Would the GOP types push the USA into default ?

Road to recovery. :lol:

That will be one of those generational sayings if it stays relevant for 4 more years.



I'm saying that if our fiat currency system rests entirely on confidence, then people need to think the debt matters and our government is funded by tax dollars, not money the Federal Reserve hands out for treasuries.
Nations we owe money too need to think we take our debt seriously.


And for those who keep advocating deficit spending or QE to reduce unemployment, what happens when each new $1 in debt creates less than $1 in new GDP?

http://www.zerohedge.com/news/guest...debt-buildup-triggers-another-financial-shock

Mathematically, that brings to mind another crisis in years ahead. Or spending $1 million to create 1 new job.

The world isn't producing any more additional oil each day, hasn't really for years now, and yet our exponential growth on paper must continue onwards.


People in foreign countries see posts like yours and they flat out know that we don't take the debt seriously. Because if you win, our credit, and our creditors, are screwed.
 
People in foreign countries see posts like yours and they flat out know that we don't take the debt seriously.
At ~$17 trillion in debt with no end in sight, it should be clear to anyone with a brain that we don't treat it seriously.
 
I was reading a report from Merrll Lynch, that assuming we do not default - this shutdown will negatively impact our GDP anywhere from 0.3% to 3.0% which is huge. The 0.3% is supposed to be the effects of just this last week alone with the 3.0% if this issue is not dealt with until the very last minute.

Theoretically coupled with the delays of the Septaper and weaker jobs numbers, this could be the spark to put us back into a double dip recession.
 
Isn't that the problem? Democrats and most neutrals perceive thats what Republicans have been doing for the last half decade now. Thats the problem when you employ a strategy known to game theorists as "Chicken". If one side doesn't go out of the way, everyone is screwed. The longer the Republicans used their unsustainable strategy, the higher the odds the Democrats would eventually fight back. That's the real problem - Republicans have basically turned Democrats into acting the same way as they are, simply because after a certain period of time when you employ a chicken strategy there is no other choice.
 
At ~$17 trillion in debt with no end in sight, it should be clear to anyone with a brain that we don't treat it seriously.

Yes and no. Focusing on the $17 trillion is a bit of a mistake. The real question is whether the debt is being serviced. The American debt is not just one big giant loan, it's a series of tiny microloans, each with their own payment schedule.

The true problem arises when the cost of servicing the debt goes above the growth in government revenues (ideally, through GDP growth). A 2% servicing cost (i.e., the cost of paying back the microloans with funds not gained through new debt issues) is quite sustainable as long as there is economic growth greater than 2%.

This is why (say) Google can currently have $8.2 billion dollars in debt and not be in the least bit of trouble (despite the fact that their total debt levels have only grown)
 
Either way I was serious that Obama may need to rethink his policy of not negotiating with terrorists. The numbers being projected show that if action is not taken we risk entering another recession - and regardless if the Republicans are in the wrong here [which they are], the economy can not afford this bickering either way.
 
People in foreign countries see posts like yours and they flat out know that we don't take the debt seriously. Because if you win, our credit, and our creditors, are screwed.
Well, it's more a question of do we take inflation seriously vs the interest rates on long term treasuries. As long as we do, we are taking our debt seriously.



@El Mac, it's not even like a series of micro loans. It's not like loans at all.
 
Then why do we have to pay it back if it isn't like loans at all?

Er, I see. When you borrow money loan style, you are borrowing their money, so that you have money, but owe it and more back, and the lender doesn't have that money. And with that loan, you spend that money. And if the lender said "gimme my money" and you had spent that money, you go bankrupt.

That's different from the US.

In the US, the "lender" is actually "the buyer/the depositor" and the borrower is "the seller/the bank". Despite appearances, the Fed is totally part of the US government.

What's going on is that the buyer of bonds is this:

US offers $10 treasury bond
Buyer spends $10 cash for $10 bond.
Buyer now owns $10 bond. It's worth $10+interest.
If buyer holds $10 bond to term, buyer might end up with $10.15 cash at the end of (short term), otherwise the buyer can use that $10 bond as $10 because bonds and cash are both dollars backed by the US government.

In the fairy tale world that a bond hold can demand their bond be immediately converted to cash, the $10 bond becomes $10 cash. The bond is gone and the money turns into cash again. This is an automatic function of accounting at the Federal Reserve (and Treasury).

So short answer is, the "lenders" already own their dollars like you own your dollars in a savings account. Everyone owns their assets. There's no money shortage or leverage risk.
 
Senate Majority Leader Harry M. Reid (D-Nev.) continues to demand that Boehner open up the government by passing the Senate’s funding legislation and then broader fiscal talks could begin.

Source: http://www.washingtonpost.com/polit...1aa1fe-305f-11e3-8906-3daa2bcde110_story.html

Isn't that the same as saying "Give me everything I want first, then maybe we will discuss your issues?" :confused:

No, it's more like if you have two roommates in an apartment who need to cosign a rent check, only one of them refuses to do so because he doesn't like how his friend hasn't been doing the dishes regularly or vacuuming, and he's been seeing this gross girlfriend whose been giving him the creeps.
 
Isn't that the problem? Democrats and most neutrals perceive thats what Republicans have been doing for the last half decade now. Thats the problem when you employ a strategy known to game theorists as "Chicken". If one side doesn't go out of the way, everyone is screwed. The longer the Republicans used their unsustainable strategy, the higher the odds the Democrats would eventually fight back. That's the real problem - Republicans have basically turned Democrats into acting the same way as they are, simply because after a certain period of time when you employ a chicken strategy there is no other choice.

Ya know, most rational individuals could respond to your post with ...
"Isn't that the problem? Republicans and most realists perceive thats what Democrats have been doing for the last half decade now. Thats the problem when you employ a strategy known to game theorists as "Chicken". If one side doesn't go out of the way, everyone is screwed. The longer the Democrats used their unsustainable strategy, the higher the odds the Republicans would eventually fight back. That's the real problem - Democrats have basically turned Republicans into acting the same way as they are, simply because after a certain period of time when you employ a chicken strategy there is no other choice."

As near as I can tell, Republicans have offered compromise after compromise, while the Obamacrats keep up with the same old, 'My way or the highway'.
 
At ~$17 trillion in debt with no end in sight, it should be clear to anyone with a brain that we don't treat it seriously.

Democrats are trying. Republican refuse to try. Anyone with a brain sees that clearly.
 
No, it's more like if you have two roommates in an apartment who need to cosign a rent check, only one of them refuses to do so because he doesn't like how his friend hasn't been doing the dishes regularly or vacuuming, and he's been seeing this gross girlfriend whose been giving him the creeps.

Nice, but I kinda like the one where the couple argue about going to the bank to increase their borrowing limit in order to pay for their lifestyle.

The hubby is all for it (he likes the feeling of power he gets from supporting his loafer friends), while the frau is more interested in living within their means.
 
I would say most realists disagree with that if you are being honest :p. But lets take your comment at face value.

Republican perception does matter. Now lets consider this from the theoretical. Both consider themselves as morally right. Both consider the other to have transgressed over the years. So considering both are pointing fingers at one another and neither wants to give an inch consider this:

Both sides are not giving an inch. Both sides have offered "compromises" to one another, that the other seems not to have realized. You claim Republicans have made compromises that have been ignored. And you ignore the compromises Democrats have made. This situation means that there appears to be no active solution and that we will enter a new recession and millions will lose their jobs if we follow this conclusion.

Therefore the narrative has to be changed. Republicans and Democrats need to change perceptions of each other and that itself requires a compromise, a new Political Order of moderates. What we need is a return of backroom cloak and dagger politics, not the overt demagoguery of Fox News and other outlets. What we need, is a return of hypocriscy and the ability to negotiate between politicians without having their hands tied. What we need - IS Less transparency in government
======

I believe Republicans are unwilling to change without unemployment reaching to 15% and beyond. I say we are on the brink of a new depression thanks to them and however it results, this will hurt the Tea-Party tremendously. For Democrats they picked the wrong time to grow a spine and stand up to Republicans for really the first time in years - there are other fights and its preferable to negotiate for the sake of the people even if everyone knows the Republicans are at fault.
 
Senate Majority Leader Harry M. Reid (D-Nev.) continues to demand that Boehner open up the government by passing the Senate’s funding legislation and then broader fiscal talks could begin.

Source: http://www.washingtonpost.com/polit...1aa1fe-305f-11e3-8906-3daa2bcde110_story.html

Isn't that the same as saying "Give me everything I want first, then maybe we will discuss your issues?" :confused:


Which is exactly what the Republicans have been saying all along. So why are you objecting to it now?
 
Ya know, most rational individuals could respond to your post with ...
"Isn't that the problem? Republicans and most realists perceive thats what Democrats have been doing for the last half decade now. Thats the problem when you employ a strategy known to game theorists as "Chicken". If one side doesn't go out of the way, everyone is screwed. The longer the Democrats used their unsustainable strategy, the higher the odds the Republicans would eventually fight back. That's the real problem - Democrats have basically turned Republicans into acting the same way as they are, simply because after a certain period of time when you employ a chicken strategy there is no other choice."

As near as I can tell, Republicans have offered compromise after compromise, while the Obamacrats keep up with the same old, 'My way or the highway'.


Name 1 compromise the Republicans have offered in the past 5 years.
 
Er, I see. When you borrow money loan style, you are borrowing their money, so that you have money, but owe it and more back, and the lender doesn't have that money. And with that loan, you spend that money. And if the lender said "gimme my money" and you had spent that money, you go bankrupt.

That's different from the US.

In the US, the "lender" is actually "the buyer/the depositor" and the borrower is "the seller/the bank". Despite appearances, the Fed is totally part of the US government.

What's going on is that the buyer of bonds is this:

US offers $10 treasury bond
Buyer spends $10 cash for $10 bond.
Buyer now owns $10 bond. It's worth $10+interest.
If buyer holds $10 bond to term, buyer might end up with $10.15 cash at the end of (short term), otherwise the buyer can use that $10 bond as $10 because bonds and cash are both dollars backed by the US government.

In the fairy tale world that a bond hold can demand their bond be immediately converted to cash, the $10 bond becomes $10 cash. The bond is gone and the money turns into cash again. This is an automatic function of accounting at the Federal Reserve (and Treasury).

So short answer is, the "lenders" already own their dollars like you own your dollars in a savings account. Everyone owns their assets. There's no money shortage or leverage risk.

Ah, but in the world I live in, the lender can never say 'gimme my money'. The lender is due his interest payments and due the negotiated return-of-principle. The very best the lender can do (if he needs cash) is sell the debt paper to someone else. And the lender certainly doesn't care if I borrow from someone else to pay him back, as long as he gets paid back.
 
When was the last budget (CR's don't count here) passed by Congress? This governing by crisis is ridiculous and has to stop.
 
Back
Top Bottom