Debt Ceiling Default Magnitude Explained

[Relentless]

For all the half-wits who have confused themselves into thinking that defaulting on the debt won't be a big problem or will somehow improve economic standing, Matt Taibbi wrote an excellent piece describing the magnitude of the problem. It's worth reading...

http://www.rollingstone.com/politics...nding-20131011

The 2008 crash was triggered by the failure of one investment bank, Lehman Brothers, and when that bank collapsed, the world discovered that it was now so interconnected financially that one significant and unexpected failure could start a nuclear chain-reaction of losses. The Lehman impact stunned everyone. The average American family lost 18 percent of its wealth within months. The stock market lost half its value. The repo market collapsed, freezing economic activity and leading to massive declines in asset prices. Unemployment soared past 10 percent almost instantly.

And that was just one bank failure. Can one imagine the consequences of the failure of the United States? The $12 trillion in outstanding government debt is 23 times bigger than the $517 billion Lehman owed when it went under in September 2008. In every way that Lehman's failure played havoc with the economy, the failure of U.S. debt would repeat the disaster, only it would do it on an almost inconceivably huger scale.

The entire world financial system revolves around the notion that the U.S. will never default, because under normal, rational circumstances, it can't. (It can always print enough money to meet its obligations, as even Alan Greenspan conceded two years ago.) Before this latest political madness, no one could ever have conceived of a sovereign state intentionally defaulting. But we're, like, a week away from this happening, and where's the emergency mobilization?

[ThunderBalls]

Teabaggers WANT the US to fall into a severe depression. Why? Because the racist pricks hate the fact that we have a black leader so much they would rather Obama have a major collapse on his legacy so that they can always point the finger back and say "See, that is what happens when you elect a black President". Their racist shit filled heads would rather the world collapse than to be outdone by a black man. None of these IQ challenged inbreds cared less when Bush ran up deficits (which Obama has actually cut) and actually argued it was a good thing if it meant killing and invading people of a different color. The slave has turned into their master and they cannot take it.

[Jel]

Derailed after 1 post, is that a new record?

[2MuchMark]

Derailed after 1 post, is that a new record?

Why derailed? I agree with Thunderballs.

We already know that from the very first night that President Obama was elected, the republicans got together to make a plan with 1 objective : To get rid of Obama.

The guest list that night (which was just over 15 people in total) included Republican Reps. Eric Cantor (Va.), Kevin McCarthy (Calif.), Paul Ryan (Wis.), Pete Sessions (Texas), Jeb Hensarling (Texas), Pete Hoekstra (Mich.) and Dan Lungren (Calif.), along with Republican Sens. Jim DeMint (S.C.), Jon Kyl (Ariz.), Tom Coburn (Okla.), John Ensign (Nev.) and Bob Corker (Tenn.). The non-lawmakers present included Newt Gingrich, several years removed from his presidential campaign, and Frank Luntz, the long-time Republican wordsmith. Notably absent were Senate Minority Leader Mitch McConnell (R-Ky.) and House Minority Leader John Boehner (R-Ohio).

Source : http://www.huffingtonpost.com/2012/0...n_1452899.html

So no matter what, republicans vow to take down Obama. The Tea Party "movement" is nothing more than a gathering of low-information nut jobs sponsored by rich republicans such as the Koch Brothers to add mass and momentum to the republican goal.

So, why is all of this happening?

Obama is a good, smart president, with a great background who still plays-nice with republicans. All of the socialist-this and Kenyan-that bullshit aside, what is left? If you strip everything down to its common denominator, it is that he is BLACK.

I really am starting to think that too many white people can't get over the fact a black man is now running the show. Republicans constantly ignore all facts and attack the man that they THINK he is (A kenyan, or a Muslim, or a socialist, or all of the above), instead of the man he actually is.

Am I wrong?

[suesheboy]

Am I wrong?

Not 1 bit

[directfiesta]

Rush Limbaugh , 2009

So I?m thinking of replying to the guy, ?Okay, I?ll send you a response, but I don?t need 400 words, I need four: I hope he fails.? (interruption) What are you laughing at? See, here?s the point. Everybody thinks it?s outrageous to say. Look, even my staff, ?Oh, you can?t do that.? Why not? Why is it any different, what?s new, what is unfair about my saying I hope liberalism fails? Liberalism is our problem. Liberalism is what?s gotten us dangerously close to the precipice here. Why do I want more of it? I don?t care what the Drive-By story is. I would be honored if the Drive-By Media headlined me all day long: ?Limbaugh: I Hope Obama Fails.? Somebody?s gotta say it.

[Barry-xlovecam]

History repeats itself?

[onwebcam]

Eliminate the private Federal Reserve and you eliminate the problem..

[arock10]

Eliminate the private Federal Reserve and you eliminate the problem..

And why is this? The gold standard is fucking retarded btw

[Relentless]

The point... Is that no matter what you think the long term solution may be, the short term fact is that the US can not default on its debt under any circumstances without horrifically catastrophic results. Anyone (whether they call them self tea-party, libertarian, conservative, liberal, unicorn or otherwise), who says defaulting on our existing national debt is in any way a rational option, is either just fucking with you, or fails to understand basic economics at the most fundamental level. Even 'threatening' to default has serious consequences, and the idiots in Congress or the media who are doing that presently should stop immediately.

[onwebcam]

And why is this? The gold standard is fucking retarded btw

Do I need to give you the full history of the Federal Reserve or what?

The point... Is that no matter what you think the long term solution may be, the short term fact is that the US can not default on its debt under any circumstances without horrifically catastrophic results. Anyone (whether they call them self tea-party, libertarian, conservative, liberal, unicorn or otherwise), who says defaulting on our existing national debt is in any way a rational option, is either just fucking with you, or fails to understand basic economics at the most fundamental level. Even 'threatening' to default has serious consequences, and the idiots in Congress or the media who are doing that presently should stop immediately.

King Obama is the one who rejected a short-term deal because we all know deep down he wants free reign to do as he pleases.

[GregE]

King Obama is the one who rejected a short-term deal because we all know deep down he wants free reign to do as he pleases.

Paying a blackmailer isn't about satisfying demands, it's about ensuring that more demands will be forthcoming.

If the Republicans want to make new law they should do it the old fashioned way by first winning some fucking elections.

[Vendzilla]

Geebus, you guys are all about bashing the GOP saying if this and if that

Right now the present administration is printing 85 billion dollars a month you guys think that's a good thing, change needs to happen
http://www.forbes.com/sites/kitconew...llies-sharply/

[onwebcam]

Paying a blackmailer isn't about satisfying demands, it's about ensuring that more demands will be forthcoming.

If the Republicans want to make new law they should do it the old fashioned way by first winning some fucking elections.

Umm isn't that why King Obama isn't getting his way? He has pretty much said it's his way or no way at all. So whatever happens from this point on is ENTIRELY Obama's fault.

[arock10]

Umm isn't that why King Obama isn't getting his way? He has pretty much said it's his way or no way at all. So whatever happens from this point on is ENTIRELY Obama's fault.

Yea no not at all. But keep on dreaming up whatever you can think of that is anti Obama

[onwebcam]

Yea no not at all. But keep on dreaming up whatever you can think of that is anti Obama

"Talks on Capitol Hill advanced with a new urgency after President Obama rejected House Speaker John A. Boehner’s (R) offer to raise the debt limit through late November to give the parties time to negotiate a broader budget deal."

http://www.washingtonpost.com/politi...7d8_story.html

King Obama is not negotiating... In turn whatever happens, happens because of his wish to be a dictator.

[onwebcam]

Oh and BTW even if the debt ceiling is not raised it doesn't mean we default. Interest on the debt is only a small fraction of the overall budget. Default is just a scare tactic to get public approval which allows them to keep spending trillions more than they bring in.

[arock10]

"Talks on Capitol Hill advanced with a new urgency after President Obama rejected House Speaker John A. Boehner?s (R) offer to raise the debt limit through late November to give the parties time to negotiate a broader budget deal."

http://www.washingtonpost.com/politi...7d8_story.html

King Obama is not negotiating... In turn whatever happens, happens because of his wish to be a dictator.

Lol wish to be a dictator. Whatever you say buddy

[Paul]

Oh and BTW even if the debt ceiling is not raised it doesn't mean we default. Interest on the debt is only a small fraction of the overall budget. Default is just a scare tactic to get public approval which allows them to keep spending trillions more than they bring in.

Even if they don't default it's going to mean severe austerity measures that will have a serious impact on the US and World economy.

Geebus, you guys are all about bashing the GOP saying if this and if that

Right now the present administration is printing 85 billion dollars a month you guys think that's a good thing, change needs to happen
http://www.forbes.com/sites/kitconew...llies-sharply/

No one thinks it's a good thing but the implications are terrifying, it would be so so much worse than the collapse of Lehman Brothers in 2008. Bank runs Governments can manage but if American defaults on it's debt you'll see most other countries default in days like a pile of dominos.

A Global Depression followed by World War III is hardly a change for the better

[epitome]

Geebus, you guys are all about bashing the GOP saying if this and if that

Right now the present administration is printing 85 billion dollars a month you guys think that's a good thing, change needs to happen
http://www.forbes.com/sites/kitconew...llies-sharply/

You mean the Fed, which is independent, not the "current Administration." If you want to be mad about something at least be smart enough to point in the right direction. Also, the printing has to continue due to all of those spending bills Congress (which very much includes the GOP) passed. Please explain why the GOP doesn't come down on its own spending instead of pointing fingers at everyone else? They control a very important part of government.

[tony286]

Teabaggers WANT the US to fall into a severe depression. Why? Because the racist pricks hate the fact that we have a black leader so much they would rather Obama have a major collapse on his legacy so that they can always point the finger back and say "See, that is what happens when you elect a black President". Their racist shit filled heads would rather the world collapse than to be outdone by a black man. None of these IQ challenged inbreds cared less when Bush ran up deficits (which Obama has actually cut) and actually argued it was a good thing if it meant killing and invading people of a different color. The slave has turned into their master and they cannot take it.

Bingo.

[Relentless]

Whether you want to spend less or not spend less, print less money or not print less money... You don't get to leave your EXISTING debt unpaid. Their 'scare tactic' is costing us money, damaging our credibility and hurting the global economy. The worst economic condition is uncertainty and these asshats are intentionally creating uncertainty as a false bargaining chip in an attempt to repeal something that the American public voted for twice, which the Supreme Court already ratified.

[arock10]

Whether you want to spend less or not spend less, print less money or not print less money... You don't get to leave your EXISTING debt unpaid. Their 'scare tactic' is costing us money, damaging our credibility and hurting the global economy. The worst economic condition is uncertainty and these asshats are intentionally creating uncertainty as a false bargaining chip in an attempt to repeal something that the American public voted for twice, which the Supreme Court already ratified.

This exactly

[Paul]

Whether you want to spend less or not spend less, print less money or not print less money... You don't get to leave your EXISTING debt unpaid. Their 'scare tactic' is costing us money, damaging our credibility and hurting the global economy. The worst economic condition is uncertainty and these asshats are intentionally creating uncertainty as a false bargaining chip in an attempt to repeal something that the American public voted for twice, which the Supreme Court already ratified.

They're playing a game of chicken with the World Economy, good times!

Relentless do you think American has any intention of ever paying back the debt?

It'll be interesting to see how long this game of musical financial chairs will continue for

[Vendzilla]

You mean the Fed, which is independent, not the "current Administration." If you want to be mad about something at least be smart enough to point in the right direction. Also, the printing has to continue due to all of those spending bills Congress (which very much includes the GOP) passed. Please explain why the GOP doesn't come down on its own spending instead of pointing fingers at everyone else? They control a very important part of government.

The current administration includes the GOP as well

The Federal Reserve buys $40 billion a month in residential mortgage-backed securities and $45 billion in Treasuries in order to keep, and push, interest rates down in order to monetarily support the economy.

It's printing the money because of high unemployment and a slow economy using Quantitative easing and record low interest rates.

I find it funny that right now more money is being collected in taxes than ever before, yet Obama still calls on higher taxes for the rich.

Food stamps usage is 400% higher now than when Barry took office because the FDA is going to Mexico teaching Mexican Nationals how to better use our food stamp program.

I agree, it's not just the Democrats , it's all of them that are screwing things up, then voting themselves a raise.

[Vendzilla]

Even if they don't default it's going to mean severe austerity measures that will have a serious impact on the US and World economy.



No one thinks it's a good thing but the implications are terrifying, it would be so so much worse than the collapse of Lehman Brothers in 2008. Bank runs Governments can manage but if American defaults on it's debt you'll see most other countries default in days like a pile of dominos.

A Global Depression followed by World War III is hardly a change for the better

Because of all the money we give other countries

[onwebcam]

Whether you want to spend less or not spend less, print less money or not print less money... You don't get to leave your EXISTING debt unpaid. Their 'scare tactic' is costing us money, damaging our credibility and hurting the global economy. The worst economic condition is uncertainty and these asshats are intentionally creating uncertainty as a false bargaining chip in an attempt to repeal something that the American public voted for twice, which the Supreme Court already ratified.

The Supreme court can't ratify anything.. All they can do is give an opinion and everyone has one. These opinions just happened to be "stacked" in favor of "The One" who appointed them.

[SuckOnThis]

The Supreme court can't ratify anything.. All they can do is give an opinion and everyone has one. These opinions just happened to be "stacked" in favor of "The One" who appointed them.

Funny statement considering Obama hasnt nominated one supreme court justice and five of the nine were nominated by republican presidents.

[onwebcam]

Funny statement considering Obama hasnt nominated one supreme court justice and five of the nine were nominated by republican presidents.

You're right he hasn't appointed one. He has appointed two, Sonia Sotomayor and Elena Kagan..

[SuckOnThis]

You're right he hasn't appointed one. He has appointed two, Sonia Sotomayor and Elena Kagan..

You're correct, my bad.

[Relentless]

The Supreme court can't ratify anything.. All they can do is give an opinion and everyone has one. These opinions just happened to be "stacked" in favor of "The One" who appointed them.

You happen to not understand how our system of government works.

The difference between your 'opinion' and a Supreme Court ruling is that their ruling is Federal case law to be enforced by the US military, Federal agencies and States. When they decide something, it is the law, period... Unless they overturn their own decision (which happens so rarely as to be nearly impossible), when Congress creates new laws that change the law of the land without violating the Constitution (presently congress can't agree on anything) or when there is a constitutional Amendment (good luck with that). The fact that congress has made itself so much less powerful actually makes the Supreme Court that much more powerful.

A lot of people had the 'opinion' that black children shouldn't go to school with white children. When the Supreme Court decided they should, the national guard showed up and those racist opinions were disregarded.

[Relentless]

They're playing a game of chicken with the World Economy, good times!
Relentless do you think American has any intention of ever paying back the debt?
It'll be interesting to see how long this game of musical financial chairs will continue for

My fear is that Republicans are suiciding their poll numbers and democrats might decide to do what's best for democrats (let the republicans ruin things) rather than what's best for the country (stop them from suiciding their party and our economy in the process).

[Barry-xlovecam]

US Constitution Amendment 14, Section 4.
The validity of the public debt of the United States, authorized by law, ... shall not be questioned.

Bill Clinton alluded to this, and if push-to-shove comes in the debt ceiling issue, this is President Obama's trump card. The House can contest it in the courts and my guess is that the US Supreme Court will grant certiorari and hear the case after the district and appellate courts hear the pleadings and rule (months or years from now).

Bottom line the United States has enough incoming revenue to pay its current obligations and will do so in spite of any political motivated debt ceiling.

There will be no default -- what we are seeing is a orchestrated drama and nothing more.

[Brent 3dSexCash]

[Relentless]

Bill Clinton alluded to this, and if push-to-shove comes in the debt ceiling issue, this is President Obama's trump card. The House can contest it in the courts and my guess is that the US Supreme Court will grant certiorari and hear the case after the district and appellate courts hear the pleadings and rule (months or years from now).
Bottom line the United States has enough incoming revenue to pay its current obligations and will do so in spite of any political motivated debt ceiling.
There will be no default -- what we are seeing is a orchestrated drama and nothing more.

It has nothing to do with incoming revenue. Unlike any other debtor, the country can print more money. World markets factor in the possibility of inflation and devalued currency, they do not factor in the possibility of the US defaulting. I agree with you it's orchestrated drama... and that drama itself has severe negative consequences.

[keysync]

Bill Clinton alluded to this, and if push-to-shove comes in the debt ceiling issue, this is President Obama's trump card. The House can contest it in the courts and my guess is that the US Supreme Court will grant certiorari and hear the case after the district and appellate courts hear the pleadings and rule (months or years from now).

Bottom line the United States has enough incoming revenue to pay its current obligations and will do so in spite of any political motivated debt ceiling.

There will be no default -- what we are seeing is a orchestrated drama and nothing more.

The treasury takes in 250B a month. The payment or maybe the interest on our debt is 20B a month.

Drama Llama...

[Captain Kawaii]

It's coming apart at the seams and there is not much we can do about it. I do not think the 1% is racist like you think. The trailer park faction of the GOP might be but the 1% club sees the entire 99% as slaves. Obama answers to the same people Bush does/did etc.

Its a mistake to combine the trailer park gop and the 1%. 1% does not like liberalism and entitlements. Ever. They see it as an attack on their wealth. Members of my family, not me, have more money than this entire board combined will ever see. They want to see liberalism fail, not Obama. He is a puppet and nothing more.

The 1% started the American Revolution and let the 99% fight it. My family had many officers in that war who led, I should say, pushed, many grunts to their deaths.

[Paul]

My fear is that Republicans are suiciding their poll numbers and democrats might decide to do what's best for democrats (let the republicans ruin things) rather than what's best for the country (stop them from suiciding their party and our economy in the process).

It's a dangerous game indeed. I suppose American can continue to do as it pleases until

A) We run out of oil or
B) More countries start trading oil in other currencies or commodities other than the $

I just can't see B) happening, many a country in recent history have tried and been invaded/regime changed for attempting it.

China has been making a lot of noise recently about a new reserve currency etc At this point in time that's all it is though, noise.

Well I'm off to buy some more Gold and hope it doesn't pay off like back in October 08 when we where days away from global bank runs

[bronco67]

All of our problems will be solved if we just a get a white person back in White House, even if it's a democrat. I think its great that wall has finally been broken down, but America is obviously not ready yet. To say there's not a visceral, racist backlash against this president is to just be in denial.

The Tea Party would not exist if McCain had won back in 2008. Don't even try to say that group is not mostly made up of ignorant racist fucks reacting to the first black president. If a black Republican had won, they would still be in Congress gumming up the works.

[_Richard_]

[Relentless]

It's a dangerous game indeed. I suppose American can continue to do as it pleases until A) We run out of oil, B) More countries start trading oil in other currencies or commodities other than the $

We will not run out of oil. We are about to become one of the world's largest exporters of oil. Now that they have figured out how to rape the Earth in new ways they are destroying huge areas of the Dakotas and West Virginia to retrieve oil, natural gas and other energy resources.

I just can't see B) happening, many a country in recent history have tried and been invaded/regime changed for attempting it. China has been making a lot of noise recently about a new reserve currency etc At this point in time that's all it is though, noise. Well I'm off to buy some more Gold and hope it doesn't pay off like back in October 08 when we where days away from global bank runs

The likely outcome will be higher interest due on new debt which has a very negative impact on our economy and a more cohesive move away from American diplomatic interests - much the same way the NSA spy programs and Snowden info are causing many countries to rethink the way the entire internet is managed...
http://www.internetgovernance.org/20...us-government/

[pornguy]

The problem and its the only one is greed.

[Relentless]

The problem and its the only one is greed.

Unfortunately that is far from true. Many of the teabaggers are from states that get the most aid and provide the least revenue. They would benefit far more by dropping their demands. Likewise, there are many others being duped into voting against their own self interest on a lot of other issues.

The problem isn't the greed of the 1%, it's the apathy and stupidity of the 99% that is allowing people to be abused like this.

[Paul]

We will not run out of oil. We are about to become one of the world's largest exporters of oil. Now that they have figured out how to rape the Earth in new ways they are destroying huge areas of the Dakotas and West Virginia to retrieve oil, natural gas and other energy resources.

We'll look back at this period in history and say "WTF where we thinking!"

The likely outcome will be higher interest due on new debt which has a very negative impact on our economy and a more cohesive move away from American diplomatic interests - much the same way the NSA spy programs and Snowden info are causing many countries to rethink the way the entire internet is managed...
http://www.internetgovernance.org/20...us-government/

Interesting, thanks for the info Relentless!

That's the thing with trust, once it's gone it's gone

The problem isn't the greed of the 1%, it's the apathy and stupidity of the 99% that is allowing people to be abused like this.

With the invention of the internet, we humans have access to more information than ever before. Enough sources of info to separate the propaganda & bullshit yet we live in an age where the majority of people in the West don't give a fuck.

Don't care about loss of

1) Privacy
2) Civil Liberties
3) Standard Of Living

That's what I find truly depressing. If the 99% could properly comprehend just how much they've been fucked over by the 1% in the past decade we'd have had an Arab spring scenario in the West.

The government you elect is the government you deserve

[Zuzana Designs]

lolz...haha

[pimpmaster9000]

seriously...you guys need to hire a CEO for the USA

democracy does not work...you have all the teabagging and the greymadering and the bullshit lobbying and the mother fucking houses and business men senators and courts and fucking constitutions and bullshit....plus your elections are a script job that focuses on stupid shit like gay marriage and abortions and everybody pretends to be religious and have family values so you fags can feel "Safe" about voting him in....plus half your population is plain stupid like in any other country...fucking divide and conquer text book style no business can be run under such conditions...

just, for fucks sake hire a CEO, with absolute power and fucking make a reality show to see what the mother fucker is up to and ban all the other parties and make a new ammedment to your constitution ordering them to shut the fuck up...if you like the CEO and he puts money in your pockets then keep him...if enough of you dissagree then trash him and find a new one and hold the old one responsible for every mother fucking fuck up to make an example to the others after him...a real big brother

it aint working yo! we all know in 10 years you will, at best, be balls deep instead of knee deep in shit like you are now...your country has been on the steady decline as far as what one man can afford with one salary for the last 50 years...fuck how much the top 1 % have or how much nukes you have or who went to the moon first...how much can one man in the USA make for a normal job and is it enough to easily support his whole family like 50 years ago? if the answer is: not enough, then it aint working plain and simple...


shit we have your democracy installed in our country and seriously: we had more cash during the war ture that the earnings are bigger, but the expenses are waaaaaaaay bigger than before so it does not amount to shit...

just my 2cents on this i-democracy bullshit and your I-healthcare and I-government

[Relentless]

That's what I find truly depressing. If the 99% could properly comprehend just how much they've been fucked over by the 1% in the past decade we'd have had an Arab spring scenario in the West.

In past generations people used racism, sexism and national origin as wedge issues to stay in control. Now they have a hard time doing it as these groups have gotten better and better at asserting themselves, most recently the LGBT community has made strong progress.

So now, instead they simply do the same thing along economic lines. Convincing people in the top 2-5% that the people in the 6-99% are evil and vice versa, when in fact the gap between the guy in the top 1% and the guy at 5% is infinitely larger than the gap between the guy at 5% and the guy at the 81% mark of the spectrum. It is amazing to me how many barely rich people and poor people think they should be enemies of each other while a tiny faction of ultra-wealthy post-nationalists continue to pull all the strings.