/sci/ - Science & Math

Lack of faith in US debt = No faith in Italian, Spanish, Portugese Debt = No faith in European debt = No faith in Japanese debt = No faith in US debt = where the fuck did the world economy go?

Military babies will have to get real jobs.

Jews won't be able to get their money.

Economy will revert to a "your wealth is worth what you have and can do" mentality.

People will start investing in other peoples' educations, as you can't just throw your money into the stock market anymore.

>>3472361
To China, Korea, Russia, Singapore, and India.

It's not about having faith in US debt, the debtors actually have (US still has AAA), but if congress is unable to act and raise debt limit, the whole country *is* effectively bankcrupt.

Then what? All hell breaking loose?

>>3472371
if the US can't pay at any point then that means an immediate lack of faith, Standard and Poor are already considering a downgrade from AAA despite the crisis

>>3472367
>People will start investing in other peoples' educations, as you can't just throw your money into the stock market anymore.

Is this a bad thing? What happens to the clever folks? I know nothing of this nonsense.

>>3472381
Who decided that these guys get to decide how to place faith in whatever we're talking about?

>>3472393
They don't, it's the investors who do. Rating agencies hold absolutely zero real power, but it's a good idea to listen to them - and as investors listen, the market reacts accordingly. Obviously, in very shady and messy, near-illegal situations like Lehman Brothers they can be wrong.

>>3472393
Has anyone really been far even as decided to use even go want to do look more like?

>>3472371
>US still has AAA

the only fucking reason why the US is still AAA is because the fucking rating agencies are from where? oh yes.. USA!

I honestly want to see USA fucking DROWN on debts, and I don't give a fuck, just to see those fucking rating bastards on the gutter

>>3472442
uhm.. even European and Japanese ones still give it highest. Only the Chinese have the wisdom to see that USA is finished.

>>3472442
I live here, in the US, and I want it to happen. I mean sure my money is worthless then, but the rioting and violence... yes.. it will be good.

>>3472471
Do you know what a country going bankrupt is?

>No money to import food
>No money to import energy
>No money to maintain comunication lines (unless private, and those will be expensive)
>No money for healthcare of wellfare
>No money for Banks
>No money to pay Judges, Cops, Doctors, Nurses, Construction workers, etc.. pretty much everyone that works for the goverment

list goes on and on

the rioting will be least of your problems

>>3472550
>long list of win
Sounds awesome!
http://www.usdebtclock.org/index.html

Also:
http://www.usdebtclock.org/world-debt-clock.html
Who's the "poor developing countries", again?

大中国！

Asia will control the world Economy.
Place your bets Socialist Asian countries vs Capitalist Asian countries.

>>3472371
I'm not from US so don't know the exact rules of their institutions, but...

I know that their debt is basically issued by their treasury department (finance ministry) as bonds (treasury bills) and the US central bank (the FEd) acts as a middleman between the treasury and the market. I think it's also possible to buy these bills directly from the Treasury, but most buy them through the Fed.

SO, if these bills sold in the past are not redeemable in cash when their term comes, the Treasury won't be able to issue more of them to have more money to pay bills (salaries, public expenditure, contracts, etc). So, they're gonna have to prioritise them (pay for some and delay payment for others) and probably shut down a part of the government, because of lack of money.

Then they would have to sell some assets (like gold reserves, other countries debt, land, buildings, whathever the US govt owns and can sell) to make money to keep operating.

Also, as these treasury bills are also used as collateral (guarantees) in other contracts, their value would most likely go down, which would force some companies to re-evaluate these contracts and lose money.

Most IMPORTANTLY, most central banks in the world own US public debt and some of them would probably start selling it on the market, which would push the price lower and lower until it becomes a worthless piece of paper everyone is trying to get rid of.

Simple.

We scrap the dollar, and deny all debt attached to it.

Then we print a brand new currency and back it with gold until things settle down. Then we put it back on fiat.

Everything is fixed, except everyone who wants to collect US debt is mad. But we've got enough nukes to keep them quiet.

>leave horses heads in beds of S&P and Moody's executives
>problem solved

>>3472607
I think everyone else have more nukes together than America.
Only Russia has about the same. Add a few more of them and ur asses are cooked.

>>3472442
Impotence breeds anger, eh foreigner?

>>3472624
America by itself has enough nukes to screw every other country.

>>3472637
and using them would be much, nuch worse than not using them.

Why can't americuns live without borrowing from other countries... Then they go around the world preaching like a bunch of evangelicals, although they are fed and clothed by the rest of the world, who pay for their greedy fat retarded asses.

>>3472644
That's what the centers of empires *do*.

>>3472624
No.

Russia has a few more. That's it.

Everyone else has a negligible amount, as far as nukes can be considered negligible.

>>3472344
ow wow some people still don't get it.

there is no default. it does not exist.

there is only the length of time before the next argument about the debt comes up: before the next election, or after.

Dems want it after, so obamanation doesn't have to talk about it. Repubs want it before for the same reason.

constitution guarantees the debt; there is no default. of course, i wouldn't plan any trips to yosemite, either

What about a cup of rage?

>>3472644
>>implying you dirty foreigners didn't come in and buy our debt by choice

Nobody forced you to buy it. You love sucking off our teats.

>>3472658
>there is no default. it does not exist.

captcha: lactle much

<span class="math">f(s_{q})=[\frac{((\Psi\cdot10^{-1})+(p\cdot10^{2}))GPA}{(f+1)(h+1)}]^{d+1} + r[/spoiler]

>Just exactly how severe the consequences will be?

In reality? Not much. Markets will drop, US borrowing costs will rise, and overall it'll be a nasty rape in the ass to a world economy that's already pretty fucked. But it's not going to lead to riots in the streets or anything.

And even if this drags on past Monday, it won't go on THAT much longer before some sort of compromise passes.

This is one of those cases where the DC inside-the-beltway crowd - both politicians and journalists - are so completely disconnected from the outside world that they can't comprehend that their "armageddon" just doesn't mean that much to the real world.

>>3472607
hahaha U LOSE! you think your speech is going to calm the people who are going to lose everything they have in your capitalistic economical system...? just tell me you didn't study, because it seems you don't remember or know what happened in 1929...pathetic!

let's say you do scrap the dollar, do you really think the global market will accept it? and make it strong as actually it it?

>>3472607
He thinks that after that US will still be part of the first world

>>3472658
>constitution guarantees the debt
You mean the passage where they talk about the debt issued to pay those who fought against rebellion and those who lost slaves?

Check this out:

>4. The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

>5. The Congress shall have power to enforce, by appropriate legislation, the provisions of this article.

You guyse have a retarded constitution. The paragraph supposed to guarantee public debt talks about paying those who fought against rebellion and not paying those who lost slaves. Wtf, this is the constitution of "the most democratic state in the world"? You still haven't managed to make your constitution at least sound from this age?

>>3472607
>>3472687
It certainly won't be accepted if it's tied to gold, since the US doesn't own anywhere near enough gold to cover 310 million people and millions of businesses with an equivalent amount of wealth as they have under the dollar.

We can never really go back to the Gold Standard for this reason. Any discussion of it under any circumstances just isn't serious.

>>3472663
Wat? You produce less than you consume, Amerifats. You're basically living on debt.

>>3472693
our constitution is sacred and shall never be altered. it's how America became the greatest nation ever.

>>3472693
Yeah, we have a thing called laws, and they prevents us from changing the constitution when ever someone feels like it. It would take an amendment to strike out that section, and there is really no point. Deal with it.

>>3472344

>Just exactly how severe the consequences will be?

Israel will take over. End of the civilized world.

as it seems you're all kids who didn't go to school, i think you'd prefer a cartoon to explain it

www youtube com/watch?v=vVkFb26u9g8

>>3472693
If you're going to pontificate on the meaning of the US Constitution, you might want to consider actually learning how it works first, you fucking moron.

That line about slaves was directly related to post-Civil War Reconstruction, and ceased to matter once all former slaves were taken care of. We just don't pretend those parts never existed in the past, like you faggots like to do. ("Oh noes a swastika! Ban! Ban!")

>>3472702
All cheap chinese crap from walmart, we dont actually need to buy that shit.

>>3472714
Yes. By stealing the land from other people who were natives in that country. And by bombing countries to take their oil, living on borrowed money from China, while selling more paper around the world. Srsly, at least the Romans had culture.

>>3472702
And you're living off our debt by buying it. You're in this shit just as deep as we are.

LOOK
http://www.usdebtclock.org/index.html

Your debt is 14 trillion and counting
Budget deficit is almost 1,5 trillion
Your interest payments alone are about 3,5 trillion

How the fuck you can manage to get out of it with dry feet?

>>3472738
Does your constitutions talk about how you stole the land of native indians, then killed them and put them in reservations?

Oh, i forgot, you don't hide your past, you're very proud of it, you put it inyour constitution. Including guaranteeing your debt, then not paying for it.

>>3472748
>>Srsly, at least the Romans had culture.

Says the guy whose TV largely spews out Baywatch reruns and Hollywood films.

>Yes. By stealing the land from other people who were natives in that country.

Wow. How totally unlike the history of any other nation.

>>3472757
the debt to GDP is far lower than during WWII and we meneged to get out of that alright faggot

>>3472751
Nope, you're paying not with goods, but with printed money. We are buying using money from selling our goods. Big difference.

>>3472761
Wow, even by 4chan standards that's a hell of an obvious logical fallacy.

Stopped reading there.

Steal fucking nothing, we fought them, they fucking lost, deal with it.

>>3472761
how do you steal land from people who don't claim to own the land?

and then, when you give them ownership over land, how is that not generous?

>>3472770
I hate to break it to you, but the real world functions in ways just a bit more complicated than you were taught in your 45 minutes of "economics" back in 10th grade.

>>3472674
great spokesman, or greatest spokesman ever?

>>3472788
I have to admit, he was pretty fucking boss.

>>3472757
i call it the "fuck you" plan

we owe you money? FUCK YOU!
you can't live without welfare? FUCK YOU!
you can't live without a subsidy? FUCK YOU!
you can't make it without Social Insecurity? FUCK YOU!
you don't like that we confiscated your pension? FUCK YOU!
you want to move your assets out of our country? FUCK YOU!

the "fuck you" plan; the last bastion of scoundrals

>>3472809
>we owe you money? FUCK YOU!

Iceland did it already.

>>3472820
hey, if it's good enough for those penguin fuckers, it's good enough for us

>>3472809
Very democratic and mature response. Typical American - when bullshiting fails, use force.

>>3472772
> lol u fagets deny ur history
> "your property based consitutition in based on a genocide of the indigenous peoples"
> STOPPED READING THERE

>>3472344
and the rest of the world got to live the american dream.

>>3472344

The ONLY way the U.S. can default is if Obama chooses not to pay the interest. So it cannot happen.

>>3473042
Constitutional crisis, ho!

>>3473045
Its so obvious to me now. The GOP is putting their dick up their butts and refusing to compromise so that Obama fails to pay off the debt and they have an actual reason to impeach him.

>>3473110
Same deal if he tries to breach the debt ceiling without Congress raising it.

>>3473129
Well, His duty to the constitution would override any other laws.

>>3472456
>Only the Chinese have the wisdom to see that USA is finished.
No. China can't let their currency deflate without fucking-over their export market, so instead they're artificially inflating their currency and driving their economy with stimulus spending, as this can't go on forever they need someone to blame for their inevitably economic downturn, hence the current 'Blame the USA', it's all political theater on the part of the CCP trying to save their heads and forestall political turmoil.

>>3473110
If paying off the debt were required by law then every single recent president with the possible exception of Clinton would've been impeached.

well, Clinton too, but for different reasons...

>>3472607
Most US debt is held domestically, idiot.

>>3473156
Make payments on the debt, not pay it all back at once.

>>3472820
Iceland didn't own anyone anything, Iceland's corporations did. Iceland simply refused to bailout their incompetent banks.

>>3473110

> thinking adding 5 trillion to the debt is paying it off

You must be seven.

>>3473267
You can add more to the debt and still make payments on it.

Am i the only oe who has ask myself if it's really true 50 cent coin has less value than a paper bill?

>>3473287

They can add tens of trillions more, sure. Can and should, are two very very different things.

>>3473309
I never said that it was right to add to the debt, just that making payments on the debt and adding more debt are not mutually exclusive.

I actually want this shit to fuck up. I want the world economy to crash. Just to see what happens and watch people panic.

4 days until party time

Can't wait to see what happens

Oh wait, we already know

Debt ceiling raised
Idiotic, non-useful budget gets passed
Republicans go on to win next election
Suddenly, things start getting better

>>3473340
Yes. "Better".

>>3473331

I wouldn't mind if shit fucked up if it helped change the greed that people have and their dumb spending and overconsumption. That said, I still would like to have a job.

Am I the only one who wants to see the US default?

Then again, I just want to watch the world burn.

Nothing of significant consequence will happen. Sorry = /.

>mfw the US has come within days of a debt-ceiling limit plenty of times in the past and nobody even noticed because the Democrats controlled Congress so there was no way for them and the news media (but I repeat myself) to use the issue to demagogue against Republicans

>>3473357
the funny and only true thing is.. you don;t need money to survive, the only real things you need to contineu living are food, a plce to live in and education...and guess what? all of this things are free...

Specifically, we want to address the blatant hypocrisy in Congress over when it is appropriate to support a debt-ceiling hike, something Congress has done 74 times since 1962.
Let’s begin by taking a look at two sets of numbers compiled by OpenCongress (www.opencongress.org), the nonprofit Web site that tracks legislative activity in the Capitol.
The first set: 193, 211, 214, 206 and 214. And the second: 0, 45, 91, 0, 0 and 0.
The first set represents the number of House Republicans who voted to raise the debt limit between 1997 and 2006, all but once when George W. Bush was in the White House and Republicans controlled the House.
The second represents House Republicans who voted to raise the debt limit between 2007 and 2009, when Bush was president but Democrats controlled the House (first three votes); and under Obama and a Democratic House (last three votes.)
And except for the Balanced Budget Act of 1997 – when 153 Democrats joined 193 Republicans to raise the ceiling on a truly bipartisan 348-85 vote – you can pretty much flip the numbers to see how Democrats voted.
All of which suggests raising the debt ceiling has more to do with politics than fiscal policy.

http://www.nashuatelegraph.com/opinioneditorials/927266-263/debt-limit-history-politics-over-policy..
html

>>3473378
>implying its not republicans who made this an issue

Seriously, congress has raised the debt 74 times before now, including times when the opposite party controlled the white house.

We will get slightly higher interest rates

>>3473357
Why would you want a job? You like having some dipshit tell you what to do, having control over whether or not you can live?

>>3473397
Yes, implying the truth does tend to happen on /sci/ occasionally.

>>3473401
cause the alternative is being homeless?

>>3473401
that is usually easier then growing your own food

It's theatrics, people. They'll get it taken care of soon so that they can continue fleecing the middle class and concentrating wealth in the top 1%. Nothing to worry about.

>>3473410
The only reason you can be made "homeless" is of someone else owns the land you're living in. That's another stupid thing that comes along with jobs.

>>3473409
So, you are saying that its not the republicans fault? The same republicans who argued for certain things, and then, when the dems agreed to them, said nope? Are those the guys you are talking about?

>>3473433
>>post things that are not true
>>expect us to believe them

This isn't Think Progress or Democratic Underground, kid.

>>3473459
>ignorant of current events
>only reading neocon news sources

yeah, ok.

>>3473459
No, i posted nothing but facts

>>3473428
Well I guess living with the hill billies is an alternative?

>>3473478
Overthrowing the system is an alternative, too.

>>3473485
Yep, that's what the 2A is for.

I don't know much about the situation but why do people believe that not raising the debt ceiling will cause bankruptcy and a government collapse?

The way I see it is if we fail to raise the debt ceiling quickly we will be unable to issue additional bonds to generate the money needed to run the country. In order to get the money we will need to use other methods such as prematurely selling off assets such as the debt of other countries that we hold (selling off bonds we own from other countries before they have matured).

Obviously eventually there will be more catastrophic consequences but I don't understand the immediate doomsday paranoia.

hahaha a very nice source of information :D
www youtube com/watch?v=d4T247koCBY

>>3473510
The idea is that we'll stop meeting our loan payments.

>>3473561

I just don't understand that concern. It seems that we have other means of meeting loan payments other than issuing additional debt if we are unable to raise the debt ceiling immediately.

>>3473575
The question is whether the budget can be balanced immediately or not. Or rather, whether that's the best way to manage the issue.

>>3473608
No, the first question, immediately preceding yours, is: SHOULD the budget be balanced immediately?

If we default we will have to make serious cut backs, like ending the TSA and other huge projects as well. Personally I don't think it do anything. I mean look at the stimulus package that hasn't even been used up yet. We'll be fine, the treasury will just have to look at who is getting what and adjust.

Personally what I think we should do from now on is have a tax system in place where I can pay atleast a few years in advance. Something like that would be nice

>>3473690
>serious cut back
well, You can cover (If I'm remembering the article correctly) Interest on Debt, Medicare, Medicaid, Social Security, and parts of the defense budget on what receipts the US takes in right now. After that, you have a few billion a month left to cover everything else the federal government does.

Pretty much we're looking at a shutdown of all discretionary federal government, short of critical maintenance and non-discretionary sections.

This isn't mine:

Pretend you have a credit card. And this credit card has a limit, we'll say $1000. This credit card is pretty near maxed out and you don't really have any cash. You need to buy some stuff soon, and you know that between now and August 2nd you need to buy some things, and you have no choice but to buy them on the credit card. At that point the credit card will be completely maxed out.
This credit card is our debt ceiling. We will hit the limit of our borrowing limit on August 2nd.
Now let's continue further. We know we have some bills next month, and we also know that we have some cash coming in, but when we look at what we have coming in vs what we have to pay, we don't have enough to cover it. Let's just say we know we'll be short by $100. So now we know ahead of time that we'll be short, and we only have one real option: call the credit card company and ask them to raise our limit.
This is what the debt ceiling legislation is trying to do: raise our credit limit.

Cont.

>>3473751
Normally this happens all the time without issue. This time, some politicians decided to stand up and say: "Umm, long term this whole 'borrow more money' method may not work out." So they are holding off on raising the debt ceiling until we can better align our "bills" and our "income". There's two ways to do this: either you lower your bills or you raise your income. Either you pay less money out, or you bring more money in.
This is where the argument happens. Democrats (traditionally) would prefer to bring more money in, so they'd like to "raise taxes". Republicans (traditionally) would prefer to have lower bills, so they'd like to do "spending cuts".
So the argument now is "How can we find a compromise where everyone is happy?" We haven't (yet, hopefully) found that compromise.
If we don't find the compromise, and we don't raise the debt ceiling, then we'll have a bunch of bills due and not enough money to pay them. At this point we'll have to start prioritizing who gets the money we do have. Should it be seniors on Medicare? Should it be active duty military? Should it be people we owe interest to for a loan payment?
This is just like our credit card example if the credit card company doesn't raise our limit. Do we pay our rent? Do we pay our car payment? Do we pay back a guy we borrowed $50 from?
And the repercussions are this: whoever we DON'T pay, how does that negatively affect us? Will we be able to get more loans? Will people lose trust in us and a government? Etc. So the outcomes could be nothing or they could be disastrous. No one knows for sure.

>>3473548
fuckers

>>3473751
>>3473757
Much as I loathe comparing personal finances to government finances, it's a moderately apt analogy if you change a few things: The Credit Card limit you have there isn't actually the limit on the credit card, it's just a self-imposed limit (i.e. the card's credit limit is actually 100k, but you made a rule for yourself to not go over 10k), the only person to call about raising that limit is yourself.

What I take issue with is the fact that if you really wanted to look at your budget, you should be getting the bills out of the way, then focusing on the budget alone. Funny, what with the end of the government fiscal year just a month or two away, the start of 2012 budget talks were coming up shortly anyway. However, one side (or both, whatever) apparently feels that their bargaining and/or political position isn't good enough to argue the budget alone and instead prefers to hold the good faith and credit of the USA hostage.

I haven't even read this thread but I can guarantee that their's at least 2-3 posts talking about how we should back the US currency up with gold.

You fags should shoot yourself.

>>3474391

> 2011
> thinking a socialist board supports economic law

I certainly hope you are not doing this.

>>3474425
>implying /soc/

>>3474428

> implying /sci/, a board filled with alleged scientists that all cream for government funding of their pet projects is not absurdly socialist

Republicans are just taking the opportunity to make Obama look bad for the next election. Republicans could vote down every plan put up for vote and then when shit happens from default they'll point fingers at Obama. Unless your poor / dumb whatever the outcome is probably won't affect you greatly.

>>3474431
Ding ding ding winrar

This place is crammed to the gills with faggots whose entire existence depends on an ever-more-engorged government teat for them to suck off of.

There's also the whole appeal to authority logical fallacy. Just because you're an awesome engineer or chemist doesn't mean you know one iota more about economics or politics than the average 11-year-old.

If you want to jack off to the Obama poster on your ceiling, go do it. Just stop posting here like you know what you're talking about.

OP: No one really knows. Not law makers, not faggot europeans jizzing their pants over this, and certainly no one on this shitty fucking board. Probably nothing but possibly a bunch of shit.

>>3474431
>implying implicitly implied implications were implicit
Also, stop supporting feudalism. It went out of vogue ages ago.

>>3473473
>>2011
>>still using the term "neo-con"

You couldn't have more blatantly outed yourself as a hardcore leftist if you'd posted a pic of yourself being crushed as Michael Moore makes you his bottom.

>>3474448

> aged above 5
> not knowing the republicans are the only ones passing anything

I certainly hope you are not doing this.

>>3474455

> after 1107
> thinking feudalism is Liberty

I certainly hope you are not doing this.

Sound fiscal policy for the last 100-odd years has been to booster a faltering economy with money the government doesn't have. Then when the economy does well, we can't change anything or we'll break it, so the government keeps spending money it doesn't have. This works well until the house of cards falls down (if it ever does). Although the current fiasco is just a theatre performance, the "stance" that the debt ceiling should stop going up and we should actually balance the budget makes sense to me. Seems most of this is caused by everyone wanting an endless Golden Age.

Let's take an educated guess at who isn't going to get paid. My money (pun intended) is on the active duty troops. They're overseas trying to avoid walking on IEDs. What are they going to do about it?

>>3474503

Obama would be raped, murdered, and not re-elected if he did that.

Doesn't matter anyway, we have defaulted 4 times before.

>>3474509

So if you had to guess who isn't going to be paid, what would you say? Honest question, I'm just speculating here.

>>3474509
>Doesn't matter anyway, we have defaulted 4 times before.

Wait what? You mean the US? No, it has never defaulter in its entire history. Thats why US treasury bonds are considered the safest investment in the world.

>>3474470
>being a member of H. sapiens sapiens
>believing unrestrained capitalism can lead to anything other than feudalism
Come, now.

>>3472344
we won't default. it is arguably against the constitution and would be a poor strategic decision for everyone even if the debt ceiling doesn't get raised.

>>3474485
that really hasn't been the case though. some presidents and congresses have been better than others, but after WW2 we have maintained approximately 18% of gdp as government spending.

under the retards bush II and obama, that has shot up to 25%. there is no reason we cannot return to clinton era levels of spending, and increasing taxes will have to happen as well regardless of what republifags try to claim. one idea i like is a 1% national sales tax that only goes towards paying down the debt, expiring when we are both solvent and out of the red.

>>3474534

The federal government defaulted in 1790 and 1933. 9 states in 1841, and 10 states in 1873 also defaulted.

>2011
>Giving a shit about any of this

I don't even know anything about economics. But I'm sure this will all work itself out as long as I don't give in on the debt talks. I mean, nobody likes tax hikes, right? I don't know why the fuck anyone would ever support those.

>>3474536

> being alive
> thinking the market that is devoid of force, coercion, and fraud can ever be feudalism

I certainly hope you are not doing this.

>>3474549
>force, coercion, and fraud
>implying these are not all legal under pure capitalism if you happen to have the most money

>>3474545

> vow to not raise taxes
> agree to 800 billion in increased taxes
> democrats whine about no compromise from republicans

I certainly hope you are not doing this.

>>3474555

> legal
> capitalism
> thinking the state can be involved with capitalism at all

I certainly hope you are not doing this.

>>3474537
>there is no reason we cannot return to clinton era levels of spending

Its going to take a long time, maybe even a decade and its going to worsen the already anemic recovery that we have.

>>3474570

They revised the first quarter to .4 percent growth. We might be going into the double-dip.

>>3474576
Honestly, I'm not surprised. But its not a double dip by definition.

Japan was and still is like this.

A lot of you people, some don't, but a lot forget or don't know that the biggest lender to the US is itself. So if the US defaults on it's debt it defaults on itself.

In reality the people who will be screwed the most will be the world as the US is pretty much the axis in which the world economy turns.

Personally I don't give a fuck either way. Let the world burn for all I care.

>>3474537
Except GDP is a measure of economic health, not government income. Sure, if you pour in $140tn the economy will see a huge surge, but the government's balance is still going to show a $1XXtn deficit for that fiscal year.
Correct me if I'm wrong, the current government works by estimating it's income, totaling up mandatory and discretionary spending, then borrowing to match expenditures instead of cutting to match income. Cutting to match income may well be unfeasible, but to me it seems like if it could be reached, we'd all be much better off.

>>3474523
That question is already settled. Neither the Treasury nor anyone else has any authority to prioritize payouts in such an event. The bills will simply be paid in the order they come due, until the money runs out.

The Obama Administration could attempt to force certain groups to be preferred over others, I suppose, but the result would be an immediate constitutional crisis.

(There's also a good chance the Supreme Court would rule in Obama's favor in such a case. SCOTUS has never had to directly interpret that part of the Fourteenth Amendment before, and lots of legal wonks think they'd decide the language is vague enough to give the president some room to maneuver.)

>>3474603

Baseline budgeting. The government takes last years spending levels, and predicts a 3-10 percent increase in spending per department. At the end of the year if they spend less than they predicted, it is savings. It has NOTHING to do with actual revenue.

If they take in 1 trillion, budget to spend 2 trillion, and end up spending 1.5 trillion, they see that as a savings of 500 billion. In reality it is a 500 billion dollar loss.

>>3474606

Thanks. I didn't know that.

>>3474603
He said 18% of GDP. That means government purchases excluding transfer payments like unemployment and social security make up 18% of GDP.

>>3474626

18 percent total, that includes the transfer payments of social security, medicare, medicaid, etc. The number seems pretty ideal, as average tax revenue is 19.5 percent. That would leave wriggle room and principle paying money.

>>3474570
>Its going to take a long time, maybe even a decade and its going to worsen the already anemic recovery that we have.
'we' aren't in a recovery lmao. the hyper rich, maybe, but not the general populace.

i am not sure how gradually reducing social security, medicare, and defense over the next decade is going to majorly affect the 'recovery' negatively either. if anything, showing that we have the basic common sense to become solvent again would increase capital investment and job creation in the private sector, which is what we need.

>>3474638
>i am not sure how gradually reducing social security, medicare, and defense over the next decade is going to majorly affect the 'recovery' negatively either.

If you reduce transfer payments, then you're going to slow down economic activity since people have less income, same thing with medicare and defense. By how much and whether the benefits of being solvent outweigh the negatives of slower economic growth is a much harder question.

My bets go with being solvent.

>>3474537

I'm fine with 1% national sales tax actually, I fucking hate how we don't keep our taxes divided these days.

>>3472344
Total annihilation of confidence in the dollar.
Dollar and dollar denominated instruments will crash in value and thusly dumped.
Borrowing costs for the dollar will rise sharply.
Dollar will fall, crippling revenues for major exporters to the US.
Credit worthiness of USA will fall, making it more difficult for import/export.

The world would be (and currently are) looking for a new reserve currency and a safe haven when shit hits the fan. Gold is a popular choice, while it's a good long term investment, it's not very liquid and without even having storage costs considered, it's pretty pricey.

I'd hate to see the US lose it's position as the world's reserve currency though. I wouldn't want to have renminbi denominated instruments because I just fucking hate chinks and I don't trust them. Kangaroo dollars would probably be getting a spotlight, maybe even Singaporean dollars or any other Asian country with a decently mature financial sector.

>>3474696
Sorry, meant to say borrowing cost of *the USA*

>>3474638
>increase capital investment and job creation in the private sector, which is what we need.

This is not how it works. Generally when a country becomes solvent and stays that way, especially countries that have a history of default, they can enjoy lower borrowing rates on their bonds, since they are more trusted. Less borrowing rate on bonds impact all the rates in the economy, thus making it cheaper to borrow.

However the US rate is close to zero. It has no more room to improve.

>>3474710
i was referring to getting unemployment down

>>3474736
It almost means the same thing actually, since GDP growth has a negative correlation with unemployment.

ergo Okun's Law

Reid and Boehner came to an agreement and presented a plan to the President last Sunday, but Obama rejected it, saying the plan had to not have any serious impact until after the election. (cnbc, July 29th).

>>3474770
>implying Obama will be re-elected

This is edging into /new/ territory, but besides the election-cycle timing and tax increases, what don't the Republicans like about Reid's plan?

>>3474783
Did you ever go to /new/ months before it was deleted? This is a civil debate between sweet little old ladies compared to it.

>>3474783
its full of shit, it includes trillions of dollars in spending cuts for future wars that dont even exist, he literally says he is saving money by not funding wars in the next 10 years than have no been included, and it makes it so budgets are made by CBO estimates

I think we should call this board /econ/.

Who's with me?

>>3474811
The Military Industrial Congressional Complex has been fighting future wars for decades. We haven't lost one yet!

>>3474804
Yeah, which is why I didn't want the thread to devolve into "Your party's plan sucks!" "No your party's plan sucks!". I get my news from BBC.com to try to avoid spin, but all they offer is "Reid says plan will cut $2.2tn, Republicans disagree!"
>>3474811
According to >>3474617 that's how the government does all it's accounting anyways.

>>3472344
YOU FUCKING TOOLS.. it doesnt matter what you think.., STUPID SHEEP.. they will pass a budget / debt deal and they will raise the limit.. NO MATTER WHAT THE DEAL IS .. on AUG 1st night SOMETHING WILL PASS>. BECAUSE EVERY COCKSUCKING DIPSHIT POLITICIAN HAS FRIENDS AND FAMILY AND TAKES MONEY FROM PEOPLE WHO ARE IN the buisness world.. WHO STAND TO LOSE BILLIONS iF THE DEAL ISNT PASSED!
so please stop fulling your dumb fuxking minds into thinking a debt deal wont be passed.. FUCKING BITCH MOTHERFUCKERS.. its fucktards like you who make our great nation go to shit.. to actually think that a bunch of fucking self serving pigs in washington give 2 single fucks about ur stupid fucking opinion.. DIRTY SLIME BALL BITCHES>.. a debt deal will be passed.. and the democrats and republicans will agree TO ANYTHING to get it passd.. ok? FUCKING DUMB SHEEP.. bitches cunts

Hello Friends.

>>3475006

BBC to get no spin?

Ha.

>>3475050

That was me. Trip was meant to be up.

>>3475038
> WHARRGARBGL slkdf alkljsd ASLKSAA GAAAAAR YOU SHEEP

Go to sleep.

>>3475050
Okay, I'll admit it. BBC because I was looking for news about Top Gear and don't pay any attention to regular news.

>>3475064
fuck you dumb bitch.. are you one of the fucking morons who thinks its possible that a debt deal wont be reached? good.. ur one of the fat stupid americans we always hear about.. once its passed you can roll back into your whole and wait for the next big doomsday prediction..ok? bitchface

>>3475064

Not even a part of the discussion yet and I concur.

so if the F.B.I. loses its funding will it still run 4chan as a honey pot

>>3475107
> fuck you dumb bitch.. are you one of the fucking morons who thinks its possible that a debt deal wont be reached?
It's amusing to see how you think the discussion is divided like two sports teams, where everybody who agrees with you is on your team and anybody who criticizes you in on the opposing team. Also amusing is how you have a caricatured package of opinions and stereotypes for everybody you put on the opposite team. In that way, anybody who doesn't agree with you must be a fat stupid American with ignorant predictions. It seems politics are the new football.

>>3475163
Maybe if we default, Americans will stop being such lazy useless fucks(I'm talking the majority), and strive to do something with their lives. Could this be the wakeup call we all need?
Ron Paul 2012

I feel like its sort of bitterly necessary we do something horrible like default. Its just the natural consequence of such reckless behavior by our government.

We need to crumble and fall apart.

>>3475130
also when The Shit Hits The Fan will every body post pictures cause you cant see it on Fox News

>>3475163
you will default, the question is when.

>>3475175
> I'm the talking majority
FTFY

OK, so just give us the bottom line.

Is the entire country about to become a Harmony Korine movie? Is that what we're looking at? Or more like Escape from New York territory?

>>3475200
more like this

>>3475209
I lol'd

>>3475130
OMG call your congressman and tell them to save 4chan /b/cause it keeps us off the streets

The question is not whether the debt ceiling will be raised but when. Either way they will be scrambling, especially if they miss the deadline. Therefore, this is more of a technical, short-term default. By technical I mean the US and the world won't explode the very next day even if the debt rating takes a hit. Contrary to all doomsayers, the US won't lose ALL investor confidence either.

>so if the F.B.I. loses its funding will it still run 4chan as a honey pot
time for a p2p /b/ we only have days not weeks