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Thread: House approves bill to end shutdown

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    Re: House approves bill to end shutdown

    Quote Originally Posted by Imnukingfutz View Post
    It depends on what questions were submitted to be polled, who they polled, who commissioned the poll.

    Poll numbers are nothing more than data to be manipulated, what results do you want.

    More and more people every week seem to be going to the Tea Party meeting here in town every month.
    Historically polls over all are very accurate. Good polls. And gallup and pew are some of the best out there.


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    Re: House approves bill to end shutdown

    Quote Originally Posted by donsutherland1 View Post
    Debt default involves failing to make debt service payments on time. Debt service includes maturing principal and interest. Your definition includes interest, alone. There was uncertainty as to whether the U.S. would continue to be able to borrow sufficient funds to meet its principal obligations. That level of uncertainty made it impossible to be certain that the U.S. would not default on its debt service. So, while one cannot say the U.S. would be assured of having defaulted on its debt service, one cannot say that the U.S. would "never" have defaulted on its debt service. However, the experience of countries that wound up in situations where they began to miss payments does not provide comfort.



    The 17th was not the date on which the U.S. defaulted. It was the date on which the U.S. had no additional extraordinary measures available. The estimate was that it would have had $30 billion in cash on hand on that date giving it a narrow margin going forward. The CBO estimated that the cash balance would have been exhausted between October 22 and October 31.

    https://www.cbo.gov/sites/default/fi...ederalDebt.pdf



    Whether spending is "necessary" or not is a matter of political and ideological view. That's entirely a different matter from how the government would have handled a situation under which its cash was eventually depleted and whether that situation would have led to its inability to roll over its maturing debt triggering a debt default.



    One needs to put the those debt numbers into context by comparing them to the size of the nation's economy. The big fiscal challenge is in the longer-term, where the nation faces enormous imbalances. Reform--mandatory spending and tax policy--will be needed to address those imbalances. The U.S. still enjoys the flexibility to do so in a meaningful fashion without large-scale macroeconomic disruption. Any debt crisis that would have resulted from the failure to raise the debt ceiling on a timely basis would have been self-inflicted, not the result of an inability to meet those imbalances that still lie in the future.
    do you believe the u.s. would have defaulted on its debt, even if we never raised the debt ceiling?

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    Re: House approves bill to end shutdown

    Quote Originally Posted by Unitedwestand13 View Post
    i dno't think it is possible to manipulate the machines that process our payments on the fly.
    oh, not raising the debt ceiling will create problems. however, those problems can be solved, but Washington, does not have the guts to do that, nor the will

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    Re: House approves bill to end shutdown

    Quote Originally Posted by ernst barkmann View Post
    do you believe the u.s. would have defaulted on its debt, even if we never raised the debt ceiling?
    I don't know for sure in the short-run, but the longer such a situation persisted, the more likely default would have grown. There was real risk or probability of debt default. It was not zero and over a sufficient period of time, such risk would almost certainly have grown more likely than not.

    Some pundits and political leaders tried to suggest that there was essentially no risk. That's incorrect. Their benign scenario requires the following proposition:

    Debt default would occur only when Revenue < Interest Payments for a sufficient time to deplete cash on hand.

    The correct scenario includes both elements of debt service (maturing principal and interest). Under that approach, debt default would occur when Revenue < ∑ Maturing Principal and Interest Payments for a sufficient time to deplete cash on hand.

    There was no assurance that this situation could have been avoided even under a prioritization of payments. If Treasury prices fell, interest yields would rise. As October 17 approached, short-term Treasury yields were rising, indicating waning demand for those securities. Shorter-duration Treasury securities need to be rolled over more quickly than long-term ones. Rising interest yields could further undermine demand for Treasury securities via changing risk perceptions, leading to further declines in Treasury prices and further increases in interest rates. A self-reinforcing cycle between falling Treasury prices and rising yields would trigger a situation where revenue eventually fell below the sum of maturing principal and interest payments wiping out cash on hand and, thereafter, producing a debt default. Moreover, even under prioritization, there would be a significant macroeconomic hit. That macroeconomic shock would reduce incoming tax revenue, further narrowing the Treasury's ability to ward off the risk of debt default.

    There is no empirical evidence that the U.S. would somehow be immune to the kind of sequence of events that have culminated in other countries defaulting or being rescued from imminent default via the IMF and others. The U.S., of course, is of a scale that makes an IMF or international community rescue all but impractical. Certainly, the U.S. has not been immune to other financial crises (2008 providing the most recent example), so to assume that it would somehow be immune to a debt crisis is almost certainly unrealistic. Moreover, unlike with the Fed's extraordinary financial crisis interventions, the Fed really had no good cards to play. The Fed's stepping in to buy maturing Treasury securities to assure that they were rolled over would amount to the kind of large-scale debt monetization that has been behind currency crises in other countries (with significant macroeconomic consequences).

    In short, no responsible Senator or Representative could deliberately risk such an outcome. The consequences of either a debt and/or currency crisis were too great. Those who voted against what is an imperfect deal, but one that avoided the finite but difficult-to-quantify risk of debt default or currency crisis were the Fed to have tried to step in, were deliberately risking that destructive outcome. That's extreme recklessness. It is not principled leadership by any stretch of the imagination.
    Last edited by donsutherland1; 10-17-13 at 05:44 PM.

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    Re: House approves bill to end shutdown

    Quote Originally Posted by iliveonramen View Post
    We weren't at risk for default but we were on a downgrade watch...and were downgraded last time the debt ceiling was used as a political tool.
    sure, it makes sense for the ratings agencies ot put us on watch... you never know when some numbskull is going to purposefully default on debt payments to prove a political point..
    I don't put it past any of the congresscritters or anyone in the administration to be a numbskull.. it's not like we are talking about honorable, honest people here.

    the simple fact remains, we were not going to default ( unless someone went full numbskull)... it was a fearmongering tactics meant to sway public opinion.... and it worked.

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    Re: House approves bill to end shutdown

    Quote Originally Posted by upsideguy View Post
    I think the Republicans are smarter than that..... they don't want to have this happen again, even closer to the election. They played out the hand and lost. The Obama care debate is now substantially behind us.
    Really? Democrats unanimously voted for a Sequestration level budget, I don't consider that a loss...I consider that Dems getting played without even realizing it.
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    Re: House approves bill to end shutdown

    Quote Originally Posted by mac View Post
    Really? Democrats unanimously voted for a Sequestration level budget, I don't consider that a loss...I consider that Dems getting played without even realizing it.
    On one hand you are correct, sequestration level spending is a win for the Cons. On the other hand, it isn't a win because they could have had that two weeks ago, passed a clean CR and declared victoryInstead, they went for what was behind door #2, which was not attainable and, as expected they fell short, costing the US economy $24B in the process and embarrassed themselves. So, the net-net, is the Cons snatched defeat from the jaws of victory; which they are so good at (Sharon Angle, Christine O'Donnell, Ken Buck, Todd Akin, Richard Murdock, control of the US Senate).

    Good judgment and knowing when to quit are lacking on the right side of the aisle.

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    Re: House approves bill to end shutdown

    Quote Originally Posted by upsideguy View Post
    On one hand you are correct, sequestration level spending is a win for the Cons. On the other hand, it isn't a win because they could have had that two weeks ago, passed a clean CR and declared victoryInstead, they went for what was behind door #2, which was not attainable and, as expected they fell short, costing the US economy $24B in the process and embarrassed themselves. So, the net-net, is the Cons snatched defeat from the jaws of victory; which they are so good at (Sharon Angle, Christine O'Donnell, Ken Buck, Todd Akin, Richard Murdock, control of the US Senate).

    Good judgment and knowing when to quit are lacking on the right side of the aisle.
    Sounds right to me. I called this shutdown needless and the GOP totally lacking of common political sense. All the Republicans had to do was look across to the other side of the Capital Building to see where the Democratic controlled Senate was to know defunding the ACA was a political impossibility. If they needed further evidence of the impossibility, all they had to do was took at who controlled the White House and his veto pen. My, My, My.
    This Reform Party member thinks it is high past time that we start electing Americans to congress and the presidency who put America first and their political party further down the line. But for way too long we have been electing Republicans and Democrats who happen to be Americans instead of Americans who happen to be Republicans and Democrats.

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    Re: House approves bill to end shutdown

    Quote Originally Posted by ernst barkmann View Post
    oh, not raising the debt ceiling will create problems. however, those problems can be solved, but Washington, does not have the guts to do that, nor the will
    It's also a really, really, really stupid way to address the problem.

    The sudden massive drop in spending would have effects throughout the globe. There would every potential for hundred of thousands to be thrown out off work, at home and abroad. We may be suddenly compelled to rapidly scale back our military. Foreign governments that are dependent (right or wrong) on our aid may collapse. It would become catastrophic for many people very quickly.

    You are clinging to the "impossible to default" mantra like the debt interest is the important spending. It's a technicality.

    We may have spending problems, but slamming the brakes on government spending would make things worse. There are better and smarter ways to do this that don't require all that turmoil.

    The GOP just needlessly threatened to roll the dice with their futures, and the future of their families. There was no need to do it, and the outcome was completely predictable.

    Some people will forget that and some won't. It'll matter on election day.

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    Re: House approves bill to end shutdown

    Quote Originally Posted by upsideguy View Post
    On one hand you are correct, sequestration level spending is a win for the Cons. On the other hand, it isn't a win because they could have had that two weeks ago, passed a clean CR and declared victoryInstead, they went for what was behind door #2, which was not attainable and, as expected they fell short, costing the US economy $24B in the process and embarrassed themselves. So, the net-net, is the Cons snatched defeat from the jaws of victory; which they are so good at (Sharon Angle, Christine O'Donnell, Ken Buck, Todd Akin, Richard Murdock, control of the US Senate).

    Good judgment and knowing when to quit are lacking on the right side of the aisle.
    They wouldn't have gotten it so easy two weeks ago. They also gained some other concessions, without a "clean" cr.
    ”People willing to trade their freedom for temporary security deserve neither and will lose both.” --- Ben Franklin

    Quote Originally Posted by The German View Post
    Sterotypes are mostly based on truths.

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