Saucycardog said:
So the current hot topic in washington right now is raising the debt ceiling before. The national debt right now is around 14.29 trillion while the debt limit is 14.3 trillion. If we go above that limit, we default.
But that's what I'm wondering. All people have said is that it would be bad to default. But how bad will it be? I remember a month or two ago everyone screaming about the government shutting down. Yet we've done that before and it wasn't the end of the world.
Anyone know?
The shut down fear was about not having a budget. No budget means no spending means no government. And it's not that if we go above the limit, then we default. The problem is that if we can't borrow more money, we can't pay off the interest on our debts. If we can't pay off the interest then that means we miss a payment. If we miss a payment, then no one would ever lend to us again. yes, the US gov't is borrowing money to pay off it's debt.
Also, it would cause the US dollar to become less valuable, which means people would stop buying securities and the like, causing the dollar to become even less valuable. If the dollar starts decreasing in value too rapidly, than it will accelerate the push to switch the global reserve currency away from the dollar.
If that happens, then not only will the dollar start devaluing even faster, it will pretty much remove any chance the US has of increasing the dollar's value or even keeping it from decreasing further anytime in the next 10 years or more. That would cause an economic collapse that would make the great depression look like a Caribbean vacation.
If the global reserve currency isn't switched, then most countries will experience a similar crash because they base their currency on ours(China, EU, Pretty much all of them). Then they can't pay their debts. Global economic crash, instead of just US, so you can bet that the reserve will switch if it comes to that.
It won't be that horrible if we raise the debt ceiling even close to the Aug 2 cut-off, because our buying power will mean that other countries will cut us some slack, and not nail us to the wall for missing a payment. but if it goes much beyond August or September, it's gonna get bad.
Worse, even if we do pass it in August or September, then the gov't will still be unable to spend for that time, which means that medicare, medicaid, welfare, disability, WICK, and pretty much all those important government programs will not function for that month or two that we don't pass it. The cost in human lives and probable rioting would be immeasurable. It's gonna get bad.
Irridium said:
Didn't Greece default? Think it did, if not then feel free to correct. But I know it got so bad it threatened to crash the economy of pretty much all EU members. Or something like that, I'm not exactly well versed in European economics.
Honestly, what needs to happen is for us to stop spending so damn much on so many things at once. A good place to start would be to pull troops back. That'd definitely save quite the pretty penny.
Also, it's not really much of a ceiling if you keep fucking raising it.
Yes, Greece did default, but other European countries bailed them out just like the US bailed out the banks. No one can do that for us(except maybe China) because we have over $14 trillion in debt, which no one could afford. Especially if they switch the reserve currency, because then whoever bails us out will have to pay for all the shit we buy for over a decade while we rebuild our manufacturing industry(which we have systematically destroyed for almost 40 years). That would be way too expensive for even China to maintain. Especially since the only incentive is that we buy stuff from China, but for all time they kept paying our bills, they would just be buying from themselves. No incentive.
And yes, exactly what we need to do is stop all active military missions, although even that might not be enough by itself. we also need to combine agencies to reduce cost. FBI, CIA, ATF, could all be combined. FDA and FCC could also be combined. A flat tax or really high sales tax instead of income tax eliminates tax loop-holes so we no longer need the IRS(ok, we might need it, but it could be much much smaller). Turn welfare into a public works program doing low-training jobs like road work or construction, so that we lower gov't costs in that sector. That might just give us enough money to start reducing the national debt. If we also raised taxes.
