Can someone please explain to me "why not raising the debt limit" is catastrophic

[Contumacious]

Its a default. The united states has never defaulted before..

Incorrect.

The United States declared bankruptcy in 1935.

The Federal Reserve Board had issued to many notes whick back then were redeemable in Gold and Silver.

There were so many notes in circulation that the treasury could not redeem them. FDR forced SCOTUS to declare that fedgov didn't have to redeem the notes domestically.

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Weve already discussed this you tool. That market decides a default. One or a few persons refusal to accept their form of reimbursement doesnt mean the entire market had judged the institution to be insolvent, which is the definition of a default.

Gold owners as criminals

The evil which Field predicted came into full force during the Franklin Roosevelt administration. In the midst of his New Deal, the federal government committed one of the most heinous acts in history when it nationalized gold in the United States and declared it a felony for any American to own gold in the future. Americans were required to turn their gold in to the federal government and receive in return the federal government’s paper money, which the government had recently devalued.

Today, given that many people believe that the federal government should have the omnipotent power to control and regulate people’s economic activities and their possessions, that might not come as such a surprise.

In the early 1930s, however, that the federal government could do what socialist and communist governments were doing in Germany, Italy, and the Soviet Union came as a mighty shock to many people’s understanding of America’s heritage of private property and economic liberty. At that time, many Americans still believed in Americanism — in the principle that a person’s possessions were his and that the government could not arbitrarily take them away, as governments were doing in Nazi Germany, fascist Italy, and the communist Soviet Union.

Moreover, not only was gold ownership declared illegal, the government went one step further: it nullified all “gold clauses,” both in private and government contracts.

Jesus christ your just pissed that the courts essentially gave congress control over the monetary system. No one lost any buying power, no one lost any wealth. Your like a little kid that wants to do everything his parents tell him he cant for no reason. "I want money backed by gold", well too damn bad you fucking loon.

As always, Heil Hitler.

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[cbirch2]

I could go find an article in support of communism and copy pasta it into a response but that doesnt give it any credit.

Think about that next time you futilely steal someone elses work.

 

[cbirch2]

Moreover, not only was gold ownership declared illegal, the government went one step further: it nullified all “gold clauses,” both in private and government contracts. [/B]

Jesus christ your just pissed that the courts essentially gave congress control over the monetary system. No one lost any buying power, no one lost any wealth. Your like a little kid that wants to do everything his parents tell him he cant for no reason. "I want money backed by gold", well too damn bad you fucking loon.

As always, Heil Hitler.

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Like ive been saying the entire time, just because a handful of people refuse the form of payment the received doesnt mean the markets reacted as if the government had defaulted. Because it didnt. It provided payment equivalent to its debts. I dont know how you dont get this. Is economics too complicated for you?

 

[RDD_1210]

Good thread with good info. Nice to see the name callers (for the most part) staying away. Thanks!

 

[Google]

Faced with the undeniable fact that a large majority of Americans are against raising the debt ceiling--rejecting the fear-mongering tactics that this administration has employed so well to achieve nearly all of its legislative successes—every leftist on this board quickly parrots the assertion that not raising the debt limit will inevitably cause the government to default on its debt.


On average the US government takes in $177 billion/month. It takes, again this an average, $19 billion/month to service the nation’s various debt obligations. So that means that if the debt ceiling isn’t raised the country can service the debt and have $158 billion left over.

This is a fact: the government’s monthly income dwarfs its debt obligations. The federal government could pay all interest on Treasury Bonds out of its monthly revenues and by doing so reduce the debt and lower us from the ceiling instead of breaking through it.

64% of Americans are against raising the debt limit. 64% are against this president, even with threats of apocalypse. The left is losing this issue, and I can't wait until 2012!!!

 

[cbirch2]

Faced with the undeniable fact that a large majority of Americans are against raising the debt ceiling--rejecting the fear-mongering tactics that this administration has employed so well to achieve nearly all of its legislative successes—every leftist on this board quickly parrots the assertion that not raising the debt limit will inevitably cause the government to default on its debt.


On average the US government takes in $177 billion/month. It takes, again this an average, $19 billion/month to service the nation’s various debt obligations. So that means that if the debt ceiling isn’t raised the country can service the debt and have $158 billion left over.

This is a fact: the government’s monthly income dwarfs its debt obligations. The federal government could pay all interest on Treasury Bonds out of its monthly revenues and by doing so reduce the debt and lower us from the ceiling instead of breaking through it.

64% of Americans are against raising the debt limit. 64% are against this president, even with threats of apocalypse. The left is losing this issue, and I can't wait until 2012!!!

Lol your totally delusional. Polls about the debt ceiling are pointless because the american people dont know what it means, they think we can just not spend more. 80% of americans are for raising taxes on rich people though, what do you have to say about that?

The debt ceiling has to be raised. I explained that on the last page you kook. Not raising the debt limit means cutting the federal budget by 50% immediately. Thats not even possible. Your just so brainwashed by conservative rhetoric that you dont know the facts. Please explain to me how your going to eliminate 50% of the entire budget by august 2nd. That would be pretty cool to see.

 

[cbirch2]

This is a fact: the government’s monthly income dwarfs its debt obligations. The federal government could pay all interest on Treasury Bonds out of its monthly revenues and by doing so reduce the debt and lower us from the ceiling instead of breaking through it.

This is a fact: You just proved you dont know anything about the debt limit at all

1. To not go into debt further the federal budget has to be cut by 45%.
2. Making yearly spending equal yearly revenue is only part of the problem. We have outstanding obligations to our creditors that we have to make sure we pay. Paying interest is different from making actual payments. So when your saying "We can just pay interest" your totally leaving out the actual payments we are required to make.
3. Paying just interest on debt isnt going to lower it, its going to keep it the same assuming we dont borrow at all. To lower the debt we have to immediately operate on a surplus. Thats cutting 40% of the entire budget. Please provide your budget. What percent of their current revenue will social security, medicare, and the military receive under your new super-ultra-austerity-package?

 

[Contumacious]

A Run on the US Government Is Coming

It's deserved and inevitable, says Mike Rozeff.

Since the dollar is also a credit instrument, it is subject to credit risk. What happens when trust in the dollar drops sharply? What happens to all these financial institutions being propped up by creating dollars when trust in the dollar fails? That is when the financial system cracks wide open. That is when governments will be tempted to freeze funds in banks and prevent withdrawals the way that Argentina did. That is when the FED will be tempted to guarantee almost any institution against cash withdrawals, but when such a guarantee will be ignored. That is when gold will soar in price against the dollar and all other fiat currencies.

I am describing a run on the United States government. This will be a withdrawal of cash financing from the U.S. government. This is the ultimate credit crisis upheaval. This will be accompanied by mass social unrest and political reorganization. Stock and bond prices will fall sharply. The S & P 500 will lose at least 60 percent. Government bonds will yield at least 10 percent. This event is foreseeable. It is also avoidable, but not without much pain and travail. Hence, although foreseeable and avoidable, it may still occur."

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[cbirch2]

A Run on the US Government Is Coming

It's deserved and inevitable, says Mike Rozeff.

Since the dollar is also a credit instrument, it is subject to credit risk. What happens when trust in the dollar drops sharply? What happens to all these financial institutions being propped up by creating dollars when trust in the dollar fails? That is when the financial system cracks wide open. That is when governments will be tempted to freeze funds in banks and prevent withdrawals the way that Argentina did. That is when the FED will be tempted to guarantee almost any institution against cash withdrawals, but when such a guarantee will be ignored. That is when gold will soar in price against the dollar and all other fiat currencies.

I am describing a run on the United States government. This will be a withdrawal of cash financing from the U.S. government. This is the ultimate credit crisis upheaval. This will be accompanied by mass social unrest and political reorganization. Stock and bond prices will fall sharply. The S & P 500 will lose at least 60 percent. Government bonds will yield at least 10 percent. This event is foreseeable. It is also avoidable, but not without much pain and travail. Hence, although foreseeable and avoidable, it may still occur."

.

Do you just have a digital library of libertarian talking points? The world isnt going to go back to a gold based currency, capitalism wont allow it. The positives of dealing entirely in some form of credit are just too massive.

 

[NYcarbineer]

Faced with the undeniable fact that a large majority of Americans are against raising the debt ceiling--rejecting the fear-mongering tactics that this administration has employed so well to achieve nearly all of its legislative successes—every leftist on this board quickly parrots the assertion that not raising the debt limit will inevitably cause the government to default on its debt.


On average the US government takes in $177 billion/month. It takes, again this an average, $19 billion/month to service the nation’s various debt obligations. So that means that if the debt ceiling isn’t raised the country can service the debt and have $158 billion left over.

This is a fact: the government’s monthly income dwarfs its debt obligations. The federal government could pay all interest on Treasury Bonds out of its monthly revenues and by doing so reduce the debt and lower us from the ceiling instead of breaking through it.

64% of Americans are against raising the debt limit. 64% are against this president, even with threats of apocalypse. The left is losing this issue, and I can't wait until 2012!!!

And 60% would rather keep Medicare and SS benefits as they are rather than reduce the budget deficit.

Health Policy (2)

 

[Sactowndog]

What sacrifies do you think we can make?

Are we going to make drastic cuts to military and every entitlement program, implement all those changes in full in two weeks, and then collect enough savings from the time those are implemented until august 2nd to run the government on a budget surplus for the rest of the year?

I can understand not knowing the niceties of it but the general numbers simply make not raising the debt limit impossible. It has to be raised.

you can't make drastic cuts in the military even if you wanted to. Best case you immediately bring everyone home you still have to pay to get them home. That all costs money. I am guessing we are also contractually obligated on some of the defense contracts which means we would have default to get out of them.

The only option will be drastic cuts to entitlements and that means social security and medicare. Republicans figure they will pin the cuts on Obama and already have their propaganda machine in full force making their case.

 

[Wiseacre]

Look, for better or worse government spending is a significant part of our GDP right now, and to decide not to raise the debt ceiling at this time when the economy is so fragile would be most unwise. I share the sentiment to reduce spending, but to do so in such a drastic move would be a real hit that isn't necessary. There's no reason why we can't work our way out of the deficits by a few hundred billion at a time, so as to avoid a major shock.