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Seriously how will it effect normal everday folks? It means we don't pay the bondholders who are holding treasuries. It means our credit rating takes a hit. So what it already has. Does that matter to the government though who is forcing banks to loan money to folks that have bad credit? Nope. So China and all the other debtholders don't get paid. Good then maybe they won't loan us anymore money and Little Timmy can crack into our gold reserves that are sitting there doing nothing unless they already sold em behind our backs.
What does it mean to me? Nothing. I'm prepared are you?
Seriously how will it effect normal everday folks?
In today's Washington Post there's an article about the partial default that happened in 1979. Obviously, the world didn't come to an end, but there were some lasting effects from only a minor, partial default.
“You hear lot of people say, ‘The government never defaulted.’ The truth is, yeah, they did . . . It might have been small, it might have been inadvertent, but it happened,” said Terry Zivney, a finance professor at Ball State University who co-authored a paper on the episode entitled “The Day the United States Defaulted on Treasury Bills.”
Quote:
The Treasury had missed payments on about $120 million worth of bills, a tiny amount even then, given the global investment in U.S. debt. Investors, some of whom joined a class-action suit against the government to recover damages, eventually were paid in full with back interest. T-bills, as they are known, continued to be considered a safe investment. Treasury officials both then and now argued that the event was not even a default, but merely a delay caused by the internal logjam.
Quote:
And yet, the study by Zivney and his partner, Dick Marcus, found that even that brief failure to meet some obligations had expensive consequences. The pair concluded “that the series of defaults resulted in a permanent increase in interest rates” of more than half a percent, which over time translated into billions of dollars in increased interest payments on the nation’s debt, a cost shouldered by taxpayers.
We won't default because the Fed just prints more increasingly-worthless dollars.
But by doing that, they reduce the buying power of every dollar you are paid in, and every dollar in your savings, and every dollar of your investment. They also fuel inflation.
So even if you retire with a million dollars a year, it will have the buying power of someone retiring 10 years ago that only had $10,000. Soon you will go through that on health care costs alone.
The "Stealth Tax" of currency devaluation is a great way to deal with massive government overspending and overborrowing.
But in the end, EVERY SINGLE WORKING AMERICAN will end up with nothing left in 10 years. And there will be no Middle Class wealth to tax to run the government "safety net."
Mad Max, here we come. Thanks, Federal Government!
Seriously how will it effect normal everday folks? It means we don't pay the bondholders who are holding treasuries. It means our credit rating takes a hit. So what it already has. Does that matter to the government though who is forcing banks to loan money to folks that have bad credit? Nope. So China and all the other debtholders don't get paid. Good then maybe they won't loan us anymore money and Little Timmy can crack into our gold reserves that are sitting there doing nothing unless they already sold em behind our backs.
What does it mean to me? Nothing. I'm prepared are you?
Debt holders will be paid. That is mandated by the 14 amendment. There will continue to be a river of money flowing into the treasury every month. All the hysteria from the left about this is so much demagoguery.
To your question, it won't mean a thing to the average Joe just as it didn't the other times we did not raise the debt ceiling.
Debt holders will be paid. That is mandated by the 14 amendment. There will continue to be a river of money flowing into the treasury every month. All the hysteria from the left about this is so much demagoguery.
To your question, it won't mean a thing to the average Joe just as it didn't the other times we did not raise the debt ceiling.
If its not raised , we will see that they lied about the great tragedy.
Seriously how will it effect normal everday folks?
It won't, unless you work for a company that is heavily into government contracts. If so, you risk being laid off.
Also, you need to be aware that raising the debt ceiling does not solve any problems.
You still have to sell all $1.5 TRILLION in from the 2011 Budget Deficit, and then turn around in March and re-sell the $1.7 TRILLION from the 2010 Budget Deficit.
If you want to see what's happening, watch when they go on sale. If no one's buying, or one's buying fast enough, you got problems.
It won't, unless you work for a company that is heavily into government contracts. If so, you risk being laid off.
Also, you need to be aware that raising the debt ceiling does not solve any problems.
You still have to sell all $1.5 TRILLION in from the 2011 Budget Deficit, and then turn around in March and re-sell the $1.7 TRILLION from the 2010 Budget Deficit.
If you want to see what's happening, watch when they go on sale. If no one's buying, or one's buying fast enough, you got problems.
Thats a great post , thank you .
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