If the US goes bancrupt in this situation, many countries would consider it as fraud. Their friends and allies would feel cheated and their opponents will do what they can to humiliate the US or turn into enemies. Many countries wouldn't lend money to the US again or accept their new currency without getting a refund for their old debts. How are you paying your imports then? Let's say oil? There's enough in the US budget to save and enough to spend to reduce debts and to get a more balanced budget. Spend less money on something, collect more from somebody.|||Quote:
They will mainly care about how hard the US tries to pay back their debts, just like you would if somebody owes you money. I for myself haven't seen that any serious efforts have been taken.
I'd be surprised if you did, given that the senate has just given the finger to the very idea of not spending us into bankruptcy.|||I somehow like the idea to ban senators from reelection if they allowed a deficit of more than 3% of the GDP. That's also the limit for Euro zone members and I was pretty much unsatisfied each time the German budget exceeded it, so I would also like to see it being applied to the German Bundestag members.|||Quote:
They will mainly care about how hard the US tries to pay back their debts, just like you would if somebody owes you money. I for myself haven't seen that any serious efforts have been taken.
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Dude Seriously? Do you understand that this is going to be the first payment ever missed if it happens?
200+ Years...
And the cause would be procedural and because concerned people are saying we need to address this not because we can't print the money or make the bookkeeping entries fast enough?
Well apparently your not one of US Guys ie: I the average USA taxpayer that already bailed everyone else out.
The Banks, The Cooperations, The UN, Our Allies and Enemy's (I will never understand Foreign Policy.), Special Interests etc.
Time for someone else to pony up.
BTW how have the rich been doing?
Seems like Ronald's "Trickle Down Theory" became "Full Rooftop Reservoirs"
Gang of 7's
Getting rid of AMT and a new tax bracket sounds good to me...
How about I go for a Libertarian wet dream
here, and Hope the T-Party works in a call for a Constitutional Convention to be called to address the deficit?|||Quote:Seems like Ronald's "Trickle Down Theory" became "Full Rooftop Reservoirs"
That's to be expected when you over-regulate the market, constantly threaten big tax hikes, inflate the money and dick around with the national budget for so long. Nobody wants to risk making a move because there is so much nasty, business hurting stuff looming just around the corner.|||Quote:
Dude Seriously? Do you understand that this is going to be the first payment ever missed if it happens?
200+ Years...
Not true. The US has missed payments before. Furthermore, contrary to the non-sense perpetrated by the media, the US has DEFAULTED before.
In 1971, Nixon unilaterally killed the Bretton Woods system and the convertibility of dollars to gold - effectively ending the gold standard. Up to that point, $35 USD was convertible to one ounce of gold. With the unilateral end of that, the United States basically defaulted on its obligations. It promised gold for its dollars, and then it unilaterally chose not to deliver.
This is called a default. The United States could no longer fulfill its financial obligations, so it chose not to. Why the world, or the media, doesn't seem to think so is anyone's guess, but suffice it to say most people - media and economists included, have no idea what they're talking about.|||Quote:
Failure to raise the debt ceiling will not cause the US to default on its debts. That's like telling the credit card company that if they don't raise your card limit, you won't be able to make your payment this month; it makes no sense.
What they really mean is that they might have to skimp on some government services if they can't borrow from the next generation to feed our greed now, and since threatening to cut their own troughs of pork-barrel spending wouldn't be likely to sway anyone, they instead tell people that they're going to cut essential services.
It's kind of like trying to cut Charlie Sheen's pay, and even though everyone knows that 50% of his salary is budgeted for cocaine, he still tries to sell you on the idea that he won't be able to afford his house payment if the cut goes through. It doesn't pass the laugh test.
Disagree. Firstly, this assumes that interest payments will be prioritized over SS and other domestic payments to voting constituents or the military. This is possible, but not guaranteed.
Secondly, it assumes that such an event would not result in a downgrade by any of the ratings agencies. Such a downgrade would dramatically increase interest rates and rapidly destroy the United States' ability to pay interest on the debt. That in turn, would cause an actual default in the eyes of foreign creditors.
Thirdly, your credit card analogy is flawed - it's missing a very important factor - that we have to borrow in order to make our current card interest payments. That is, if the the credit card company doesn't raise your card limit, you cannot borrow anymore to pay the interest on what you've already borrowed.|||Ah, the typical landslide of denial into financial ruin.
"Why are you signing up for a seventh credit card?!"
"Duh. So I can pay the interest on the first six and buy a new boat. What are you, stupid?"
|||Quote:Dude Seriously? Do you understand that this is going to be the first payment ever missed if it happens?
200+ Years...
Yes, seriously. If you have debts, you must never miss a payment. Never. Being unable to pay even a single rate means bancruptcy. If you take a loan and you fail to pay the rates, all debts usually become due on the spot. You can check the contract in case you have one, it probably has a passage like that. However, the bank will try to find a solution which will give it back as much as possible, so insisting on it might not be what they will do. But better don't count on it.
It's a bit different with bonds, however, as they aren't paid in rates, but run out at a certain time and be due in full then... which usually requires the sale of new bonds. However, if nobody wants to buy the bonds for the offered interests, you will have to make a better offer, with higher interests or a shorter timespan.
Anyway, I'm from the country which probably had the biggest bancruptcies in the last 100 years, one in 1923 (with a full-blown hyper-inflation) and one after WW2, so I'm not going to be arrogant here. However, both were a result of having lost a world war and the US is certainly not even remotely close to that situation.|||But a big ol' war is around the corner, right? I heard some predictions about this somewhere.
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