Should Republicans let the nation default?

People who think that stuff will be blamed on Obama....

 

According to former Treasury Secretaries, both Democratic and Republican, the treasury processes 80 million payments a month, the system is set up to pay everyone in full, there is no way to only pay some and not others.

And according to this grizzled IT veteran, there is no way to alter a system of that size and complexity to do that in 10 days, there isn't even enough time to prepare an RFP that would cover what would need to be done.
So, in ten days, everyone gets paid or we default, and paying the bondholders, but not paying the military would be just as much a default as not paying the bondholders. If you are considering the creditworthiness of a country, and that country can't make it's payroll, you don't rate them AAA or even AA.

It's time for the GOP to cut their losses and say they're sorry, and go back to the drawing board.
Or if they are going to stay crazy, it's time for Obama to have a trillion dollar coin struck.


Or John Boehner can honor the deal he made with Harry Reid this summer and pass the clean CR like he agreed to.
You can't negotiate in good faith with a lying sack of "republican values".

 

The source of blame certainly rests with Obama and the Democrats for not putting together a "normal" budget before the fiscal year starts.

 

If the US defaults it would in fact send the entire world economy into a death spiral. I was initially against Cruz antics but now that the game is on I hope the Republicans hold out as long as possible. I think they will have to cave though because Obama simply has no concept of what he is doing and the Reps aren't going to destroy the economy because our idiot president wants to play chicken.

 

This is a trick question. We have enough revenue from tax collecting to pay off the interest on our debt, probably a thousand times over. That's what defaulting is about... You default, when you can't pay your debtors... who charge you interest. You need to pay 100% of the interest, that is all. If you had to pay all of the debt off, to prevent default, we wouldn't have debt... We pay more than our interest, because we can.

So, no... we should never default, because that would be very bad, but the reality is we won't. Any threat of default from the Dems or Repubs is bull(*)(*)(*)(*).

 

And what will be the reaction when government paychecks aren't delivered, purchases from the private sector aren't paid for and contracts with the private sector aren't honored? I agree that avoiding default on loans is possible (but note that the government is more bound to pay some bills than it is other bills), but the obvious irresponsibility and widening ripples of shock as some committments aren't honored will have a strong effect on global markets anyway (just not as strong as interest on debt defaulting).

I mean, here is the government of the only superpower on Earth and it can't run its own affairs well enough to balance the books and meet its financial committments? Can you truly say this is a message we should be sending to ourselves, much less the rest of the world? Not to mention the increased costs of borrowing that would result, as nervous investors will evaluate the government as a greater risk and demand greater compensation for that increased risk. Interest rates are currently so low that any big change will have a massive impact on borrowing costs.

 

So this naturally excuses the republican extortion and deliberate pain they are inflicting on millions of their fellow americans?
This also excuses the republican threat to the credit and good faith of America and the accompanying global pain it will cause?

Excuses like that tell the tale as well as any narrative.

 

We should really pay off the total debt.

A one time assessment on wealth over 10 million, would raise enough to pay off the entire debt, and still leave the wealthiest 1% enough money to be the wealthiest 1%.

 

jonsa is delusional


See Harvard study for proof of those deaths in the Republican created holocaust. As everyone knows about 1/3 of Israel's GDP comes from USA dollars. Never has been a secret. But every true American patriot knows that.

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End all tax shelters and the problem will be solved over night.

 

I didn't realize that those you consider to be a true American patriot were so ignorant of the facts.

Total trade amounts to $40 billion a year between the US and Israel, with a US trade deficit of $10 billion. Israel's GDP is roughly $250billion.

Mr. Truth shouldn't lie.

 

Maybe Canada should put on it's big boy pants and act like a sovereign nation instead of a whiny child. Any financial fallout from a US default is solely on the shoulders of foolish nations that put too many eggs in one basket, which is not the US's fault...

 

We already know we're in trouble... the world already knows we're in trouble. It's public knowledge that our debt continues to rise, even to the point that it surpasses GDP - which is really something, when you have the highest GDP in the world. Our credit rating has been downgraded twice - that was public (world-wide) knowledge. We were downgraded not because of the debt ceiling, but because we can't manage our money and decrease our debt. It's getting ridiculous.. no, it's been ridiculous for years, but now it's just obscene. The truth of the matter is we won't default and it won't have an effect on our world standing, because our world standing already sucks - but, like a Lannister, we always pay our debts (so far).

Also, why wouldn't paychecks be delivered or purchases be made? Even if we don't raise the debt ceiling, we'll still have a budget that we'll live within. Live within your means... I'm certain you've heard that one before? We can fund the entire government, by making cuts, without raising the debt ceiling. We don't have to spend more than we already do.

 

Ummm... there aren't enough millionaires/billionaires in the world to pay off our $17 trillion debt.

 

Actually the top 1% has enough to pay off the entire 12 trillion dollar national debt that can actually be paid off, and still have enough left over to be the top 1%.
It's not my idea, Donald Trump thought it up.

 

8 members of this forum voted FOR a government default. Who are these people and what do they know about economics?

 

Dude... that idea is 14yrs old, when the debt was about $5.7 trillion, not $17 trillion, and it's a flawed idea. We have 400 billionaires in the US right now... the majority of which have less than $5 Billion. We "only" take in about $3 trillion in revenue per year from taxes. The 1% would have to contribute a great deal more than to make a dent and it would still not pay it off. Then what? You can't do that every year... they're not raking in that kind of money every year.

 

First, there's only 12 trillion in debt held by the public, and that's the only debt that can be paid off, the rest is an accounting entry, that can be worked out, but it can't be paid off even if you had the cash.

Second, where the debt held by the public has gone up, so has the wealth of the top 1%, so it's still possible, at least the numbers work out.

Keep that in mind when people say there isn't enough to pay off the debt, there actually is. I mean if there was enough to pay off 5.7 trillion 14 years ago, that same rate would raise nearly enough to pay off the entire now, or reduce it to a small fraction of what it is.

The other thing to keep in mind is that there is such a thing as a "sustainable deficit" that's when he debt as a % of GDP stays constant or falls, as it did every year from 1946 to 1981, when tax rates on the wealthy were higher.
It was the Reagan tax rates that turned the deficit into the unsustainable range.
And even the slightly higher tax rates of the Clinton era erased the deficit, and even now the deficit has been brought close to the sustainable level under the Obama administration.

 

Clearly Obama is instructing those in charge of parks and facilities in DC to make everything as crappy as possible for the public. This is who is intentionally making things bad and just for effect too.

 

You're dreaming... When I was talking about billionaires in my previous post, I was keeping their current values in mind, when addressing the $5.7 trillion debt, 14 years ago. Today's wealthy couldn't have paid off yesterday's debt at this time. There's absolutely no chance of that happening now, whether the debt is $12 trillion or $17 trillion.

Debt as a % of GDP has not stayed constant under Obama... The debt increased from 76% to 101.6% of GDP in nearly 5 years. For the first time since 1946, our debt has surpassed GDP. The debt in 1946 had nothing to do with tax rates... it had everything to do with spending. WWII was one of the most costly events in our nation's history and rose our debt to 121.7% of GDP. Reagan raised the debt ceiling to fight & win the Cold War. Bush Jr. raised the debt ceiling to fight a War on Terror and aid in the recovery of the economy (which was a major flaw). Obama raises the debt ceiling to fund Social Welfare and aid in the recovery of the economy (which is failing miserably).

I think it's funny that you're calling our current budget deficits "sustainable." A loss of $1+ trillion per year is "sustainable." That's simply crazy talk.

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Exactly... Everything that's closed falls under the Executive Branch. If you're angry about something closing, take it up with Obama. He makes the final call.

 

So seriously, you should spend a little time getting familiar with the topic.

Total net worth of US households is around 70 Trillion.
Of that 40% or 28 trillion belongs to the top 1%.
They could pay off the 12 trillion in debt and still have 16 trillion, which would be enough to make them, the top 1%.

The debt as a % of GDP fell from 1946 to 1981.
This is sustainable forever.
Reagan changed the tax rates and since then the debt as a % of GDP has risen, nearly every year, (small decline during the Clinton years).
Clearly the data points to changes in the tax rates as the reason for this.

And right now, "sustainable deficits" would be somewhere in the neighborhood of 400 billion a year, and we are almost there.

 

The reason that you righties are always on the wrong side of things is because you take your cues from the people who make money keeping you afraid and uninformed like Limbaugh, Beck, Hannity, and the rest of the talking heads who aren't actually journalists(but that doesn't stop people from getting their "news" from them). Tax revenue isn't an opinion which basically puts it out of the purview of opinion peddlers like Limbaugh. When it comes to hard numbers, you take those numbers from the people in the best position to give you an accurate count, and that is not an AM radio talk show host.

 

We'll never default.

But I'd be fine with ending the ability to borrow money.

 

Wth are you talking about?

We haven't seen a $400 billion a year deficit since 2007. We haven't seen anything close to that in 5 years and you really expect that to change once 100% of Obamacare reaches fruition? Impossible... Businesses and people of wealth have been fleeing this country in record numbers over the last several years, due to increases in taxes. The more wealth leaves, the less tax revenue we'll see. Unemployment is at record highs, social welfare spending is at record highs and unfortunately you don't see a relationship. Less employment results in a decrease in tax revenue. An increase in spending + decrease in revenue = record breaking deficits and a higher debt.

GDP rises with the health of the economy. Our average rate of GDP growth over the last 5 years has been .58%. That's pathetic. Our highest annual rate is 2.4% in 2010, which dropped to 1.8% in 2011 and 2.2% in 2012. The debt, however, has been growing at a considerably faster rate of of about 10.46% over the past 5 years (2009: 16.5%, 2010: 13.9%, 2011: 9.1%, 2012: 8.6%, 2013: 4.2% (so far)). Growth has been dropping steadily over the last 5 years, as well, but 2013 isn't over yet (plus, they stopped counting it) and once we see the full implementation of Obamacare, I fully expect that rate to jump back up.

Additionally, you're talking about the top 1% (which changes, depending on the time of day and study being done). Traditionally, it's based on income and in 2007, entrance into the 1% included families raking in $380,000/yr. In 2008, it was $252,000/yr. Now it supposedly includes only those who have a net worth of $6.9 million or more. The amount of people in the 1% has decreased by about 23% from 2007, due to how they measure qualifications. How was it measured 14 years ago?

That being said, you're asking people to forfeit pretty much all of their money, that they earned, to pay off the debt of a spend-crazy government... Even if they could do it, which they couldn't, why should they?

 

Heard a few interviews with Boehner - in exchange for the Republican controlled house passing a debt ceiling raise they want some conditions attached to that. That seems reasonable to me. The Democrats in the Senate get their debt ceiling increase, and the Republicans get a superficial slow in government spending so as to look good to their base. Win-win.

The idea that the Republicans would bite the hand that feeds them and actually default seems ridiculous to me. The establishment Republicans are first and foremost self-interested. Don't mistake them for 'libertarian warriors' - they're quite the opposite in effect. They've been behind many of the expansions in government - their motivation is electoral: their low-government stance is entirely a response to that attitude in the people, but as with the Democrats, they never actually live up to much of anything their base believes.

 

Thread: Should Republicans let the nation default?


Only if they wish to lose elections.