I don't think the situation is entirely cut and dried. For instance, if we don't raise the debt ceiling, that doesn't mean that we instantly go into default on our debt. We still have a sizable revenue stream as a nation and could take money from discretionary spending projects and use it to pay debt obligations, for instance. But that would mean sizable cuts in such spending and would wreak havoc with our domestic programs. Furthermore, even if we did meet our debt payments, S&P would probably still downgrade our rating, which would increase our costs across the board and have gnarly negative repercussions.
There's a really interesting story by Ezra Klein about S&P and our country's credit rating here: http://www.washingtonpost.com/blogs/ezra-klein/post/how-congress-put-our-credit-rating-at-risk/2011/07/11/gIQA3WxhTI_blog.html The gist of it is this: at the beginning of the year, S&P was of the opinion that we definitely needed to balance out our spending and income and reduce long term deficits but there was not a big immediate concern. But as the year went on, their concern grew. Was it because our financial picture changed? Nope. It is because the political picture changed and all of a sudden, you've got a situation where the political lines are being drawn in the sand and people in Washington are saying if a deal doesn't get done *right now* they won't ever agree to anything. Basically, S&P is looking at the political situation and influential people in the Tea Party taking over the budget discussion on the Republican side of the aisle and, as a result, pushing an aggressive timeline that says "now or never" which makes S&P very worried about the "never" side of things. So it's gone from "something that needs to be looked at and dealt with by adults, we are mildly optimistic it will happen" to "holy shit, these kids are driving the bus off a fucking cliff and we need to figure it out right the fuck now". And that's the story of our credit rating. And it's all political. Judah On Mon, Jul 25, 2011 at 6:38 PM, Scott Stroz <boyz...@gmail.com> wrote: > > Not if you listen to the moronic Tea Baggers. According to them, > nothing will happen..at all...its all a bluff by Obama. > > These fucktards think they know better than every other expert I have > heard, yet, they continue to play chicken with the global economy. > Assholes. > > On Mon, Jul 25, 2011 at 8:13 PM, Grussgott <grussg...@gmail.com> wrote: >> >> Yup. Very expensive and probably a global recession with a US depression. >> Probably would meltdown Europe too. Very very bad. Most of us would lose >> our jobs to start and then it'd get worse from there. >> >> Basically it'd be a self-inflicted shot to the head in that the country >> might survive but it'd be pretty disfigured. >> >> Sent from my iPad >> >> On Jul 25, 2011, at 12:43 PM, Jerry Milo Johnson <jmi...@gmail.com> wrote: >> >>> >>> My understanding is that basically failing to raise the debt ceiling >>> is the government saying "we are not planning on paying back all the >>> money we have budgeted.". >>> >>> So, either the government stops paying those bills they budgeted, or >>> they are going to have to borrow that money as UNSECURED debt. >>> >>> (picture the Minn Government shutdown, or Cali sending all those >>> people home with no notice, or Cali not sending tax refunds to people >>> they owed money to, but instead sent IOUs but no money). >>> >>> Those unsecured loans are going to be expensive, like >>> break-your-kneecap-if-you-are-late expensive. And regular lenders on >>> the money that IS authorized (the money under the current debt >>> ceiling) are going to also start charging a LOT more to lend that >>> money, since we have said basically we cannot be trusted any more. >>> >>> And since those loans are going to be way more expensive, our BUYING >>> power per dollar is going to go way down. >>> >>> And our currency, compared to others is going to drop dramatically, so >>> all imports will be more expensive, and all exports will be worth >>> less. >>> >>> In the end, it will probably mean a HUGE reduction in government jobs >>> (like tens of thousands of layoffs or furlows), which will tank the >>> economy further, a HUGE reduction in government services, and a HUGE >>> increase in the debt, and a decapitation of our economy, probably into >>> a depression. >>> >>> It is going to be very expensive for you and me, wallet-wise. >>> >>> Or so I understand it, being completely economically and politically >>> and religiously challenged. (I just dont understand ideologues) >>> >>> On Mon, Jul 25, 2011 at 1:26 PM, Scott Stewart >>> <webmas...@sstwebworks.com> wrote: >>>> >>>> So with all the talk about the US debt ceiling... has me wondering.. >>>> what would happen if we did default? >>>> >>>> Is it the fall of Western Civilization and we all go back to living in >>>> animal skin tents, hunting and gathering to get by >>>> ..or >>>> Is it a reset..meaning, kind of like going bankrupt, our debts gone >>>> and we start over albeit with a signifcantly diminished credit score? >>>> >>>> note: I am not an economist, so please.. plain english :) >>>> >>>> -- >>>> -- >>>> Scott Stewart >>>> Adobe Certified Instructor, ColdFusion 8 & 9 >>>> Adobe Certified Expert, ColdFusion 8 & 9 >>>> >>>> Blog: http://www.sstwebworks.com >>>> Email: webmas...@sstwebworks.com >>>> >>>> >>> >>> >> >> > > ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Order the Adobe Coldfusion Anthology now! http://www.amazon.com/Adobe-Coldfusion-Anthology/dp/1430272155/?tag=houseoffusion Archive: http://www.houseoffusion.com/groups/cf-community/message.cfm/messageid:340953 Subscription: http://www.houseoffusion.com/groups/cf-community/subscribe.cfm Unsubscribe: http://www.houseoffusion.com/groups/cf-community/unsubscribe.cfm
