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Yellen: US on track to default on national debt in October

Doc7505

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Yellen: US on track to default on national debt in October

8 Sep 2021 ~~ By Sylvan Lane
Treasury Secretary Janet Yellen on Wednesday warned congressional leaders that the U.S. is on track to default on the national debt in October if the White House and Congress are unable to raise the debt limit.
In a Wednesday letter, Yellen said that the Treasury Department would likely run out of cash and exhaust “extraordinary” measures to keep the federal government within its legal borrowing limit at some point next month.
"Once all available measures and cash on hand are fully exhausted, the United States of America would be unable to meet its obligations for the first time in our history," Yellen said.
“Given this uncertainty, the Treasury Department is not able to provide a specific estimate of how long the extraordinary measures will last. However, based on our best and most recent information, the most likely outcome is that cash and extraordinary measures will be exhausted during the month of October,” she continued.
Yellen wrote the letter to Speaker Nancy Pelosi (D-Calif.), House Minority Leader Kevin McCarthy (R-Calif.), Senate Majority Leader Charles Schumer (D-N.Y.) and Senate Minority Leader Mitch McConnell (R-Ky.).
The Treasury Department has taken so-called extraordinary measures to prevent the U.S. from defaulting on the national debt since the federal debt limit was reimposed on Aug. 1. If the Treasury Department runs out of ways to stave off a default without borrowing more money, the inability of the U.S. to pay its debts could send debilitating shockwaves through the financial system.
Yellen urged lawmakers for months to raise the debt limit before it was reimposed in August, warning that a delay could "cause irreparable damage to the U.S. economy and global financial markets."
She has since pleaded with Congress to give Treasury the ability to pay debts already approved by previous presidents and congressional majorities.
"Waiting until the last minute to suspend or increase the debt limit can cause serious harm to business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States," Yellen wrote.
"At a time when American families, communities, and businesses are still suffering from the effects of the ongoing global pandemic, it would be particularly irresponsible to put the full faith and credit of the United States at risk."
Even so, Democrats and Republicans are locked in a stalemate over who bears responsibility for protecting the full faith and credit of the U.S.
The White House and Democratic leaders are planning to tie a debt limit increase to another must-pass government funding bill, daring Republicans to trigger both a government shutdown and a default by opposing the measure.
“We fully expect Congress to act promptly to suspend the debt limit and protect the full faith and credit of the United States and we expect them to do that in a bipartisan way just as they did three times during the prior administration," said a White House official on Tuesday.
But Republicans have refused to raise the debt ceiling unless spending cuts and debt reduction programs are attached.
Democrats could also try to jam a debt ceiling increase into the pending $3.5 trillion infrastructure, climate and social services bill they are attempting to pass through budget reconciliation. Passing the bill would only require simple majorities in each party, but the package may not be ready for a vote before the U.S. breaches the debt limit.
Yellen has warned for months that the U.S. could default as soon as October, explaining that the economic impact and fiscal response to the coronavirus pandemic makes it hard to determine exactly when. Earlier analyses from the nonpartisan Congressional Budget Office and the Bipartisan Policy Institute — a think tank that closely tracks the debt limit — found that the U.S may not reach a default until November.


Comment:
Is it any wonder that the Bai Dung Administration is running out of money?
While Democrats complained the tax cuts of the last administration claiming it benefitted only the rich, most Americans were happy to see their taxes reduced.
Now Democrats are calling for everyone to pay their fair share. As usual The Ultra Rich aznd lesser rich will pay little while the average Joe will carry the load in taxation.
Under this administration that is now gone thanks to the inflation caused in the last 8 months along with the lack of jobs and Democrats continuing the massive payouts to keep people home. Until people go back to work things will remain the same.... BAD.
Joey Xi, Pelosi and Schumer have been pushing the $3.5 Trillion Infrastructure boondoggle that has little to nothing to do about infrastructure.
Among other things the debacle of August retreat from Afghanistan will not go away and this may hurt the chances for the passage of the Bill. As it is two Democrat Senators Joe Manchin and Krysten Sinema are not in favor and there are others that may also bolt from the crowd to vote Nay when the time comes.
ATST, perhaps we should take the time to research and see who are the richest politicians on both sides of political Parties.
Obviously Joey Xi is counting on the short memory of the population and is pushing forward hoping he's right. This time I don;t think people will forget to quickly and his approval rate will remain in the mid to low thirties.
 

ESDRAELON

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warning that a delay could "cause irreparable damage to the U.S. economy and global financial markets."
I was reading this, earlier and when I got to that sentence, I broke out laughing at the sheer lack of self-awareness these people seem to display. I mean, who are they trying to kid? The damage was done and inescapable about 10-15 Trillion ago. The Turtle knows that Pelosi and Schumer realize they can pass this without any Republicans signing off. He also knows they absolutely do not want to take that kind of risk and they seem certain that the Rs will fold like a cheap suit, the way they always have before.

It's always been such a fun process for the Democrats. They love the "government shutdown" crisis made for TV and for beating Republicans like rented mules because the media whores that service the Democrats can always be counted on to trash the mean old conservatives who want to freeze or starve old folks and eat babies for dessert.
THIS time around, I hope old Nancy soils her depends and chips a false tooth on whatever liquor bottle she's slamming straight in the hours leading up to DEFAULT *gasp*
Republicans hold all the cards this time, baby. They'll likely bend over as usual but this time, those who do it will pay come election time.
 

Smokin' OP

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Hypocritical, Trumptards whining about the debt ceiling, every time a democrat is in office, like clockwork.

During Donald Trump's term -- a four-year period in which Republicans forgot to pretend to care about the deficit and spending concerns -- Congress raised the debt ceiling three times without incident. Two years ago, Trump went so far as to declare, "I can't imagine anybody using the debt ceiling as a negotiating wedge." The Republican went on to describe the debt limit a "sacred thing in our country."
 

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Yellen: US on track to default on national debt in October

8 Sep 2021 ~~ By Sylvan Lane
Treasury Secretary Janet Yellen on Wednesday warned congressional leaders that the U.S. is on track to default on the national debt in October if the White House and Congress are unable to raise the debt limit.
In a Wednesday letter, Yellen said that the Treasury Department would likely run out of cash and exhaust “extraordinary” measures to keep the federal government within its legal borrowing limit at some point next month.
"Once all available measures and cash on hand are fully exhausted, the United States of America would be unable to meet its obligations for the first time in our history," Yellen said.
“Given this uncertainty, the Treasury Department is not able to provide a specific estimate of how long the extraordinary measures will last. However, based on our best and most recent information, the most likely outcome is that cash and extraordinary measures will be exhausted during the month of October,” she continued.
Yellen wrote the letter to Speaker Nancy Pelosi (D-Calif.), House Minority Leader Kevin McCarthy (R-Calif.), Senate Majority Leader Charles Schumer (D-N.Y.) and Senate Minority Leader Mitch McConnell (R-Ky.).
The Treasury Department has taken so-called extraordinary measures to prevent the U.S. from defaulting on the national debt since the federal debt limit was reimposed on Aug. 1. If the Treasury Department runs out of ways to stave off a default without borrowing more money, the inability of the U.S. to pay its debts could send debilitating shockwaves through the financial system.
Yellen urged lawmakers for months to raise the debt limit before it was reimposed in August, warning that a delay could "cause irreparable damage to the U.S. economy and global financial markets."
She has since pleaded with Congress to give Treasury the ability to pay debts already approved by previous presidents and congressional majorities.
"Waiting until the last minute to suspend or increase the debt limit can cause serious harm to business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States," Yellen wrote.
"At a time when American families, communities, and businesses are still suffering from the effects of the ongoing global pandemic, it would be particularly irresponsible to put the full faith and credit of the United States at risk."
Even so, Democrats and Republicans are locked in a stalemate over who bears responsibility for protecting the full faith and credit of the U.S.
The White House and Democratic leaders are planning to tie a debt limit increase to another must-pass government funding bill, daring Republicans to trigger both a government shutdown and a default by opposing the measure.
“We fully expect Congress to act promptly to suspend the debt limit and protect the full faith and credit of the United States and we expect them to do that in a bipartisan way just as they did three times during the prior administration," said a White House official on Tuesday.
But Republicans have refused to raise the debt ceiling unless spending cuts and debt reduction programs are attached.
Democrats could also try to jam a debt ceiling increase into the pending $3.5 trillion infrastructure, climate and social services bill they are attempting to pass through budget reconciliation. Passing the bill would only require simple majorities in each party, but the package may not be ready for a vote before the U.S. breaches the debt limit.
Yellen has warned for months that the U.S. could default as soon as October, explaining that the economic impact and fiscal response to the coronavirus pandemic makes it hard to determine exactly when. Earlier analyses from the nonpartisan Congressional Budget Office and the Bipartisan Policy Institute — a think tank that closely tracks the debt limit — found that the U.S may not reach a default until November.


Comment:
Is it any wonder that the Bai Dung Administration is running out of money?
While Democrats complained the tax cuts of the last administration claiming it benefitted only the rich, most Americans were happy to see their taxes reduced.
Now Democrats are calling for everyone to pay their fair share. As usual The Ultra Rich aznd lesser rich will pay little while the average Joe will carry the load in taxation.
Under this administration that is now gone thanks to the inflation caused in the last 8 months along with the lack of jobs and Democrats continuing the massive payouts to keep people home. Until people go back to work things will remain the same.... BAD.
Joey Xi, Pelosi and Schumer have been pushing the $3.5 Trillion Infrastructure boondoggle that has little to nothing to do about infrastructure.
Among other things the debacle of August retreat from Afghanistan will not go away and this may hurt the chances for the passage of the Bill. As it is two Democrat Senators Joe Manchin and Krysten Sinema are not in favor and there are others that may also bolt from the crowd to vote Nay when the time comes.
ATST, perhaps we should take the time to research and see who are the richest politicians on both sides of political Parties.
Obviously Joey Xi is counting on the short memory of the population and is pushing forward hoping he's right. This time I don;t think people will forget to quickly and his approval rate will remain in the mid to low thirties.
Debt ceiling?

LOL.

Oh, you mean the debt sky.

Well guess what, the sky goes on forever and ever and ever and ever and ever and ever......................................................................
 

Natural Citizen

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Firstly, the 'debt ceiling' is a delusion.

There is interest due on every bond, and there is interest due on every one of those loans that banks make. That means that there is interest due on every Federal Reserve Note in existence.

Let's ask a question. If you borrow the very first Federal Reserve Note in existence and you promise to pay it back plus another Federal Reserve Note's worth of interest, where do you get the second Federal reserve Note to pay the interest? The answer is that you have to borrow that Federal Reseve Note into existence and promise to pay it back with interest as well.

So, now there are 2 Federal Reserve Notes in existence, but you now owe 4. And so on, and so on, and so on, and so on. It keeps happening over and over and over again.

The result is that there is never enough 'currency' to pay the debt. There is always more debt in the system than there is 'currency' in existence to pay the debt. Therefore the entire system is impossible. It is finite. It will come to an end one day. Why we're practically there. Covid served as a very convenient and timely distraction from the inevitable. And they were able to print a boat load of currency to delay the inevitable while everyone was looking the other way. And there's much to say about that.

Think about it this way. What would happen if the government stopped borrowing to do deficit spending? Are the payments on those Treasury bonds going to stop? What would happen if the public stopped borrowing and going deeper into debt? Are your house and car payments going to stop? No. They're not. There is a payment due every month on the principal plus the interest on every Federal Reserve Note in existence and those payments do not stop. If we stop borrowing, then no new 'currency' is created to replace the 'currency' that we used to make those payments. Whether you're making a payment on a loan or paying a tax to make a payment on a Treasury bond, the portion of the payment that goes to pay off the principal extinguishes that portion of the debt. BUT...the debt also extinguishes the 'currency.' When currency and debt meet, they destroy each other. If we just pay off the principal only, all of the loans and Treasury bonds that exist, the entire 'currency' supply vanishes. So, if we don't go deeper into debt every year, the whole thing goes into a deflationary collapse under the weight of those payments.

People always talk about balancing the budget, bringing down the debt, and living within our means, but they don't understand that this is deflationary. It is impossible to do under our current monetary system without collapsing the entire economy. This is why any talk of a debt ceiling is not only ridiculous, it's delusional. The system is designed to require ever-increasing levels of debt just to continue. And that's why politicians will always kick the can down the road and raise the so-called debt ceiling over and over again until the whole system finally collapses under its own weight. And that's really all that Yellen is doing by raising alarms to raise the so-called 'debt ceiling'. She's just kicking the can down the road so the whole system doesn't crash on the current administration's watch.

But...It will crash. Just as sure as God made little green apples.

People should be preparing to survive the coming crack-up boom. Because it's coming.

For sake of clarity...

 
Last edited:

Natural Citizen

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I'm glad someone posted this, btw. I was gonna start a topic but glad I did a search first.

Saved me some typing.
 

Natural Citizen

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The other thing, and it's getting a bit deeper into things, is that now we have to pay taxes just to be able to have a monetary system.

Keynesians have literally trashed the entire system.

Yet so many argue over socialism and capitalism. That's a waste of time and energy.

What people should be pissed off about are the Keynesians. Keynesianism is crushing the prosperity of the nation. Eventually freedom itself, as it's the surest pathway to Marxism and eventually communism.

While everyone is arguing redundantly over socialism and capitalism, the Keynsians are laughing all the way to the central bank while their policies put the middle class and seniors in the poor house and in the shadow of the authoritarian hammer.
 
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wamose

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Forget about this 3.5 trillion of insane spending on the infrastructure bill and find at least 15% in spending cuts and then we'll consider raising the debt ceiling.
 

Toddsterpatriot

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Firstly, the 'debt ceiling' is a delusion.

There is interest due on every bond, and there is interest due on every one of those loans that banks make. That means that there is interest due on every Federal Reserve Note in existence.

Let's ask a question. If you borrow the very first Federal Reserve Note in existence and you promise to pay it back plus another Federal Reserve Note's worth of interest, where do you get the second Federal reserve Note to pay the interest? The answer is that you have to borrow that Federal Reseve Note into existence and promise to pay it back with interest as well.

So, now there are 2 Federal Reserve Notes in existence, but you now owe 4. And so on, and so on, and so on, and so on. It keeps happening over and over and over again.

The result is that there is never enough 'currency' to pay the debt. There is always more debt in the system than there is 'currency' in existence to pay the debt. Therefore the entire system is impossible. It is finite. It will come to an end one day. Why we're practically there. Covid served as a very convenient and timely distraction from the inevitable. And they were able to print a boat load of currency to delay the inevitable while everyone was looking the other way. And there's much to say about that.

Think about it this way. What would happen if the government stopped borrowing to do deficit spending? Are the payments on those Treasury bonds going to stop? What would happen if the public stopped borrowing and going deeper into debt? Are your house and car payments going to stop? No. They're not. There is a payment due every month on the principal plus the interest on every Federal Reserve Note in existence and those payments do not stop. If we stop borrowing, then no new 'currency' is created to replace the 'currency' that we used to make those payments. Whether you're making a payment on a loan or paying a tax to make a payment on a Treasury bond, the portion of the payment that goes to pay off the principal extinguishes that portion of the debt. BUT...the debt also extinguishes the 'currency.' When currency and debt meet, they destroy each other. If we just pay off the principal only, all of the loans and Treasury bonds that exist, the entire 'currency' supply vanishes. So, if we don't go deeper into debt every year, the whole thing goes into a deflationary collapse under the weight of those payments.

People always talk about balancing the budget, bringing down the debt, and living within our means, but they don't understand that this is deflationary. It is impossible to do under our current monetary system without collapsing the entire economy. This is why any talk of a debt ceiling is not only ridiculous, it's delusional. The system is designed to require ever-increasing levels of debt just to continue. And that's why politicians will always kick the can down the road and raise the so-called debt ceiling over and over again until the whole system finally collapses under its own weight. And that's really all that Yellen is doing by raising alarms to raise the so-called 'debt ceiling'. She's just kicking the can down the road so the whole system doesn't crash on the current administration's watch.

But...It will crash. Just as sure as God made little green apples.

People should be preparing to survive the coming crack-up boom. Because it's coming.

For sake of clarity...


There is interest due on every bond, and there is interest due on every one of those loans that banks make. That means that there is interest due on every Federal Reserve Note in existence.

I owe interest on the $20 FRN in my wallet?
What rate do I owe? Who do I owe it to? How do they collect?
 

Ringo

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Yellen: US on track to default on national debt in October

No, they can simply print more green papers and thereby distribute inflation throughout the Earth.
 

ESDRAELON

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People should be preparing to survive the coming crack-up boom. Because it's coming.
I think it will be triggered intentionally at a time of their choosing and since we've been set against each other for a few years now, they expect the bloodletting to reduce our population significantly. All they have to do is collapse the economy and the food shortages will take care of the rest. Inner-cities will be like feeding time at the zoo. The survivors will fan out over the land like a plague of locusts and they'll do whatever it takes to steal from those who have prepared.
 

ESDRAELON

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The other thing, and it's getting a bit deeper into things, is that now we have to pay taxes just to be able to have a monetary system.

Keynesians have literally trashed the entire system.

Yet so many argue over socialism and capitalism. That's a waste of time and energy.

What people should be pissed off about are the Keynesians. Keynesianism is crushing the prosperity of the nation. Eventually freedom itself, as it's the surest pathway to Marxism and eventually communism.

While everyone is arguing redundantly over socialism and capitalism, the Keynsians are laughing all the way to the central bank while their policies put the middle class and seniors in the poor house and in the shadow of the authoritarian hammer.
Seems the collapse is inevitable but we'll see how individual states handle the aftermath.
 

Natural Citizen

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Seems the collapse is inevitable but we'll see how individual states handle the aftermath.

Texas is preparing for the crack-up.


Other states will be watching this, no doubt. Utah comes to mind. And a few others.
 

Toddsterpatriot

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Texas is preparing for the crack-up.


Other states will be watching this, no doubt. Utah comes to mind. And a few others.

Wow!
Nearly $5 worth of bullion per citizen.

Texas is ready for anything!!!!
 

HenryBHough

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Oh why not!

I mean, isn't it de-facto default when the currency is so debased by inflation that "repayment of the debt" is made with worthless paper?

Not even good for wiping one's ass as every knows money is jutf filthy lucre!

No matter whether it comes by congressional inaction or currency corruption the result is still that the value of the debt is never going to be repaid.

Gonna be fun to see how much smack you liberals can buy from Mexico when they won't accept your worthless scraps of paper.
 

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