If forced to make a choice between reneging on social security in an "informal" default, or actually defaulting by (eg) deleting Chinese-held CUSIPs from the Pay Back Sometime spreadsheet... ...Washington will screw the Chinese. Because if they go the other path, Americans will start burning down buildings. And that isn't good for anyone's re-election chances. So yes, you're right, it doesn't necessarily mean "meaningful" default from a theoretical perspective, but from a political practicality perspective, it sure does. Not that any of it matters - this kabuki show is almost over and a "deal" will be converged on "in the nick of time". Everybody gets to be a hero...
That should be a major concern, and if the U.S. defaults on Treasuries, or for that matter on any of its obligations, the bond ratings are in jeopardy, and the dollar will quite likely lose it status as the reserve currency, far more rapidly than anyone anticipated. Such an event would be a disaster for the U.S.
Looks like they are going to try and reach a deal this weekend, seems the pressure is still on, of course they are going to wait until the last minute to raise it, thats the same game they always play....A decision will be made shortly so no need to start worrying anytime soon, only way to keep the economy going is to keep spending and raising the debt ceiling. The biggest joke will be a raise in the debt ceiling and no agreement on any type of spending cuts or increase in taxes.
The Fed has NOT been printing money. They have managed operations without having to "print", according to Bernanke.
Probably a last minute solution until the next crisis. You are correct though. feds have more to fear from their own people than the chinese. Hell, even I'm even wary of some of them.
the choice is between saving a country from chaos, extended recession and even class warfare vrs arrogance, ego, evilness and outright drunk stupidity. it is an easy choice but only evilness will find it hard to differentiate.
That's what it may well come down to. A certain measure of socialism serves a very useful function - it is what keeps (enough) people from getting into a bad enough spot that they start lining the lucky ones up against walls and shooting them. The plain fact is that suprressing revolutions is much more expensive than food stamps and a little income tax redistributions. If I read you right, you and I have a similar concern - it has been such a long time since The Haves have felt threatened by the Have Nots that they've forgotten that very important point. Which means they may well do try and do something immensely stupid.
What R.C. just said about revolutions (Leon Trotsky's thousand page History of the Russian Revolution is still in print if you don't believe him) and this guy. For the rest of you, debt ceiling increases are exactly one sentence long. They are routine. They are done at the last minute, because everyone knows it's not going to be a popular vote. This one's had a lot of noise around it, just like the last time we had this lethal combo of a bunch of Rep freshmen high on winning their very first election, and a Dem prez in his first term. Just like then, it will get done, because it has to get done. Just like then, the Reps will look like fools for pandering to their stupid freshmen. They've already lost 2012, and they know it; hence Mitch McConnell's last ditch, desperate attempt to salvage some kind of political capital out of this. The rest of the world is looking at this and has decided Italy has a better run government than we do; they're right, too. Over there, the Tea Party would be seen by 90% of the population for the dumbasses they are; over here, it's just 80%, which explains why they can take the rest of us hostage, and explains why here at ET they compete with each other to see who has the biggest (online) balls and the smallest cranium (in real life, too, in this case; no one who can add would hold to the ridiculous political position these people do).