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You don't understand. If we don't raise our debt ceiling in the near term, we will signal to the markets that we (the USA) are unable to pay our obligations and will default for the first time in the history of the country. Do you have any idea what that will do to our stock and bond markets (not to mention the rest of the world's) and to interest rates on US debt?
Of course we need to reduce debt significantly over the next few years. But in the immediate term, we need to raise that debt ceiling because the consequences of default will be ugly.
the consequences of continuing down the road we are on will be even uglier.
the consequences of continuing down the road we are on will be even uglier.
people dont realize that there will come a time where we wont be able to pay our obligations. this can come now or it will come when the debt is a few trillion dollars more. we are just delaying the inevitable reality if spending isnt severely cut.
but the debt limit will be raised, no cuts will be made and we will find ourselves unable to raise enough debt to pay the bills soon enough. oh and the interest rates will probably have to go up which will increase our borrowing costs by hundreds of billions more. thats hundreds of billions of additional cost with no additional benefit. its gonna be awesome. you know who buys most of our debt? the federal reserve. people are clueless.
the consequences of continuing down the road we are on will be even uglier.
No one is saying that we should continue on the road we're on. Of course debt has to be reduced over the next decade. But people with no financial education think that this is just like the simple world they know of balancing a monthly check book, and it's not. There is a reason that prominent PhD economists all over the world are warning of the impacts of default, and that's because they actually understand what the consequences are in an interdependent world of equity markets, debt markets, and interest rates.
There is a reason that prominent PhD economists all over the world are warning of the impacts of default, and that's because they actually understand what the consequences are in an interdependent world of equity markets, debt markets, and interest rates.
haha "phd economists." is that a real job?
im not sure if you understand why they warn of default. its because default will have a big negative impact very quickly. so nobody whose job depends on it can suggest that and our elected morons wont allow it. but it is effectively just pushing the problem a little further into the future but it will be worse because the debt will be trillions more. also, you say "nobody says we can continue on our current road" but thats bs. the democrats have absolutely no desire to cut spending.
Dude, this isn't even a serious suggestion. The debt ceiling has to be raised, not raising the debt ceiling will result in the collapse of the US economy.
If its not raised, I guess we can start digging large holes to put all the dead seniors in, I'm imagine many are going to starve and die without their social security and medicare payments....
This country is such a joke, total political theater is now taken seriously.
I guess we can start digging large holes to put all the dead seniors in
the seniors will die! the children will starve! this is just bs scare tactics. the federal government doesnt need debt to operate. they will still have revenue to spend.
how much should americans put up with? have you worked and saved, and watched your money depreciate? has the price of items that you NEED increased drastically? do you feel any stability in the system as it now stands with the federal reserve in control and the "printing machines" running night and day?
we are going to have to face this debt issue sooner or later, and it might as well be sooner. otherwise, the federal reserve can keep ripping the rest of us off.
After creating a lot of dud sub prime and other loans they issued fraudalent bonds based on those debts when it all went belly up the "banksters" (not all banks) simply organised a financial coup and handed those bad debts to the fed for a cash refund and the fed passes the cost for the taxpayer to pay it all off.
are we really supposed to just accept this as business as usual-because it isn't.
You don't understand. If we don't raise our debt ceiling in the near term, we will signal to the markets that we (the USA) are unable to pay our obligations and will default for the first time in the history of the country. Do you have any idea what that will do to our stock and bond markets (not to mention the rest of the world's) and to interest rates on US debt?
Of course we need to reduce debt significantly over the next few years. But in the immediate term, we need to raise that debt ceiling because the consequences of default will be ugly.
Hi ambient,
You can't reduce the debt without reducing the money supply. The only way to do it without catastrophic results is during a rapid expansion of private debt by the fractional reserve cycle as we saw in the 90s. Why we allow commercial banks the bulk of the inflation tax should be the main topic of conversation here.
Government debt is what we use as currency. A dollar is essentially the government's promise to pay. The only thing really going on when you pay a debt with dollars is that one IOU is exchanged for another.
The biggest reason I'd like to dump this system is because no one understands it. Even when I explain it to people a hundred times their brains simply cannot wrap around the concept of IOU currency, debt money, credit economy or anything you want to call it. As it stands the national debt is the entire basis of our money system. As I have explained the preferred IOU is government's IOU.
Another person was absolutely stunned when I told him we could pay off the national debt tomorrow. Well, its owed in USD. We essentially stuff world markets with interest bearing treasuries. All we would need to do is pay them non interest bearing treasury notes. It would then no longer be debt. it would however create one massive wave of inflation. Since interest bearing implies a benefit to hold it rather than spend it.
The real truth is the Federal guberment owes nothing since it can print all the USDs it owes, unlike Iceland or even Ireland who owes an EU controlled entity. Notice how its up to a country like Germany. A real debt is when its owed in a currency you can't print. The debt is a complete facade. What a relief one might say except that you are paying for the national debt now in huge amounts of inflation taxes gobbled up by the Fed guberment and the commercial banks that control it. Not only is the dollar worth a fraction of what it was, its also on top of the growing population and advances in technology. If the population went from a 100 million to 300 million, then even if the dollar was worth the same, it would represent 2/3 of wealth that went somewhere since the demand for a fixed currency would go up in treble. All the dollar depreciation charts are massively understated. That does not even include carry trade or reserves in foreign banks. Bankrupt Americans think they will pay? They are bankrupt because they have been paying.
9 out of 10 people will not understand what I just posted. Its just beyond most people to understand what the current form of a US dollar is. They cannot accept it and usually think I am babbling some useless banker speak utterly unaware of just how important it is to understand the concept used to swindle them.
instead of pretending to negotiate spending cuts (while really negotiating for their own wealth and protection of their own special interests) our elected criminals should have been decided how exactly to move forward when the debt limit isnt increased. but they will never do that because politicians do no benefit by reducing spending. private interests, businesses, unions and other advocacy groups do not contribute to campaign funds or buy gifts to politicians to cut spending (not on either side). so whether we like it or not, we will end up cutting spending at the point of a gun not via a compromise between sides (its funny to think that either side is representing taxpayers because neither of them are). so we will find ourselves one day in a position where we do not even have the ability to sell more treasuries. we will have no choice but to cut spending. so instead of pushing it into the future, they should have been doing it now. well, they should have done it a while ago when obama voted against raising the debt ceiling. but then he had different politician aspirations and he had less personal gain that he could get by spending more. now obama wants to spend like crazy so he can be set for life.
look at the holders of us treasures. the federal reserve is number 1. social security holds a lot of them but guess what? social security now operates in the red so that is a big treasury buyer that wont be adding. foreign countries arent adding. institutions dont seem to be adding to their treasury positions. so how is america going to raise debt? we all pretend like its a simple matter of raising the debt limit and we are flush with cash. but thats not going to be the case much longer.
Last edited by CaptainNJ; 07-03-2011 at 10:23 AM..
the seniors will die! the children will starve! this is just bs scare tactics. the federal government doesnt need debt to operate. they will still have revenue to spend.
Not scare tactics, its the reality of the situation. You would have to dramatically increase taxes to cover the governments bills, without these increases there would have to be major cuts to key government problems, namely medicare and social security.
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