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  • #46
    astralis Sir, Quite simply; one does not. Zhe bubble is burst. Since Lehmans we have thrown good money after bad - another Greece bail out in Europe, an extension of the US deficit; 'tis the same thing. The politicians have delaying the inevitable, throwing good money after bad for political reasons; to be able to say "I/We are in control". Sadly this is not so. If they had the guts to let the banks go bust then today they might be in control but since they gave our money to the banks they now find themselves with deficits threatened by the very markets they tried to save. Thus Europe and the US have piled public money into the banks (who were the cause of the problem) and are now threatened by the banks who now have the ability to increase rates on Governments borrowing. See http://www.worldaffairsboard.com/int...-crisis-4.html

    Is time to get some guts and stop the markets and banks ripping us all off... they first sell you a dodgy motgage then nab your house then go bust cos they sold so many dodgy mortages and nobody could afford to pay so property prices went through the floor. However because they've sold these bets on these mortgages (derivatives) all ever as 'assets' every banks assets are over-valued by a large extent. So Governments bail them billions and spend billions more trying to increase the economies to recoup the tax. Now the Governments are bankrupt and we are paying again through higher taxes and reduction in other areas.

    Time to get real! The irony is that if my business were doing badly no bank would help me yet the banks themselves do not play by the same rules; they are 'too big to fail' so they will continue to rake in money while new businesses that owes, say $10,000, will be at a disadvantage to any large corporation that owes $1,500,000 as the first is unlikely to get a loan etc and the same goes for whole countries! Because the US owes its investors (including my sister!) more than anyone else we have to give them more!!!!!

    astralis I am but a girlie and not an economist at all but the way I see this going is recession and the sooner we have it done the better. Yes it will be hard and nasty for some and those who can help each other will have to. We have been living on credit too long and it's catch up time. Pls turning off light before leaving.

    Comment


    • #47
      Originally posted by Julie View Post
      President Obama nearly bankrupts the country with his out-of-control deficit spending... then demands responsible fiscal leadership from the Republicans.

      :puck:
      I guess I missed the part where George W Bush paid off the $5 trillion added to the national debt during his presidency. Doubling the national debt is the landmark achievement of his eight years, but to listen to the hard right wingnuts, Mr Obama came into office with a strong economy and no debt whatsoever.

      Sheesh.
      Trust me?
      I'm an economist!

      Comment


      • #48
        Originally posted by DOR View Post
        I guess I missed the part where George W Bush paid off the $5 trillion added to the national debt during his presidency. Doubling the national debt is the landmark achievement of his eight years, but to listen to the hard right wingnuts, Mr Obama came into office with a strong economy and no debt whatsoever.

        Sheesh.
        Sheesh indeed.

        In the other thread you said:

        The purpose of raising the ceiling is to allow the government to finance commitments, the vast majority of which were incurred under previous administrations, and which are already passed by both houses of congress and signed into law by a president.
        And of course I have already detailed the spending that is actually passed by the Congress, and how the Bush years debt exploded after 2007 whe the dems took the Congress, but hey- minor details...

        This is where you put up another list of Reagan spending, so go ahead big boy.
        "We will go through our federal budget – page by page, line by line – eliminating those programs we don’t need, and insisting that those we do operate in a sensible cost-effective way." -President Barack Obama 11/25/2008

        Comment


        • #49
          Originally posted by DOR View Post
          I guess I missed the part where George W Bush paid off the $5 trillion added to the national debt during his presidency. Doubling the national debt is the landmark achievement of his eight years, but to listen to the hard right wingnuts, Mr Obama came into office with a strong economy and no debt whatsoever.

          Sheesh.
          $5 trillion over 8 years sounds like peanuts compared to $14.3 trillion in 3 years doesn't it? Nobody has said Obama came into office with a strong economy and no debt whatsoever. Obama was given a hot potatoe and he simply didn't know what to do with it...so he's still holding it. If it burns him, that's his stupidity.

          Bush came into a recession right after the Clinton administration as well, then 9/11 happened.

          Comment


          • #50
            Originally posted by highsea View Post
            This is where you put up another list of Reagan spending, so go ahead big boy.
            If you didn't understand the first time, there isn't much point in reposting, is there?

            It is historically inaccurate to deny that the national debt doubled under the Bush Administration.
            Trust me?
            I'm an economist!

            Comment


            • #51
              Originally posted by DOR View Post
              It is historically inaccurate to deny that the national debt doubled under the Bush Administration.
              The only person here even insinuating that anyone was going to deny that fact was you.
              Meddle not in the affairs of dragons, for you are crunchy and taste good with ketchup.

              Abusing Yellow is meant to be a labor of love, not something you sell to the highest bidder.

              Comment


              • #52
                Originally posted by DOR View Post
                If you didn't understand the first time, there isn't much point in reposting, is there?

                It is historically inaccurate to deny that the national debt doubled under the Bush Administration.
                United States public debt - Wikipedia, the free encyclopedia





                By October 2008, due to increases in domestic and foreign spending,[106] the national debt had risen to $11.3 trillion,[107][108] an increase of over 100% from the start of the year 2000 when the debt was $5.6 trillion.[109][110] Most debt was accumulated as a result of what became known as the "Bush tax cuts" and increased national security spending
                Link #1 - http://web.archive.org/web/200706280...historical.pdf


                Washington Times article explaining debt levels in the year 2000 -


                On Aug. 23, the national debt officially reached $8.98 trillion. That level represents an increase of $3.25 trillion (57 percent) since Jan. 20, 2001, when George W. Bush became the 43rd president of the United States. Between now and Sept. 30, the end of fiscal 2007, the national debt should increase by another $40 billion. The White House’s recent Mid-Session Review estimated that the national debt will increase $565 billion in fiscal 2008. (That’s more than $300 billion higher than fiscal 2008’s projected unified budget deficit of $258 billion.)

                Now comes a leak from the White House revealing that the president will soon be requesting an additional $50 billion in spending in fiscal 2008 for the war in Iraq. Not only will that bring fiscal 2008’s spending on the administration’s global war on terror to nearly $200 billion; it will also raise that year’s projected increase in the national debt from $565 billion to $615 billion — plus at least an additional $2 billion in debt-service costs (next year and every year thereafter) to finance the $50 billion in increased borrowing for the war.

                The administration projects that its budget for the upcoming fiscal year, which includes $50 billion for that year, will add another $558 billion to the national debt. Needless to say, the $558 billion is a conservative estimate. In its recently updated budget and economic outlook, the Congressional Budget Office (CBO) offers two Iraq-withdrawal scenarios (one faster than the other) that would still require war spending between $119 billion and $156 billion for fiscal 2009. The average for the two is $138 billion, which is $88 billion higher than the administration’s $50 billion “placeholder” for 2009. Add another $60 billion for CBO’s estimate of the certain (but, alas, unbudgeted) 2009 patch for the alternative minimum tax (AMT). To finance the nearly $150 billion in additional borrowing ($88 billion/war and $60 billion/AMT) in 2009, add another $7 billion for 2009 debt-service costs (which, of course, will also have to be paid every year thereafter as well). Just these three changes, which total $155 billion, would raise the projected fiscal 2009 national-debt increase from $558 billion to $713 billion. That’s half a trillion dollars more than the administration’s projected unified budget deficit of $213 billion for fiscal 2009. Prorating fiscal 2009’s $713 billion national-debt increase over the budget year’s first 112 days (Oct. 1, 2008, through Jan. 20, 2009, the last day of the Bush administration), we find that the national debt would increase by $220 billion in fiscal 2009 before Mr. Bush departs.

                So, let’s do the math. As of last week, President Bush had added $3.25 trillion to the national debt since he entered office. Before the current fiscal year ends, he’ll add another $40 billion. Fiscal 2008 will further increase the national debt by $617 billion. Add $220 billion from fiscal 2009’s $713 billion total debt increase. By Jan. 20, 2009, our back-of-the-envelope calculations project that Mr. Bush will have increased the national debt by $4.13 trillion (nearly 75 percent) in eight years.

                Compounding the situation, Mr. Bush will be handing over to his successor a budget that will be adding about $700 billion to the national debt each year through at least fiscal 2012. That’s based on the president’s projections and the CBO’s estimates for war spending and AMT patches. Small wonder the president has threatened to draw ink for his veto pen.
                These were projections from 2006, of course, way before the bailouts. From 2001 to 2008 it nearly doubled from 5 trillion to 10 trillion. And you are going to lay blame on the 110th Congress? In 2006 the debt was 8.5 trillion, add the Administrations budget projections, that takes you around 4.13 trillion. How about the bailouts, that were lead by this administration? Your telling me the congress was responsible? The Dems controlled the house, and at times the senate was even, with tie-breaking vote going to the administration, with two independents. Regardless, it was never enough to overcome a veto. So why didn't Bush take a stand than? Its easier to veto, than what the republicans are doing now. Why wasn't there a veto?
                Last edited by Dago; 19 Jul 11,, 10:26.
                sigpic

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                • #53
                  Originally posted by Dago View Post
                  These were projections from 2006, of course, way before the bailouts. From 2001 to 2008 it nearly doubled from 5 trillion to 10 trillion. And you are going to lay blame on the 110th Congress? In 2006 the debt was 8.5 trillion, add the Administrations budget projections, that takes you around 4.13 trillion. How about the bailouts, that were lead by this administration? Your telling me the congress was responsible? The Dems controlled the house, and at times the senate was even, with tie-breaking vote going to the administration, with two independents. Regardless, it was never enough to overcome a veto. So why didn't Bush take a stand than? Its easier to veto, than what the republicans are doing now. Why wasn't there a veto?
                  So now we are going to blame Bush for the Democrats reckless spending? Wow...the democrats who wrote and voted for the budgets for FY 2007 and 2008 are as much to blame for those deficits as is President Bush. The democrats’ control of Congress for the last two years of the Bush Administration does not relieve Bush of responsibility for the 2007 and 2008 budget deficits, BUT their control of Congress for those years does show the democrats’ own reckless spending:

                  Figures from the U.S. Statistical Abstract reveal that the budget deficit actually declined each year during the first 5 years of Bush’s presidency, from $352.8 billion in 2003, down to $133 billion by 2007. It also shows that deficit spending did rapidly increase during the last two years of the Bush Administration. According to the Statistical Abstract, in 2008, the deficit climbed to $364 billion; in 2009, the deficit exploded to $1.4 trillion.

                  Military spending was not unusually high during the Bush Administration. According to the CBO, the Iraq war cost approximately $709 billion from 2003 to 2010. During the Bush Administration, military and defense spending averaged less than 20% of federal spending, and about 4% of GDP. The stimulus program, passed in the first year of the Obama Administration, has already cost $572 billion, and the CBO estimates that its final cost will be approximately $814 billion, exceeding the costs of the war by more than $100 billion dollars.

                  And the rising deficit continues......
                  Last edited by Julie; 19 Jul 11,, 13:22.

                  Comment


                  • #54
                    pari,

                    Originally Posted by astralis
                    pari,



                    just wondering, how does one "isolate" the world's largest (by threefold) and most diversified economy? and how does one stabilize the world economy without american liquidity/capital? europe can barely stabilize herself, and that's only with such economies as greece and portugal and ireland. imagine if either italy or spain falls.
                    It isolates itself by becoming effectively worthless as a tradeable currency. No one can use it as a tradeable unit of exchange (which is why it's so big and 'diverse' in the first place') so it becomes a non player. Yes there will immense pain but believe it or not the rest of us have a brain and can come up with some other medium of exchange (hence the meeting of reserve bank governors), we still need to trade basic commodities and the US will have to make some form of debt repayment to be taken seriously, just as Greece/Ireland etc are being required to now.
                    I mean, you are talking debt default on the part of the United States, yes?
                    Are you suggesting we'll all continue to accept your polished clamshells for payment even though you yourselves declare them worthless? Just because you're 'big'?
                    please don't tar us all with the ideology of the Tea Party-- they're the ones whom want to ruin the credit of the US, not the rest of us.

                    in any case, why yes, yes the world will continue to use the dollar as currency. there's no viable alternative, and it's too useful. like i said-- euro is even shakier, and the yuan is nowhere close to being a power player. even if the debt ceiling doesn't go through, the US credit rating goes from AAA to AA+, not BB.

                    it just becomes more expensive for the United States.
                    There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "My ignorance is just as good as your knowledge."- Isaac Asimov

                    Comment


                    • #55
                      Originally posted by astralis View Post
                      pari,



                      please don't tar us all with the ideology of the Tea Party-- they're the ones whom want to ruin the credit of the US, not the rest of us.
                      The major problem with the US is the very deep 'us and them' divide. Your debt crisis belongs to all Americans, not any particular ideological group.
                      Originally posted by astralis View Post
                      in any case, why yes, yes the world will continue to use the dollar as currency. there's no viable alternative, and it's too useful. like i said-- euro is even shakier, and the yuan is nowhere close to being a power player. even if the debt ceiling doesn't go through, the US credit rating goes from AAA to AA+, not BB.

                      it just becomes more expensive for the United States.
                      Depends on the level of default: at what point do investors cry enough? We've already had one crisis, now another internal US crisis looks set to slash another few trillion off international wealth. I know it's a 'how long is a piece of string' question but at what point does using the $US become more expensive than it's worth? Also at what point do individual states within the republic decide the federal reserve isn't acting in their own states best interests?
                      In the realm of spirit, seek clarity; in the material world, seek utility.

                      Leibniz

                      Comment


                      • #56
                        Would a US Default Mean Disaster?

                        Failure to raise the debt ceiling would inflict immediate pain on many Americans and long-term damage to the nation’s finances. But there’s a chance the fallout could be far worse.

                        President Barack Obama says a failure to raise the US debt ceiling would be Armageddon.

                        “The idea that this is catastrophic is wrong,” Sen. Tom Coburn, R-Okla., rejoins. On Meet the Press on Sunday, Coburn said, “What is catastrophic is to continue to spend money we don’t have.”

                        Besides, he added “the debt limit doesn’t really mean anything, because we’ve always extended it.”

                        Well, which is it? A failure to extend the debt ceiling would seem like a catastrophe, or not. You can’t be just a little bit “Armageddon” any more than you can be a little bit pregnant.

                        Frankly, I think the catastrophe claim is justified—but not on the evidence that anyone is offering. Arguments that a failure to raise the debt limit will raise interest rates, slow US economic growth, increase inflation, and ultimately cost the United States its AAA credit rating are all true, but they don’t add up to an ultimate end-of-the-world battle.

                        The inability to deal with something as relatively simple as raising the debt ceiling is a symptom of fiscal dysfunction in Washington, which will push the US further down the road to economic stagnation.

                        But the image that comes to my mind is that of a frog cooking to death in a pot of water that heats up so slowly the frog never jumps out. Not fire blasting from heaven to devour Gog and Magog.

                        Mind you, there is a possibility that failure to raise the debt ceiling could set off a catastrophe in the financial markets along the lines of the Lehman Brothers meltdown. But no one seems to be talking about how that could happen—maybe because it’s too complicated for us rubes to understand or maybe because it’s another example of why the current system of global finance needs to be torn down and completely rebuilt.

                        Come to think of it, it couldn’t be that second reason, though—Wall Street and Washington would be fine showing everyone how the sausage is made. Really, they would.

                        Understanding the Problem
                        The problem posed by the debt ceiling is actually pretty simple. Every month the United States takes in less than it spends.

                        The gap has averaged $125 billion a month in 2011. In February, the monthly deficit hit $223 billion, which was a record.

                        May, a very good month for revenue inflows, saw the lowest deficit for that month in five years—but that deficit still hit $59 billion. It was also the 32nd consecutive monthly deficit.

                        The cumulative red ink pushed the federal government right up to the current debt ceiling of $14.29 trillion on May 16. The US Treasury has been juggling accounts ever since—by, for example, delaying internal transfer payments—but it will run out of gimmicks on August 2, according to its calculations.

                        At that point, the federal government will have to stop spending more than it takes in—unless Congress raises the debt ceiling to allow more borrowing.

                        Going cold turkey on debt is made more difficult because some parts of federal spending are climbing automatically. As of May, spending formulas increased the cost of Social Security, Medicare, and Medicaid in 2011 by 3.6%, 3.8%, and 5.4% over 2010, respectively, according to the Congressional Budget Office.

                        The biggest jump came from spending on the public debt, up 16% from 2010.

                        If the Treasury can’t juggle cash internally to avoid running up against the debt ceiling, then it will have to juggle externally to bridge the average $125 billion monthly gap. In June, the interest due on the US debt came to $110 billion, but most months it’s closer to $30 billion.

                        The government sent out about $60 billion in Social Security checks in May. Not sending out Social Security checks and not paying interest on Treasury debt would go a long way to closing the monthly gap.

                        The Consequences of Failure
                        Here are the five arguments Obama is making for raising the debt ceiling:

                        First, at least one core function of the US government—with lots of public support—is going to take a big hit if the United States suddenly has to live within its revenue.
                        What’s it going to be? Social Security? Veterans’ benefits? Pay for active-duty military personnel? Interest on Treasury debt?

                        Want to avoid hitting a big, politically powerful group hard in your efforts to fill the gap? Can’t be done.

                        Eliminating the entire budget for the Smithsonian museums, for example, would save just $800 million over a year, or about $67 million a month. Completely zero out the NASA budget, and you reduce the gap by about $1.6 billion a month. Cut the Environmental Protection Agency’s budget completely, and the monthly gain is $750 million. Even combined, they’re peanuts compared with that $125 billion gap.

                        To close the gap, you’ve got to go after the big programs that have been responsible for bringing the current negotiations over the debt ceiling to deadlock.

                        Second, cuts of this magnitude will, in the short term, send the US economy back into recession.
                        In the first quarter of 2011, the US economy showed a 1.9% annual real rate of growth (after subtracting the effects of inflation on the value of goods and services produced here).

                        That resulted in the US economy growing (once again after subtracting inflation) by a whopping $64 billion. That’s only about half as big as the monthly cuts that would be necessary to fill the revenue gap in the event of a failure to raise the debt ceiling.

                        Yes, in the long run the US debt of $14.3 trillion is a powerful drag on growth in the US economy. But in the short run, reducing the government’s spending by $375 billion a quarter in borrowed money will depress economic growth.

                        Third, trying to run a government without either a surplus or the possibility of adding additional debt to balance out month-to-month swings in revenue and spending will produce massive uncertainty.
                        So what does Treasury do when interest payments balloon in June and December, as they do every year? Does the government cut back on interest payments even more that month, and then increase payments in January and July?

                        Tax receipts don’t come in evenly over the course of a year, either.

                        Fourth, all this uncertainty and chaos will add to the interest rates the United States must pay on its debt.
                        Stands to reason, doesn’t it? US Treasuries have been used as the definition of a risk-free investment, because buyers could count on the US always paying its bills and behaving somewhat responsibly. Now both of those attributes deserve serious re-examination.

                        And even if Congress does come up with a deal that extends the debt ceiling, major damage has already been done to US credibility.

                        Imagine that you’re an overseas investor following the current debate in Washington. You’ve heard US politicians say that a default is better than raising the debt ceiling. You’ve heard statements that have basically challenged you to find another place to put your money.

                        And you’ve seen politicians willing to sacrifice bond investors to short-term domestic politics. Every investor in the world has got to be asking: "How soon can I find an alternative investment for some of my Treasuries?"

                        Fifth, none of this is good for the long-term trend in the US dollar.
                        Standard & Poor’s has put the US AAA rating on credit watch with negative implications. The credit-rating company has said that if a credit downgrade happens, it could come within the next three months.

                        This, like the uncertainty surrounding the debt ceiling fight and the demonstrated inability of US politicians to come up with a plan for addressing the long-term US debt problem, has eroded the desire of overseas investors to hold dollars.

                        Until Washington can demonstrate a real plan to reduce the projected growth in US debt, I think the dollar will be locked into a downward trajectory. That adds to the upward pressure on US interest rates, of course, as well as the downward pressure on the US standard of living.

                        All this adds up to serious pain for the average American. Even if you aren’t a member of one of the groups that winds up paying for a failure to extend the debt ceiling, you’re still going to pay the price in slower growth and higher interest rates.

                        But I don’t see Armageddon here. Interest rates won’t go up overnight. In fact, they may not go up at all until the Euro debt crisis is “solved.”

                        Even then, US interest rates are likely to climb slowly, because Treasuries are such a big part of the global portfolio that it’s hard to find alternatives overnight. (Nonetheless, the US debt-ceiling crisis, like the larger US debt crisis, is good for gold and other commodities, as well as currencies such as the Canadian and Australian dollars, the Swiss franc, and the Norwegian krone.)

                        No Armageddon, But...
                        I think we’re looking at a gradual worsening of the US global financial posture. But that doesn’t count as Armageddon, because that’s pretty much what investors have been looking at for years. Do you know anyone who is surprised at this trend?

                        My big worry is that the current slow erosion of faith in US Treasuries will turn into a cascade of unanticipated consequences if the debt ceiling isn’t raised.

                        Treasuries play a unique role in the global financial markets. They aren’t important only because they’re jammed into so many global portfolios, including the portfolios of so many of the world’s countries. They’re also important because they serve as collateral on a huge percentage of the complex deals that use derivatives to shift risk around the globe.

                        It’s that role that makes me think Armageddon is a possibility. It’s a remote possibility, I think. But given the very limited information about these markets and the balance sheets of the players, I can’t say with any degree of certainty how small the possibility might be.

                        A Look at the Repo Market
                        For example, Treasuries are used as collateral for cash loans in the repo (repurchase) market.

                        In a repo agreement, the seller of a security agrees to buy it back from a buyer at a higher price on a specified date in the future. Repos are, in effect, short-term loans; they are used to raise short-term cash by banks and corporations.

                        Central banks, such as the Federal Reserve, also use them to manage the money supply. To expand the money supply, the Fed decreases the repo rate at which it buys back government debt instruments from commercial banks. To shrink the money supply, the Fed increases the repo rate.

                        It’s a huge market. Bank of America Merrill Lynch estimates that 74% of primary dealer repo financing—or about $2.1 trillion—involves Treasuries as collateral.

                        And you don’t have to be JPMorgan Chase (JPM) or the European Central Bank to have exposure to this market. Money-market funds have big chunks of their cash in the repo market. (Anyone who remembers the problems that the Lehman crisis created for money-market funds should regard any advice on using money-market funds as a safe haven in the event of a US default with extreme skepticism.)

                        And this is just one of the markets that uses Treasuries as collateral. According to estimates by JPMorgan Chase, about $4 trillion in US Treasury debt is used to back deals.

                        The truth, though, is that no one knows exactly what it would take to trigger problems in one or more of these markets. We do know, though, that Wall Street is worried.

                        The Financial Times has reported that Matthew Zames, an executive at JPMorgan Chase and chairman of the Treasury Borrowing Advisory Committee, wrote in April to Treasury Secretary Timothy Geithner that “a default could trigger a wave of margin calls and a widening of haircuts on collateral, which in turn could lead to deleveraging and a sharp drop in lending.”

                        On July 15, the Securities Industry and Financial Markets Association held a meeting with staff from the big banks to discuss the effects of a US default on those markets.

                        Watch the Ripples
                        The ripples from any default or downgrade of the US credit rating would spread out like this:

                        Investors who lent cash against Treasuries as collateral would require more bonds to back their loans. That would force borrowers to find cash, sell other assets, or close their repos and other positions.

                        And that would set off a wave of deleveraging, very similar to the one that swept the financial markets in the wake of the Lehman bankruptcy in September 2008. We could get a replay of the credit crunch that almost brought down global financial markets and the global economy in 2008. (And this time the Federal Reserve would be unable to ride to the rescue.)

                        As I say, I think this is a remote scenario. But what troubles me is that almost three years after the Lehman bankruptcy, the global financial system remains pretty much the opaque network of undisclosed and unregulated leverage it was then. Very little has changed that would prevent a replay of that crisis.

                        To me, such a rerun would qualify as Armageddon—and that makes me wonder why nobody who is trying to get this debt-ceiling deal done is explaining to voters this aspect of the danger we all face.

                        Maybe it is too complicated—not for voters but for the politicians who sit in Washington. Certainly we’ve seen a very convincing demonstration over the last few weeks of Washington’s abysmal level of understanding of finance and economics.

                        Why Didn’t They Fix This?
                        But I can’t help thinking that there’s something else at work. Neither party really wants to draw attention to the fact that they did so little to fix the system that produced the last crisis.

                        The Republicans have concentrated on gutting a system of reforms—even before the regulations for them have been written—but nobody thinks the reforms being so tepidly defended by the Democrats in Congress and in the White House really get at the problems that contributed to the last crisis.

                        Above all, I suspect, nobody wants to admit that the pain a failure to raise the debt ceiling and a downgrade of the US credit rating following a default would inflict on the average voter isn’t enough reason to reach a deal. But that worries from Wall Street might well be.

                        When the country remains as angry as it has every right to be about Wall Street’s ability to escape the consequences of the last crisis, I doubt that anyone in Washington wants to remind voters that the folks in D.C. listen to Wall Street and ignore Main Street.
                        In the realm of spirit, seek clarity; in the material world, seek utility.

                        Leibniz

                        Comment


                        • #57
                          pari,

                          The major problem with the US is the very deep 'us and them' divide. Your debt crisis belongs to all Americans, not any particular ideological group.
                          as i've argued with highsea and dale, one party, or to be more specific one sector of one party, has been leading the charge in terms of "go ahead, let's default if we have to". lower taxes > debt crisis.

                          Depends on the level of default: at what point do investors cry enough? We've already had one crisis, now another internal US crisis looks set to slash another few trillion off international wealth. I know it's a 'how long is a piece of string' question but at what point does using the $US become more expensive than it's worth?
                          highsea pointed out accurately that this would not be a full default; it would be partial. if it happens, the US will probably end up using its available revenues to ensure the bond owners were paid.

                          the effects will be quite nasty in the short/medium-term, but more muted in the long term. as i said, the other major players are on an even worse footing than the US. the US would go into default because of a lack of political will; europe has a moderate chance of defaulting because...it simply has not enough money.

                          Also at what point do individual states within the republic decide the federal reserve isn't acting in their own states best interests?
                          you're talking about a full blown civil war and individual states going their own way/getting their own currency...it's not that bad. besides, sometimes i suspect the union kept the south just for their fried catfish, BBQ, georgia peaches, and tasty baked goods, and that's still true today. :)
                          There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "My ignorance is just as good as your knowledge."- Isaac Asimov

                          Comment


                          • #58
                            Originally posted by astralis View Post
                            you're talking about a full blown civil war and individual states going their own way/getting their own currency...it's not that bad. besides, sometimes i suspect the union kept the south just for their fried catfish, BBQ, georgia peaches, and tasty baked goods, and that's still true today. :)
                            Oh, that is really low Astralis....:slap:

                            Comment


                            • #59
                              Fried catfish? BBQ and peaches I could understand, but fried catfish just sounds weird...
                              Meddle not in the affairs of dragons, for you are crunchy and taste good with ketchup.

                              Abusing Yellow is meant to be a labor of love, not something you sell to the highest bidder.

                              Comment


                              • #60
                                dude, it's pretty tasty. when i was at montgomery, alabama, the cooks would have fried catfish, chicken fried steak, ...it's the cornmeal/spice mix that they've got down. sometimes they'd mix it up with south carolina BBQ, or the dry-rub texas BBQ beef brisket.

                                then dessert was peach cobbler or apple pie.

                                after a week it was pretty clear to me why the South is wrestling with an obesity problem; i was running several miles and spending an hour at the gym every day, and i still gained a bit of weight.
                                There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "My ignorance is just as good as your knowledge."- Isaac Asimov

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