Who cares,right?

[ugonow]

"NEW YORK (Reuters) - The United States would immediately have its top-notch credit rating slashed to "selective default" if it misses a debt payment on August 4, Standard & Poor's managing director John Chambers told Reuters.

Chambers, who is also the chairman of S&P's sovereign ratings committee, told Reuters on Tuesday that U.S. Treasury bills maturing on August 4 would be rated 'D' if the government fails to honor them. Unaffected Treasuries would be downgraded as well, but not as sharply, he said.

"If the U.S. government misses a payment, it goes to D," Chambers said. "That would happen right after August 4, when the bills mature, because they don't have a grace period."

Fears of a technical default have been rising after budget negotiations between Democrats and Republicans fell apart in Washington earlier this week. Even a brief default by the United States would immediately increase the country's borrowing costs, weighing on the fragile economic recovery and eroding the dollar's status as a reserve currency."

[deziloooooo]

Jun 29, 2011 17:17:17 GMT -5 ugonow said:

"NEW YORK (Reuters) - The United States would immediately have its top-notch credit rating slashed to "selective default" if it misses a debt payment on August 4, Standard & Poor's managing director John Chambers told Reuters.

Chambers, who is also the chairman of S&P's sovereign ratings committee, told Reuters on Tuesday that U.S. Treasury bills maturing on August 4 would be rated 'D' if the government fails to honor them. Unaffected Treasuries would be downgraded as well, but not as sharply, he said.

"If the U.S. government misses a payment, it goes to D," Chambers said. "That would happen right after August 4, when the bills mature, because they don't have a grace period."

Fears of a technical default have been rising after budget negotiations between Democrats and Republicans fell apart in Washington earlier this week. Even a brief default by the United States would immediately increase the country's borrowing costs, weighing on the fragile economic recovery and eroding the dollar's status as a reserve currency."

ugonow..the posters here , to many of them, don't believe it would happen as it is said above and if it did, think it wouldn't bother them at all personally.. so wrong they are.

[rovo]

I don't understand the logic of the previous posters. A failure to raise the debt ceiling will not cause the USA to default on the bond payments. It could do so but it would be at the discretion of the Executive Branch. There is more than enough income to meet the payments going forward. The administration would see to it the bond obligations are met. If not, then our credit rating would suffer drastically and the calls for impeachment would be loud and clear. No administration would be foolish enough to allow default.

[frep]

Yep, there would be enough revenue to cover the debt payments. The problem is after they paid the debt payments they would be forced to make cuts to other programs.

[rovo]

Jun 29, 2011 20:11:16 GMT -5 frep said:

Yep, there would be enough revenue to cover the debt payments. The problem is after they paid the debt payments they would be forced to make cuts to other programs.

Absolutely true but the article quoted by the OP dealt with the likelihood of default. There would be severe cutbacks in spending. Just think of it as an inaction by Congress to force an instantly balanced budget. But then again, even an "inaction" is an action.

[BeenThere...DoneThat...]

Jun 29, 2011 20:11:16 GMT -5 frep said:

Yep, there would be enough revenue to cover the debt payments. The problem is after they paid the debt payments they would be forced to make cuts to other programs.

...meanwhile, there is support for letting this 'problem' unfold and we pay the price now, on our own terms, rather than later, on someone else's...

[rovo]

There may be some support for not raising the debt ceiling but such an action would have catastrophic results. I remember 1 if not 2 other times this happened but 1) we were not engaged in military action(s) and 2) we were not teetering on the edge of a recession.

A better alternative would be a compromise with severe spending cuts because at least the available funds would be directed to where Congress thinks they are needed the most.

I can see the appeal to not raising the debt ceiling from a financial standpoint but it will hurt. Really hurt. Are we really prepared to watch people die from a lack of funds?

[❤ mollymouser ❤]

I care.

[BeenThere...DoneThat...]

Jun 29, 2011 22:50:52 GMT -5 rovo said:

There may be some support for not raising the debt ceiling but such an action would have catastrophic results. I remember 1 if not 2 other times this happened but 1) we were not engaged in military action(s) and 2) we were not teetering on the edge of a recession.

A better alternative would be a compromise with severe spending cuts because at least the available funds would be directed to where Congress thinks they are needed the most.

I can see the appeal to not raising the debt ceiling from a financial standpoint but it will hurt. Really hurt. Are we really prepared to watch people die from a lack of funds?

...reluctantly, yes... imo... I've seen and heard so much exasperation lately from so many for some time now... in part, I think, because we were "warned" about the catastrophic damage we'd face for not passing the stimulus packages... as well as the significant improvements we'd see... and well, it's not what was promised, huh?

...meanwhile, we're watching Greece unravel on the nightly news... watching our soldiers die far away... and maybe there's just a lot of "federal fatigue," of sorts...

...maybe it's a question of hearing "wolf!" cried one too many times?

...so, yes, I think there'd be support to battening down the hatches and letting the games begin... we're already bleeding and hurting, so why not cauterize the wound? imo...

[ugonow]

Debt-limit delay would jeopardize Social Security payments
By Richard Wolf, USA TODAYUpdated 20h 59m ago |
WASHINGTON — Social Security payments to millions of retirees and people with disabilities could be threatened if President Obama and Congress can't agree to increase the government's debt limit by Aug. 2, a new analysis shows.

Analysis shows the government would be unable to make payments due Aug. 3 to Social Security recipients.
Although the Treasury Department likely could avoid delaying Social Security checks, the analysis by the Bipartisan Policy Center points up the depth of the cuts that would be needed if the $14.3 trillion debt ceiling isn't raised.

It shows that in August, the government could not afford to meet 44% of its obligations. Since the $134 billion deficit for that month couldn't be covered with more borrowing, programs would have to be cut.

If Social Security, Medicare, Medicaid, unemployment benefits, payments to defense contractors and interest payments on Treasury bonds were exempt, that would be all the government could afford for the month. No money for troops or veterans. No tax refunds. No food stamps or welfare. No federal salaries or benefits.

Want to protect the social safety net? That would be possible — but only if Treasury stopped paying defense contractors, jeopardizing national security. Plus virtually every federal agency and employee.

"We should be honest with ourselves what this would be like, and the answer is it would be chaotic," said Jay Powell, a former top Treasury official in President George H.W. Bush's administration. "There is no way to avoid really serious pain."

Treasury Department receipts and spending for August 2009 and 2010 and found that the government likely would not have enough revenue to make the full $23 billion payment to Social Security recipients due Aug. 3. That's the first Wednesday of the month, when a majority of Social Security and Supplemental Security Income checks go out.

Things wouldn't improve much as the days pass. The first major interest payment to creditors would be due Aug. 15 — $29 billion, more than the $22 billion due to arrive in revenue.

On that day, Treasury would have to roll over nearly $500 billion in maturing debt — necessitating an auction which, by that time, might have fewer takers than usual. If demand declines, interest rates would rise.

As the center foresees it, the picture would get worse: layoffs and lawsuits. Global market reaction and media glare. A possible downgrade in the U.S. credit rating, perhaps followed by the loss of market access.

The effect on the country, said former Republican senator Pete Domenici of New Mexico, would be "irretrievable." "

[cme1201]

In 2009 was a budget passed by congress that could deal with this issue? No we funded the government with continuing resolutions.

In 2010 was a budget passed by congress that could deal with this issue? No we funded the government with continuing resolutions.

[deziloooooo]

With all respect's to those who post here and say it won't be as bad as is suggested, I hope you understand when I say I have to go along with those who seem to have the credentials and say it will be a terrible thing, with far reaching consequences..

They should get the best deal they can, with compromises, and when they reach that point , no more to be gotten, then pass the increase of the ceiling and in the next Congress go after the larger cuts in spending..

To allow us to possible default, even the possibility of this happening..

"On that day, Treasury would have to roll over nearly $500 billion in maturing debt — necessitating an auction which, by that time, might have fewer takers than usual. If demand declines, interest rates would rise.

As the center foresees it, the picture would get worse: layoffs and lawsuits. Global market reaction and media glare. A possible downgrade in the U.S. credit rating, perhaps followed by the loss of market access.

The effect on the country, said former Republican senator Pete Domenici of New Mexico, would be "irretrievable."

is unconscionable IMHO.

[privateinvestor]

Who cares,right

Obama, Reid and Pelosi care big time IMHO If we default they are worried these three incompetent dems will be blamed and cost them votes...do guess what?? Obama needs to deal with it and show some leadership for a change....but it might just be too little too late and we could go into default and the government will not be able to pay their bill or just pay the interest on their debt..

P.I. (Unhappy Democrat)

[deziloooooo]

"Who cares,right "
--------------------------

I do for one..

[cme1201]

My issue is the fact that it is now OH MY GOD THE SKY IS FALLING time. Anyone with 1/2 a brain could have seen this coming for the past 2 years. No budgets offered in congress, no budget passed by the democratic senate in 787 days.

It should have been dealt with way before now, now all we have is media pushing fear for one reason to get the American people worked up, because it's better to fearmonger than deal with the issue.

[BeenThere...DoneThat...]

>>> My issue is the fact that it is now OH MY GOD THE SKY IS FALLING time. Anyone with 1/2 a brain could have seen this coming for the past 2 years. several decades... <<<


...fixed...

[privateinvestor]

Jun 30, 2011 7:50:07 GMT -5 cme1201 said:

My issue is the fact that it is now OH MY GOD THE SKY IS FALLING time. Anyone with 1/2 a brain could have seen this coming for the past 2 years. No budgets offered in congress, no budget passed by the democratic senate in 787 days.

It should have been dealt with way before now, now all we have is media pushing fear for one reason to get the American people worked up, because it's better to fearmonger than deal with the issue.

Not really I watched MSNBC "Morning Joe" this AM and Jim Cramer said that Wall St is extremely worried about going into default and the inside betting is we may not see a deal struck with Obama and the Repubs because of the so called "Revenues" impasse which includes raising taxes....Cramer may be a lot of things but when he says the investment community is very worried about default maybe he is right on this time...IMHO naturally..

Cramer also qouted his bud Jim Rogers who has his views on this issue if anyone really cares about "Default"

videos.thestreet.com/v/40270068/jim-rogers-how-u-s-will-default.htm

[rovo]

Dezi offered the following quote a few posts above this post.

"On that day, Treasury would have to roll over nearly $500 billion in maturing debt — necessitating an auction which, by that time, might have fewer takers than usual. If demand declines, interest rates would rise.

I don't know who he was quoting but it could play out as stated.

On the other hand, it could be the exact opposite. Since no new debt is being issued (only rolling over existing debt) and since there has been a pretty good demand for USA debt, it is possible for the existing debt to be rolled over at an interest rate below that coming due.

[Deleted]

Jun 29, 2011 20:11:16 GMT -5 frep said:

Yep, there would be enough revenue to cover the debt payments. The problem is after they paid the debt payments they would be forced to make cuts to other programs.

Isn't this the way it should be? Cuts are going to have to be made. This is just a political ploy by both sides to try and fear-monger the general public.

[jkapp]

Jun 30, 2011 7:35:38 GMT -5 ugonow said:

Debt-limit delay would jeopardize Social Security payments
By Richard Wolf, USA TODAYUpdated 20h 59m ago |
WASHINGTON — Social Security payments to millions of retirees and people with disabilities could be threatened if President Obama and Congress can't agree to increase the government's debt limit by Aug. 2, a new analysis shows.

Analysis shows the government would be unable to make payments due Aug. 3 to Social Security recipients.
Although the Treasury Department likely could avoid delaying Social Security checks, the analysis by the Bipartisan Policy Center points up the depth of the cuts that would be needed if the $14.3 trillion debt ceiling isn't raised.

It shows that in August, the government could not afford to meet 44% of its obligations. Since the $134 billion deficit for that month couldn't be covered with more borrowing, programs would have to be cut.

If Social Security, Medicare, Medicaid, unemployment benefits, payments to defense contractors and interest payments on Treasury bonds were exempt, that would be all the government could afford for the month. No money for troops or veterans. No tax refunds. No food stamps or welfare. No federal salaries or benefits.

Want to protect the social safety net? That would be possible — but only if Treasury stopped paying defense contractors, jeopardizing national security. Plus virtually every federal agency and employee.

"We should be honest with ourselves what this would be like, and the answer is it would be chaotic," said Jay Powell, a former top Treasury official in President George H.W. Bush's administration. "There is no way to avoid really serious pain."

Treasury Department receipts and spending for August 2009 and 2010 and found that the government likely would not have enough revenue to make the full $23 billion payment to Social Security recipients due Aug. 3. That's the first Wednesday of the month, when a majority of Social Security and Supplemental Security Income checks go out.

Things wouldn't improve much as the days pass. The first major interest payment to creditors would be due Aug. 15 — $29 billion, more than the $22 billion due to arrive in revenue.

On that day, Treasury would have to roll over nearly $500 billion in maturing debt — necessitating an auction which, by that time, might have fewer takers than usual. If demand declines, interest rates would rise.

As the center foresees it, the picture would get worse: layoffs and lawsuits. Global market reaction and media glare. A possible downgrade in the U.S. credit rating, perhaps followed by the loss of market access.

The effect on the country, said former Republican senator Pete Domenici of New Mexico, would be "irretrievable." "

There'd be plenty of money to pay SS recipients if previous admins hadn't drained the trust fund dry...and they wouldn't have been able to drain the fund dry if the democrats hadn't signed the trust fund over to the general fund to begin with.

[ugonow]

Yup, all dems. I know of a president that raised SS taxes, cut benefits to both medicare and SS and used the procedes of the increase and cuts to add to the general budget.Just a sneaker way of doing it.-------"The first major confrontation over Social Security occurred in the early 1980s during the Reagan presidency. Reagan had promised to balance the federal budget. But the budget that he sent to Congress in 1981, because of the heavy expenditure on the military, would have led to record deficits, despite deep cuts in social expenditures. David Stockman, Reagan's budget director, decided that the only possibility of avoiding these huge deficits would be to raid Social Security. Rather than state this openly in the budget, however, he included forty billion dollars in "future savings to be identified." As Stockman later admitted, this was nothing but a euphemism for budgetary reductions to be won by "storming the twin citadels of Social Security and Medicare" (Stockman, The Triumph of Politics, p. 124-125). The Reagan administration's frontal assault on Social Security began on May 12, 1981. It included substantial reductions in benefits for those seeking early retirement at age sixty-two, plus cuts in basic benefi ts--altogether forty-five billion dollars in "savings."

[floridayankee]

Jun 29, 2011 17:17:17 GMT -5 ugonow said:

"If the U.S. government misses a payment, it goes to D," Chambers said. "That would happen right after August 4, when the bills mature, because they don't have a grace period."

The last time I saw the future loss of money staring me in the face (lay-off) and knowing the bills still needed to be paid, I started saving for that eventual "rainy day".

I guess it would be too much to ask for our government to have that much foresight.

[floridayankee]

Jun 30, 2011 7:44:36 GMT -5 deziloooooo said:

They should get the best deal they can, with compromises, and when they reach that point , no more to be gotten, then pass the increase of the ceiling and in the next Congress go after the larger cuts in spending.

This is what has been going on all along....business as usual...pass the buck...let someone else deal with this in the future.

The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies.

Over the past 5 years, our federal debt has increased by $3.5 trillion to $8.6 trillion.That is “trillion” with a “T.” That is money that we have borrowed from the Social Security trust fund, borrowed from China and Japan, borrowed from American taxpayers. And over the next 5 years, between now and 2011, the President’s budget will increase the debt by almost another $3.5 trillion.

Numbers that large are sometimes hard to understand. Some people may wonder why they matter. Here is why: This year, the Federal Government will spend $220 billion on interest. That is more money to pay interest on our national debt than we’ll spend on Medicaid and the State Children’s Health Insurance Program. That is more money to pay interest on our debt this year than we will spend on education, homeland security, transportation, and veterans benefits combined. It is more money in one year than we are likely to spend to rebuild the devastated gulf coast in a way that honors the best of America.

And the cost of our debt is one of the fastest growing expenses in the Federal budget. This rising debt is a hidden domestic enemy, robbing our cities and States of critical investments in infrastructure like bridges, ports, and levees; robbing our families and our children of critical investments in education and health care reform; robbing our seniors of the retirement and health security they have counted on.

Every dollar we pay in interest is a dollar that is not going to investment in America’s priorities.

Senator Barack Obama
Senate Floor Speech on Public Debt
March 16, 2006

[deziloooooo]

Jun 30, 2011 11:45:12 GMT -5 floridayankee said:

Jun 30, 2011 7:44:36 GMT -5 deziloooooo said:

They should get the best deal they can, with compromises, and when they reach that point , no more to be gotten, then pass the increase of the ceiling and in the next Congress go after the larger cuts in spending.

This is what has been going on all along....business as usual...pass the buck...let someone else deal with this in the future.

The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies.

Over the past 5 years, our federal debt has increased by $3.5 trillion to $8.6 trillion.That is “trillion” with a “T.” That is money that we have borrowed from the Social Security trust fund, borrowed from China and Japan, borrowed from American taxpayers. And over the next 5 years, between now and 2011, the President’s budget will increase the debt by almost another $3.5 trillion.

Numbers that large are sometimes hard to understand. Some people may wonder why they matter. Here is why: This year, the Federal Government will spend $220 billion on interest. That is more money to pay interest on our national debt than we’ll spend on Medicaid and the State Children’s Health Insurance Program. That is more money to pay interest on our debt this year than we will spend on education, homeland security, transportation, and veterans benefits combined. It is more money in one year than we are likely to spend to rebuild the devastated gulf coast in a way that honors the best of America.

And the cost of our debt is one of the fastest growing expenses in the Federal budget. This rising debt is a hidden domestic enemy, robbing our cities and States of critical investments in infrastructure like bridges, ports, and levees; robbing our families and our children of critical investments in education and health care reform; robbing our seniors of the retirement and health security they have counted on.

Every dollar we pay in interest is a dollar that is not going to investment in America’s priorities.

Senator Barack Obama
Senate Floor Speech on Public Debt
March 16, 2006

Funny how things change and the responsibilities are increased when one moves from one position in Government to another, actually in business too, more responsibilities , ones ideas all of a sudden seem to make what one thought of as the correct way, when faced with other possible problems, ones original thoughts have to be mitigated when faced with otter consequences that make the original thoughts moot..not that the problems go away, but the solutions of might have to be mitigated to fir the reality of the moment, and in this case I think it is a perfect example of that...the problems that face us if the cap is not increased are to great to allow to happen..sop possible a slower, less extreme immediate resolution of the problem is being considered..it took us a long while to get to this point, the fall out of drastic cuts are thought by the one in the chair should be mitigated and spread over a longer period of time..

[ugonow]

Funny how things change and the responsibilities are increased when one moves from one position in Government to another

Yes, as evidenced by Obama being against raising the limit that time in 2006..... but of course republicans pushing to raise it how many time in 8 years ? ..., is of no importance or indicitive of anything......

[floridayankee]

Jun 30, 2011 11:55:28 GMT -5 deziloooooo said:

Funny how things change and the responsibilities are increased when one moves from one position in Government to another, actually in business too, more responsibilities , ones ideas all of a sudden seem to make what one thought of as the correct way, when faced with other possible problems, ones original thoughts have to be mitigated when faced with otter consequences that make the original thoughts moot..not that the problems go away, but the solutions of might have to be mitigated to fir the reality of the moment, and in this case I think it is a perfect example of that...the problems that face us if the cap is not increased are to great to allow to happen..sop possible a slower, less extreme immediate resolution of the problem is being considered..it took us a long while to get to this point, the fall out of drastic cuts are thought by the one in the chair should be mitigated and spread over a longer period of time.

What's really funny is how people support "their guy" doing the the exact same things they opposed "the other guy" doing. That's why this whole thing will never be fixed. Imagine that if it were a repub president. Most of the left would be blasting the hell out of him for wanting to increase debt limit yet again. Most of the right would be saying it was needed to "save the country".

Nothing is going to change unless we slam on the brakes. If it hurts, so be it. Get the pain over with instead of dragging it on and on and on and on......

And, for the record, I really don't see the repubs as the ones to "save us". If we can get some sort of agreement between D's and R's, any potential spending decreases and/or tax increases will be pissed away on special interest pork added on to the bill.

[floridayankee]

Jun 30, 2011 12:16:05 GMT -5 ugonow said:

but of course republicans pushing to raise it how many time in 8 years ? ..., is of no importance or indicitive of anything......

aka...the right f'd the future for 8 years. We can't stop now because it's out turn.

Attitudes like this is exactly why nothing will ever change. Giddy-up!

[ugonow]

I meant more of example of how it is more of a political tool than anything to both parties, I wasn't trying to defend either side.I think it is advantagous to the people at the wheel to have it raised, and politicaly advantagous for the minority party to hand cuff the administration.

[floridayankee]

Jun 30, 2011 13:57:05 GMT -5 ugonow said:

I meant more of example of how it is more of a political tool than anything to both parties, I wasn't trying to defend either side.I think it is advantagous to the people at the wheel to have it raised, and politicaly advantagous for the minority party to hand cuff the administration.

I was speaking more about that attitude being the attitude of the politicians...not you personally. Sorry, but I wasn't clear on that.

As I said before, Nothing will come from all this political posturing on the debt ceiling by the repubs. Every bill passed through congress comes infested with pork to purchase one vote or another. I have no faith that the current repub led house will put forth anything different this time than the usual crap covered lip service.

Whatever passes will will be bacon flavored I'm sure. I hope they prove me wrong.