Tim Geithner Warns U.S. Debt Default Means 'Lights Out' And A New Depression

[July16th-20th]

Source: HuffPo

WASHINGTON -- If Congress fails to hike the nation's borrowing limit by Aug. 2, it will be "lights out" on the government and the economy, Treasury Secretary Tim Geithner told Democrats in their meeting Friday.

Word of that message came Monday from Senate Majority Leader Harry Reid, who said in Senate floor remarks that Geithner laid out an extremely grim scenario if Congress does not boost the country's debt ceiling from the current $14.3 trillion.

Geithner has said publicly that the Treasury has been juggling the bills since May to avoid defaulting on an payments, but would exhaust all such measures on Aug. 2.

Read more: http://www.huffingtonpost.com/2011/07/18/debt-default-lights-out-degression-tim-geithner_n_901861.html

[MannyGoldstein]

1. The current plans being discussed mean the same

We're pretty fucked, no?

[cstanleytech]

4. Depends on what plan passes really.

They all will suck a bit but the one Obama has been pushing sucks the least but has the most to gain because it would close so many of the loopholes corporations are using to avoid paying taxes.

[No Elephants]

42. A bit? LOL.

[fascisthunter]

7. Exactly...

[TomCADem]

18. No, not really. Despite suggestions that a default is not that bad...

...If the U.S. defaults, then our current situation will look like cake walk. Think. Today, interest rates are still at historical lows, but imagine adding high interest rates to the mix. So, to accept the Republican argument that the default is overrated is playing with fire.

[July16th-20th]

29. Playing with Insanity

And accepting it. We are going down BAD if we let fools like Cantor have their way.

[Demeter]

31. Well, I was Getting tired of the current Depression, Anyway

Maybe a new, Improved Depression will brighten things up around here.

[No Elephants]

35. Someone promised an improved depression?

[Demeter]

39. Falls in to the "Any Change Would Be an Improvement" Slot

We've been stuck in this "Extend and Pretend" mode for nearly two decades, if not longer. It needs some kind of resolution.

[No Elephants]

46. Ah, you subtle minx! I'd be willing to tighten my belt, if the Pentagon and our CIC do the same.

You may say that I'm a dreamer, but I'm not the only one.

[Demeter]

49. Them First

and put the banksters out of our misery

[No Elephants]

34. Again.

[Drale]

2. Ok just playing the devils advocate here for a moment

If we did default and it killed the US's credit, why pay out debts at all? Fuck the rest of the world, its not like they are going to be sending us money to help our people anyway.

[banned from Kos]

3. Because we borrow .40c on the dollar to pay current expenses.

If our credit gets whacked we can no longer borrow!

That is an Instant Austerity plan where 40% of our outflow is cut!

[Drale]

5. Thats my point

The Repukes said we would still pay our foreign debt but why? If we can't borrow anymore anyway, I say fuck the rest of the world.

[ozone_man]

11. Point is well taken.

Let's default and tell the creditors to screw off, while fully making good on social security. The heck with our credit rating, we've borrowed enough already. If we can't make ends meet, then it's time to raise taxes and cut spending. How simple is that? Start with cutting the defense budget in half.

[Drale]

14. No I'm not calling for a default but if it where to happen. /nt

[russspeakeasy]

16. "raise taxes" ?? my god man are you crazy...?

if taxes go up, the world ends. !! Spread the word.

[No Elephants]

45. Soooo, we'll see you six p.m. Saturday in Manhattan?

[Bandit]

50. shhhhh be very careful, to even mention the word could cause catastrophic damage we could never

Recover from...It is a word NEVER to be uttered out loud and NEVER EVER in front of others..:shrug:

[dixiegrrrrl]

22. Iceland did that. Had a bad couple years, but now is doing fine.

[No Elephants]

40. Cut DEFENSE? Why do you hate America? ,

With all the obese grandparents and disabled and poor people waddling around, the most obvious cuts to make are in OASDI and fuel subsidies to the poor. (Yes, shivering burns calories.) It's for their own good, really. A humanitarian effort, if you think about it long enough.

Besides, TERRA, TERRA, TERRA.

[KansDem]

56. We could always go to the payday loan places...

Maybe some title loans?

I mean, just in case we needed to raise a little cash...

[JDPriestly]

12. Why not ask Americans to start buying bonds?

The banks would suffer, but they are too big too fail and therefore too big for their own good anyway.

[No Elephants]

38. We bail out banksters, Wall Street, and Big "Health" and then we bail out China? Count me out.

[JDPriestly]

54. Good point. If they valued their currency at a fair rate,

they would be buying our products, not our debt.

Again and again, the cycle of poverty returns to debt.

And we have such a huge debt in the form of trade deficits because our currency is overvalued and the currency of countries like China is undervalued.

And why do we have such an overvalued currency, a currency so overvalued that it prices our labor out of the competition?

Because our currency is the coin used to trade oil. And the oil-rich nations insist that we protect our currency from inflation so that the money they get for their oil does not lose value.

Go back and read the Financial Times and oil industry journals from 1973-74. You will learn about the first oil crisis. I may be wrong because it is a long time and I may have forgotten where I learned this. But I think I read this in the Financial Times or at least figured it out from the articles there or in the oil journals of that time.

[No Elephants]

37. And cutting out a war or two is apparently out of the question. LOOK OUT, GRAMPS!

[AndyTiedye]

9. One of the Larger Holders of Government Debt is the Social Security System

Default on the debt and you screw Social Security.

[banned from Kos]

19. ++++ 1000! this post is so important- SS is our #1 bond holder

in real terms!

I despise the GOP for putting us in this situation!

[Samantha]

26. And that is exactly what some plan

I believe.

Sam

[No Elephants]

41. That could be fixed easily, if anyone wanted to fix it.

[blank space]

13. read this and you'll see why

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=4925854&mesg_id=4925955

[No Elephants]

44. With respect, linking to your own post on another thread is not exactly authoritative.

[No Elephants]

36. Hey, banks were too big to fail and the U.S. is a lot bigger.

[sunwyn]

6. It could possibly be the lead up to dumping the dollar as the world currency

[The Big Vetolski]

15. What's wrong with that? Oh, OIL. Oil would be sold under some

other currency. Did not Saddam Hussein want to switch to the Euro shortly before the Conquest of Iraq?

It would destroy our financial system. It would make it unaffordable to drive SUVs to the grocery store. Waaaah! Since our financial system has pretty much destroyed me and mine, I have no sympathy. Just create a new currency like the Brazilians did and move on. Screw Wall Street.

[TexDevilDog]

8. Depression? We are already in a depression

.

[nilram]

24. hmm, might become a, um, what's the word -- a Grand Depression???

I dunno.

[No Elephants]

47. If so, few will be able to afford jumbo shrimp anymore.

[Turbineguy]

10. With talk like that

you only encourage republicans. They now have a strategy for America's Final Solution.

[No Elephants]

43. They're not the only ones.

[harvey007]

17. And going deeper into debt is better?

We're tired of paying for endless wars and corporate welfare and subsidies for the rich.

We need to cut the fat and start living within our means, not on the backs of our grandchildren.

http://www.taxpayer.net/

http://www.youtube.com/watch?feature=player_embedded&v=2fOyI2mhTd8

http://www.youtube.com/watch?v=fgWAxPUHDFY

[russspeakeasy]

21. harvey, harvey, you're just not scared enough yet.

if we raise the debt limit high enough, we can have all the wars we want and our grandchildren will have full employment. Dangerous employment, but......

[Safetykitten]

20. Geithner on a stick, popping out of the clock.

[No Elephants]

48. LOL. The mental image is pretty funny. Timmeh never made me smile before. Thanks.

[peace4ever]

23. wow - our leaders have really managed our finances well, eh...

:shakes-head:

[krabigirl]

25. yeah right. nt

[July16th-20th]

27. Not sure what you mean

Are you saying that a default would not be catastophic? Just asking.

[July16th-20th]

30. Hello?

:shrug:

[midnight armadillo]

28. If Uncle Sam defaults so am I

That's right, fuck paying the mortgage and credit card bills...save the $ for whiskey, guns, and ammo.

[Rex]

32. Oh, you mean to go with this depression we are already in?

Fuck...they couldn't talk straight if their lives depended on it. Oh no...new depression, more need for price gouging by the corporate paymasters! Another round of bailouts! Dam those poor people, why do they want to live so long!!?! I thought they were misserable...why prolong it?

Be patriotic and die at age 61...a message paid for by your local GOP.

The GOP, still serving the Dark Lord.

[No Elephants]

33. See, waste in D.C. We don't need a new depression. We haven't worn out the one we already have yet.

Do Republicans want to force Obama and Timmeh to spend what's left of the stimulus money before they approve an increase?

I've seen a few being grilled on TV about their seeming willingness to bring on catastrope, whereupon, they've backed to, "August 2 is not a real deadline."

[newspeak]

51. Oh what a plan, welching on the debt

then the repugs can really get rid of SS by not honoring the bonds. Do you think that someone like IMF can come in and dictate to the american people like they're doing to Greece?

The greedy unconscionable repugs and DINOs can shove it if they think about putting grannies, children and the sick under the bus. What kind of sick feks are now running the show? We are in the asylum and the truly psychopathic are running it.

[newspeak]

52. I'm waiting for the end result

all this catastrophic theater-gave carte blanche to Little Boot's while he was busy shoveling money from the treasury to his corporate friends as fast as possible, but now we are in a catastrophe!!!!! Scare the populace so finally you can pass a "screw the most vulnerable" piece of shite while the wealthy and corporations float above the fray, again. It will be "oh well, we had to pass this because the country was going into an economic disaster", just like Little Boot's before the election, some on DU knew that we were in a financial crisis before Little Boot's made his announcement, imparting to the public we got to shovel money to my friends because they've done some naughty things by policing themselves and we got to bail them out or the country is going down.

I'm tired of this theater, and if they keep screwing the american public, one day the plebes will eventually have had enough (especially if they're all suffering the effects of these BS policies) and millions may be walking on wallstreet.

[ItNerd4life]

53. The sky is falling!!! How many times are they going to cry with this B.S.?

Not raising the debt ceiling has happened many times in the past and the sky didn't fall.

[Lorien]

55. Just more shock doctrine politics. Move along. nt

[Cool Logic]

57. On the other hand... Default 'Off the Table,' Debt Deal Will Be Struck: Geithner

http://upload.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x4925133