Via Reuters I read that some analysts expect an agreement, but for U.S. to still lose its AAA credit rating, with a cost of $100 billion. I didn’t see clarification what the estimation was. That amount is only 0.7% of debt; could it have been annual?
I posted this link in another thread.
So higher interest rates will apply across the board, not just on the amount that doesn’t get paid. Also, it’s not a ‘one-time fee’. Higher interest rates would apply to all government borrowing every year from that point on, until something changes to bring them down again. That might take years.
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I also try to assume that people have good motives. I make an exception in the case of elected officials, who are often trying to pull something over us. The same congresspeople who are staging this mess voted for this year’s budget - including the deficit spending. OK, maybe some of the Teabaggers didn’t, but the budget passed the House and the Senate. Now they want another bite at the apple because they did not get 100% of what they wanted. They are rules lawyering - next thing you know they’ll claim that they don’t need to pay texes because of the fringe on the flag.
Secondly, these same “cut the budget at all costs” bozos are the first ones to say “Don’t cut DoD at all!” I’m a DoD contractor, and IMNAAHO a few sensible policy changes could eliminate my position, and hundreds of similar positions across DoD. That, and injections of Giveadamn™ into the veins of the developers, but that’s another story. DoD is huge, and cuts can be made. We need to look at what we can afford and set priorities. Former Defense Secretary Gates had much more informed things to say on this topic. The same Congressbozos hold other spending areas sacrosanct - but that is how we got into this mess. Don’t cut my program - but cut taxes and with a bit of pixie dust the deficit will magically go away.
I won’t, and it hasn’t. Funny thing about arithmetic - you can’t get around it.
Lastly, the current deficit and debt are too big to fix with just spending cuts. To fix deficits of this size, Uncle Sam needs to cut spending, and raise taxes, and (somehow) get the economy booming to increase revenues on the same tax laws and reduce demand for social safety net programs. The looming debt crisis is that if Uncle Sam can’t borrow, and has to live within its current means on a day-by-day basis, it cannot pay its bills. The federal govenment will not have enough cash on hand to pay the Social Security checks to everyone in the program next week on the day they are due. So it can pay most - but not all - of Social Security and spend nothing else that day, or it can skip Social Security and pay some - but not all - of the rest of its bills. Salaries for active duty troops, veterans hositals, funding for local police, and so on are all at risk.
Some congresscritters may be sincere in their beliefs, but those beliefs run into a hard wall of reality. They ought to know better. From their actions it appears that even the ones that do know better don’t care about the consequences to the country, as long as they pick up a few votes next election.
As Johnny L.A. then explains, Yes, the $100 billion is an annual loss as interest rates on The World’s Safest Investment rise by about 0.6%.
I want to put that in perspective.
First, $100 billion is a lot of money and it does seem a shame to spend it just for the “privilege” of a credit-ranking demotion. If the U.S. had an extra $100 billion to spend, think of how much that could buy in medicine research, or road-and-bridge repair, or even (though this wouldn’t be my choice) our military. If the complaint is that taxpayer’s dollars could be better spent, wasting this $100 billion on the ratings bust seems a real shame.
But are Republican constituents really upset about this? Why should they be? The $100 billion doesn’t disappear – it’s transferred to the accounts of bond holders. The rich and super-rich of any sort are likely to have a lot of their cash wealth in the form of U.S. T-bonds, or paper whose yield is explicitly or implicitly tied to that of U.S. debt. I don’t say that most rich people are happy about this debt-ceiling fiasco, but they aren’t upset that another $100 billion of taxpayer dollars are being redirected to the coffers of debt holders. And of course, any waste of taxpayer dollars serves the purpose of Starve the Beast.
Hope this helps. :rolleyes:
I think a lot of the talk about the U.S. defaulting on its debt is scare-mongering and political posturing. Many are making the mistake of using the debt to the GDP ratio which is fallacious as all of the debt isn’t due within a year (most of it becomes due in 30 years).
If the debt ceiling needs raised, the President can do so on his own as some of his predecessors have in the past. Granted, at some point, once the economy rebounds, the U.S. government will have to tighten its belt, but do do so now would be a bad idea (reference 1937).
Bri2k
^This. Both sides are trying to use this point as leverage to get their way. If the impacts of were truly as disastrous as they are painting them to be, either side should be willing to compromise. The fact they aren’t is telling.
“Even a clock that doesn’t run is right twice a day.”
That is fact that cannot be ignored. 
Bear in mind that if the US doesn’t pay people or contractors for work they’ve already done, then that is also a form of default.
Clearly, you misunderstand the delusional mindset of these Tea Partiers. They are a faction of ultra-fundamentalist, apocalyptic Christians who 100% believe that we are living in The End Times and the return of Jesus Christ is imminent – but only after the Seven Years of Tribulation followed by the Battle of Armageddon which will ultimately destroy the entire world as we know it.
The thing to keep in mind is that these Tea Party people WANT the Apocalypse to happen. Many of them would probably knowingly vote for the Antichrist, if they knew who he/she was, because Jesus Christ won’t return until the destruction of the world. What better way to hasten Christ’s return by causing the Apocalypse to happen early?
These are scary times we live in, having leaders like these. The sad part is that I can’t blame anyone for this mess except the stupid, lemming-like Americans who voted for these fucktards in the first place. :mad:
Can you please show me a cite where all elected republicans that ran under a Tea Party banner have affirmed the statements you make above? Can you even show me one?
Says who?
If those people get stiffed completely that’s one thing…if payments are postponed that’s quite another.
My understanding is that the “plan” of the Tea Partiers, if you can call it that, is indeed to stiff them entirely.
Are you seriously asserting that apocalyptic Christians wish to prevent the Second Coming of Christ??
And I don’t think it’s necessary to provide a cite where Michele Bachmann, Sarah Palin, and George W. Bush (not a Tea Partier, but perhaps an honorary one) have asserted that The End Times are indeed upon us. Since it’s ridiculous to assume that Christians wish to prevent or delay Christ’s return, everything I said can be inferred from that simple fact.
I’ll bite: this is Great Debates, so you do need to provide a cite.
I’m reading this in IMHO, but I had fun practicing Google search anyway. AFAIK, Bachmann’s crackpottery is not contested, so I’ll show easy Google hits for just Bush and Palin.
Cite:
Cite:
Mea culpa. I could have sworn it was in GD, but I was obviously mistaken.
That uses the same fallacy as you did. No quotes from the man himself.
This link doesn’t work for me.
Stiff who entirely?
Obligations that are owed at this moment … or future obligations?
OK, the Republicans know it… but does the Tea Party? Because a lot of this is Tea Party BS.
I just clicked the link again and it worked.
And, you’re right, the Great Man’s words should be most convincing. You can find the following quotes easily all over the 'Net. (I’ll let the Google-fu experts find the most reputable source.)