US Debt Disaster

[Skylar1]

so... yup. can't believe nobody made a thread about this yet.

(note, there's about a billion different articles on this thing, so I'll just summarize myself the key points)

like 2 days left until the US is unable to pay it's obligations and we risk default. Worse, yet, even if a deal is reached in time, the chances that credit rating agencies will downgrade the US's AAA credit status is pretty much inevitable at this point.

Nothing's been done of any real progress at this point, the republican party is close to imploding (even senator McCain made a remake "the Tea Party hobbits need to go back to middle earth). The bill that barely passed the house with the majority votes of the republicans is going to be set to the side by a table measure by the senate meaning they're not even going to vote on it; the House is planning on doing the same with the Reid bill.

The tea party advocates who were elected on the basis that they won't raise the debt ceiling or increase government revenues (which even letting the bush tax cuts expire is seen as that) or they risk losing their jobs- brilliant.

At this point the only way that the debt ceiling can be raised in time is if Obama risks impeachment and evokes a section of the 14th amendment that allows him to prioritize the national debt as paramount to all else, and use an executive order to bypass congress and raise it himself.

The Dow has fallen about 400 points in the past week, the Treasury and States are preparing to decide which bills will be paid out come the 2nd, and who will the get the short end of this stick.

Now the only thing we can really do, is just sit back and watch events unfold in the next 2-3 days.

[Eris]

[S]enator McCain made a remake "the Tea Party hobbits need to go back to middle earth["]

Hahahahaha. Sorry. I know this is a serious matter. But. Hahahahhahahahahahaha. My respect for him just increased by a lot.

[DOOM!]

Hahahahaha. Sorry. I know this is a serious matter. But. Hahahahhahahahahahaha. My respect for him just increased by a lot.

I told y'all I'd pick McCain over Obama, not that it would have made any difference; the US would have been in the exact same sum of debt at this particular time.
Question to you liberal demofags: Where's your Obama now?

[nrL]

Good, good. The US will fall...and the fat, idiot americans will no longer be able to keep going how powerful and awesome their pathetic nation is.

No longer will they have any excuse to treat the USA as a centre of the universe nor consider themselves better then Europe, China, Japan, Russia or any other great nation/culture they previously despised and labelled as inferior.

[Skylar1]

Good, good. The US will fall...and the fat, idiot americans will no longer be able to keep going how powerful and awesome their pathetic nation is.

No longer will they have any excuse to treat the USA as a centre of the universe nor consider themselves better then Europe, China, Japan, Russia or any other great nation/culture they previously despised and labelled as inferior.

hey now, don't paint all of us with the same brush.

I've been saying for years now that the US is far behind the rest of the 1st world nations in just about all ways.


Edit: here's one article that sticks out pretty good though from Fareed Zakaria

The Damage is already done!
I know you have all heard so much about the debt ceiling that you're probably exhausted. But I think it's important to point out a few facts because this matter has been so clouded by rhetoric.

Did you know that there is only one other country in the world that even has a debt ceiling? That's Denmark, a strange anomaly, and its debt ceiling is deliberately kept very high so that it will never need to be raised.

Why does no one else have a debt ceiling?

Because when a legislature votes to authorize spending at a certain level but authorizes tax revenues at a lower level, it is assumed that the government will have to borrow the difference.

The vote to have higher expenditures than tax revenues is - in effect - a vote to borrow money to cover the difference.

And in the United States, Congress - including Republicans - voted for a budget in which expenditures exceeded tax revenues.

The logical consequence of that budget - again, passed by Republicans and Democrats, is that the government has to make up the difference by borrowing.

To come at it now after the budget has been passed is like getting your Visa bill and calling up the company to say, "Actually we don't want to buy all that stuff we bought."

That's not how it works. First you pay the bill, then you can change your spending habits.

So why do we have a debt ceiling?

Ironically, it was put in place during World War I so that Congress didn't have to authorize every new issue of debt. It was assumed that it would be a formality to raise it. Since 1960, the debt ceiling has been raised 78 times.

My basic point is that this is a crisis that we have manufactured out of whole cloth. We have created a circumstance in which the world doubts our credibility, rating agencies are thinking of downgrading our debt and the dollar's role as the world's reserve currency could be jeopardized.

Please understand that none of these things are happening because the United States is running deficits. There was no indication - by any metric - that the United States was having difficulty borrowing money one month ago. In fact, the world has been lending money to the United States more cheaply than ever before.


We face downgrades and investor panic not because of our deficits but because we are behaving like deadbeats, refusing to pay our bills, pouting while the bill collector waits at the door.

We do have a large deficit and debt and we do need to get it under control. That the Tea Party has raised awareness about this is admirable. And I agree with their view that the current set of entitlements - Medicare especially - have to be reformed dramatically to get our fiscal house in order. But that is not an excuse to endanger the good standing of the United States.

First you pay the bills and then you figure out how to change your spending habits.

The tragedy here is that the damage may already have been done.

From now on, every time the debt ceiling needs to be raised, the world will wonder: Will the U.S. stand by its promises or will it break them?

article: http://globalpublicsquare.blogs.cnn....-already-done/

[Assiduous✡Aristocrat]

Good, good. The US will fall...and the fat, idiot americans will no longer be able to keep going how powerful and awesome their pathetic nation is.

No longer will they have any excuse to treat the USA as a centre of the universe nor consider themselves better then Europe, China, Japan, Russia or any other great nation/culture they previously despised and labelled as inferior.

I like how ignorant you are. It's cute.

You sound... Jelly.

And Videogamer555: Running a counrty is different from running a company.

[nrL]

I like how ignorant you are. It's cute.

You sound... Jelly.

Jelly? Not really. If anything, somewhat butthurt.

I like how ignorant you are. It's cute.

Will you take me home?

[miniPhil]

Will you take me home?

Is that going to be a thing now? Some Nigerian family will adopt Madonna.

[nrL]

Is that going to be a thing now? Some Nigerian family will adopt Madonna.

I bet they find her kawaii

[Robin Sena]

The only Americans that wll keep their money and pull through unscathed will be the celebrites and politician.
Perhaps they should learn from the book of Luke, on the rich man and the beggar.

[Eris]

This global economic crisis boils down to the oil prices, and the fact that the oil resources can no longer meet the demands (we're rapidly approaching the point--not where it runs out--but where it costs more energy to produce oil than you get from burning it). This probably isn't going to be the end of civilization (unless we handle it exceptionally poorly), but it's rather the harbinger of a change in how we live.

The reason the US is hit harder than other places by this is that it's economy is built up around capitalizing off a series of lucky breaks it's had throughout the 20th century (coming out of WWII unscathed, having oil resources, and so forth) that are long lost. This has lead to some seriously poor decision making in infrastructure as well as in the way the overall economy works.

[GameGeeks]

@Ericgamer1 The actual date is August 15th. The Treasury has enough money to at least pay interest till then. I hope Obama does grow a pair and actually do something for once. So far he has shown he can't lead. Using that order would show some backbone at the least.

@lil' McDoom In a corner wearing a tutu.

[Skylar1]

@Ericgamer1 The actual date is August 15th. The Treasury has enough money to at least pay interest till then. I hope Obama does grow a pair and actually do something for once. So far he has shown he can't lead. Using that order would show some backbone at the least.

uh, no. It's august 2nd, because that is the start of the august recess which means that everyone in congress goes home for the month.

[GameGeeks]

uh, no. It's august 2nd, because that is the start of the august recess which means that everyone in congress goes home for the month.

Considering the situation, I doubt that'll happen. Not to mention not everyone goes home. That'd be like sending all doctors home for a weekend. And I doubt in this day and age, the treasury simply writes a check. So they could continue paying interest till the 15th. But it doesn't matter as it's more then likely impossible to pay off the debt anyways. The following is from last year but considering the debt has only increased since then it's even more so.

http://theeconomiccollapseblog.com/a...-national-debt

[Skylar1]

Considering the situation, I doubt that'll happen. Not to mention not everyone goes home. That'd be like sending all doctors home for a weekend. And I doubt in this day and age, the treasury simply writes a check. So they could continue paying interest till the 15th. But it doesn't matter as it's more then likely impossible to pay off the debt anyways. The following is from last year but considering the debt has only increased since then it's even more so.

the problem here is that even if they do prioritize to pay the interest rates, Standards and Poor has already threatened that they would still downgrade the country because (while still meeting debt obligations) it's no way to run a country, and therefore makes for a greater risk.

A week ago, a downgrade seemed avoidable, now, it looks like it's going to happen.

[GameGeeks]

the problem here is that even if they do prioritize to pay the interest rates, Standards and Poor has already threatened that they would still downgrade the country because (while still meeting debt obligations) it's no way to run a country, and therefore makes for a greater risk.

A week ago, a downgrade seems avoidable, now, it looks like it's going to happen.

At this point, I say let the country default. The Federal Government has seized too much power over the years and needs to be trimmed. Even if the Federal Government defaults the country, while taking a massive blow, would still continue on. The State Governments would still be around to enforce local laws, companies would still provide services. It'd be a struggle but we'd still be able to survive. It's not like anarchy will ensue.

[-akichan-]

Good, good. The US will fall...and the fat, idiot americans will no longer be able to keep going how powerful and awesome their pathetic nation is.

Hehe...good thing I'm the thinnest of the thinnest and I do work hard for living XD


Well back to the article, does that mean there will be more budget cutting? I wouldn't be qualify for student loan...?!?! Nooo I have two more years of university and I need money =(

[Skylar1]

A flat out default would be an automatic downgrade, and at that point, it might be lowered even passed AA to possibly C, or D

Well back to the article, does that mean there will be more budget cutting? I wouldn't be qualify for student loan...?!?! Nooo I have two more years of university and I need money =(

you may still qualify, but you can expect to pay a lot more on interest.

[Videogamer555]

If Shigeru Miyamoto (of Nintendo fame) were the US, president, everything would be better.

[DOOM!]

If Shigeru Miyamoto (of Nintendo fame) were the US, president, everything would be better.

LOL,wut? U retartet?

[Manhattan_Project_2000]

If Shigeru Miyamoto (of Nintendo fame) were the US, president, everything would be better.

Yes, I want the person who invented Mario to lead the world's last remaining super power. Let's see if we can get Steve Jobs to be vice president, and then we can start selling 100 dollar U.S. bonds to hipsters for 350 dollars and get out of this crisis by next week.

[Videogamer555]

Nintendo is a very well off company. Whoever is running it is doing a good job, and any high up employees like Mr. Miyamoto are probably deserving of a lot of the credit so would maybe run a country well too.

[Skylar1]

Less than 36 hours left now until the deadline. They -say- they're close to some sort of compromise, but hasty decisions make for bad outcomes.

WASHINGTON (CNN) -- Senate Majority Leader Harry Reid said Sunday there was no agreement yet on raising the federal debt ceiling, but "we are cautiously optimistic."
Reid made his comments after his counterpart -- Senate Minority Leader Mitch McConnell -- told CNN's "State of the Union" on Sunday that Democrats and Republicans are "very close" to reaching a deal on $3 trillion in spending cuts that would raise the debt limit.



"We had a very good day yesterday," the Kentucky Republican said, adding that the two sides "made dramatic progress."
With the deadline to reach a debt ceiling agreement just two days away, congressional leaders and the White House are mulling parts of a tentative deal that would extend the debt limit through next year.
A Republican source close to the negotiations told CNN the goal is $3 trillion in savings, and that the deal would include a $2.4 trillion increase in the debt ceiling.
Just hours before, two sources familiar with the negotiations told CNN that the framework of a tentative deal to raise the nation's debt ceiling calls for up to $2.8 trillion in total deficit reduction over the next decade.
The agreement, still being negotiated by the White House and bipartisan congressional leaders, would allow the debt ceiling to be raised by enough to last at least through the end of 2012.


The debt limit would be increased in two stages, both of which would occur automatically -- a key Democratic demand that would prevent a repeat of the current crisis before the next election.
Sen. Charles Schumer, D-New York, told "State of the Union" that the mood on Capitol Hill is "relief that we won't default."
While nothing is definite yet because there is no final agreement, "default is a lot less of a possibility now than it was a day ago," he said, adding that "leaders are talking in a constructive way."
The agreement includes upfront spending cuts in the range of roughly $1 trillion, the sources said. A special congressional committee would recommend additional spending reductions of up to $1.8 trillion no later than Thanksgiving. If Congress fails to approve the recommended cuts by late December, automatic, across-the-board cuts -- including both defense and Medicare -- would take effect.
News of a possible deal came shortly after the Senate delayed consideration of Majority Leader Harry Reid's debt ceiling proposal late Saturday night, pushing back a key procedural vote by 12 hours.
The vote to stop debate and end a GOP filibuster on the plan will now be held at 1 p.m. ET on Sunday, as opposed to 1 a.m.
Reid, D-Nevada, said he was asking for a delay to provide additional time for negotiations underway at the White House.
There are "many elements to be finalized" and still "a distance to go," Reid said. "We should give everyone as much room as possible to do their work."

full article:
http://money.cnn.com/2011/07/31/news..._ceiling_deal/

[Skilero]

Reid's proposal does not measure savings correctly. He counts the savings from cuts already established in the past, and he also counts the savings from pulling out of Afghanistan and Iraq earlier than a practical date.

Do the math and tell me how this is fixed without touching welfare, or the 99-week unemployment benefits, or government entities such as the national Dept. Of Education that a considerable number of congresspeople have actually refused to cut, and others have shown through votes that they have no interest in cutting them.

I've been watching the House and Senate for awhile now. As far as I can tell, many Republicans won't "compromise" because doing so wouldn't let them pass legislation they believe can actually fix the problem and may even hurt it.

CSPAN2 reports that House Republicans are meeting up to fromulate a bill that includes a rise in the debt ceiling.

Question: What's the problem with a balanced budget amendment if it allows for extra spending in matters of domestic security?

I'd love to see Biden in some of this - he's disappeared I think. Pres. Obama's plan is nonexistent at the same time.

[Skilero]

Double post is justified.

President Obama has just given an address saying there's a framework that's been agreed upon by 'both sides' that is going to invite a 'bipartisan committee to meet in November' selected by both parties in each chamber of Congress. He said it was not the deal he would have preferred, and that Republicans get '98%' of what they want out of it. Speaker Boehner expresses optimism for the deal - developments on the deal's context are expected by myself to surface from the media in the following days.

The committee will serve as the main body whose sole responsibility is to maintain the government debt.

An apparent flaw in the committee reportedly mandates that one of two 'safeguards' be launched in the event of the committee's being incapable of producing any plans for the national debt within a certain amount of time or in the event of the national debt's reaching a certain closeness to the debt ceiling. According to newscasts, one of these safeguards cuts $540 billion dollars to the defense budget - a surmisable, and potentially detramental, figure to strip out of the defense.