View Poll Results: If Congress can't get their **** together by August 2nd:

Voters
19. You may not vote on this poll
  • We are screwed six ways from Sunday

    9 47.37%
  • No big. Just ask Michele Bachmann

    1 5.26%
  • Not sure

    5 26.32%
  • Other (please explain)

    4 21.05%
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Thread: Are we screwed?

  1. #1
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    Are we screwed?

    There seems to be a scoff movement which is spreading the word that we'll be fine if August 2nd comes and goes without agreement. Are they right or wrong?

    Per Bachmann:

    “And don’t let them scare you by telling you that the country’s going to fall apart and that we’re going to default on our debt. The fact is we aren’t, because revenue continues to come into Washington, D.C.,” the Minnesota congresswoman said. “It’s a very small percentage that we have to end up paying on that interest so that we don’t fall into default.”
    http://caucuses.desmoinesregister.co...or-tough-love/
    Last edited by BDBoop; 07-10-11 at 04:15 AM.

  2. #2
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    Re: Are we screwed?

    It will be a catastrophe if even one day goes by without the debt ceiling being raised...and a subsequent agreement will only partially mitigate it.
    Last edited by Kandahar; 07-10-11 at 04:27 AM.
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  3. #3
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    Re: Are we screwed?

    Quote Originally Posted by Kandahar View Post
    It will be a catastrophe if even one day goes by without the debt ceiling being raised...and a subsequent agreement will only partially mitigate it.
    So what about Mrs. Bachmann's quote?

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    Re: Are we screwed?

    For this and many other reasons, we are completely, irrevocably ****ed.
    For: legalizing drugs, gay marriage, abortion, guns, universal health care, public sector jobs, nuclear power, free education, progressive taxation
    Against: corporations, make-work, the 40 hour work week, intellectual property, imperialism, "homeland security," censorship

  5. #5
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    Re: Are we screwed?

    Quote Originally Posted by BDBoop View Post
    So what about Mrs. Bachmann's quote?
    I'm not sure if Bachmann is just using it as a negotiating tactic (to send a message to Obama that the GOP is perfectly willing to default on our debt), or if she's actually managed to convince herself that this is true. But either way she's completely wrong about this...as usual.
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  6. #6
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    Re: Are we screwed?

    One of you two forgot to vote. That's 10 points off from Slytherin.

  7. #7
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    Re: Are we screwed?

    The Congresswoman is absolutely correct that going past Aug 2 would not mean a default on our debt. That doesn't mean there wouldn't be pain - immediate reductions in government spending in other areas would have to happen. But the interest on the debt is a small percentage of our spending, and can be more than easily handled with the revenues we have coming in. The Treasury Secretary is required by law and the government is required by the Constitution to make sure that our debt obligations get paid first. If the Park Services get shut down and the Cowboy Poetry Festival doesn't happen this year... well, worse things have happened. As time goes by, however, the cuts will start hitting harder - DOD spending will have to be reduced (probably just to operational necessities and personnel) and so on and so forth. In the meantime, there are alot of things the government can do to provide itself money in the short term.

    Bachmann was wrong, however, to say she would never vote to raise the debt ceiling. I had been increasingly willing to consider her a candidate that might legitimately rate my vote - not any more. I'm all for a balanced budget, but we don't get there that way.

  8. #8
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    Re: Are we screwed?

    To be honest I put not sure, theres just too much about it I admittedly dont know...what I do know is that Michelle Bachman is not my source of accredidation that all will be fine.

  9. #9
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    Re: Are we screwed?

    Quote Originally Posted by cpwill View Post
    The Congresswoman is absolutely correct that going past Aug 2 would not mean a default on our debt. That doesn't mean there wouldn't be pain - immediate reductions in government spending in other areas would have to happen. But the interest on the debt is a small percentage of our spending, and can be more than easily handled with the revenues we have coming in.
    In terms of the impact on our nation's credit, if we fail to raise the debt ceiling it really doesn't matter whether or not we continue to pay the interest on our debt as opposed to paying something else. Creditors would view it exactly the same way: a failure to make good on our obligations.

    The Treasury Secretary is required by law and the government is required by the Constitution to make sure that our debt obligations get paid first. If the Park Services get shut down and the Cowboy Poetry Festival doesn't happen this year... well, worse things have happened. As time goes by, however, the cuts will start hitting harder - DOD spending will have to be reduced (probably just to operational necessities and personnel) and so on and so forth. In the meantime, there are alot of things the government can do to provide itself money in the short term.
    The short-term consequences would be a lot more drastic than no Cowboy Poetry Festival...a LOT more. 43% of our budget would need to be suddenly eliminated. Even a "government shutdown" of all non-essential discretionary spending on par with what normally happens during budgetary standoffs would be grossly insufficient...that would only cover about half of the shortfall. To cover the rest of it, our options would be limited: Either we stop sending out social security checks, or we stop paying our soldiers, or we suddenly prohibit Medicare/Medicaid/VA patients from getting the treatment they were expecting. Any of those options are completely unacceptable.

    Mathematically, there are no other ways to stay under the debt ceiling.
    Last edited by Kandahar; 07-10-11 at 04:59 AM.
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  10. #10
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    Re: Are we screwed?

    Quote Originally Posted by Kandahar View Post
    In terms of the impact on our nation's credit, if we fail to raise the debt ceiling it really doesn't matter whether or not we continue to pay the interest on our debt as opposed to paying something else. Creditors would view it exactly the same way: a failure to make good on our obligations.
    this is incorrect. if anything, investors would realize that the United States is fundamentally coming to terms with it's overspending and debt, and then would be reassured that the same administration that screwed over bondholders in the Auto Bailouts wasn't going to do it to them. again, the Treasury Secretary is required by law and the government is constitutionally required to honor those debts in full, and bondholders know this. they aren't going to get a haircut, and they won't miss an interest payment. under no circumstances do I see bondholders viewing the US shutting down portions of itself as tantamount to a credit default. we will probably see prices fall, but that's the result of the Fed getting out of the market.

    The short-term consequences would be a lot more drastic than no Cowboy Poetry Festival...a LOT more. 43% of our budget would need to be suddenly eliminated.
    yes and no - there are alot of ways the government can shift costs and bring in extra money and reduce immediate expenditures. but those measures are mostly temporary, and we would approach actual cutting-to-former-borrowing equivalency over time (though how much probably no one can say).

    Even a "government shutdown" of all non-essential discretionary spending on par with what normally happens during budgetary standoffs would be grossly insufficient...that would only cover about half of the shortfall. To cover the rest of it, our options would be limited: Either we stop sending out social security checks, or we stop paying our soldiers, or we suddenly prohibit Medicare/Medicaid/VA patients from getting the treatment they were expecting. Any of those options are completely unacceptable.
    It's worth noting here that DOD spending =/= soldier paychecks. Boeing will take an IOU from us with an agreement to back-pay, and there is no necessity to fund ops other than wartime or humanitarian assistance for the week or month or so that it takes to get a deal struck. there will be disruptions absolutely - but it won't be the end of the world if the Marine Corps spends another 45 days shooting the SAW rather than the IAR. There are alot of (agreeably, only very temporary) cuts that can be made from DOD in a post-Aug-2 environment.




    none of which means that we will default on the debt.

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