Wow. Even The Economist is calling bullshit on the GOP

[The Hitman]

http://www.economist.com/node/18928600?fsrc=scn/tw/te/ar/shameonthem

IN THREE weeks, if there is no political deal, the American government will go into default. Not, one must pray, on its sovereign debt. But the country will have to stop paying someone: perhaps pensioners, or government suppliers, or soldiers. That would be damaging enough at a time of economic fragility. And the longer such a default went on, the greater the risk of provoking a genuine bond crisis would become.

There is no good economic reason why this should be happening. America’s net indebtedness is a perfectly affordable 65% of GDP, and throughout the past three years of recession and tepid recovery investors have been more than happy to go on lending to the federal government. The current problems, rather, are political. Under America’s elaborate separation of powers, Congress must authorise any extension of the debt ceiling, which now stands at $14.3 trillion. Back in May the government bumped up against that limit, but various accounting dodges have been used to keep funds flowing. It is now reckoned that these wheezes will be exhausted by August 2nd.

<...>

Now, however, the Republicans are pushing things too far. Talks with the administration ground to a halt last month, despite an offer from the Democrats to cut at least $2 trillion and possibly much more out of the budget over the next ten years. Assuming that the recovery continues, that would be enough to get the deficit back to a prudent level. As The Economist went to press, Mr Obama seemed set to restart the talks.
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What a crazy world we are living in.

[napi21]

1. The only good side of this is that I believe we'll see those idiot

teabaggers voted out next Nov!

[Sarah Ibarruri]

2. You think so? American people are gullible and none too bright, as evidenced every year

We can look at every year from Raygun on, and see that!

[napi21]

4. In many cases that's true, but if all the predictions of a default are

true, the consequences will devastate almost everyone, from rich to poor. People realize a big mistake was made when it affects them personally. Most rich hold at least SOME Bonds, and the bond market will die. Who knows which debts willl be paid and which won't. Godhelp us if it's SS or Medicare. Personally, I'd like to see it be federal emplyees pay because that's the only way I can see it affecting Congress. Most of them are wealthy and it won't matter, but many new Reps aren't wealthy. Some live & sleep in their office because they can't afford two homes, and depend on their paycheck for survival. I doubt they could single out just COngressional pay, which is why I said all Fed. employees.

[Sarah Ibarruri]

5. What exactly would happen in a default? What would happen first, then second, etc?

I can't visualize it.

[EC]

14. Other than checks not going out?

Is that what you mean? How about interest rates going through the roof? On credit, on mortgages, car loans etc. Just think of all those homeowners that took adjustable rates, their mortgage payments will go way up. Car lots will stop selling again, because very few people will qualify for loans....on and on, visualize the rest..

[Sarah Ibarruri]

15. Ok. Got it. nt

[napi21]

17. Not to mention SS checks not going out, Medicare payments not

made, thus most Docs would stop accepting it. Honestly, I don't want to think about it!

[The Big Vetolski]

22. No, that's scare tactics. Where's your proof? How can you say SS

checks and Medicare would stop going out? Sure they would. All a default does is lower the national credit rating as determined by the same credit-rating firms who assured us that credit-default swaps were just fine and dandy. Come ON, dude! These people have NO credibility.

[napi21]

28. The Treasury Sec. has to make the decision, and it can be anything.

It's the same way when YOU have more bills due than maney. YOU have to decide who to pay. I would hope it would begin with Federal workers, not because I have anything against Fed. workers, but because all the Congressmen are Fed workers and I want those who caused this disaster to pay a price. Second, should be the arms suppliers. Firrst should be our interest on the debt so the world knows we are not dead beats.

[The Big Vetolski]

21. So people quit paying and refuse to move out of their homes? Then

what?

[The Big Vetolski]

23. I think you're confusing this with a government shutdown. nt

[EC]

27. No, default:

http://shamaniceconomist.blogspot.com/2011/07/what-is-united-states-default-interest.html


It's the same thing as if we made a late payment or interest only payment on our credit cards, the interest rate goes way up. Pay your credit card bill late one month and see...go ahead I dare you...:rofl:


I mailed one in during a holiday week-end (not thinking that the post office would be closed, since I forgot it was a holiday weekend) and guess what? Although I never had a late payment or missed payment in over 10 years...my interest rate went from 6% to 29.9% and hasn't gone down much in the last 3 years...it's now down to 22.9% - needless to say, I don't use credit anymore except in emergencies.

[The Big Vetolski]

20. I really don't know. From what I do know, it may be something like

this:

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=103&topic_id=612689&mesg_id=612689

All of the replies have been nothing but hit and run snark. Does ANYONE KNOW? Other than the rich taking a hit, at least in the short term, what would a debt default really do? From what I can see, not much to me and mine.

[joshcryer]

10. If we default they'll blame Obama. And many liberals will blame Obama.

Especially if it impacts socialized programs the most, which is what these fascists are banking on.

[aquart]

11. I won't. It would mean he didn't cave.

Fat chance.

[joshcryer]

13. Sounds like Bohner was the one who caved.

[aquart]

16. Pity you cannot see my beatific smile.

It could soothe oceans and calm volcanoes.

[The Big Vetolski]

26. How will a debt default affect social programs? It will raise interest

rates, sure. Stocks and bonds lose their value. So what? We may get inflation, but we've survived inflation before. A debt default is not the end of the world, no matter what the millionaire talking heads, who will see their own portfolios lose value, say.

I just don't trust these corporate media bastards anymore. Anyway, I see no need to panic, man.

[PADemD]

3. Stop congressional paychecks first!

[unblock]

19. well that's completely counter-productive.

first, congress is corrupt enough without giving them a NEED to be corrupt.

second, rich people and corporations will find a way to help republicans (add the congresscritter's spouse as a consultant or member of the board of directors) and democrats will be the ones under pressure to cave in order to get paid.

sometimes things that feel good don't work out well in the long run.

[The Big Vetolski]

24. You are the second person on this thread confusing a debt default

with a government shutdown. They are two completely different things. A debt default will NOT shut down the government. Period.

[malletgirl02]

6. Conservatives and the Economist

Conservatives would have to fuck up pretty bad for the Economist to call the out.

[The Hitman]

7. Easy there with the obscene avatar

I wouldn't want you offending Ken Cuccinelli with that VA Seal...

[Sal Minella]

8. Both Alan Greenspan and David Stockman have now said the first

thing to do is repeal the Bush tax cuts. You'd think somebody would pick up a clue here somewhere?

[joshcryer]

9. If we go into default can we blame the Republicans?

[tomp]

18. blame both parties, both got us here.

when were the dems opposed to war or to borrowing from SS to pay for it, or against tax cuts for the rich, or holding banks accountable?

[spanone]

12. amen....k&r

[eallen]

25. The Economist editors are realists, not market fundamentalists