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Even when the National Debt isn't getting any higher (For example, it has not gotten any higher since last April this year), the Treasury is always paying off various shirt-term and long-term bonds as they come due, and then turning around and buying more bonds and borrowing money in other ways. It's always going on.
If we default on payments (actually if we default on the interest payments), then the next time we want to borrow more money to keep the existing level of debt where it is, we'll have to pay substantially more interest.
Ove time, our ENTIRE OUTSTANDING NATIONAL DEBT would have higher interest rates.
Is that bad?
Well, in 2011, we paid $430 billion on a Debt of approx. $15 trillion. $430 billion in one year, is about $1,500 for every man, woman, child, and illegal alien in the country. For that one year. Or nearly $6,000 for a family of 4.
And we were fortunate that interest rates were very low that year, amounting to around 3%.
But it wasn't long ago that the country had double-digit interest rates. They stayed above 10% for some 7 years, occasionally topping 20%.
If we default, I don't know how high they would go. But they would go high.
If they hit that 20% they once were, then that would cost that family of four, around $40,000 per year.
I think most conservatives understand the consequences of a default. I think what many on the other side dont get is that going farther and farther in debt is not the answer.
I think most conservatives understand the consequences of a default. I think what many on the other side dont get is that going farther and farther in debt is not the answer.
Absolutely.
That's why the rational grown-ups would extend the debt ceiling now and then get together and earnestly talk about how to create a credible plan that would get the nation back on track over the course of the next 5-10 years.
But that's not the kind of people we have in Washington.
I think most understand that the government is taking in more than enough to pay off any debt obligation and anything to the contrary is nothing more than scare tactics like we got with the sequester warnings.
I think most understand that the government is taking in more than enough to pay off any debt obligation and anything to the contrary is nothing more than scare tactics like we got with the sequester warnings.
This is exactly the kind of nutty talk from the right that makes this so much scarier.
You guys don't understand that while there may be enough to pay interest on the debt to bondholders, there will quickly not be enough to pay doctors for Medicare services, disabled veterans, even active duty soldiers, and social security retirees.
Now seriously: what do you think this nation will look like when these and other internal stakeholders stop getting their income from one day to the next? You seriously think the economy will just keep on chugging right through that?
Talking about how it's no big deal to default...welcome to crazy town. And people saying this are in our political leadership, for God's sake! I still can't believe such people would even be elected.
I think most understand that the government is taking in more than enough to pay off any debt obligation and anything to the contrary is nothing more than scare tactics like we got with the sequester warnings.
The default in April 1979, ended up costing taxpayers hundreds of billions of dollars. The Treasury Department blamed it on a crush of paperwork partly caused by lawmakers who — this will sound familiar — bickered too long before raising the nation's debt limit. It was lawmakers determined to attach a strong balanced budget amendment to the bill. They finally relented, the day before Social Security checks were expected to start bouncing. The tumult contributed to Treasury's failure to redeem $122 million in maturing T-bills, touted as one of the world's safest investments.
Many bond holders were forced to join & file a class-action lawsuit against thr US treasury. Some investors that April and May waited more than a week for their money. Treasury blamed problems with its newfangled word-processing equipment. The system was stressed, officials said, when the booming popularity of T-bills collided with the last-minute debt ceiling increase from Congress.
Investors called it a "default" and sued for interest to cover the gap. Treasury called it a "delay." It ushered in an 8% rise in interest rates that took 8 years to return to previous level. That cost taxpayers hundreds of billions of dollars.
I think most conservatives understand the consequences of a default. I think what many on the other side dont get is that going farther and farther in debt is not the answer.
But according to a poster above, the debt has not grown at all since "last April this year," whatever that means.
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