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Thread: So will the US default on the debt?

  1. #1
    Senior Member sundancekid's Avatar
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    So will the US default on the debt?

    Quite unbelievable to witness the circus in Washington these days. Could a self-imposed recession be on the books? Or something even worse? And this has nothing to do with future spending, but rather paying bills already racket up and approved by Congress. It is entirely political. Unbelievable.

    Seems the Republicans have finally backed off Obamacare at least. Which had a horrible rollout as well mindů Wasn't Obama supposed to be tech-savvy?

  2. #2
    Super Moderator LivinLOS's Avatar
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    I struggle to imagine a real default scenario..

    But at what point will they get spending under control.. Its never the right time.. always just "not yet"...

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    Senior Member billpay's Avatar
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    Not raising the debt limit doesn't mean the US is defaulting on the debt. Only if the US stops paying the INTEREST on the debt, will the US default....and that won't happen.

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    Super Moderator LivinLOS's Avatar
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    Quote Originally Posted by billpay View Post
    Not raising the debt limit doesn't mean the US is defaulting on the debt. Only if the US stops paying the INTEREST on the debt, will the US default....and that won't happen.
    Well various claims are that the date when the money runs out is the 17th.. I would imagine those are scaremongering..

    Other views say end of the month..

    but either way they are cutting it fine..

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    Senior Member billpay's Avatar
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    The US brings in about $250B per month. Interest on the debt is about $20B.
    The date of the 17th just means that we can't borrow more money....there is plenty to pay the interest.
    Last edited by billpay; 9th October 2013 at 20:29.

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    Senior Member Bacon's Avatar
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    Yeah even Bill Gates could pay your interest for ya.
    ןooʇsɹɐq ʎɯ uo ʞɔɐq eɯ ʇnd esɐeןd sıɥʇ pɐeɹ uɐɔ noʎ ɟı

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    Quote Originally Posted by billpay View Post
    The US brings in about $250B per month. Interest on the debt is about $20B.
    The date of the 17th just means that we can't borrow more money....there is plenty to pay the interest.
    Treasury Could Issue Super-Premium Bonds - Business Insider

    The U.S. government takes in $277 billion in tax revenues each month, and spends $452 billion each month

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    Senior Member marc26's Avatar
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    default won't happen and you see the Republicans backing down already

    but they need to stop tkaing these things to the deadlines

  9. #9
    Super Moderator LivinLOS's Avatar
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    Quote Originally Posted by billpay View Post
    The US brings in about $250B per month. Interest on the debt is about $20B.
    The date of the 17th just means that we can't borrow more money....there is plenty to pay the interest.
    But theres also debt falling due.. not only interest.. Which as debt is never reduced needs to be rolled over.. And a lot of other costs that cant be furloughed..

    I havent looked at the numbers in this at all..

    What amazes me tho is this is simply called 'balancing the books' !! The impossibility of even for a few months spending only as much as they get in revenue..

  10. #10
    Senior Member sundancekid's Avatar
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    Quote Originally Posted by billpay View Post
    The US brings in about $250B per month. Interest on the debt is about $20B.
    The date of the 17th just means that we can't borrow more money....there is plenty to pay the interest.
    Point being that raising the debt ceiling does not increase future US federal debt. Rather, it simply means that you are able to pay off existing debt, which has already been approved by (a Republican controlled) Congress mind.

    So even though that may not technically be a "default", it would not be long for the US to start forfeiting on other contractual obligations. The mere idea that the US should not pay its bill is kind of frightening regardless of how one defines the term. And what other ramifications could come of this? We don't really know as the US has always been able to pay its bills in the past...

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    Super Moderator LivinLOS's Avatar
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    Yay.. Trillion Dollar coins and other financial alchemy..

  12. #12
    Super Moderator LivinLOS's Avatar
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    The U.S. government takes in $277 billion in tax revenues each month, and spends $452 billion each month
    While we are at it..

    at the beginning of the global financial crisis, the Fed had less than $500 billion in US Treasury securities and almost zero mortgage backed securities (MBSs).

    Today, the Fed owns over $2 trillion of US government debt (a 4-fold increase) and another $1.3 trillion in MBSs.

    They've completely mopped up every ounce of liquidity. And in doing so, they've twisted interest rates and manipulated every asset class from stocks to bonds to real estate to commodities along the way.
    But QE hasnt financed the government at all !! Keeping rates to near zero and directly buying up 1.5 trillion isnt financing it..

  13. #13
    Senior Member dontpanic's Avatar
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    Never happen, but isn't the US debt to GDP ratio pretty healthy?

  14. #14
    Senior Member sundancekid's Avatar
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    Kind of a side issue, but QE has nothing to do with financing the government. (And looking at the numbers, they've actually done quite well on the QE1 MBS purchases...)

    But back to the issue, failing to pay its obligations would be akin to a "default" in my book. And a business could certainly not sustain that over an extended period. What, picking and choosing which "customers" should get the money? Like why should China receive the interest payments, whereas the US veterans and SS recipients are ignored?

    Thing is, I entirely agree that the US is on an unsustainable path when it comes to long-term debt kicking in round 2020 or so. Due mostly to Entitlement spending and the need to further break the cost curve.

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    Senior Member billpay's Avatar
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    ^agree with most of what you say....absolutely need to rein in the debt....now

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    Boehner is afraid of 40 Pee Party Tea Baggers in the House of Representatives. He is an alcoholic, spray tanned, jack ass..

    Why a Shrinking Tea Party Still Holds the Nation Hostage | Earl Ofari Hutchinson

    When Tea Party-affiliated candidates scored big victories and even upsets of GOP incumbents in some races in 2010 they had one mantra and that was to shrink government, and shrink it fast. However, there was a darker underside to the Tea Party surge and its appeal to legions. They had a visible and loathed target to vent their antipathy toward, President Obama. The thought of an African American sitting in the White House was stomach-wrenching too many of them. For a while, more than a few protestors at Tea Party rallies vented their spleen at Obama with outrageous, racist pictures, and posters of him, and demeaning digs and taunts. To drive their racial loathing of him home they proudly waved Confederate flags. Meanwhile, millions of Americans cheered their war call, and voted for the candidates that yelped it the loudest.

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    Senior Member tnlawyer's Avatar
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    Quote Originally Posted by Dupree View Post
    Boehner is afraid of 40 Pee Party Tea Baggers in the House of Representatives. He is an alcoholic, spray tanned, jack ass..

    Why a Shrinking Tea Party Still Holds the Nation Hostage | Earl Ofari Hutchinson

    When Tea Party-affiliated candidates scored big victories and even upsets of GOP incumbents in some races in 2010 they had one mantra and that was to shrink government, and shrink it fast. However, there was a darker underside to the Tea Party surge and its appeal to legions. They had a visible and loathed target to vent their antipathy toward, President Obama. The thought of an African American sitting in the White House was stomach-wrenching too many of them. For a while, more than a few protestors at Tea Party rallies vented their spleen at Obama with outrageous, racist pictures, and posters of him, and demeaning digs and taunts. To drive their racial loathing of him home they proudly waved Confederate flags. Meanwhile, millions of Americans cheered their war call, and voted for the candidates that yelped it the loudest.
    Agree that Boehner is a jackass. As is McConnell, Graham, McCain, Hatch, etc. But I'm calling BS on this guy's statement about the racism. Would love to see pictures. I've been to several political events over the past several years and have NEVER seen anything remotely close to what he's reporting. Several prominent tea party leaders/speakers are black, hispanic, women, etc. I don't mind when people have policy disagreements with the tea party, but this continued baseless racism mantra is really tiring.
    LivinLOS likes this.

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    Quote Originally Posted by tnlawyer View Post
    Agree that Boehner is a jackass. As is McConnell, Graham, McCain, Hatch, etc. But I'm calling BS on this guy's statement about the racism. Would love to see pictures. I've been to several political events over the past several years and have NEVER seen anything remotely close to what he's reporting. Several prominent tea party leaders/speakers are black, hispanic, women, etc. I don't mind when people have policy disagreements with the tea party, but this continued baseless racism mantra is really tiring.
    So you don't listen to Rush Limbaugh?

  19. #19
    Senior Member tnlawyer's Avatar
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    Quote Originally Posted by Dupree View Post
    So you don't listen to Rush Limbaugh?
    No, I don't. And believe me, if I saw someone spewing racial garbage I'd be the first to tell them to knock that shit off. A truly racist group wouldn't support and cheer the likes of Ted Cruz, Bobby Jindal, Benjamin Carson, Herman Cain, etc would they? Like I said I've never seen anything even remotely racist. If the guy has pictures, I'd love to see them. If it really happened, I'd be the first to denounce it.

  20. #20
    Senior Member marc26's Avatar
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    Quote Originally Posted by tnlawyer View Post
    Agree that Boehner is a jackass. As is McConnell, Graham, McCain, Hatch, etc. But I'm calling BS on this guy's statement about the racism. Would love to see pictures. I've been to several political events over the past several years and have NEVER seen anything remotely close to what he's reporting. Several prominent tea party leaders/speakers are black, hispanic, women, etc. I don't mind when people have policy disagreements with the tea party, but this continued baseless racism mantra is really tiring.
    so how do you explain this obsession with Obamacare?
    it was voted on and passed, taken to the Supreme Court and ruled in favor
    Obama was voted in the 1st time on his healthcare and voted in a 2nd time on healthcare with a down economy. Romney's(the Rep candidate) whole campaign was against Obamacare and they lost
    in simple terms, the Republican side has lost on this Obomacare issue on numerous occasions

    can you recall any other instance like this where one party has lost on one issue so many times and just keeps stomping their feet and saying no?

    so, if you haven't, than what else explains it?>

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