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

[Radelaide]

People will come to New Zealand >

Australia maybe. The Australian dollar is worth more than the NZ and US both.

 

[Thaluikhain]

People will come to New Zealand >

Australia maybe. The Australian dollar is worth more than the NZ and US both.

Though, the Australian dollar tends to be higher than the NZ dollar anyways. The ratios aren't terribly important in of themselves, it's the change that affects things.

 

[ShindoL Shill]

well, i assume you have to move back in with your parents.
which here would mean Britain and the Netherlands divide you up and leave some for China to repo.
or nothing changes except the country makes crap stuff. hey, maybe the war in Afghanistan will end!

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 DEFENSE BUDGET!!!!
STOP BORROWING SO MUCH MONEY WE CAN'T PAY OFF!!!

yup, yip, my argument for legalisation, you're to aggressive anyway, thats how the whole world got fucked up.

 

[Spinozaad]

Once again it'll be the end of the world as we know it.

And things will, by and large, stay the same until the next Great Disaster Waiting To Happen is happening.

 

[Staskala]

Actually, they can. Portugal, Spain, Ireland, and Greece are all examples. Hell, back in 2000 or 2001 Japan did default and they lost their AAA credit rating.

Also, even if we weren't in Iraq and Afghanistan, we would probably still be in this situation. The government borrows money not to fund those wars but to fund a ton of useless programs that are just there to extend the grasp of the government.

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.

And what happened when Greece, Portugal and Ireland were "defaulting"?
They took up additional loans to pay back the interest and that was it - no one truly defaulted. To smaller economies like the ones mentioned the entire deal is still a heavy blow, because no one is willing to just lend them money unless they also take drastic measures to raise money.

A nation like the US, however, has a shitload of ways to raise money. Privatize government property, sell gold or various stockpiles of resources, raise taxes, cut back on the military and its operations, cut other spending, whatever.
Most likely they won't do any of it, they'll just borrow a couple of additional billions and that's it. The US credit rating is still good enough, not great, but no one would refuse them either. That's the common practice; just postpone the issue. Sucks for the following generations, but who cares? Everything that happens after the 4 years ahead is of no concern.

We've had this debate a thousand times here in Germany, after reunification when we were completely in the red due to the reconstruction of the East. And look how much happened. They introduced some extra ways to get money, the EU bitched at us a few times, the end.

 

[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?

How IS Iceland doing nowadays? I haven't heard of cannibalism occurring or people strangling their children to spare them from the ravenous hordes of banking clans so I assume they made it out alright from their predicament at the start of the recession?

Except the huge drop in value of their currency , lower ratings , lower wages , relying on the IMF even for air , they're ok . Also , the USA is a LOT larger than Iceland and the population ain't so pacifist , you gotta add that . A default in the USA could lead to revolts , wont be pretty.
you can read about it here http://en.wikipedia.org/wiki/2008%E2%80%932011_Icelandic_financial_crisis ( they seem to still be in crisis)

Also , Iceland got economic help from Russia , EU and IMF . USA has an economy the size of all the EU put together , nobody can help you , you're too big.

 

[Scrubiii]

I know far to little about economics to make a serious comment in this debate, so I'll just say that China will buy the US, dump half their population into it and turn the Mojave desert into a training ground for their twelve-year-old Olympic gymnasts.

Ironically captcha was 258 taxacts.

 

[Happy Sock Puppet]

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.

Finally someone speaking sense. This whole 'blame both parties' attitude just allows the same shenanigans to continue. Vote out the extreme right wing, which happens to be most of it. The Democrats aren't perfect but they are the less insane party. People who simply view this whole thing as 'two different extremes' are fucking idiots and need to pay more attention to politics daily, versus just when there is a major crisis going on.

 

[likalaruku]

Same thing that happened when the US government tried to ban alcohol, because American's can't be civilized about it like the Japanese.

 

[Pinkamena]

I haven't got the slightest idea what will happen, but I've got my popcorn ready.

 

[talideon]

Actually, they can. Portugal, Spain, Ireland, and Greece are all examples. Hell, back in 2000 or 2001 Japan did default and they lost their AAA credit rating.

Also, even if we weren't in Iraq and Afghanistan, we would probably still be in this situation. The government borrows money not to fund those wars but to fund a ton of useless programs that are just there to extend the grasp of the government.

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.

And what happened when Greece, Portugal and Ireland were "defaulting"?
They took up additional loans to pay back the interest and that was it - no one truly defaulted.

Almost correct. You're right in that none of Spain, Portugal, or Ireland defaulted. Greece *did* do a 'selective temporary' default using some accounting trickery by the ECB.

The USA is more like Greece than Ireland: like Greece, it has a huge sovereign debt, though unlike Greece it doesn't have a population who all active evade tax. In Ireland's case, we had no sovereign debt problem until we were forced to cover the bonds of *private* banks rather than doing the smart thing and either letting those banks fold and then carrying over the deposits and loans over to new institutions, or simply forcing a debt for equity swap on bond holders. The EU and the ECB became fixated on the moronic and anti-market notion that no bond holder must not be left unpaid. Of course, I'm leaving out some details such as how the banks amassed that massive debt, Republican-style buggering up and erosion of our tax system, and the "cheapest bailout in the world", but that's the gist.

Ireland was *forced* to take on extra debt in the form of a "bailout" to cover this private debt, though it wasn't Ireland who were bailed out, but the primary creditors of the banks, who are mostly based in France, Germany and the UK. And guess which states were most utterly insistent on this all happening? Yup, you guessed correct...

Another contributor is the the ECB's mission: they're fixated on maintaining stability, even at the cost of the economy of the individual member states. This poisonous doctrine is what will likely ultimately kill the Euro.

Part of the US Dollar's problem is that it's the world's reserve currency--you can thank Nixon for demanding that--which is part of the reason why it's stayed AAA for so long, in spite of its sovereign's massive debt. The Euro has a similar problem: it ended up becoming an unofficial alternative reserve currency. This was by design and why the ECB is fixated on 'stability', but is now biting it in the ass.

 

[SilentCom]

Zombie apocolypse, don't ask me how, but you know it's coming.

 

[Flames66]

What is actually happening on Aug 2nd?

 

[MoNKeyYy]

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.

NOTE:The rules of the internet state that every post in a thread decreases in relevance to the original topic

I'd just like to point out that during the 2008 budget debate Harper was getting tonnes of flak from every other party for "Not using the surplus money for the benefit of Canadians". Layton in particular was critisizing him using the money to pay off debt instead of putting it into other projects. When the global recession hit that year Harper was holding a big WHO'S IRRESPONSIBLE NOW BITCHES Sign over his head while Canada sat securely on top of the 'Most Stable Economy' list.

OT (Because there are no rules about moderating either)

I've heard a few things. Best case scenario from what I've heard is that there's a minor economic crash that extends the recession a couple years and social programs get trimmed, worst case scenario this pushes the US down a slipepry slope to toal economic meltdown a few years down the line.

 

[s0p0g]

why, the end of the world of course. again. like some... when was that? when US american banks finally showed the world how to fuck up real good. i still have a job. no-one's been fired. i still buy food and still drive my car. the horror!

y2k - all nuclear plants are like totally gonna blow up and shit because... their computers can't handle the change of the date! yeah, sure.

el-quaida is totally gonna kill like EVERYBODY like EVERYWHERE. uh-huh.

oh and iraq... if the US, 'cause no-one else has teh ballz, totally invades the country and bombs civilians, the missiles they possibly might have, as some guy somewhere whispered, that can travel up to several hundred (!!) kilometres (OMFG! my car can do that too!!!) will blow up the entire planet. *yaaawn*

why do governments (no, not only you guys over there in the US) these days sound like those guys from some sect church? who always announce the end of the world? - this year fo real! totally!! *snore*

 

[Macgyvercas]

My plan to balance the federal budget:

1) Eliminate corporate welfare. All of it.
2) Cut the salaries of all senators, congressmen, representatives, the president, etc. by 50%.
3) Pull out of Iraq and Afghanastan (sp?).
4) Cut the defense budget by 15%.

 

[McNinja]

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

The funny thing about that is that China has been replacing its dollar currencies (what it owns of the US) with the Euro and other currencies.

Also: Are you f**king kidding me? Now I have to watch motherf**king ADS to post of the Escapist? F**K THAT NOISE.