So if the USA defaults August 2nd, what will happen?

[lacktheknack]

Some bad shit.

So, anyone know a good, relatively wallet-friendly university in another country?

Try Canada. I was kind of stunned to find that a term at the University of Alberta (where I am) cost about 10% of Yale or other Ivy League schools. TEN PERCENT. And it's not a bad education, either.

 

[aussiesniper]

I'm not completely sure. Either nothing or the fucking rapture from what I've been hearing.

Here's some answers.

Cut down on unneeded spending.
Cut down on government corruption.
Legalize and tax drugs.
CUT OUR FUCKING DEFENSE BUDGET!!!!
STOP BORROWING SO MUCH GODDAMN MONEY WE CAN'T PAY OFF!!!

Do you mind if I play a little Devil's Advocate?

1) What is needed to some is unneeded to others. It would be nice if we could determine what was needed and unneeded, but since this American politics, we can't determine anything.
2) Unless someone walks around with a sign that says "HA HA! I'm corrupt!", cutting down on corruption is harder than you think. Congressmen often protect their own, and lobbyists seem to run DC. They aren't going anywhere.
3) Even if drugs like marijuana was legalized, the intake from drugs that were taxed would be so minimal it would barely put a chip in our debt. Plus, there would no doubt be a black market that was not taxed that many people would go to. And asking people to do the right thing for the betterment of the country is harder than you might think.
4) I'll agree with you here. It needs to be cut, but not completely or even significantly. As much as I hate our world police persona, I do find our military somewhat necessary.
5) Don't really know the circumstances of this, so I can't really say anything.

EDIT: To the "bleed the mother fuckers dry" poster: as much as I'd like to agree that the rich need to be taxed, I don't think that solves the problem. When you think rich, you think of the dudes with five yachts, yes? The government sees the rich as anybody who makes more than (I believe) $200,000 a year. That not only includes the aforementioned five yacht club, but most small business owners, the people that hire the middle and lower class. If they get taxed, they don't have the money to hire someone else. This doesn't create jobs, which means more people can't pay their taxes and need to go on welfare, which drains money. A very, VERY generalized explanation, but this is how I understand it.

The tax on the >200k group can indeed hurt small business, but it's irresponsible to let the executive board of Goldman Sachs and such only pay as much as they do (~40%) when the US Government itself is dangerously close to default.

Although, they may just use one of the many loopholes in the tax system (no tax on trust funds!) to dodge paying anything much.

 

[Sinclair Solutions]

Edited for Space.

The tax on the >200k group can indeed hurt small business, but it's irresponsible to let the executive board of Goldman Sachs and such only pay as much as they do (~40%) when the US Government itself is dangerously close to default.

Although, they may just use one of the many loopholes in the tax system (no tax on trust funds!) to dodge paying anything much.

So the problem, then, is the line set by the government, yes? Would it be better if we changes the definition of rich to someone who makes over a million a year? Or maybe even THAT is too low. I'm not really sure.

As for loopholes, I really don't know.

 

[crudus]

What I hope will happen: We will do what is necessary, find a way to recover, and learn from our mistakes.

What will probably happen: We will cut spending by a lot (no Social Security and the like), recover by shear luck, and learn nothing.

The entirety of Congress is taken out back and shot and we bring in a new congress who will fix everything

This should have happened 4 years ago.

 

[aussiesniper]

Edited for Space.

The tax on the >200k group can indeed hurt small business, but it's irresponsible to let the executive board of Goldman Sachs and such only pay as much as they do (~40%) when the US Government itself is dangerously close to default.

Although, they may just use one of the many loopholes in the tax system (no tax on trust funds!) to dodge paying anything much.

So the problem, then, is the line set by the government, yes? Would it be better if we changes the definition of rich to someone who makes over a million a year? Or maybe even THAT is too low. I'm not really sure.

As for loopholes, I really don't know.

Well, the real issue is that once you earn enough money to really be considered super-rich, it's cheaper to hire a team of lawyers and accountants than to actually pay your tax. Maybe the ideal situation would include a tax break for small business owners, and a new tax bracket for people earning >500k or 1 million. Then again, those people tend to have enough power to influence politicians, so this probably won't happen.

 

[DarkRyter]

We're gonna have to sell Utah to the Chinese.

 

[008Zulu_v1legacy]

If the USA was even close to defaulting, they'd raise taxes, cut spending or, you know, just move out of Iraq.

That's assuming that the Big Businesses that own the politicians and government would allow them to.


My guess is that the world will switch the currency on which world transactions would be based, the Euro would be my bet. The focus of the world will switch to the EU and Americans will be pitied by all the better off nations. None will offer much in the way of help.

 

[aussiesniper]

If the USA was even close to defaulting, they'd raise taxes, cut spending or, you know, just move out of Iraq.

That's assuming that the Big Businesses that own the politicians and government would allow them to.


My guess is that the world will switch the currency on which world transactions would be based, the Euro would be my bet. The focus of the world will switch to the EU and Americans will be pitied by all the better off nations. None will offer much in the way of help.

Unfortunately, the Euro is looking pretty weak right now, what with Greece and such. If the US defaults, it could mean serious damage to the EU. The world's favourite currency also cannot be the Chinese Renminbi, because the Chinese government fixes their currency to be worth some constant fraction (1/6, I think) of a US dollar.

Then again, according to wikipedia, China has been setting itself up to start trading the renminbi freely, instead of fixing it at a certain value. So who knows? Maybe it WILL be Chinese currency as the next international standard.

 

[KarmaKing93]

OCEANIA SHALL RISE FROM THE PACIFIC AND BECOME THE NEW WORLD LEADERS!
Kangaroos for all!

 

[Thaluikhain]

What are the chances of this actually happening though?

Small...nobody wants it to happen, but it's a very useful bargaining chip.

"Give me X, or I'll doom us all!"...nobody how much they want X, they don't want to be doomed. There will be alot of frantic negotiations, and then the hostage (the US economy) will be released more or less unharmedish.

 

[Bek359]

Short term, probably nothing immediately. Long term, we're pretty fucked.

 

[BNguyen]

Ah, so eight years of "fiscally responsible" conservatisism finally caught up to them.
Unfortunate and terrible in the short term, but maybe good in the long term, as long as they can see that it was Bush's fiscally irresponsible governement and not Obama's that caused this. Obama was left with a huge mess to clean. It was already too late by that time.

Let's just hope Canada wakes up and boots Harper sooner than later as he seems to read from the same playbook as the Republiscans.

But isn't it Obama who is
1. paying off huge companies who turn around and pocket the money only to get more because Obama can't remember if he gave it to them or they lost it, and
2. he continues to trip around the world spending evermore cash on his personal plane just to apologize to countries that the US barely maintains relations with

Who's more to blame?
Bush, who tried to warn the people of Katrina and get back at the terrorists (even if it became more focused on oil)
or
Obama, who believes crapping cash into the hands of greedy CEOs will help them get out of the debts they created and does nothing but try to extend the influence of the government into the people's already not so private lives?
I'd have to say Obama is who is sending this country to hell in a hand basket

But, in all honesty, it's not entirely the politicians' faults that the economy is trashed, say thank you to every man or woman who owns a large company and decided to gamble with the stocks or spend what little profit there is on more private jets

 

[BNguyen]

Edited for Space.

The tax on the >200k group can indeed hurt small business, but it's irresponsible to let the executive board of Goldman Sachs and such only pay as much as they do (~40%) when the US Government itself is dangerously close to default.

Although, they may just use one of the many loopholes in the tax system (no tax on trust funds!) to dodge paying anything much.

So the problem, then, is the line set by the government, yes? Would it be better if we changes the definition of rich to someone who makes over a million a year? Or maybe even THAT is too low. I'm not really sure.

As for loopholes, I really don't know.

Well, the real issue is that once you earn enough money to really be considered super-rich, it's cheaper to hire a team of lawyers and accountants than to actually pay your tax. Maybe the ideal situation would include a tax break for small business owners, and a new tax bracket for people earning >500k or 1 million. Then again, those people tend to have enough power to influence politicians, so this probably won't happen.

they just have to form the law before the super wealthy can have a say in the matter, which usually just turns into a tax break for them as well as a huge bonus, courtesy of the taxpayers
as soon as we can fire every corrupt politician and hire some honest men and women to sort everything out, there will be no such thing as a fair government left pure of the winds of big business

 

[GrimTuesday]

First world nations can't default. Stop listening to the fear-mongering bullshit that a certain part of your media likes to propagate.

You're wrong, as evidenced by the default of Greece, Spain, Portugal, and Ireland which has contributed to the almost complete meltdown of their economies.

Basically, the government doesn't take in enough money for all the programs it runs. So to make up for the gap in revenues and what is actually required, they issue what are called bonds. For the most part, these are only worth between 50 and a couple hundred dollars and are mostly bought by your average citizen. Now there are also a type that are worth much more than that and are bought up by other countries for the most part. Now, if we were to default on our loans this would make the US's credit score go down, thus showing potential investers that the US is a less than secure investment, thus driving up the interest rates we pay to those countries that have purchased the bonds. So really, it means the the government will either not have as much money because other entities aren't buying our bonds, or the government is having pay even more in interest due to the lowered credit rating.

There are other things at work, but that is a basic explanation of why a default would be bad.

The funny thing is....a country like china who invests in us....Cant really do much about it. They get paid what we pay them and they can't tell us THE INTEREST RATE IS UP MORE MONEY PER YEAR THANK YOU....because they cant harm us or take anything away...Besides most of the money for bonds is domestic

Um, actually, if we don't pay the interest, our credit rating would be downgraded, and then, in the future, we would have to pay a higher interest rate just to get anyone to buy our bonds. And even if the majority of bonds are domestic (Which I highly doubt), WE WILL STILL HAVE TO PAY A HIGHER INTEREST RATE.

Basically, the government doesn't take in enough money for all the programs it runs. So to make up for the gap in revenues and what is actually required, they issue what are called bonds. For the most part, these are only worth between 50 and a couple hundred dollars and are mostly bought by your average citizen. Now there are also a type that are worth much more than that and are bought up by other countries for the most part. Now, if we were to default on our loans this would make the US's credit score go down, thus showing potential investers that the US is a less than secure investment, thus driving up the interest rates we pay to those countries that have purchased the bonds. So really, it means the the government will either not have as much money because other entities aren't buying our bonds, or the government is having pay even more in interest due to the lowered credit rating.

There are other things at work, but that is a basic explanation of why a default would be bad.

Okay this is the only really accurate explanation of what would actually happen. It wouldn't be the end of the world but it would be pretty bad for America's economy, and what's bad for the American economy is bad for the world. What some people don't understand is that both parties, like someone else here said, really want to raise the ceiling; it's not like the republicans want the country to default. It's just a bargaining chip. The republicans feel disenfranchised and powerless so they're using their votes in order to get concession they've wanted for a while. The default almost certainly won't happen, and even if it did, the Supreme Court would probably just call up the 14th amendment and declare the ceiling raised themselves if they agree on it. Although the court is fairly conservative, it's still fairly likely that it would be raised either way.

Political science major FTW

 

[banksy122]

It won't happen. China relies to much on USA to let it default. If USA falls, China falls and the rest of the world follows. The senate or whatever will meet an agreement and china will fund them for a few more years and then this will happen all over again.

 

[Phlakes]

Some bad shit.

So, anyone know a good, relatively wallet-friendly university in another country?

Try Canada. I was kind of stunned to find that a term at the University of Alberta (where I am) cost about 10% of Yale or other Ivy League schools. TEN PERCENT. And it's not a bad education, either.

Damn... Even if we don't default, I'm looking into that...

 

[Gwarr]

First world nations can't default. Stop listening to the fear-mongering bullshit that a certain part of your media likes to propagate.
If the USA was even close to defaulting, they'd raise taxes, cut spending or, you know, just move out of Iraq.

Iceland . First world country ya?