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US Debt Default

In a week of sigificant events, this might prove to be the most significant.


I just wonder how the story is being covered in the US? Does Obama have this wrong or is it that the Republicans would rather sit back and watch America burn than come to an agreement to raise the debt ceiling (as has been done many times before).


Apologies if there is already a blog about this.

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stubby43

I just started reading about this and it actually sounds like the global impact would be far worse than anything that happens to America, lots of countries have defaulted before Argentine is notorious for it and has been fine.

A default, is basically a resetting of the economy (at its most severe), it brings inflation under control but the downside is all that money held in the old currency is worthless.

America isnt talking about a complete default, only holding off on payments for a while but the problem is the vast majority of the global economy is held in US dollars, China in particular is worried because it bought US securities agressively over the past decade.

Its the first time in history such a major economy that basically underpins the global economy is even considering a default and it will cause shock waves across the world destablising more economies.

d3d

i doubt this would mean anything to me no matter how you explained it.

gumbolimbo

Clearly, my country's press doesn't think it's important because there's hardly anything about it in the newspapers, except deeply buried in the economic pages. I need to catch up reading about it before having any sort of opinion.

aled

Perhaps it's just political brinkmanship. The deadline is August 2nd and most commentators are optimistic that a deal will be struck - it's just that the stakes are astronomically high. Cynically, I just imagine that the Republicans are trying to make life as miserable for Obama as they can before they come to an agreement.

ivejustquitsmoking

*nosebleeds trying to understand stubby's post

moulin bleu

Republicans would rather sit back and watch America burn than come to an agreement to raise the debt ceiling

this pretty much terrifies me on a daily basis.

The Paper Crane
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I was about to post a similar articular after hearing on the news that basically the US is up to its overdraft limit. I am sure they will wangle it somehow and try their hardest to maintain a business as usual approach, to prop up a failing system that benefits the small minority.

nathanwpyle at gmail.com

From the AP, NYT stuff I have read, both sides unfortunately are playing to the more fanatical parts of their bases. Most of the country is in the middle on this one - more willong to compromise than either side. Unfortunate really

SuperRyan

This is getting massive coverage in the US. Daily.

Political leaders are saying that we won't get to the point of default, yet they cannot all agree (compromise) on one fucking plan.

nathanwpyle at gmail.com

^ meanwhile, from what I read, most of America was pretty satisfied with one of the many, many proposed plans. But alas no agreement was reached.

The populace has the great advantage of not trying to get re-elected

Ste7en

No, its not republicans, its not democrats, its FUCKING POLITICIANS..

Also, we have raised our debt ceiling 74 times prior to this, and have enough revenue coming in this year to pay our interest payment on our debt, but we're heading into the pre-election period and its become a big ideological fight for the votes of the american people.

Democrats want to raise taxes without cutting as much spending, Republicans are demanding that spending be cut significantly- but both of them are full of shit, and are really just jockeying for control of where tax money is spent.

reags

d3d on Jul 24 '11 at 6:02am i doubt this would mean anything to me no matter how you explained it.

Leon in short. Being an Aussie means should USofA's economy hit the dumps, your future winnings from Threadless would be considerably less than a year ago when converted to AUD ;)

EZFL

Ste7en on Jul 24 '11 at 8:34am No, its not republicans, its not democrats, its FUCKING POLITICIANS..

d3d

what ever happened to the good old fashioned bikini carwash?

nathanwpyle at gmail.com

ha giant national car wash! All proceeds go to our grossly swollen deficit. Do it for the kids!

nasmo

Pretty scary situation no matter how you look at it. Fortunately, we don't have to wait on the politicians to act. Everybody can do their part, with this handy website the Treasury Department set up. If everybody chips in, we'll have this thing solved in no time!

SuperRyan

Michelle Obama and Hillary Clinton bikini carwashing can take my money any day

Christopher M

Eh, I doubt a default's going to happen. Both Obama and the Republicans get most of their campaign contributions from big corporations, who stand to lose big if the US defaults, so one way or another they'll come to a deal in time to raise the debt ceiling. The question is how much are they going to cut in terms of social services along the way. It's pretty telling that the debt ceiling way raised several times under the Bush administration without anyone making much noise about it - but now, it's suddenly an excuse to cut Social Security and Medicare. It's also pretty telling that it's always programs for the poor and the eldery that are always on the chopping block, and never, for instance, any of the wars the US has been fighting for a decade.

aled

Another day, another 3.83 Billion Dollars.

shirtflirt

raising the credit limit as a means of bypassing defaulting in essence is defualting. eventually, this economic model will implode.

SuperRyan

NPR keeps bringing up third parties because of this (keeps bringing aka like 2 or 3 times :^P) and I'm like "Yeah, probably not."

stubby43

I'm kind of disappointed at how little press this is getting because if there is a default theres going to be significant ramifications for the global economy.

Unfortunately an explanation of a highly complex financial system isnt as exciting as Amy winehouse is dead.

Ellsswhere
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its all a joke anyway, its not real, do you honestly think anything will change if its not raised... its fake money

its like if you reached your credit card limit and called up the credit company and said oh dont worry about it just raise my limit then kept spending money you never had in the first place, political theater is dusgusting

Ellsswhere
3 designs submitted - Score now!

wow, anyone remember the doomsday clock, 5 minutes to 12, silly people

maddingo

Well... Both Major parties share damn near eqaully in the blame for this massive cluster fuck

and of course in the ridiculous path that has led us to be 14+ trillion god damn dollars in debt in the first place.

too be sure this is a huge problem that I for one am not at all clear as to how to fix now... We should have never allowed this to happen in the first place but since we have ..fuck who knows what to do now.

I would like to see some common sense tax reforms such as lowering the corporate tax but then also closing the loopholes that allow major corporations to pay less in taxes than I DO...for fuck sake.

I am in favor i allowing Bush's tax breaks to expire.

I think that we need to basically once and for all come to the conclusion that if there are services that we demand somehow someway we have to be able to pay for them.

It is a a massive massive cluster fuck however.

d3d

what's the US military budget these days?

Haragos

We should probably stop spending so much money. Case Closed. I solved it. I want a medal.

maddingo

A LOT... but ..

We are fighting a god damned war ATM and still have a bunch of people in Iraq..even if we are kinda winding that down now.

I really don't know... what to suggest we do now.. y'all in the rest of the world best hope we think of something however cause things are going to get BUMPY should the US Default... super bad...

Haragos

Cut every budget (Welfare, Military, Medicare, and so on) 50% and all our problems are over. Government does too much anyways.. it should be cut down to size.

ISABOA

looking at that debt clock for any period of time makes me realize that were fucked, matters not the current debate - unless we pull our heads out of our ass we are totally screwed

shirtflirt

it's kinda like watching nero play his fiddle while an ember falls into a haystack...

maddingo

the sad part is it doesn't matter what you political leanings pretty much everyone is about equally to blame in getting to this rather appalling place.

shirtflirt

OR

they can just abolish the debt ceiling.

why is it that only we and Denmark have debt ceilings? and what is the point of a debt ceiling if it's going to be lifted/raised 70x in the past 50 years. what a fucking joke.

ISABOA

the point is to draw a line in the sand and say "you shall not pass"

Haragos

We've been spending almost non-stop since the 1910s to now at a pace we simply could not afford. Now we totally can not afford it and instead of cutting spending at a dramatic rate (which we almost have to now because we let it get too far out of hand) we're going to just raise the debt up even higher.

No one is serious about cuts but a select few and they simply don't have the voice or power to get it done. I think the average american knows what needs to be done but Politicians never will. Wish we had term limits.

Kookaberry

Both parties spend based on bullshit emotions and not fact. Republicans spend money on stupid wars and telling people what to do with their bodies, and Democrats spend money on feel good welfare programs when they have been specifically tested by these things called SCIENTISTS who have been unable to demonstrate any positive effect on society. BLAHHHHHHH

ISABOA

point of order - I don't think it costs much to tell people what to do with their bodies

:P

shirtflirt

just the lobbying is what costs those pesky repubicans

shirtflirt

wtf is that AMBASSADOR badge...?

ISABOA

i take it back - the enforcement of said commandments on peoples bodies costs us a fortune.

see me and my duplicitous nature is wacky

Kookaberry

In a perfect world, it wouldn't cost a penny to tell us what to do with our bodies. In a perfect world, parents would be good at parenting and families would take care of their physically and mentally sick and their elderly and their and we wouldn't need social welfare. In a perfect world, we'd leave each other's shit alone and wouldn't need or desire war. Life is expensive because we are a species of irresponsible, dishonest, live by the seat of our pants children.

d3d

civilisation has to fall somehow. it might as well be over something as trivial as money, and all america's fault. i'm gonna go work on some makeshift weapons and barricades.

Kookaberry

Quick! Everyone fuck everyone else on my ready.

... .... .....

GO

ISABOA

stabs violently

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