Quote :

"GOP's Weekend Off May Cause Catastrophic Default WASHINGTON -- House Republicans are setting up a catastrophic U.S. default by deciding to take a weekend off while time to resolve deadlocked negotiations ticks down to a close, Senate Majority Leader Harry Reid (D-Nev.) said Thursday. With just 11 days until the United States can no longer borrow fresh money -- and will have to start letting bills go unpaid -- Reid and Democratic policy boss Sen. Chuck Schumer (D-N.Y.) took to the Senate floor to express shock at the House for quitting for a couple days. "It's hard to comprehend how the United State House of Representatives, at the height of this fiscal crisis has decided to take the weekend off," Reid said, suggesting it was a way for the GOP leaders to give in to the extreme wing of the party that wants a default, without actually appearing to do so. "

http://www.huffingtonpost.com/2011/07/21/harry-reid-house-weekend-cause-debt-default_n_905783.html

Republicans are willing to crash the economy in an effort to blame it on President Obama.

7/21/2011 11:36:23 PM

Tell me again why the government only being able to spend as much money as it takes in will crash the economy?

7/21/2011 11:41:16 PM

Oh hai pryderi

7/22/2011 12:58:15 AM

Quote :

"Tell me again why the government only being able to spend as much money as it takes in will crash the economy?"

http://www.miamiherald.com/2011/07/21/2324820/how-the-debt-limit-showdown-could.html

7/22/2011 2:24:20 AM

thread title 1/10... you get the 1 for almost being clever.

7/22/2011 3:07:36 AM

If they allow the country to default it will only last a few days. Wall Street will hammer them on their personal phone lines until they finally raise it.

that leaves two questions for me:

a)How much damage could be done in a few days? I'm not sure anyone really knows.
b)Will the only thing they are willing to pass be a half-assed McConnell plan that kicks the plan to Obama in two years? A pretty weak move IMO.

7/22/2011 8:36:23 AM

Quote :

" Oh hai pryderi"

I DID NOT HER, I DID NOT!

7/22/2011 9:32:38 AM

Look, we know what will happen in the event we hit the debt ceiling, it is codified in law. It states what programs in order get paid when available cash does not match expenditures, and debt service payments are way at the top of the list. As such, this will in no way be a default. If anything, this event should improve the U.S. debt rating, as it will bring spending in line with revenues.

7/22/2011 10:01:44 AM

^I'm with you on this one. This shit is just BS politics as usual.

7/22/2011 12:04:44 PM

Lynching...that's code language for something isn't it?

TROLL IN THE SOAP BOX!!!!!



Thought you ought to know.



http://thewolfweb.com/message_topic.aspx?topic=615952

7/22/2011 12:13:09 PM

They all knew the rules of the game, if you're Obama all you have to do to avoid this is keep the house. This was not a surprise, what did he think the GOP would do. For such a smart guy he kinda fell in to this. I also like how this number matters, but the trillions off the balance sheet are forgotten. This game is over, the die has been cast. Default is comming, either by printing press or traditional.

7/22/2011 12:42:23 PM

^ or did he think ramming healthcare through would unite the parties? I'll submit he is less than bright.

7/22/2011 12:44:13 PM

People need to compromise. the country is getting to big for shitty health care.

7/22/2011 1:54:53 PM

Quote :

"the country is getting to big"

7/22/2011 2:07:08 PM

If failing to raise the debt ceiling lowers our credit rating, causes the stock market to drop and leads to job losses of 750000 jobs per month like it did under Bush, then the GOP will be responsible for crashing the economy.

7/22/2011 8:54:32 PM

riiiiiiiiiight. Obama jacking up spending like there was no tomorrow, leading up to the crisis, will have NOTHING to do with it. riiiiiiiiiight. Both sides are to blame, as both sides are at the table

7/22/2011 8:56:13 PM

Haven't you guys heard, GOP is doing this because he's black.

It's like the democrats don't want us to elect another minority, because they just keep playing the race card, which I do not give a f%^& about.

7/22/2011 9:29:10 PM

You are so dense. The government dreams up scare tactics and says IF YOU DONT LET US DO _____ THEN TERRIBLE THINGS WILL HAPPEN.

That is how they continue to pillage the nation. And people like you blindly believe it time and time again no matter how many times they screw you over.

Thats exactly how they passed the TARP steaming pile of shit not even three years ago and you've already forgotten.

You do realize that allowing the debt to spiral out of control is much more dangerous for our economy and national safety, right?


But don't just take my word for it. Listen to what history buffs and experts are saying.

Quote :

"Default now, Or Suffer A More Expensive Crisis Later Debate over the debt ceiling has reached a fever pitch in recent weeks, with each side trying to outdo the other in a game of political chicken. If you believe some of the things that are being written, the world will come to an end if the U.S. defaults on even the tiniest portion of its debt. In strict terms, the default being discussed will occur if the U.S. fails to meet its debt obligations, through failure to pay either interest or principal due a bondholder. Proponents of raising the debt ceiling claim that a default on Aug. 2 is unprecedented and will result in calamity (never mind that this is simply an arbitrary date, easily changed, marking a congressional recess). My expectations of such a scenario are more sanguine. The U.S. government defaulted at least three times on its obligations during the 20th century. -- In 1934, the government banned ownership of gold and eliminated the right to exchange gold certificates for gold coins. It then immediately revalued gold from $20.67 per troy ounce to $35, thus devaluing the dollar holdings of all Americans by 40 percent. -- From 1934 to 1968, the federal government continued to issue and redeem silver certificates, notes that circulated as legal tender that could be redeemed for silver coins or silver bars. In 1968, Congress unilaterally reneged on this obligation, too. -- From 1934 to 1971, foreign governments were permitted by the U.S. government to exchange their dollars for gold through the gold window. In 1971, President Richard Nixon severed this final link between the dollar and gold by closing the gold window, thus in effect defaulting once again on a debt obligation of the U.S. government. Unlimited Spending No longer constrained by any sort of commodity backing, the federal government was now free to engage in almost unlimited fiscal profligacy, the only check on its spending being the market’s appetite for Treasury debt. Despite the defaults in 1934, 1968 and 1971, world markets have been only too willing to purchase Treasury debt and thereby fund the government’s deficit spending. If these major defaults didn’t result in decreased investor appetite for U.S. obligations, I see no reason why defaulting on a small amount of debt this August would cause any major changes. The national debt now stands at just over $14 trillion, while net total liabilities are estimated at over $200 trillion. The government is insolvent, as there is no way that this massive sum of liabilities can ever be paid off. Successive Congresses and administrations have shown absolutely no restraint when it comes to the budget process, and the idea that either of the two parties is serious about getting our fiscal house in order is laughable. Boom and Bust The Austrian School’s theory of the business cycle describes how loose central bank monetary policy causes booms and busts: It drives down interest rates below the market rate, lowering the cost of borrowing; encourages malinvestment; and causes economic miscalculation as resources are diverted from the highest value use as reflected in true consumer preferences. Loose monetary policy caused the dot-com bubble and the housing bubble, and now is causing the government debt bubble. For far too long, the Federal Reserve’s monetary policy and quantitative easing have kept interest rates artificially low, enabling the government to drastically increase its spending by funding its profligacy through new debt whose service costs were lower than they otherwise would have been. Neither Republicans nor Democrats sought to end this gravy train, with one party prioritizing war spending and the other prioritizing welfare spending, and with both supporting both types of spending. But now, with the end of the second round of quantitative easing, the federal funds rate at the zero bound, and the debt limit maxed out, Congress finds itself in a real quandary. Hard Decisions It isn’t too late to return to fiscal sanity. We could start by canceling out the debt held by the Federal Reserve, which would clear $1.6 trillion under the debt ceiling. Or we could cut trillions of dollars in spending by bringing our troops home from overseas, making gradual reforms to Social Security and Medicare, and bringing the federal government back within the limits envisioned by the Constitution. Yet no one is willing to step up to the plate and make the hard decisions that are necessary. Everyone wants to kick the can down the road and believe that deficit spending can continue unabated. Unless major changes are made today, the U.S. will default on its debt sooner or later, and it is certainly preferable that it be sooner rather than later. If the government defaults on its debt now, the consequences undoubtedly will be painful in the short term. The loss of its AAA rating will raise the cost of issuing new debt, but this is not altogether a bad thing. Higher borrowing costs will ensure that the government cannot continue the same old spending policies. Budgets will have to be brought into balance (as the cost of servicing debt will be so expensive as to preclude future debt financing of government operations), so hopefully, in the long term, the government will return to sound financial footing. Raising the Ceiling The alternative to defaulting now is to keep increasing the debt ceiling, keep spending like a drunken sailor, and hope that the default comes after we die. A future default won’t take the form of a missed payment, but rather will come through hyperinflation. The already incestuous relationship between the Federal Reserve and the Treasury will grow even closer as the Fed begins to purchase debt directly from the Treasury and monetizes debt on a scale that makes QE2 look like a drop in the bucket. Imagine the societal breakdown of Weimar Germany, but in a country five times as large. That is what we face if we do not come to terms with our debt problem immediately. Default will be painful, but it is all but inevitable for a country as heavily indebted as the U.S. Just as pumping money into the system to combat a recession only ensures an unsustainable economic boom and a future recession worse than the first, so too does continuously raising the debt ceiling only forestall the day of reckoning and ensure that, when it comes, it will be cataclysmic. We have a choice: default now and take our medicine, or put it off as long as possible, when the effects will be much worse. -Ron Paul "

[Edited on July 22, 2011 at 9:47 PM. Reason : a]

[Edited on July 22, 2011 at 9:51 PM. Reason : a]

7/22/2011 9:41:47 PM

psssh. Ron Paul. Didn't you know he wrote racist letters back in the day?

7/22/2011 10:22:21 PM

7/22/2011 10:36:05 PM

isnt the blame bush thing getting a little old? hasnt obama had enough time behind the wheel to make his own impact?

wasnt his whole platform "bush sucks, im not bush, i can fix this, trust me, ill turn things around, etc?"

instead hes made things about 4x worse? dont even bother blaming this on house republicans- they werent an issue when he began.

[Edited on July 23, 2011 at 7:28 AM. Reason : ...]

7/23/2011 7:21:42 AM

Good leadership is admitting the problems that exist, have a strong desire to fix them, taking responsibility to fix things once in power, and not blaming your predecessor.

You CANNOT have it both ways.

As soon as Reagan was President, Carter ceased to exist.

7/23/2011 8:10:50 AM

Obama made things 4 x worse? You're wrong. President Obama is making things better.

7/23/2011 8:20:27 AM

Quote :

"Good leadership is admitting the problems that exist, have a strong desire to fix them, taking responsibility to fix things once in power, and not blaming your predecessor."

Quote :

"The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;"

Quote :

"No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time."

When can we expect Congress to take responsibility for their, ahem, responsibilities?

[Edited on July 23, 2011 at 9:21 AM. Reason : ]

7/23/2011 9:07:31 AM

I fully expect Obama to touch off a Constitutional crisis by issuing debt anyway to cover the obligations imposed by Congress, and a sweet irony would happen if the Supreme Court ended up affirming what has often been suspected: The 14th Amendment makes the debt ceiling unconstitutional.

I mean sure our bond rating may even go down to A territory and it will become more difficult to borrow going forward, but at least the Treasury won't need to suddenly stop funding the military.

7/23/2011 10:08:52 AM

7/23/2011 10:34:40 AM

correlation != causation

I'm curious as to how Obamacare can instantaneously reduce the job growth rate by 90%.

7/23/2011 10:37:23 AM

^^ Dude using that logic then the CO2 emissions are definitely causing global warming.



[Edited on July 23, 2011 at 11:52 AM. Reason : xc]

7/23/2011 11:52:11 AM

Quote :

"Look, we know what will happen in the event we hit the debt ceiling, it is codified in law. It states what programs in order get paid when available cash does not match expenditures, and debt service payments are way at the top of the list. As such, this will in no way be a default. "

If there is a default, the sole reason would be that the treasury chose to default. That won't happen. The spending must come down significantly whether taxes are raised or not. Obama's prosal to cut total spending by 3% to 4% is an absolute joke. Robbing Peter to pay Paul and calling it cuts is a joke. Major changes need to be made in expenditures and the tax code. The course we are on is not sustainable any more. Western Europe sees it, why can't we. Britain just cut their spending by ~20%. Tough decisions were made, but they did something. Are we too lazy and spoiled to do the same? I guess we'll see.

7/23/2011 2:06:14 PM

Quote :

"and a sweet irony would happen if the Supreme Court ended up affirming what has often been suspected: The 14th Amendment makes the debt ceiling unconstitutional."

HOW? How in the fuck would that even be close? You realize the 14th said the DEBT shall not be questioned. It doesn't say the debt shall not be avoided or prevented from being raised. This 14th Amendment bullshit is ASTONISHING, especially coming from a "Constitutional Law Professor." What part of "Congress has the power to issue debt" do you not fucking comprehend?

7/23/2011 2:44:18 PM

^^Yeah but the UK's debt ceiling is still 2x as high as ours. And their health care system is really good and far superior to ours. If you are trying to say that we should model western europe then I am all for it, but I don't think that's what you are trying to say.

[Edited on July 23, 2011 at 2:46 PM. Reason : df]

7/23/2011 2:45:38 PM

Yeah, their healthcare system is so good that when they need special surgeries, THEY COME HERE. man, that'll be awesome

7/23/2011 2:46:15 PM

^ exceptions and technicalities.

7/23/2011 2:47:24 PM

Quote :

"This 14th Amendment bullshit is ASTONISHING, especially coming from a "Constitutional Law Professor.""

lewisje is a Constitutional Law Professor?

I did not know that.

[Edited on July 23, 2011 at 2:50 PM. Reason : The more you know!]

7/23/2011 2:49:22 PM

^^ EXCEPTIONS? It's the god damned rule! They need fancy surgery, it doesn't exist in England. They need regular surgery, they have to wait for 2 fucking years to get it, or they come here. THAT'S HOW IT FUCKING IS!!!


^

7/23/2011 2:57:01 PM

^^^^^The point to take from my comment was that even the social democrats in some western european countries have realized that spending way more than you take in and running up massive debt is not sustainable. Yet our government seems to want to spend even more and accelerate debt accumulation. I mean Obama's last budget proposal called for the debt to almost double in ten years. That is pure lunacy.

[Edited on July 23, 2011 at 2:58 PM. Reason : arrows]

7/23/2011 2:57:56 PM

^^ Why the rolly eyes?

Your statement clearly implied lewisje is a constitutional scholar.

Did you really mean someone else?

7/23/2011 3:04:19 PM

Britain also actually has sufficient taxes.

7/23/2011 3:11:25 PM

^That is neither here nor there. Even if we adopted the exact same rates we would barely make a dent in the deficit. Taxes are not the answer. We need to cut about $1 trillion per year in our budget and then raise spending rates as the collection of revenue increases and the debt is paid down. That would mean that the military and entitlements must be cut. There is only about $200 billion in descretionary spending in the budget. We could eliminate all of that and it still wouldn't matter. Painful decisions need to be made now, not after the perpetual "after the next election" BS that both sides spew.

7/23/2011 3:24:56 PM

Well ya it requires a mix of everything. Raise taxes, cut the military, end wars, raise the SS age to where it should be adjusted for average lifespan and print money to pay off the rest.

7/23/2011 3:31:25 PM

Printing money to erase the debt is a bad idea. If the value of the $ gets low enough the world economy will switch to another currancy as the universal currancy and then we would be fucked. How about we lower the federal corporate taxes (currently the world's 2nd highest) so that all of our megacorps don't headquarter themselves in other countries and remove all those evil profits from the tax cycle. That would raise revenues with the quickness. Or at least give them a tax holiday to pay a lower tax rate on out of country revenue if they bring it back inside the US economy. That would be a nice shot in the arm don't you think?

7/23/2011 3:41:08 PM

Just penalize them for headquartering outside the US

[Edited on July 23, 2011 at 3:56 PM. Reason : fix the law to common sense. if most of the company is in the us they pay us taxes or something like]

7/23/2011 3:56:01 PM

Oh yes. Let's chase even more companies and jobs away from our country. That'll fix everything.

Would it not be better to get 15% of something rather than 35% of nothing? Why are so many people bound and determined to punish successful US business? Make the economic environment attractive to corporations and they will stay and try to make more money and therefore generate more revenue to be collected. Trying to force them to stay will just make them leave even faster.

Any publically owned companies primary goal is to make money for their investors not to provide people jobs with awesome benefits and fill up the governments wallet. If it makes sense to move out of the country to increase the bottom line that is the company's obligation to do so. So, make it make fiscal sense to make them want to stay/move back here bringing their revenue and jobs with them. It's not a hard concept.

[Edited on July 23, 2011 at 4:13 PM. Reason : ]

7/23/2011 4:08:06 PM

Quote :

"We need to cut about $1 trillion per year in our budget and then raise spending rates as the collection of revenue increases and the debt is paid down."

Through what mechanism will revenue increase?

7/23/2011 4:41:15 PM

Revenue naturaly increases every year as the economy grows. So, if the economy produces a 3% growth in taxable GDP then raise the budget by 3%. Our economy rarely shrinks so revenue will usually increase. The problem is when spending grows faster than the economy.

7/23/2011 4:56:51 PM

Quote :

"Revenue naturaly increases every year as the economy grows. So, if the economy produces a 3% growth in taxable GDP then raise the budget by 3%. Our economy rarely shrinks so revenue will usually increase. The problem is when spending grows faster than the economy."

This doesn't answer my question. I'm curious what mechanism you believe will increase revenue while reducing the budget by 1 trillion each year.

7/23/2011 5:04:50 PM

If by "increase revenue" you mean new taxes, I do not believe that is necessary. The amount of money collected by the government can increase without changing anything in the tax code is the ecomy is growing. I am in favor of simplifying the tax code and eliminating many tax loop holes that have been introduced for political purposes. For example, one of my pet peeves is the child credit. Why is the government essentially paying someone because they reproduced. I know the idea was to help lower income families to offset cost of child care but from a logical perspective its bullshit. As a single taxpayer I already supplement other peoples kids through paying for their education and other childrens programs. Why do they getto pay less taxes to introduce another tax obligation into the world. That's just one example. Another is raising the general corporate tax, but then giving exemptions to big companies that threaten to relocate like what happened in Michigan with Caterpillar. There are a thousand others. Tighten up the tax code and eliminate the political pandering to subgroups and I think revenues would be increased dramatically and then we can start restoring some of the programs we had to scale back.

7/23/2011 5:25:04 PM

Quote :

"If by "increase revenue" you mean new taxes, I do not believe that is necessary. The amount of money collected by the government can increase without changing anything in the tax code is the ecomy is growing. I am in favor of simplifying the tax code and eliminating many tax loop holes that have been introduced for political purposes. For example, one of my pet peeves is the child credit. Why is the government essentially paying someone because they reproduced. I know the idea was to help lower income families to offset cost of child care but from a logical perspective its bullshit. As a single taxpayer I already supplement other peoples kids through paying for their education and other childrens programs. Why do they getto pay less taxes to introduce another tax obligation into the world. That's just one example. Another is raising the general corporate tax, but then giving exemptions to big companies that threaten to relocate like what happened in Michigan with Caterpillar. There are a thousand others. Tighten up the tax code and eliminate the political pandering to subgroups and I think revenues would be increased dramatically and then we can start restoring some of the programs we had to scale back."

How is the economy going to grow when you're slashing the debt that fast every year? By what mechanism?

7/23/2011 5:43:20 PM

My thought is that we are artificially swelling the economy to an unsustainable level by spending money we don't have and are running up debt. I'm saying that we as a nation are spending above our means. We as a people will need to adjust our lifestyles some. That will be difficult for a lot of people, but that is reality. Oh and if the implication is that our economy would colapse if the government lowered its spending by $1 trillion, my answer is that the economy was doing just fine before 2006 when the federal budget was $1 trillion less than where it is today. Just sayin.

I'm not saying that we would reduce the debt by $1 trillion a year. That would be impossible. I meant to cut the budget from $3.6 trillion to $2.6 trillion per year. Maybe pay down the debt by $100-200 billion a year if the funds were available.


[Edited on July 23, 2011 at 6:02 PM. Reason : Clearing up confussion]

7/23/2011 5:57:54 PM

We also need to open up immigration. That was what kept us afloat throughout history.

7/24/2011 1:42:41 PM