What happens if they don't raise the debt ceiling?

[LiberalAndProud]

What if there is no agreement? What happens to seniors and disabled who depend on Social Security checks today? What happens to our economy? To the global economy?

We believe the Rs are bluffing. Are they really?

http://www.salon.com/technology/how_the_world_works/2011/07/07/reasons_not_to_panic_on_obama_and_social_security/index.html

[nadinbrzezinski]

1. Won't be pretty... I lived through this in Mexico

and trust me... that was a walk in the park compared to the US... will definitely NOT be pretty.

[Angry Dragon]

2. We just slide quickly down the hole we have been sliding

into for the last ten years .............

And you might have to learn a new foreign language

[napi21]

3. I believe they're bluffing too, and I also believe the Pubs will

at some point finally come to some agreement and vote to raise the debt ceiling as Congress SHOULD have done well over a month ago. Noone seems to know for sure what would happen to the World economy. Everyone, stock brokers included, that I've soken to about this have all said they don't know because it's never happened before, but everyone believes the result would be disaterous. Interest rates would skyrocket, the current debt would explode because it would cost us so much more to borrow money, and neither of those things reflect the impact on those whose life depends on getting their checks.

[supraTruth]

4. Tell the President to tell boehner&cantor that WILL instruct his Treasury Secretary to CUT

CONgressional paychecks FIRST if the Aug. DEADline is missed!

HIT THEM in the ONLY place THEY understand, their POCKETBOOKS!

GAME OVER!

http://supratruth.newsvine.com/

[JHB]

13. Not them. You can count on the congressmen to be able to get "loans"...

...to keep them afloat.

Draw up a list of what companies, projects, and programs that will have their payment deferred until the the issue is resolved, and sort it by state and congressional district. And inform the people who will be getting a raincheck instead of a paycheck why this has become necessary, and that their congressperson has the power to do something about it.

If you want to break up the congressional Republican lockstep voting phalanx, youhave to put pressure on them as individuals.


It might also be worth pointing this (Geithner and Obabma effectively deciding who gets paid on time) out to the teabaggers:

"You've spent the last two years calling Obama a socialist, corrupt, every name in the book and more. And now you want to hand him fiat power over the budget?"

[RZM]

5. I find it difficult to believe they would let the deadline expire without raising the debt limit

These are veteran politicians who know they would have to own whatever happened after and I don't see them taking that risk. Of course, maybe their pollsters/researchers are telling them that Obama will receive the lion's share of the blame . . . but I doubt it. I think they are playing chicken and are praying that Obama backs down first.

[girl gone mad]

6. Probably not that much, to be honest.

A sovereign government that issues debt in its own fiat currency can only default by choice. My guess is the bond vigilantes will consider this event merely a temporary political default, not a serious or consequential technical default. As such, the risk premium will be minimal.

[RZM]

8. That's an interesting argument

Hadn't thought about it like that, but it makes sense.

[Fool Count]

12. That would probably be the case were it not for all the

derivatives contracts triggered by technical default on US Government debt. There is no way to avoid the declaration of default, if a coupon payment on
any US Treasury bond is missed due to failure to increase the debt ceiling. What kind of avalanche that would cause, I wouldn't even dare to guess,
but it wouldn't be good for the world economy.

[Bandit]

14. Would you call an interest rate increase of 1% minimal?

Because that is the most likely outcome. One percent increase in interest rates would cause our National Debt to rise about a trillion dollars in a ten year period. Not exactly minimal..

[nevergiveup]

7. There is a sizable group of Rs who are not bluffing.

Obama is in a position where he must someway negotiate with a bunch of terrorists who control the House of Representatives. No matter how this goes down it is going to suck.

[RaleighNCDUer]

9. There's your solution. People who take hostages are terrorists.

We send terrorists to Gitmo.

With the terrorists gone, we raise the debt limit.

Game over.

[whosinpower]

10. It is understandable that you would be concerned

with seniors and those on SS, etc.

BUT - beleive me when I tell you - Wall street will not let this occur. Not for the the seniors or those on SS - but with all its assets and well - US debt, treasuries, etc.

It will not happen - and even if it does happen, I do not believe that the sky would fall. This would be considered a political issue - not a structural one. That is that the faith of the US government to pay its debts would continue even if its politicians played ideological games.

And the GOP will have shot their nuke - and it will fizzle on them - and the weapon will then be useless.

[Posteritatis]

11. The earth will plunge directly into the sun. (nt)