Why The US Might Default Even with Enough Tax Revenues

Discussion in 'Politics' started by Toro, Jul 14, 2011.

  1. Toro
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    Toro Diamond Member

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    This came in to my email today. It is from David Malpass of Encima Capital. I expect it will be on his website in a week.

    Default may occur because of a technical issue I hadn't known about.

    I do not expect the US to default, but I also know that there is much we don't know. Those here claiming that there is zero chance that the US will default - or that if we default it is all Obama's fault - have zero knowledge of the intricacies of the government law and finance. I don't know what the odds are of a default - 1%? 2%? 5%? 0.1%? - I don't know. But it isn't zero.
     
  2. jillian
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    jillian Princess Supporting Member

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    thank you for that. i think people wear partisan blinders that don't allow them to assess this situation rationally.
     
  3. Leweman
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    Leweman Gold Member

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    Time to start all over again.
     
  4. Quantum Windbag
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    Quantum Windbag Gold Member

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    If default is actually a real risk why won't Obama accept a short term deal to raise the debt ceiling in order avoid default?
     
  5. Dr.House
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    Dr.House Lives on in syndication!

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    A: Politics...
     
  6. jillian
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    jillian Princess Supporting Member

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    because any deal that only cuts and doesn't raise revenues isn't a deal.

    so you might want to talk to eric cantor about that one.
     
  7. Quantum Windbag
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    Quantum Windbag Gold Member

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    You sound a bit like Obama. do you always call others on what you do?
     
  8. Quantum Windbag
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    Quantum Windbag Gold Member

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    That wasn't even an answer to my question.

    Let me rephrase it for you. if default is actually such a danger why is Obama willing to see the nation go into default rather than accept a short term deal to raise the debt ceiling in order to work on a real deal without the threat of a complete economic meltdown if we do not reach a deal?
     
  9. zzzz
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    zzzz Just a regular American

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    It would seem like foreign countries may try throw a monkey wrench (where did that term come from?) into the whole default scenario by cashing in treasury notes early before the first of the month thereby causing a liquidity problem for the government. The Chinese hold a lot of US paper and yes the ploy would cost but the effect could be cause the government to default before the first of the month..
     
  10. FuelRod
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    FuelRod Gold Member

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    What do you mean I can't pay off my visa with my mastercard?
     

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