2011 4:06 PM
Reply to: Message 1 by Straggler
07-15-2011 3:38 PM


Why this has come to a head now?
What is likely to happen?
What could happen (worst case but reasonably possible scenario)?
What are the consequences?
Who can we blame?

1. Because for generations now we have lived well beyond our means (all administrations, all congresses, both parties) and whether it's this year, next year or next decade, it has to happen some time, so why not now?

2. Our politicos will settle, raise the debt limit (before Aug 3) and pass the whole big bag of shit off to the next poor dumb bastards that get elected in the future.

3. Worst case? We default on a $14 trillion debt setting off a world-wide depression that will make the 30's look like fat times, leading to global famine, war, nuclear war and the extinction of humanity. Well, maybe that last one is a bit hyperbolic.

4. See #3 above.

5. You Brits. You should have never surrendered at Yorktown.


This message is a reply to:
 Message 1 by Straggler, posted 07-15-2011 3:38 PM Straggler has not yet responded

Replies to this message:
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jar
Member
Posts: 32356
From: Texas!!
Joined: 04-20-2004
Member Rating: 2.0


Message 3 of 209 (624061)
07-15-2011 4:15 PM
Reply to: Message 1 by Straggler
07-15-2011 3:38 PM


Possible
Realistic possibilities.

The current revenue inflow is sufficient to cover interest payments on the debt so even if the Debt Limit is not raised, default in the short term is not likely.

If the Debt Limit doesn't get raised, the short term impact would be on the poor, the ill, the unemployed and those on Social Security. The rich, those working and those with streams of income not related to Social Security would likely see little short term effects. It's likely that US Postal services would stop and the payments to military, Social Security retirees, those on Federal Welfare and Federal unemployment extensions would suffer almost immediately.

The Postal services will get picked up by alternative carriers and so they would benefit.

State economies would take a hit since the funds paid to the unemployed, those people on Social Security retirement benefits and those receiving Medicare benefits almost all gets spent locally.


Anyone so limited that they can only spell a word one way is severely handicapped!

This message is a reply to:
 Message 1 by Straggler, posted 07-15-2011 3:38 PM Straggler has responded

Replies to this message:
 Message 25 by Straggler, posted 07-16-2011 1:46 PM jar has responded

  
Taq
Member
Posts: 8262
Joined: 03-06-2009
Member Rating: 6.3


Message 4 of 209 (624065)
07-15-2011 5:02 PM
Reply to: Message 2 by AZPaul3
07-15-2011 4:06 PM


1. Because for generations now we have lived well beyond our means (all administrations, all congresses, both parties) and whether it's this year, next year or next decade, it has to happen some time, so why not now?

It doesn't have to happen in the long or short term. If the debt ceiling is raised in the short term and the debt is brought down to reasonable levels over the next 10 to 20 years then there is no problem.


This message is a reply to:
 Message 2 by AZPaul3, posted 07-15-2011 4:06 PM AZPaul3 has responded

Replies to this message:
 Message 5 by AZPaul3, posted 07-15-2011 5:49 PM Taq has not yet responded
 Message 13 by Bailey, posted 07-15-2011 7:00 PM Taq has responded

  
AZPaul3
Member
Posts: 4854
From: Phoenix
Joined: 11-06-2006
Member Rating: 4.8


Message 5 of 209 (624068)
07-15-2011 5:49 PM
Reply to: Message 4 by Taq
07-15-2011 5:02 PM


Debt Reduction
It doesn't have to happen in the long or short term. If the debt ceiling is raised in the short term and the debt is brought down to reasonable levels over the next 10 to 20 years then there is no problem.

So true. But that would require fiscal discipline on the part of several consecutive congresses. I am not optimistic.


This message is a reply to:
 Message 4 by Taq, posted 07-15-2011 5:02 PM Taq has not yet responded

  
xongsmith
Member
Posts: 1939
From: massachusetts US
Joined: 01-01-2009


Message 6 of 209 (624069)
07-15-2011 5:56 PM
Reply to: Message 1 by Straggler
07-15-2011 3:38 PM


It's the filthy disgusting greedy rich corporate bastards that have all their lackeys running the government and have positioned their most effective criminals (all the big Republican shitholes and some of the Democrat shitholes) in political office. They refuse to give up their heinously constructed tax breaks and instead want to fuck over the people of the USA even more than they already are, as they wage wars around the globe, raping, torturing, exterminating everything they find in sight.

I can only earnestly hope that, somehow, some horrible new painful irreversible disease hits the world that is extremely infectious only to those people who would agree with their psychotic mindset as they arrive while the rest of us are immune.

The Republicans are Assholes. They have been so all my life. They don't give 1 blue shit about the United States. They only care about making their share of the pie higher. They should all just go off somewhere like the Elephants they are and DIE.

But, then, that's just my modest, calm opinion today.


- xongsmith, 5.7d

This message is a reply to:
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xongsmith
Member
Posts: 1939
From: massachusetts US
Joined: 01-01-2009


Message 7 of 209 (624070)
07-15-2011 5:56 PM
Reply to: Message 1 by Straggler
07-15-2011 3:38 PM


dBoard 4.0 even more unfriendly to dial-up...

Edited by xongsmith, : duplicate


- xongsmith, 5.7d

This message is a reply to:
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jar
Member
Posts: 32356
From: Texas!!
Joined: 04-20-2004
Member Rating: 2.0


Message 8 of 209 (624075)
07-15-2011 6:08 PM


A first step.
As a first step to solving the problems we should totally change all the tax brackets from dollar amounts to multiples of the US poverty rate.


Anyone so limited that they can only spell a word one way is severely handicapped!

Replies to this message:
 Message 11 by Jon, posted 07-15-2011 6:46 PM jar has responded

  
Phat
Member
Posts: 13789
From: Denver,Colorado USA
Joined: 12-30-2003
Member Rating: 1.3


Message 9 of 209 (624077)
07-15-2011 6:41 PM
Reply to: Message 6 by xongsmith
07-15-2011 5:56 PM


Core Differences
Fumbling around in the quote mine, I found this gem:
quote:
liberals belief economic growth comes from wise investments by government experts; conservatives believe that economic growth stems from millions of Americans having the freedom to make their own economic decisions everyday.

Problem is, if left to free market competition, the US middle class will still suffer with global competition, and the corporate interests wont give a rats ass. They will simply hire the overseas labor! This is one glaring problem today. We have lost our sense of nationalism and helping our neighbor make it before the guy across the country (or in another country).


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jar
Member
Posts: 32356
From: Texas!!
Joined: 04-20-2004
Member Rating: 2.0


Message 10 of 209 (624078)
07-15-2011 6:45 PM
Reply to: Message 9 by Phat
07-15-2011 6:41 PM


Re: Core Differences
Of course I imagine that your source did not provide either evidence or support for that absurd assertion.


Anyone so limited that they can only spell a word one way is severely handicapped!

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 Message 9 by Phat, posted 07-15-2011 6:41 PM Phat has acknowledged this reply

  
Jon
Inactive Member


Message 11 of 209 (624079)
07-15-2011 6:46 PM
Reply to: Message 8 by jar
07-15-2011 6:08 PM


Re: A first step.
As a first step to solving the problems we should totally change all the tax brackets from dollar amounts to multiples of the US poverty rate.

Interesting idea! How would a system like that work? What would that do to the poor people who currently pay no taxes?

Jon


Love your enemies!

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 Message 8 by jar, posted 07-15-2011 6:08 PM jar has responded

Replies to this message:
 Message 14 by jar, posted 07-15-2011 7:05 PM Jon has responded
 Message 20 by Rrhain, posted 07-16-2011 4:42 AM Jon has responded
 Message 72 by bobbins, posted 07-21-2011 9:31 PM Jon has responded

  
frako
Member
Posts: 2904
From: slovenija
Joined: 09-04-2010
Member Rating: 3.5


Message 12 of 209 (624081)
07-15-2011 6:47 PM
Reply to: Message 1 by Straggler
07-15-2011 3:38 PM


Is the United States going to default on it's debt and plunge the global financial system into a crisis of never-seen-before proportions?

Not necessarily only the ones that lent you the money The rest of the world would feel the collapse but not as badly as most think.

Why this has come to a head now?

You have been borrowing more then you should now your screwed it could be managed but it will get worse if you just raise the sealing and go on like nothing is happening.

What is likely to happen?

Your money in the bank forget about it its gone, the same thing happened in Iceland people wanted to get some cash from their accounts banks said no.

What could happen (worst case but reasonably possible scenario)?

Countries that want their money back get nuked by the US, people in the US get fucked big time 3d world country big time

What are the consequences?

The people that lent the US money will want it back and just about everything the government owns can be lost to foreigners to pay off that debt.

Who can we blame?

Yourself for not stepping on your governments feet when the time was right.

Edited by frako, : No reason given.


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Bailey
Member (Idle past 2822 days)
Posts: 574
From: Earth
Joined: 08-24-2003


Message 13 of 209 (624082)
07-15-2011 7:00 PM
Reply to: Message 4 by Taq
07-15-2011 5:02 PM


In Regards to the Flickering Flame of Optimism
It doesn't have to happen in the long or short term. If the debt ceiling is raised in the short term and the debt is brought down to reasonable levels over the next 10 to 20 years then there is no problem.

Optimism's is a fickle finch Taq.

The debt ceiling’s been raised over 72 times and strangely the effect’s been increased interest levels and thus debts and deficits, rather than decreasing debt to any semblance of reason. The debt hasn’t decreased in over 50 years; however, when it comes to debt, the number itself doesn't actually matter anyway and it should be easily demonstrable.

Of course the above view doesn’t address the daunting challenge imposed by unemployment and jobs numbers, etc., etc..

Additionally, people should bypass the smoke and mirrors and give credit where it is do rather than to every college kid with a red cup. For example, when noting a declination in the jobless rate, also inform us of the shrinking workforce correlating so well. But I digress ..

Providing Tom’s total debts were equal to $1 million, he may be considered by many as financially ruined.

However, providing the United States' total debts were equal to $1 million, it would be in the prime of its existence.

The size of the debt - $1 million, is the same in both cases, but what it means is completely different because that number itself means very little. What matters is how the number relates to the economy in question.

For the national debt, what matters is how the debt compares as a percentage of the gross domestic product. The reason the debt is a problem is not simply because it’s encroaching $14.3 trillion dollars, but because that happens to be about 100 percent of the nation’s GDP. And granted - while it’s not unheard of, its perdy bad and especially so ..

Combined with a bygone era of industry, a collapsing consumer economy and all sorts of other delicate bubbles to burst.

In the end, a nation can only diminish tax revenues (due to structural unemployment or otherwise) for so long while seemingly fostering a kleptocracy by increasing the debt on a steadily rising tide of interest, before the flame of optimism eventually becomes extinguished.

If I win the lotto I'll pay the debt, but if's only get us so far and grampa always said ya can't spends 'dem thank you's.

One Love

Edited by Bailey, : sp.


I'm not here to mock or condemn what you believe, tho my intentions are no less than to tickle your thinker.
If those in first century CE had known what these words mean ... 'I want and desire mercy, not sacrifice'
They surely would not have murdered the innocent; why trust what I say, when you can learn for yourself?
Think for yourself.

Mercy Trumps Judgement,
Love Weary


This message is a reply to:
 Message 4 by Taq, posted 07-15-2011 5:02 PM Taq has responded

Replies to this message:
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jar
Member
Posts: 32356
From: Texas!!
Joined: 04-20-2004
Member Rating: 2.0


Message 14 of 209 (624084)
07-15-2011 7:05 PM
Reply to: Message 11 by Jon
07-15-2011 6:46 PM


Re: A first step.
It would not change that at all.

The point is to make it harder for the politicians to avoid a progressive tax system by playing games with terms like "middle class" or "rich".

Taxes would be based on multiples of the poverty line. At or near the poverty line you would pay no income taxes, but as income rises you would move into named brackets like "10 X Poverty level" and "100 X Poverty level" and "1000 X Poverty level".

The goal is to make the relationships clear and transparent.


Anyone so limited that they can only spell a word one way is severely handicapped!

This message is a reply to:
 Message 11 by Jon, posted 07-15-2011 6:46 PM Jon has responded

Replies to this message:
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Taq
Member
Posts: 8262
Joined: 03-06-2009
Member Rating: 6.3


Message 15 of 209 (624085)
07-15-2011 7:13 PM
Reply to: Message 13 by Bailey
07-15-2011 7:00 PM


Re: In Regards to the Flickering Flame of Optimism ()
Optimism's is a fickle finch Taq.

So is defeatism.

For the national debt, what matters is how the debt compares as a percentage of the gross domestic product. The reason the debt is a problem is not simply because it’s encroaching $14.3 trillion dollars, but because that happens to be about 100 percent of the nation’s GDP. And granted - while it’s not unheard of, its perdy bad and especially so ..

I agree that percentage of GDP is the best way to judge the size of the national debt. Using this figure, there have been instances where the national debt has gone down in recent times:

The recent upsurge in debt was a government attempt to stabilize the economy. While this a dangerous ploy, it was better than letting the economy tank. What it did was buy time, time in which the economy can hopefully improve to pay off the debt.


This message is a reply to:
 Message 13 by Bailey, posted 07-15-2011 7:00 PM Bailey has responded

Replies to this message:
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