I take it that by Aug 2nd there will some sort of deal that will allow for raising of the debt ceiling to give government some space to throw efforts into. HOWEVER Administration has to show some real spending cuts and Obama has to have "selfless balls" to also raise the taxes. Once the budget is balanced then US can look forward some economic growth down the road. These two measures will stagnate the economy for next 2-5 years but this is a better pill than outright hyperinflation and chaos in the society and also global economy resulting in global depression and political disturbance. More than the half of the 13T debt is owed to the American people and institutions. So defaulting will hurt internally much more than countries like China, EU and Oil rich nations. Bringing jobs back from overseas can be a good offset to the economic stagnation. Canada exports half billion dollars worth of lentils to India each year and demand is rising further in nearly all grain sectors. Why cannot US grab the lucrative farming market share to export to economies on the 'consumption high' gear.
The revenue doesn't exist to finance our completely unaffordable entitlement and Corporate welfare system. We either kick the can down the road, or take our beatings now. For those of you who advocate "mild" socialism to pacify would-be Che Guevara's, sure, that's fine. We can do that at HALF of what we're spending today. Sound good? If not, you're fooling yourself. Either Congress gets it's finances in order now, or the market will do it for us, later. At current expenditures, we are broke. Without the deficit, equilibrium point for US GDP is 15% LOWER than where we stand today. Americans need to wake the fuck up and realize this gravy train is over. Generally, the Tea Party are ignorant to the economic fallout of not raising the ceiling. As are most Americans. They're right for the wrong reasons. But what's the alternative? Borrow with impunity until we're Greece? Wait until the dollar implodes? That's your solution? Even if somehow we put back to work the 6 million Americans shit-canned since '08, the Federal Budget deficit would still be 1 Trillion dollars. 1 Trillion. The economy is structurally deficient. We are running on fumes. This is it. All the welfare cases, public sector leeches, grannies sucking down 50 different pills a day, bloated defense contractors, they're all gonna get flushed. This is reality. Now what? Shoot the messenger?
Can't disagree. We should overhaul healthcare delivery and restructure social security and if Repubs would give up their zombie dogma that lower taxes and smaller govt. ALWAYS create jobs and growth (against evidence) we could begin re-building infrastructure and incenting technical and scientific research and education necc. for 21st century.
More doomsaying. 2008 cratered the Federal budget. Crises will do that. That's all that happened. The Great Depression was a lot worse, and so was the size of the deficit that resulted from that. When WWII ended, debt to GDP was higher than it is now. Far as I know, the ratings agencies didn't say a thing. Now comes the part where someone pipes up and says "It's different this time!" It's always different. At the end of WWII, there was a huge fear that the entire economy would implode, again. You had the returning soldiers who would now need work, you had that huge debt, and half the world was an ash heap. Things didn't get better overnight. Europe had to rebuild over a period of years, and over here there was an inflation spike and a spike in the number of industrial strikes. Shortages abounded. Things didn't really stabilize until around 1950 in the US, probably later elsewhere. China of course was gifted with a civil war and then Mao, and Eastern Europe got to enjoy Stalin, so things weren't exactly rosy everywhere. The difference between that generation and this one is that that one got busy working on solving things. When money needed to be spent on the Marshall Plan to rebuild Europe and keep Stalin out of the western half, they spent it, regardless of that debt. They were brave, not a bunch of chickens constantly whining about how the sky is falling.
. Thanks for the history lesson but in WW2 we didn't have $100 trillion in medicare + prescription drug liabilities with no way of paying it and a powerful voter bloc that refuses to let that go.
it is fundamentally different from what is happening now. right now there is the possibility of a money crunch, which is impossible if the government truly prints money.
the coming depression is already bigger than 1930´s. It is inevitable. When the true effects of the depression hit, these liabilities will simply void. Overnight pensions, medicare and other will be cut 50% or simply dissolved. You are thinking up a scenario where there is still reason. But reason will disappear in the quest for a balanced budget.
So I pulled this out of an article today and thinking that it seems even though there is still no agreement I think they will still go ahead with a raise in the debt ceiling sometime this week or next only to push an agreement on where to cut spending sometime in 2012. Seems even today July 16th the democrats are still up against the republicans to increase the debt ceiling and then they go on to say that the vote is being prepared next week, however there is an unlikely outcome that a balanced-budget constitutional amendment is approved! As I said over and over again the best outcome is to NOT raise the debt ceiling and let what needs to happen, happen. How many times are they going to increase the debt ceiling without coming to an agreement on where to cut spending. They are so quick to spend, spend, spend, but talk about cutting any spending doesn't even exist. This economy is in a really sad state right now! ------------------------------------------------------------------------ "We have to ask everyone to play their part because we are all part of the same country," Obama said Saturday, as he pushed for a package of spending cuts and tax increases that has met stiff resistance from Republicans. "We are all in this together." In his weekly radio and Internet address, Obama said the wealthiest Americans must "pay their fair share." He invoked budget deals negotiated by former President Ronald Reagan and Democratic House Speaker Tip O'Neill, and former President Bill Clinton and Republican Speaker Newt Gingrich. "You sent us to Washington to do the tough things, the right things," he said. "Not just for some of us, but for all of us." But as a critical Aug. 2 deadline approached, the chances that Obama would get $4 trillion or even $2 trillion in deficit reduction on terms he preferred were quickly fading as Congress moved to take control of the debate. House Republicans prepared to hold a vote next week to allow an increase in the debt ceiling through 2012 as long as Congress approves a balanced-budget constitutional amendment, a highly unlikely outcome.
Reason already has dissappeared in the form of the Tea Party. What business does not lever it's balance sheet at opportune times? Also the "family checkbook" analogy is particulary irksome.