Who loses the most if the debt ceiling is not raised? RICH REPUBLICANS

[Cronus Protagonist]

Ergo this whole GOP threat to forever taint the US's credit rating is total, complete and utter bullshit.

We should walk away from the table and let them decide themselves. Up or down: Raise the debt limit. All Democratics vote "present".

Problem solved.

[LetTimmySmoke]

1. That's a terrible idea.

It sounds fine over the short term, but is stupid over the long term. The voters don't want to see the Dems do it.

Remember - just because the GOP does stupid things doesn't mean that Dems should do so too.

[Cronus Protagonist]

6. Strange assertions there

1. How do you know the voters don't want the Democratics to do this?
2. How is it stupid over the long term and not in the short term?

And, of course, I do not select out stupid things that the Republcans do so that we can do them too, which is an odd, and unsupported accusation.

[emsimon33]

57. But they already do

Michelle must wear a "I'm with Stupid" tee shirt under her clothes.

[nadinbrzezinski]

2. The country... the WHOLE COUNTRY

people really have no clue what default could means... really...

[Cronus Protagonist]

7. I can tell you it means FUCK ALL to me

Really. And I think it's a true fact that the people with most of the money will be hurt the most, and they're the same ones posturing that they're going to allow a default.

If the Democratics and Obama cannot tell when they're being sold a bill of goods and threatened with empty threats, I'm available as a consultant.

[nadinbrzezinski]

13. Having lived through one I can tell you that you are dead wrong

the people with the most cash will be able to weather this the best. So no new jet or cruise this year? People will starve, and it will not be the O'Reilly or Becks of the world.. it will be your neighbor.

There are days I wonder if people realize (no they don't) what they are asking...

[Cronus Protagonist]

22. The debt ceiling will be raised

It was invented for the purpose of taking more from the poor. If the poor remove their chips from the table, the debt limit will still be raised. Ergo the complaint you have is moot.

[nadinbrzezinski]

29. It was invented in 1912...

and no, I will not rest easy until it is raised.

JAYZUS this nihilism from BOTH SIDES is just damn crazy.

[Cronus Protagonist]

36. nihilism?

None here. Look it up.

http://en.wikipedia.org/wiki/Nihilism

[nadinbrzezinski]

45. Yes on BOTH SIDES

I am using it in a very accurate accurate way.

Look up American Exceptionalism while you are at it.

[Cronus Protagonist]

69. Well, I disagree on your interpretation of nihilism

I offered a solution to a political propaganda ploy, not a nihilistic philosophy.

[A Simple Game]

82. Are you arguing against yourself?

If the poor lose and the rich lose, who wins?

If the purpose is to take from the poor, who gets what is taken?

[Cronus Protagonist]

86. Gosh, are you really having that much difficulty understanding this?

There will be no default. It's a con. A sham. The debt ceiling is something that Republicans care not a whit about when the president is Republican, and neither do the Democratics. The whole gloom and doom scenarios that you and your buddies are promoting are all moot. There will be no default.

And the purpose is to take from the poor by removing benefits and entitlements using this bogus bullshit as a whip and an excuse (depending which "side" you're pretending to represent).

[A Simple Game]

81. I don't know where this rich will suffer meme got started, do you have a source?

In my opinion the rich may suffer (very little) short term.

One of the consequences of defaulting is that interest rates, including government bond rates, will go up significantly. When the debt ceiling is raised, and it will be eventually, the government will have to pay much higher interest rates on it's bonds. When the rich, who own a lot of our debt, cash in their low interest bonds, they will then buy high interest bonds. Short term problem solved.

[JDPriestly]

43. I'd rather see a total default than a partial default on Social Security.

A total default would harm everyone.

A partial default only hurts those of us who are on Social Security and cannot get jobs any more.

A total default, as the OP says, would hurt all bond holders -- including many rich people.

The debt of the federal government is 58.9% of GDP.

The rest of the 92.7% debt is at the state level.

Here in California much of it is due to the fact that taxes cannot be raised. All we can do is borrow money to fund what we have to have.

Schwarzenegger served as governor close to 8 years with the agenda of cutting the fat in government. All he did was run up debt. I assume he could not find fat to cut.

That is how we got such a huge debt -- states had to borrow money to keep basic services going.

If the debt ceiling is raised, what then?

The Republicans absolutely refuse to pay higher taxes. How will we handle that?

[nadinbrzezinski]

49. The GOP is fracturing...

so the crisis will lead to sooner or later HIGHER taxes... this is not sustainable.

Either that... or (as I have said before) the empire is falling apart and the country will break apart into three to five successor states. Some will be more ahem... somalia like than others. Hope you land in a successor state that is far more progressive.

[JDPriestly]

52. I'm in California.

Southern California. I think you are too maybe.

We would be progressive and capable of working together as a people.

I hope that the country stays united through this. But the Republicans seem bent on destroying everything.

Strange isn't it? The conservatives are the ones who want to tear up everything.

I have trouble believing the situation.

I hope I am just being overly pessimistic.

I doubt that Republicans "intend" to tear up the country. But it may be the necessary result of their inability to be flexible and focus on solving problems rather than being "right" at all costs.

Obama's desire to cooperate and compromise would normally have my full support. But trying to cooperate and compromise with the Republican conservatives is like trying to cooperate and compromise with a two-year-old who wants to explore your handbag.

Obama needs to distract the Republicans, and his groveling to try to get along with them just incites them to worse behavior.

[nadinbrzezinski]

53. There are way too many parallels to 1859

to be honest... and remember those who tore the country back then were the conservatives of their era.

[JDPriestly]

55. True.

Too many parallels to a number of the most troubling times in history.

And as you point out, the fault line is almost exactly on the Mason-Dixon line with wavering states in the Midwest.

[nadinbrzezinski]

56. Yep, and of course we have those who think

it will be a glorious thing to go to war again...

for the record NOT me.

[JDPriestly]

60. If social programs are cut more than they have been, we will

have unrest in the streets I fear.

I watched from my office in downtown LA as the fires started in our 1992 riots. And I remember the riots of the 1960s.

Americans are very peaceful now. But our leadership needs to remember that when people lose hope they can do crazy, self-destructive things. It isn't that they are bad people. They just lose control.

Humans are social animals. Our young and old cannot survive without the care and assistance of the healthy and mature in the prime of life. It is our biological fate and we cannot escape it.

Similarly, we cannot escape the fact that all of us must have the basics -- a safe place to eat and enough food to survive. We are in this together.

The government is the only entity that can provide these basics to citizens in need. Our private enterprise system does not offer any model for helping people who cannot provide for themselves.

I have a friend whose husband lost his job. She was teaching and then lost her job. They lived on their retirement savings while they looked for work. She only receives $500 per month from Social Security. He is not yet old enough to receive Social Security.

This is just one of the many horrible stories I have heard about people in their 50s and 60s who have lost their jobs and had to live on their retirement savings. That is why I am so opposed to cuts in Social Security and Medicare. They are unrealistic. Too many baby boomers have been living on their meager retirement savings the past few years.

If you make people wait until they are 67 to get Medicare, you will just have to increase funding for Medicaid. A lot of people have already developed serious health problems like diabetes or skeletal weakness (needing hip and knee and shoulder replacements for example) and need regular care at the age of 65.

[nadinbrzezinski]

68. Multiply what you saw by orders of magnitude

if we end up in a civil war... though IMHO we only need the literal spark... people are that radicalized at this point

[JDPriestly]

85. Unfortunately, I fear that you are right.

It would be help if we could trust the government to be honest with us.

A lot of the dissension is caused by the fact that the government keeps so many secrets, leaving people to theorize about what gossip, what theory about what is happening is true and what is not.

[Cronus Protagonist]

70. They will not default.

These gloom and doom scenarios are moot.

[napoleon_in_rags]

3. Freedom is just another word for _______ ____ __ ____.

People are coming to terms with the fact that their well being is tied to the well being of the whole. The factor that may be at play with all this is the fact that some of these rich and powerful people may themselves be looking for a change, looking for something more substantial and real than a big bank account. We'll see how this plays out, but no matter what you can mark my words: This is one of the most important moments in history of this century. What happens here is of great importance.

Peace.

[pnwmom]

4. Wrong. Interest rates will jump up, which will impact anyone

who needs to borrow money for any reason. Those rich enough to lend money (i.e., buy bonds) may actually benefit.

[Cronus Protagonist]

8. WRONG. It will not impact me.

Or any of the millions of people in this country who already cannot borrow money. Besides, the point is that someone with big bucks in the bank, lots of stocks, real estate, whatever wealth you choose, they will be hurt the most, which is why it is crystal clear that all these rich Republican millionaire fat cats will NEVER hurt themselves, ergo they WILL NOT LET IT DEFAULT. Hence all this bullshit posturing is just a lever for them to use to step on the rest of us, who will be hurt significantly less by a default than they will.

Bush created the debt for them to use for this purpose. Reagan did the same thing. Bush senior did the same thing.

Walk away from the table and the Republicans will raise the limit themselves. They hate to lose their wealth.

Honestly, this whole debacle is like a kid holding his breath to get mummy to give him another cookie.

[nadinbrzezinski]

15. You think food is expensive right now?

JUST WAIT.

Yes, it will touch you in very significant ways.

[Cronus Protagonist]

19. Irellevant.

You are adopting the Republican's lie. They will raise the debt ceiling.

[pnwmom]

23. Oh, so you don't eat food? Or pay for electricity? Or gasoline?

Lucky you. Higher interest rates and inflation won't affect you at all.

[Cronus Protagonist]

25. Again, you are being taken in by shrewd manipulation

They will not let the country default. You're beginning to sound like chicken little.

[pnwmom]

27. Maybe you should read your OP. You claim that the wealthy

will lose the most in the event of a default. That's where you're wrong. They are in a better position than most to weather the effects of a deeper, longer recession -- or a depression.

[Cronus Protagonist]

37. They would lose more dollars than the rest of us combined

Ergo my OP is accurate. Sorry for thinking you would know that.

And once more. THEY WILL RAISE THE LIMIT. The whole thing is a dog and pony show.

DEBTSCARE

[pnwmom]

50. They will lose dollars they don't need to survive. And many of them

have investment vehicles that can compensate for any default -- such as the ultra-shorts that Eric Cantor owns. So they won't end up with a net loss.

It's everybody else who will suffer.

[A Simple Game]

83. Exactly, the only thing that may hurt the wealthy is if the dollar loses most of it's value.

It would then hurt them less than the poor, but it would hurt them.

[JDPriestly]

48. The people who own the debt are wealthy.

Along with the Social Security recipients, they hold the bonds.

They buy bonds to avoid paying taxes on their profits.

So, they would lose the most money.

The Republicans and Obama want to discriminate against bond holders by forcing Social Security recipients to lose on the value of their bonds while the rich, other bondholders get to keep the full value of their bonds.

That is why I say that a default would be preferable to a discriminatory default on the Social Security recipients' bonds.

All's fair -- and the rich Republicans and Obama have declared war on Social Security recipients. All's fair . . . . .

I'm sure that Cheney and Bush would agree with me when I say, All's fair . . . . .

[former9thward]

76. "They buy bonds to avoid paying taxes on their profits"

What does that mean? People do not avoid taxes by buying bonds.

[JDPriestly]

80. They don't have to pay federal taxes on their state bond earnings I believe.

And about 33% of our 92.7% debt to GDP is state debt according to the chart on Wikipedia quoting the 2010 number of the IMF.

The federal debt is only 58.9% of GDP.

[nadinbrzezinski]

30. How many defaults have you lived through?

I have lived through one, if not two...

Americans are NOT freaking exceptional and what happened in OTHER PLACES will be a walk in the damn park


AND EVEN IF THEY WAIT TO THE LAST SECOND AND RAISE IT THEY WILL DO DAMAGE TO THE SYSTME AND FOOD IS NOT GOING TO GO UP, IT ALREADY IS.

This level of ignorance is just freaking astounding... ON BOTH FREAKING SIDES.

[Cronus Protagonist]

38. It won't happen.

It's all bullshit and your fears are honorable, but moot.

[nadinbrzezinski]

44. Tell that to Carter

that was the last time that technically we defaulted. Care to look at where interest rates went?

Again, ignorance and all that... with a good dose of nihilism.

:banghead:

That is all that is left.

[Cronus Protagonist]

20. double post

hiccup on the board.

[JDPriestly]

47. True. Farmers will be delighted.

[pnwmom]

21. No, you're not thinking this out. People with plenty of money

might actually benefit. They'll be able to earn more interest on their money.

But the ordinary person who has to pay credit card interest, or buy a used car, or get a college loan will have to pay higher interest rates. And everyone will suffer the effects of the inflation that will go along with the higher interest rates, especially the people who already have the least.

[Cronus Protagonist]

24. They will not let it default, ergo your complaint is moot

They have too much to lose. We have so little to worry about.

[pnwmom]

26. Your whole premise is wrong. "Who loses the most" isn't

the wealthy, although they certainly don't want the default.

The people that will lose the most in the ensuing crash of the economy will be -- as always -- those who are the poorest and most vulnerable.

[metalbot]

63. While I agree that the debt ceiling WILL get raised (to protect the wealthy), you would be impacted

If you are thinking "I'm already so poor, this can't possibly affect me", please consider that your personal situation will get much worse the more people who are in your position.

[Cronus Protagonist]

71. If you agree it will get raised, and it will, the gloom and doom scenario is moot

No point to it.

[JuniperLea]

78. Your post here proves without question that you have no clue...

What would happen should the debt ceiling not be raised and the full faith and credit of the USA is downgraded.

If you think you have nothing now, get ready for less than nothing.

If you think food is expensive now, get ready to pay 100x more than usual for Top Ramen.

If you think gas is expensive now, just wait until you can't drive a car and can't afford a bus ticket on one of the few remaining buses available to you.

[JDPriestly]

46. That is true unless they are bondholders.

But a default will cause inflation, lots of it.

[FreakinDJ]

5. How many countries hold US Dollars in their reserves

Lots

Wouldn't be a complete melt down of the world monetary system but it would be close

Dollar Still Main Reserve Currency
http://www.gfmag.com/archives/134-february-2011/11063-fx-dollar-still-main-reserve-currency.html#axzz1SQLd22Cs

[Cronus Protagonist]

10. It doesn't matter, the Republcians will RAISE THE LIMIT!

Think about it and you'll come to the correct conclusion. This is just like a kid holding his breath to get more cookies from mommy.

[FreakinDJ]

16. Agreed - it is "Brinkmenship"

but more then that it is "Who is going to control the message into the 2012 Elections"

on that front I believe Obama has a slight chance of winning

[deacon]

9. Big business will ring their collective necks thin if they allow a default. n/t

[Cronus Protagonist]

12. And they ARE big business, ergo they WILL NOT LET IT DEFAULT!

Sorry for the yelling... I'm not yelling at you, that was for the benefit of the others on here who are taking the Republican position. They're like Aunt Agatha, who's pinching mommy and telling her to give the lad a cookie before he kills himself by holding his breath.

[pa28]

11. Their bluff is ridiculously transparent.

Republicans represent the very wealthiest corporations and individuals and those core sponsors simply will not allow their fortunes to be jeopardized by default and the resulting financial chaos.

As you said, their "base" has the most to lose of anyone and I suspect the top .01 percent feel a gnawing resentment at their fortunes being used as a bargaining chip. Republicans are weakened by pressure from their own side but sometimes I think our own side is too wrapped up in the election cycle or too financially compromised in itself to see it.

[Cronus Protagonist]

14. Our own side are also the RICH and own lots of stock and such like

They're just smart enough to know they need to raise the debt ceiling, but not smart enough to see they're being manipulated.

[pa28]

41. You are very right on this issue.

Those whose fortunes are based on stability and the status quo have the most to lose. It's kind of funny to see those with very little to lose balance their own losses against that and think it's an even bargain.

Pressure from the Chamber of Commerce and Wall Street is starting to come to bear on Republicans. McConnell looks like he about to soil his pants. They are bluffing.

[A Simple Game]

84. They are smart enough to be rich, smart enough to have power, but

not as smart as someone who is so poor they have nothing to lose?

You should do some exercises after that stretch.

[DearAbby]

64. And Obama called the bluff with one of his own

Upped the pot with "EVERYTHING ON THE TABLE" they knew the gig was up, walked away.

[AndyTiedye]

17. SOME Rich Repigs Will Make a Killing on their Ultrashort ETFs

They are betting that we WILL default, and they will make a killing if their minions in Congress can pull it off.
They let Eric Cantor in on a tiny piece of the action, as was reported in the news.

[pnwmom]

28. Either they will make a killing, or they will at least be buffered

from the losses -- which most of us will not be.

[AndyTiedye]

31. I Know. The Repigs are Practicing the Snidely Whipsnade School of Politics

[Incitatus]

33. if this happens, the destruction will PALE in comparison to the Bush recession..

I don't think most Americans know what is going on. I had to explain to 3 people today what the debt ceiling even is. News ratings are very low considering to the whole population and even fewer go online to see what is going on in politics.

[Speck Tater]

18. Personally, I'm learning to speak Spanish.

This country is just getting crazier every day. I'm strongly considering relocating to someplace else.

[Historic NY]

32. Have we ever not raised it? Lets try defaulting for a change...

[kenny blankenship]

34. The stock market certainly doesn't believe there's any real chance of default.

[Cronus Protagonist]

39. They know that, I do, and now the rest of DU does

...apart from some scaremongering...

[Marr]

65. Exactly. How many times have we been told that the markets will recoil if they just

don't feel "confident"? I mean, we're regularly told that the whole system will shake if Wall Street gets so much as a case of melancholy, and yet here they are, claiming economic armageddon is days away, and the markets are chugging along like normal.

I'm amazed that anyone can even pretend to believe this is a legitimate threat.

[Cronus Protagonist]

72. I am so glad that you see that too

It seems most people on here are unable to see past the rhetoric.

[napi21]

35. You're WRONG! Wealthy people will be able to weather the storm and/or

move their moey to some investment that will limit their losses. Everyone else will suffer greatly from extremely high interest rates, mtg. adjustments, credit card bill interest, inability to buy a house or a car, or any other big ticket item. Every individual, small business, and even moderate sized business will be greatly harmed, and for what? To be able to say I stood my ground? That's just foolish.

[Dawgs]

58. +1. The percentage will be much higher for those that already can't afford things.

OP doesn't think this through very well.

[pansypoo53219]

40. media whores will blame it on democrats.

nt

[MilesColtrane]

42. The real rich are who the Washington GOP serves.

And, they would not be significantly hurt if the dollar crashes.

You didn't see the Carnegies, Astors, Rockefellers, or Fords standing in soup lines in the 30s.

If properly hedged, the modern day robber barons could do quite well for themselves in the event of a major economic catastrophe.

[Major Hogwash]

51. "ergo", I like that. Short, sweet, and to the point.

I agree, and then Obama should turn to look at all of the Republican Congressmen assembled behind him when he signs the debt ceiling bill, raising it, and say, "what a bunch of wusses you guys turned out to be."

Hahahahahaha!!!!!!

[MouseFitzgerald]

54. Thats the way it should have been since the beginning

It was always a bluff. There should be one up or down vote on whether or not to raise the debt ceiling. Republicans would be able to choose to either raise it or be solely responsible for not raising it. If they chose not to raise it they would cease to exist as a political party, they know it.

[Cronus Protagonist]

75. Sanity doesn't sell detergent and Dove, which is why all you hear about is armageddon

And you're right, a bluff as transparent as this needs to be exposed.

[Dawgs]

59. Like your idea of letting them vote on it, but you couldn't be more wrong about who loses the most.

:hi:

[closeupready]

61. I saw that almost from Day One.

K&R

[fascisthunter]

62. hoooooo boy, look at what you started

great point!

[JoePhilly]

66. The rich have the assets to ride out any collapse.

They have many homes.

The middle class, and the poor, would be crushed. Lacking assets, they can't wait live with no income. Most of the rich don't need an income.

Not a sane proposal.

[Cronus Protagonist]

73. There will not be any collapse at all

Because they will raise the debt ceiling. So your proposition is moot.

[JoePhilly]

77. Which should also be said of your OP then I guess ... its moot.

Why ask about the impact of an event you know won't happen?

[Spike89]

67. Very common mistake

Yes, you are right that defaulting will hurt the rich the most. The problem with your argument is the very simple fact that it won't hurt them exclusively. Although the rich will "get hurt" the most, they really won't feel anywhere near the pain that the working poor will feel. Losing $1 million must surely smart, but the only ones likely to get hurt that deeply have many more millions to help salve their wounds. Working poor might only lose a $1,000, but that could be the difference between keeping or losing your house, which can affect employment, which can make them poor enough that in the future, stupid policies can't hurt them at all.

[Cronus Protagonist]

74. Yes, but because the people in power will lose a LOT, they will NOT let it default

Hence all the claims of a looming financial armageddon are moot, and this is reflected in the markets by NO CHANGE, because the marketeers all know what the Republicans all know, which is that the ceiling will be raised no matter what happens.

[JoePhilly]

79. That's incorrect.

If the Dems all "walk away", a clean bill passes in the Senate, but not in the House. The Tea Party nuts don't intend to vote for it. Given that, Boehner can't get enough YES votes unless at least some Dems vote YES.

If they vote PRESENT, the bill fails in the House ... and the media would blame the Dems in a heart beat for the disaster that follows.

The old GOP would have acted as you say ... but with the 80 or so tea party nuts in the House, its not true.