Us Debt Default

[AmScray 355]

Thoughts?

[Skeleton Jelly 2]

Thoughts?

I think this is the topic that led to the hblask vs. SilentSnow cage match.some discussionI voted A.

[ShakeZuma 585]

I voted A, but my preference is e: where we don't pass the debt ceiling, the economy collapses, leading to all sorts of government shutdowns, including a couple of medical research facilities, which leads to a super zombie virus being released into the population, and I get to ride around shooting zombies. that's my preference.

[Skeleton Jelly 2]

I think people who want to shoot zombies are a little unbalanced. Imbalanced? No, I think it's unbalanced. Mentally.Anyway, what's the appeal of zombie shooting? Two things: 1) They're dead already, so it alleviates the natural guilt associated with killing. 2) They're in human form. It must speak to a deeper desire to hunt the most dangerous game. What if the world was being taken over by zombie llamas? Pretty meh I'd say. Unless those zombie llamas transmitted their zombiness through their spitting. That would add an interesting element to it. Llamas spit, right? Or is that camels? So, in conclusion, Shake wants to kill humans, but doesn't want to go jail so he yearns for the freedom to kill without repercussions.Or does all that go without saying?

[ShakeZuma 585]

yeah that's about the long and short of it

[LongLiveYorke 38]

Here's what I don't get:Say the debt limit is reached, so we can't borrow more money and go further in debt, so we can't pay off our current obligations. Can't we then just print money? That wouldn't increase the debt, and we could use it to pay people. It would cause inflation, sure.

[SilentSnow 1]

Here's what I don't get:Say the debt limit is reached, so we can't borrow more money and go further in debt, so we can't pay off our current obligations. Can't we then just print money? That wouldn't increase the debt, and we could use it to pay people. It would cause inflation, sure.

I'm not 100% sure, but I think the debt limit refuses to let us print any more money. Otherwise it would be completely meaningless. Also, there is a decent chance that the debt limit law is unconstitutional since it requires you to break other laws.

[El Guapo 8]

Here's what I don't get:Say the debt limit is reached, so we can't borrow more money and go further in debt, so we can't pay off our current obligations. Can't we then just print money? That wouldn't increase the debt, and we could use it to pay people. It would cause inflation, sure.

The term "printing money" doesn't mean physically going to the printing press and making more cash. It's the act of selling new issuance of treasuries. If the debt ceiling is reached, it means we cannot issue more treasuries, thus not receiving cash from investors or other countries to finance our government activities.

[hblask 1]

Reaching the debt limit does NOT cause default. Politicians making bad decisions *could* cause default, but I think even the most cynical politicians would not play that game.Reaching the debt limit *could* cause a bunch of useless agencies to shut down.The long term threat of default from an unsustainable debt load far outweighs any short term concerns about having to send bureaucrats home for a few weeks.

[LongLiveYorke 38]

The term "printing money" doesn't mean physically going to the printing press and making more cash. It's the act of selling new issuance of treasuries. If the debt ceiling is reached, it means we cannot issue more treasuries, thus not receiving cash from investors or other countries to finance our government activities.

Aren't there other ways of "printing money?" For example, during the recent rounds of quantitative easing, we weren't simply selling treasury bonds. Actually, we were buying them. We got the money to buy them by simply "printing money" electronically, which usually meant artificially increasing bank's reserves.I don't really know much about this, but I read this:http://www.telegraph.co.uk/finance/breakin...ast-resort.html

[LongLiveYorke 38]

Reaching the debt limit does NOT cause default. Politicians making bad decisions *could* cause default, but I think even the most cynical politicians would not play that game.Reaching the debt limit *could* cause a bunch of useless agencies to shut down.The long term threat of default from an unsustainable debt load far outweighs any short term concerns about having to send bureaucrats home for a few weeks.

This says a lot about your political philosophy in a nutshell.

[El Guapo 8]

Aren't there other ways of "printing money?" For example, during the recent rounds of quantitative easing, we weren't simply selling treasury bonds. Actually, we were buying them. We got the money to buy them by simply "printing money" electronically, which usually meant artificially increasing bank's reserves.I don't really know much about this, but I read this:http://www.telegraph.co.uk/finance/breakin...ast-resort.html

Hmmm. I would like to hear from MK on this, now I am actually not sure. But I know the Federal Reserve hold a huge amount of liquid capital for overnight loans to banks. The also use it to increase and decrease the money supply, but I have never heard that they can just all of the sudden type in "1,000,000,000,000" into a ledger and now they have that much more money.

[LongLiveYorke 38]

Hmmm. I would like to hear from MK on this, now I am actually not sure. But I know the Federal Reserve hold a huge amount of liquid capital for overnight loans to banks. The also use it to increase and decrease the money supply, but I have never heard that they can just all of the sudden type in "1,000,000,000,000" into a ledger and now they have that much more money.

Wouldn't that be sweet, tho

[hblask 1]

This says a lot about your political philosophy in a nutshell.

That I care more about the long term financial security of the country than short term political gamesmanship? I'm just finding myself a bit shocked to find there are so many people who would say the opposite.

[mrdannyg 274]

That I care more about the long term financial security of the country than short term political gamesmanship? I'm just finding myself a bit shocked to find there are so many people who would say the opposite.

lol, no, that you consider the workings of the federal government to be "useless agencies." Nice try though.

[Skeleton Jelly 2]

I think you're both oversimplifying to try to make the other side look silly.Ron Paul

[El Guapo 8]

Thats a pretty good article

[Roll the Bones 74]

I think you're both oversimplifying to try to make the other side look silly.Ron Paul

Well, yeah, Ron Paul is silly.

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.

The loss our AAA rating will raise rates and costs us trillions upon trillions due to high rates in virtually every aspect of the economy aside from just new debt. Every car loan, home loan or any loan will have a higher rates thus slowing the recovery even further if not thrusting us into a depression. No foriegn country would feel safe in investing in the US further and would turn to other countries like China. If a foreign power threatened to do this (weaken) our economy and threaten the stability of our country, Republicans would want to go to war.

[brvheart 1,752]

I think you're both oversimplifying to try to make the other side look silly.Ron Paul

I love Ron Paul sooooo much.

[Roll the Bones 74]

I love Ron Paul sooooo much.

I'll never get the infatuation with Libertarianism. The answer is always, "The free market will fix it". Well, how? Well, it just will!No, how? How will it fix things?It's the free market! It will fix everything!:facepalm: When people like Ron Paul talk about beliefs, it's very Ayn Randian and comes off like scripture, like it's holier than thou and like Ayn Rand, anyone that criticizes it is not worthy of your attention. Nothing short of "radical" capitalism is even worthy of discussion and the whole house of cards is based on the idea that our nature is selfish, competitive and greedy despite factual evidence from evolutionary psychologists and anthropologists that humans have a dual nature, that the other side of us makes us altruistic, cooperative and charitable. To form a society that espouses those later traits as evil is simply beyond my comprehension.

[Skeleton Jelly 2]

Ok, I give up! You got me!-Straw Man

[AmScray 355]

To form a society that espouses those later traits as evil is simply beyond my comprehension.

No one espouses them as evil. Charity, altruism and cooperation are fine in their natural form, but that doesn't extend to their being codified as a 'well intentioned laws'. It's no longer 'charity' when its a mandate. I don't expect you to pony up your earnings to pay for my view of how the world 'should be', don't demand the same of me. Ron Paul is bang-on when it comes to our economic problem, as are most Austrians. I agree that the free-market dogmatists are usually retards, but this is one area where they're spot on the money.How will the free markets fix this?They will do so by restoring a sustainable and natural equilibrium to our economy, as they always do. The free market ecosystem just doesn't allow certain things to occur- a lot of those 'things' are the root of our current economic troubles. Our current M.O. is totally unsustainable and based on a debt/inflation shell game. It is not free-market driven and if allowed to continue, will result in our total economic collapse. It's already significantly depreciating our standard of living, as we ship unimaginable sums of wealth to China in the form of debt interest, leaving very little left to take care of ourselves here. Have our wars contributed to this? Yes, a bit, but not nearly as bad as the shrieking leftists would have you believe.

[hblask 1]

I'll never get the infatuation with Libertarianism. The answer is always, "The free market will fix it". Well, how? Well, it just will!No, how? How will it fix things?It's the free market! It will fix everything!:facepalm: When people like Ron Paul talk about beliefs, it's very Ayn Randian and comes off like scripture, like it's holier than thou and like Ayn Rand, anyone that criticizes it is not worthy of your attention. Nothing short of "radical" capitalism is even worthy of discussion and the whole house of cards is based on the idea that our nature is selfish, competitive and greedy despite factual evidence from evolutionary psychologists and anthropologists that humans have a dual nature, that the other side of us makes us altruistic, cooperative and charitable. To form a society that espouses those later traits as evil is simply beyond my comprehension.

Scram already pointed out a few of the flaws, but to your question as how the market will fix it, you should read I, Pencil. The answer is: just as it does everything, by appealing to the self interests of each producer along the line, without coordination or even the knowledge of what the end result is.We cannot get out of the current economic slump because the Fed will not let us find the bottom. Nobody knows what a house is worth now. Are we at the bottom or not? Rates are ridiculously low and nobody is buying. What does that mean? Well, the rates are low because of loose monetary policy, not because of natural supply and demand factors. How do we factor that in? How long will monetary policy be so screwed up?If you don't understand how supply and demand negotiates prices in a free market.... well, that's pretty basic. Pick up a good economic book such as this one.People are self-interested. This is a fact. Any system that denies that is doomed to fail. So any time a politician calls for "shared sacrifice", you know they are about to talk about a plan that makes things worse. People will not, over the long run, harm their own family for the greater good. It just won't happen. So instead, we should focus on a system that allows each person's self-interest to benefit the maximum number of people.

[ShakeZuma 585]

scram, man, I love you bro, but you've really gotta start finishing your posts before you hit "reply." I end up reading each of your posts like 3 times for the edits. keep it up and I'll be forced to multi-quote you.

[AmScray 355]

scram, man, I love you bro, but you've really gotta start finishing your posts before you hit "reply." I end up reading each of your posts like 3 times for the edits. keep it up and I'll be forced to multi-quote you.

I just can't do it. I've tried, but it fails. "Edit relentlessly" was an expressive technique beat into my head by an old college professor, so, yeah.Disclaimer- all my posts are a work in progress for about 10 minutes after being initially made.Sometimes more. I've gone back and edited ancient posts that are totally beyond the threshold of likelihood that people are actually 'reading them'.