Thread: Economy Connoisseurs: is the US going to default?

SOOO loosely.

My answer: very probable. Doesn't matter if it's now or in the future.

It probably will not, even if they don't make an agreement in congress we can still pay our bills. Unless they are jerks and default on purpose, they can easily avoid it at this time. Though they would have to turn off some services they normally give.

Originally Posted by Alric

It probably will not, even if they don't make an agreement in congress we can still pay our bills. Unless they are jerks and default on purpose, they can easily avoid it at this time. Though they would have to turn off some services they normally give.

Raising the debt ceiling will allow the US government to pay debts that they already owe. If they do not raise it, then they will default.

They don't necessarily have to default just because the debt ceiling isn't raised, which was my point. The government is constantly taking in money, but are currently paying out more than they get. They do have enough to pay everything they are required to pay. If they don't pay for any of the optional stuff, and only pay back the debts they are required to pay off, then they will not default.

Of course if the government says, screw it. Pays for the optional stuff any way, and ignore the debts, then they will default on some of the debts and it will make the government look like its ran by retarded morons, which is probably not far from the truth. In fact, a lot of the politicians have been trying to position things to make the situation worse than it had to be, because to them politics is far more important than our economy.

Originally Posted by Spartiate

Raising the debt ceiling will allow the US government to pay debts that they already owe. If they do not raise it, then they will default.

So the government can only pay off its debts if it raises how much debt it can take on?

What does default mean?

Originally Posted by tommo

What does default mean?

It means they'll skip the debt payment.

So they just won't pay it?

Makes sense.

Yah, government is teh genius.

LMFAO!

Truer words have never been spoken.

Originally Posted by tommo

So they just won't pay it?

Makes sense.

And that's when the hired goons get sent in with baseball bats!

I have to agree, the goons in congress care more about politics than our economy. So, there is a chance that this default will happen. If it does, I say its time for a purge of the parties.

Well if you take say the treasury bonds that is a good example. You have a treasury bond that is due to be paid, and it is backed by the US government. It has always been a guaranteed bet, stocks and bonds from other companies may be very solid or could be somewhat risky, but the government's own bonds are supposed to be pretty much guaranteed. Now when they say default, they mean people will go in to cash in their bonds and the government says, to bad we have no money and you lose everything you invested.

More likely, instead of telling people to screw off I suspect they would just delay payment, which would still have a massive impact on things. Though they don't even have to do that. If they shut down buildings, and told people to take time off(they don't actually have to fire everyone but they need to tell them to go home until they sort it out), they could afford to pay off all the investors and stuff, even without taking out new loans.

Think of the government as a giant company, because that is basically what it is.

Oh.
So they pay the debt to China for example, but stop paying Americans.

Makes even more sense.

Originally Posted by tommo

Oh.
So they pay the debt to China for example, but stop paying Americans.

Makes even more sense.

Not really. If the US defaults then very bad things happen. No one will lend them anything else due to the credit risk, and very quickly they'll have no money whatsoever to purchase things

As an analogy, think of a mortgage on a house. If you miss the minimum payment, that does very bad things to your credit rating, and if you're already in a bad situation could cause you to end up defaulting (say part of your credit gets withdrawn and various bank who you owe money to demand repayment). Going hungry for a week to make sure you don't miss that repayment is better than losing your home and being kicked out on the street.

Originally Posted by tkdyo

I have to agree, the goons in congress care more about politics than our economy. So, there is a chance that this default will happen. If it does, I say its time for a purge of the parties.

Any reason why it isn't a time for a purge either way?

Originally Posted by StonedApe

Any reason why it isn't a time for a purge either way?

To me? No, there is no reason to not purge either way. But I dont see many other things convincing the people in general to get riled up and revolt.

No need to revolt to purge the parties. Just form new ones and don't vote for the old ones. Or better yet, just don't form new ones and vote for independents that are aligned with your political feelings.

Originally Posted by PhilosopherStoned

No need to revolt to purge the parties. Just form new ones and don't vote for the old ones. Or better yet, just don't form new ones and vote for independents that are aligned with your political feelings.

Except hardly anyone votes for the independents, ever... like 1% of Americans or less... although that may change if everyone gets sick of the party crap enough... I doubt it will anytime soon, though.

So the complaint is that the country as a whole gets to decide but your opinion should trump theirs?

Not sure what's going on with you guys. You got a functioning democracy; if you can't work out how to use it then there's nothing much you can do about it.

Originally Posted by Xei

So the complaint is that the country as a whole gets to decide but your opinion should trump theirs?

Not sure what's going on with you guys. You got a functioning democracy; if you can't work out how to use it then there's nothing much you can do about it.

I dunno, my complaint is that people keep voting for morons backed by corporations and banks who pass absurd laws that take away civil liberties. The complaint is that people keep voting for democrats and republicans despite that these groups are fucking up.

Maybe I'm wrong, but it seems to me that banks and corporations have made it extremely for independents to get elected. They have done this by making the basis of elections advertisements and media coverage. In this way, those who have money and control of media are basically in control of the elections. It's true that the American populace is also partly to blame, they had a part in this, but those who have money in this culture have the ability to manipulate it.

Maybe I'm just paranoid, but did anyone else look at what was going on in the last election and realize that Obama was going to win about 3 years before the election? In one sense we have a functioning democracy, but when public opinion can be swayed as it can and when people are only shown 2 options it's kind of hard to say it's functioning, especially when you look at the poor results we get from it.

The government lacks transparency and elections are based on superficiality, this is my complaint. Which I realize is a problem not restricted to the political process, the people have a major role in it as well.

Well, what can ya do about it? That's all I'm asking. If the American populace is so determined to perpetuate the inanity, let them have it. You say it's only in part down to the public; I say that it's virtually all down to them. The evil corporations can't force them to listen to advertisements and similar partisan media rather than being objective (an option far more viable than ever with the internet); that's something they've chosen to do, or failed to not do, by their own volition. Same goes for the general apathy about becoming an individual candidate with sensible policies, and the apathy about voting for such people. I don't see any way out, you can't force people in a democracy not to vote stupidly. Do you actually want a democracy? What changes do you think should be made to the system?

The White Devil has corrupted everything.

You can take this as kind of a win for us. It was a big mess and the compromise sucked and didn't really do anything, and our credit rating as a country might take a hit, but they actually kind of did something, and they weren't forced to. Most people really expected them to go with the status quo up to the point where there was hyper inflation or until our dollar was already collapsing before they would make any attempt to fix the debt. They are finally trying to do something now at least, they are slow in doing it and really don't want to, but there is at least an attempt.

My hope is that this brought enough light to the subject that people will be talking about it next election. If they are, then maybe Ron Paul can get a fair shake this election cycle, because he was talking about this 20 years ago, and if people had listen to him at any point during that time we wouldn't be having the problems we have now.