So......what exactly happens if the US can't raise the debt ceiling?

[Not G. Ivingname]

Snip

Not as much as people say will happen.

What happens is that the US will have to cut most of it's functions, besides those related to defence or other vital operations.

Federal workers won't get checks if no agreement is made within two weeks, pentions won't be paid, national parks will be shut down, NASA will be mostly shut down, and several other insitutions will be closed. This has happened many times before, it happened several times under Reagan, once under Clinton, and about a dozen with Carter. The economy wasn't destoryed than and trust me I think it will be for the best if we do reach the debt ceiling.

 

[Rednog]

John Cena will start to sell punches!

The Undertaker will fight in a non Wrestlemania match, The Rock will actually wrestle again, Randy Orton will be a face who's shtick isn't crippling people, the tag team division will actually be legitimate again, the divas' matches will actually be interesting!....ok I got a little carried away with the last one.

 

[IceStar100]

John Cena will start to sell punches!

The Undertaker will fight in a non Wrestlemania match, The Rock will actually wrestle again, Randy Orton will be a face who's shtick isn't crippling people, the tag team division will actually be legitimate again, the divas' matches will actually be interesting!....ok I got a little carried away with the last one.

Aw the evening gown matches. I miss those.

 

[Jegsimmons]

The real question is: why did they get into so much debt in the first place?

better question...why the hell did WE need to borrow money?

The ORIGINAL National Debt was from asking France for help defeating the British. So, yeah, this nation wouldn't EXIST without having had a national debt...

but wasnt that actually paid off during the andrew jackson years? wasnt it the only time the US sold land to pay off debt?

 

[rossatdi]

1. All countries have debt, its a natural part of the way the economy works.

2. The reason the US has lots of debt is because:
a) Low income tax for the wealthy, with bonus loop holes if you have a smart accountant.
b) Low corporation tax for big companies, with bonus loop holes if you have smart accountants.
c) Hyper-active military expenditure left over from the Cold War era (1/5 of the Federal budget is military/defence as is Social Security, by comparison the UK spends 8% of its budget on defence).
d) An expensive and failing medical system that combines the dual glories of poor coverage and high federal cost (UK has universal free healthcare at entry which takes 18% of its budget, the US federally spends 23% of its taxes on Medicare and Medicare alone).
e) The US led banking collapse which required a bailout to avert full scale economic collapse

3. The reason it won't be reduced any time soon are:
a) Spiralling social problems extending for massive failures in social policy
b) A voter base that has some how been convinced its in their best interest to allow the wealthy to get away without paying their way, fight tooth & nail against much needed healthcare reform and wouldn't allow major military spending cuts.
c) Republicans that are so self-interested but successful at moving the debate to social issues and Democrats that couldn't organise a drunken orgy in a brewery brothel.

4. If the debt ceiling isn't raised, the US economy will collapse (or at least slump), Obama will get the blame from the electorate despite the Republicans actions to block raising the ceiling (and opposing the helpful end of tax breaks for the wealthy), probably not in 2012 but in 2016 you'll see a hard(ish) right Republican candidate ride to victory in a crumbling country.

 

[rossatdi]

The Republicans aren't stupid - they know that if they don't raise the ceiling and hurt the economy that they will cop the blame. It's all politics. The ceiling WILL be raised.

Its slightly conspiratorial but it has been suggested the Republican leadership doesn't care too much if another collapse happens, they won't win 2012 and they know it. Sabotaging the country into a cyclical depression 3-4 years maybe will prime them perfectly for a presidential win in 2016 just as the economy starts to recover naturally.

The worrying thing is the Republicans aren't stupid, they just don't care about the every day working man. The scary thing is that they've got such an impressive communications team that they some how managed to be appealing to middle class and working class Americans who have been and will continue to be directly hurt by Republican policies - all the while dragging the debate into abortion rights and essentially uneccessary social issues.

 

[jpblade666]

John Cena will start to sell punches!

The Undertaker will fight in a non Wrestlemania match, The Rock will actually wrestle again, Randy Orton will be a face who's shtick isn't crippling people, the tag team division will actually be legitimate again, the divas' matches will actually be interesting!....ok I got a little carried away with the last one.

I love you lol!

 

[Casual Shinji]

Greece nearly defaulted. It got so bad it threatened to crash the economy of pretty much all EU members. Came damn close too.

That might still happen.

All the leaders of the EU are basically twiddling their thumbs, and the investors are going apeshit. The only real solution now is for the EU to remit the 140 billion euro debt that Greece has. And at the same time Italy and Portugal are quickly following in Greece's wake.

Yeah, that whole introduction of the euro sure was a great idea, wasn't it?

 

[Malo_Tux]

I hear that England is pretty nice this time of year...

 

[Boris Goodenough]

Yellowstone will erupt.

 

[antidonkey]

I guess we'll have to park the country down the street so China can't find it to repo it.

 

[Saviordd1]

Eh Obama isn't making it better but he sure as hell isn't making it worse, honestly I feel sorry for ANYONE who had to take the presidency after bush because there is no way any of them could handle it.

That's just another variation of the old "It's not Obama's fault the country is flying apart" spin. We were told prior to his inauguration that Barack Obama was the greatest mind of our generation, the only one who could save America from plunging into the abyss of despair and restore justice and honor to our fair nation.

Nearly three years later the US is the laughing stock of the international community and everyone's panicking that we're going to default on our debt. And where is the genius plan Obama has to reverse our slide into destruction? Increase the debt even more? How is that a great idea? Hate to tell you this, but this isn't a case of "Bush screwed things up so badly NOT EVEN OBAMA CAN FIX IT" but rather that Barack Obama is completely inept at everything he tries to do and is making a bad situation worse.

I mean, really? What can we point to as a sign of Obama's competency? There's nothing but hype, just like it was before he became President!

I've never heard this whole "genius of the generation" thing, I just found Obama preferable to McCain and that's it. Beyond that the International community has been laughing at us since bush (And don't say they were "scared" of us like some idiots because that's just not even nearly true) obama HAS actually helped that, his election showed the world we DO have a brain somewhere, then he won the nobel peace prize (For reasons I still don't get) and has actually tried to be DIPLOMATIC with other countries, so obama is doing much better on the world stage then Bush.

 

[Not-here-anymore]

Most 'developed' countries nowadays seem to be in debt, because the people who live in these countries dislike paying tax, but like having money spent on them. Saying you won't do one or t'other is a surefire way to not get elected, no matter how much you use the words 'the greater good'
That's pretty much inevitable in a competitive democracy, really. Unless you can get every party standing to agree to raise taxes and cut spending for a few years to fix it, debt is going to increase rapidly. And they won't agree: if one party goes against that, the rest are screwed and out of office.

And I'm guessing there isn't some kind of global accountant who can shift the money everyone owes everyone else around until global debt is minimised, somehow.

I hear that England is pretty nice this time of year...

Nah, our national debt's actually much, much worse than yours. Not sure we even have a ceiling.

 

[MelasZepheos_v1legacy]

I don't claim to be an expert but I can see one very simple cause for the problem.

Governments, especially in the US, aren't in power long enough to enact the long term plans that might potentially get everyone out of the mess.

Say you set up a ten year plan with a Democrat President, it's not perfect, but it'll go a long way to solving the problem. However, the ten year plan needs to be followed up by a fifteen year plan to best capitalise on the ten year plan.

Presidents are in power for eight years (basically), so any plans they put in had better be understood by everybody to be the only solution to getting out of the hole. You wouldn't even get to the end of the ten year plan before the President gets changed.

Simply put, this is an impossible situation. Democrats and Republicans disagree so much on the very base issues like the economy that no long term will ever be put in place. This isn't even acase of 'the situation will get so dire that they have to work together.' Marx put it best 'every decision is economic' which means that politicians need to have their strongest views where their economic policy is concerned.

To add to the problem, as if that wasn't enough, are the public, most of whom don't understand economics beyond 'I have enough money to buy what I want, therefore I'm happy.' They don't care if the money is technically not theirs because it's being distributed by a government that's borrowed the money it's giving to its citizens from banks and other countries, because for most people's view of economics, having the money in hand is all they need. So while the most important policies in the country should be economic, Presidents will often rise or fall on Foreign Policy, Education programs, the Justice system. No one wants to be told by a President, 'things are about to get real tough, and we need to country to just trust us.' That President would be out after only four years of his ten year plan.

That's the source of why the problem is so hard to fix. And it's not limited to the US either. The first thing the Conservativs did when they came into power was start changing all the long term Labour government plans, just like Labour did when they came into power.

Politics and economics should never be short term, but for various reasons, the people like to change their politicians in five year intervals. There is simply no time for any realistic forward motion on anything.

 

[aba1]

Honestly I know the states loves there shinny army but they should really just cut the damn thing in half n just have a regular size army for a while that should cut a chuck of the debt.

 

[Mute52]

Some huge changes will need to be made to keep this country alive, and a lot of them people won't like.

It's either that or China asks for their money with force

 

[Pinkamena]

I don't understand half of what's being said in this thread.
I guess politics are not for me. Derp.

Also, what's default?

 

[gyroscopeboy]

WHY THE FUCK IS THIS A PROBLEM!?

Yes, Currence is supposed to be a representation of gold in a vault somewhere hidden away. But does anyone ever truly NEED this gold? NO!! We all rely only on money to pay our bills. the gold is just rotting away in a vault under a fucking mountain or something, 10 dollars is worth 10 dollars, gold has nothing to fucking do with it otherwise everything would have a price measured in gold. if everyone were to ignore the gold nothing would change, we are only holding on to a system that can never fully provide for our needs, if we all just switch to a currency that has its worth on its own merit then more could just be produced.

Example: If i were to print 1 trillion dollars, yet no one found out about the printed money in any way, would anything change? no, because in daily life money has its own value and that's the only thing we need but if someone finds out about it the value of the dollar would magically decrease, even though there was no problem before. it's bullshit, all of it

Then by your argument, counterfeiting a shit-tonne of paper money wouldn't cause a problem either...

 

[RDubayoo]

I've never heard this whole "genius of the generation" thing,

You've never heard him called The One?

I just found Obama preferable to McCain and that's it. Beyond that the International community has been laughing at us since bush (And don't say they were "scared" of us like some idiots because that's just not even nearly true) obama HAS actually helped that, his election showed the world we DO have a brain somewhere, then he won the nobel peace prize (For reasons I still don't get) and has actually tried to be DIPLOMATIC with other countries, so obama is doing much better on the world stage then Bush.

So your proof that Obama is doing better on the world stage is that he won a Nobel Peace Prize for reasons you don't even understand (welcome to the club, btw)? Not good enough. And rather than reducing the number of conflicts the US is in Obama added one to the list with Libya, so I guess he's not such a fan of diplomacy over war after all.

Back to the original topic, the problem with the notion that the US will only default if the debt ceiling is not raised is that the debt ceiling is a completely arbitrary number. I saw a story today about Standard & Poor, a financial services company and credit rating agency, might downgrade our triple A rating even if we do raise the debt ceiling, so as far as I'm concerned the Democrats' whole premise is torpedoed. The debt ceiling is there to prevent excessive spending that would put us in this kind of situation, nothing more or less.

On the other hand, it would at least be amusing to see how humiliated Obama would be if S&P downgraded our rating even after Obama got his way after promising the country it would solve everything. It wouldn't be worth the economic destruction he'd cause, but at least Barry would have egg on his face.

 

[Saviordd1]

I've never heard this whole "genius of the generation" thing,

You've never heard him called The One?

I just found Obama preferable to McCain and that's it. Beyond that the International community has been laughing at us since bush (And don't say they were "scared" of us like some idiots because that's just not even nearly true) obama HAS actually helped that, his election showed the world we DO have a brain somewhere, then he won the nobel peace prize (For reasons I still don't get) and has actually tried to be DIPLOMATIC with other countries, so obama is doing much better on the world stage then Bush.

So your proof that Obama is doing better on the world stage is that he won a Nobel Peace Prize for reasons you don't even understand (welcome to the club, btw)? Not good enough. And rather than reducing the number of conflicts the US is in Obama added one to the list with Libya, so I guess he's not such a fan of diplomacy over war after all.

Back to the original topic, the problem with the notion that the US will only default if the debt ceiling is not raised is that the debt ceiling is a completely arbitrary number. I saw a story today about Standard & Poor, a financial services company and credit rating agency, might downgrade our triple A rating even if we do raise the debt ceiling, so as far as I'm concerned the Democrats' whole premise is torpedoed. The debt ceiling is there to prevent excessive spending that would put us in this kind of situation, nothing more or less.

On the other hand, it would at least be amusing to see how humiliated Obama would be if S&P downgraded our rating even after Obama got his way after promising the country it would solve everything. It wouldn't be worth the economic destruction he'd cause, but at least Barry would have egg on his face.

He added one with "Libya" (Its in the middle of a civil war after all) which gained the support of the UN because they actually approve of this war, so we added one conflict but added overall approval with the world.

And there it is, its always the democrats fault. It makes me laugh because the republicans aren't helping at all since neither side is willing to actually AGREE to save our country.