djAdvocate
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Post by djAdvocate on Jul 20, 2011 15:57:59 GMT -5
Fairly I am not here to pick and choose..basically, they must raise the debt cealing or we will have years of bad stuff happening..to allow us to go into defalt , it will be of little consequenc who is at fault, I don't really think those lost on the Titanic where thinking as the ship slid beneath the waves as they sang the last hymn who the hell was at fault.. ...and, again, this ship is sinking as is... the question is how long it will take before it cannot be 'saved' despite intervention... it is a fair question, and i believe it has an answer. i believe the answer is that we could easily withstand $22T in debt, at our current economic output. if we get busy tackling the problem, we might actually manage to come in below that.
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fairlycrazy23
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Post by fairlycrazy23 on Jul 20, 2011 17:09:03 GMT -5
...and, again, this ship is sinking as is... the question is how long it will take before it cannot be 'saved' despite intervention... it is a fair question, and i believe it has an answer. i believe the answer is that we could easily withstand $22T in debt, at our current economic output. if we get busy tackling the problem, we might actually manage to come in below that. That seems very wrong , as we can clearly not afford the debt we have and maintain our current spending without borrowing, when we hit $22T will it then suddenly be easy reduce spending?
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fairlycrazy23
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Post by fairlycrazy23 on Jul 20, 2011 17:21:59 GMT -5
Sure there is serious danger if we go into default. We can have the cost of servicing this debt skyrocket. That would be at the discretion of the treasury. Well, I actually think that practically the only thing that the Federal Government is Constitutionally required to pay is the debt, so in truth there should not be any chance of a default on the debt, sure we will have to shut a lot of stuff down and cut out quite a bit. Ultimately I think they should raise the debt ceiling to get through current fiscal year, but something concrete has to be done.
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Angel!
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Post by Angel! on Jul 20, 2011 17:22:30 GMT -5
Sure there is serious danger if we go into default. We can have the cost of servicing this debt skyrocket. I think the argument is that not raising the ceiling doesn't necessarily mean that we default on our debt. But, someone isn't going to get paid. Who will get the short end of the stick & what will be the consequences of that?
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Post by BeenThere...DoneThat... on Jul 20, 2011 18:15:58 GMT -5
Sure there is serious danger if we go into default. We can have the cost of servicing this debt skyrocket. I think the argument is that not raising the ceiling doesn't necessarily mean that we default on our debt. But, someone isn't going to get paid. Who will get the short end of the stick & what will be the consequences of that? ...or what are the consequences of giving so many the long end of the stick and paying them on credit?
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djAdvocate
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Post by djAdvocate on Jul 20, 2011 19:40:51 GMT -5
it is a fair question, and i believe it has an answer. i believe the answer is that we could easily withstand $22T in debt, at our current economic output. if we get busy tackling the problem, we might actually manage to come in below that. That seems very wrong , as we can clearly not afford the debt we have i am not following you here. interest is 6% of the budget. how is that not affordable?and maintain our current spending without borrowing, when we hit $22T will it then suddenly be easy reduce spending? i never suggested that we would "suddenly quit spending at $22T". what i suggested is that we take the $4T that is on the table, and keep working at it until the budget is balanced. i am thinking it would happen at significantly less than $22T. but if not......we have a buffer! ;]
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djAdvocate
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Post by djAdvocate on Jul 20, 2011 19:43:35 GMT -5
Sure there is serious danger if we go into default. We can have the cost of servicing this debt skyrocket. that is precisely the issue. if we lose our credit rating (and that would not even necessarily require a default, btw), that would move us from #1 to #19 (or lower) on the credit list among nations. that would perhaps double our cost of borrowing, which would add as much as $200B to the budget each year until we recover our rating. so, by playing this game with the cap, we could be putting our budget another 6% out of whack.
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djAdvocate
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Post by djAdvocate on Jul 20, 2011 19:44:39 GMT -5
Sure there is serious danger if we go into default. We can have the cost of servicing this debt skyrocket. That would be at the discretion of the treasury. Well, I actually think that practically the only thing that the Federal Government is Constitutionally required to pay is the debt cool, so when military pay and social security roll around, we should pay China instead? that sounds real politically viable to me. NOT.
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Post by privateinvestor on Jul 20, 2011 19:48:47 GMT -5
There is no danger if the limit is not raised
There could also be danger if the debt ceiling is raised and NOT accompanied by a debt reduction plan approved by the President and the Congress...so let's revisit this thread again after 02 August to see if this is correct or not....but I doubt that Moody's would issue a statement that was not based on facts...
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fairlycrazy23
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Post by fairlycrazy23 on Jul 20, 2011 19:50:59 GMT -5
That would be at the discretion of the treasury. Well, I actually think that practically the only thing that the Federal Government is Constitutionally required to pay is the debt cool, so when military pay and social security roll around, we should pay China instead? that sounds real politically viable to me. NOT. That is not what I said. I'm not talking about political viability, just what the government is constitutionally required to pay, and the debt seems to be about the only thing, so The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.Service the debt and then prioritize the rest.
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Post by privateinvestor on Jul 20, 2011 19:57:44 GMT -5
The financial markets are looking for more than just raising the debt ceiling...they want to see a budget from the President for 2011 that addresses the serious debt issues our country faces this year and next year. IMHO
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handyman2
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Post by handyman2 on Jul 20, 2011 20:01:27 GMT -5
If we default the rate of interest goes up on our outstanding loans if the loaner chooses to do so. I doubt the treasury will not pay the military and SS. that would be suicide for the government. It very well may be that we get into a situation where we can borrow no more money even with raising the limit later. You know that would force the government into a balanced budget. Not a bad thing in my way of thinking.
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djAdvocate
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Post by djAdvocate on Jul 20, 2011 20:04:11 GMT -5
cool, so when military pay and social security roll around, we should pay China instead? that sounds real politically viable to me. NOT. That is not what I said. I'm not talking about political viability, just what the government is constitutionally required to pay, and the debt seems to be about the only thing, so The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.Service the debt and then prioritize the rest. i have read that clause several times in the last week. i believe that is from the 14th amendment, right? paragraph 2? something like that. it SPECIFICALLY says that debts required for pensions and the military must be paid, right? so what if there is no money left to pay China after that?
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djAdvocate
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Post by djAdvocate on Jul 20, 2011 20:05:08 GMT -5
The financial markets are looking for more than just raising the debt ceiling.. nah....they are pretty much looking for raising the debt ceiling. ;]
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deziloooooo
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Post by deziloooooo on Jul 20, 2011 20:06:36 GMT -5
Sure there is serious danger if we go into default. We can have the cost of servicing this debt skyrocket. that is precisely the issue. if we lose our credit rating (and that would not even necessarily require a default, btw), that would move us from #1 to #19 (or lower) on the credit list among nations. that would perhaps double our cost of borrowing, which would add as much as $200B to the budget each year until we recover our rating. so, by playing this game with the cap, we could be putting our budget another 6% out of whack. Thank you, some one gets it, it's been suggested if the interest penalty went up just 1 % , it would add $150 Billion per year to our debt..and no it doesn't all of a sudeen go back to what it was if they all get together and take care of business as they should, we don't have the say on the rate paid .. this is seriouse crap here all, and the bickering and posturing really has to stop..
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djAdvocate
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Post by djAdvocate on Jul 20, 2011 20:07:07 GMT -5
If we default the rate of interest goes up on our outstanding loans if the loaner chooses to do so. I doubt the treasury will not pay the military and SS. that would be suicide for the government. preciselyIt very well may be that we get into a situation where we can borrow no more money even with raising the limit later. You know that would force the government into a balanced budget. Not a bad thing in my way of thinking. it is a terrible way of thinking, imo. this is a terrible time to turn the spigot off, right when we are on the verge of a recovery from a very serious downturn. if it happens, mark my words- we WILL regret it.
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djAdvocate
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Post by djAdvocate on Jul 20, 2011 20:10:01 GMT -5
that is precisely the issue. if we lose our credit rating (and that would not even necessarily require a default, btw), that would move us from #1 to #19 (or lower) on the credit list among nations. that would perhaps double our cost of borrowing, which would add as much as $200B to the budget each year until we recover our rating. so, by playing this game with the cap, we could be putting our budget another 6% out of whack. Thank you, some one gets it, it's been suggested if the interest penalty went up just 1 % , it would add $150 Billion per year to our debt..and no it doesn't all of a sudeen go back to what it was if they all get together and take care of business as they should, we don't have the say on the rate paid .. this is seriouse crap here all, and the bickering and posturing really has to stop.. here is the thing, dez. the negotiations center around 14% of the budget, or about $500B. if we fail to pay interest on ANY of our debt, it could easily cost HALF THAT. so, letting this go on is the equivalent of cutting non military discretion spending FOURTY (40) PERCENT!
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Post by privateinvestor on Jul 20, 2011 20:11:52 GMT -5
The nation hopes the U.S. will adopt “responsible policy to ensure investors’ interests,” Chinese Foreign Ministry spokesman Hong Lei said at a separate briefing.
Demand has been higher than average this week at the Treasury’s auctions of three- and 10-year notes this week as investors continue to seek a U.S. refuge from Europe’s worsening sovereign-debt crisis.
While yields remain low, investors remain concerned they will increase as the borrowing deadline approaches.
Yields on 10-year notes would rise about 37 basis points if the U.S. government temporarily misses a debt payment while promising to make bondholders whole as soon as the debt limit was raised, according to the average estimate of 45 JPMorgan Chase & Co. clients that were surveyed by the firm. Foreign investors forecast yields would rise 55 basis points.
An increase in Treasury yields of 50 basis points would reduce U.S. economic growth by about 0.4 percentage points, JPMorgan said in a report, citing Fed research and data.
“It certainly underscores the importance of passing the debt ceiling and not putting us in default status, and making sure there’s a longer-term fiscal plan to contain spending and the deficit we’ve been running up over the last few years,” Anthony Cronin, a trader at primary dealer Societe Generale SA in New York, said yesterday. To contact the reporters on this story: John Detrixhe in New York at jdetrixhe1@bloomberg.net; Daniel Kruger in New York at dkruger1@bloomberg.net To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net www.bloomberg.com/news/2011-07-13/u-s-debt-rating-placed-on-review-for-downgrade-by-moody-s-as-talks-stall.html
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djAdvocate
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Post by djAdvocate on Jul 20, 2011 20:19:11 GMT -5
yep, the debt ceiling is the immediate concern. the long term concern is the budget.
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Post by privateinvestor on Jul 20, 2011 20:21:37 GMT -5
It certainly underscores the importance of passing the debt ceiling and not putting us in default status, and making sure there’s a longer-term fiscal plan to contain spending and the deficit we’ve been running up over the last few years,” Anthony Cronin, a trader at primary dealer Societe Generale SA in New York, said yesterday[/color]
"making sure there's a longer-term fiscal plan" is the key thing here I think ..but how long will our financial systems here and abroads wait for that plan??? I don't think anyone knows but delaying it could be a major issue for the financial markets I would assume..
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djAdvocate
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Post by djAdvocate on Jul 20, 2011 20:41:48 GMT -5
It certainly underscores the importance of passing the debt ceiling and not putting us in default status, and making sure there’s a longer-term fiscal plan to contain spending and the deficit we’ve been running up over the last few years,” Anthony Cronin, a trader at primary dealer Societe Generale SA in New York, said yesterday[/color]
"making sure there's a longer-term fiscal plan" is the key thing here I think ..but how long will our financial systems here and abroads wait for that plan??? I don't think anyone knows but delaying it could be a major issue for the financial markets I would assume.. your opinion, PI. if i am a bond holder, i care a LITTLE about the long term situation. i care a LOT about getting MY MONEY BACK! claro?
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Post by privateinvestor on Jul 20, 2011 20:51:36 GMT -5
It certainly underscores the importance of passing the debt ceiling and not putting us in default status, and making sure there’s a longer-term fiscal plan to contain spending and the deficit we’ve been running up over the last few years,” Anthony Cronin, a trader at primary dealer Societe Generale SA in New York, said yesterday[/color]
"making sure there's a longer-term fiscal plan" is the key thing here I think ..but how long will our financial systems here and abroads wait for that plan??? I don't think anyone knows but delaying it could be a major issue for the financial markets I would assume.. your opinion, PI. if i am a bond holder, i care a LITTLE about the long term situation. i care a LOT about getting MY MONEY BACK! claro? If you are talking about US Treasury Bonds I would not be too worried..I own both Treasury notes and bonds and am not worried about being paid on their maturity dates and some mature next year... I just sold some TIPS and made a few bucks
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djAdvocate
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Post by djAdvocate on Jul 20, 2011 21:05:10 GMT -5
your opinion, PI. if i am a bond holder, i care a LITTLE about the long term situation. i care a LOT about getting MY MONEY BACK! claro? If you are talking about US Treasury Bonds I would not be too worried..I own both Treasury notes and bonds and am not worried about being paid on their maturity dates and some mature next year... I just sold some TIPS and made a few bucks i am not talking about you. i am talking about people that loan the government BILLIONS. you don't have to wonder what they think. the Chinese told us last week.
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Post by privateinvestor on Jul 20, 2011 21:24:24 GMT -5
If you are talking about US Treasury Bonds I would not be too worried..I own both Treasury notes and bonds and am not worried about being paid on their maturity dates and some mature next year... I just sold some TIPS and made a few bucks i am not talking about you. i am talking about people that loan the government BILLIONS. you don't have to wonder what they think. the Chinese told us last week. I don't have a clue but would guess they are NOT worried....our government will do all in it's power to maintain it's triple A bond rating And "Helicoper" Ben Bernanke, and "Little" Timmy Geithner are calling our debt holders and telling them they can sleep nights and not to worry about our debt..
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handyman2
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Post by handyman2 on Jul 20, 2011 23:09:46 GMT -5
Normally the bond holders would not worry. They would figure this is just a temporary situation. How ever if the bond holders feel that the administration is incapable of resolving the situation the problem could become quite serious. Loss of confidence in the Obama administration could cause long term problems.
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bimetalaupt
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Post by bimetalaupt on Jul 20, 2011 23:29:42 GMT -5
Normally the bond holders would not worry. They would figure this is just a temporary situation. How ever if the bond holders feel that the administration is incapable of resolving the situation the problem could become quite serious. Loss of confidence in the Obama administration could cause long term problems. 14th Amendment.. Bills must be paid. Enough said!!! or should I use the language of the Amendment .. Debt will not be questioned Just a thought, Bi Metal Au Pt
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Post by deziloooooo on Jul 21, 2011 0:19:07 GMT -5
Thank you, some one gets it, it's been suggested if the interest penalty went up just 1 % , it would add $150 Billion per year to our debt..and no it doesn't all of a sudden go back to what it was if they all get together and take care of business as they should, we don't have the say on the rate paid .. this is serious crap here all, and the bickering and posturing really has to stop.. here is the thing, dez. the negotiations center around 14% of the budget, or about $500B. if we fail to pay interest on ANY of our debt, it could easily cost HALF THAT. so, letting this go on is the equivalent of cutting non military discretion spending FOURTY (40) PERCENT! It is what I have been saying..they must , all of them, Tea party types included, should be thinking when it comes down to it, the best deal is there and no more to give, from the POTUS, they MUST increase the debt ceiling...and then go fight it out with the American electorate..they win , new Potus, then that one can cut even more from what ever he wants too, though I believe it won't be as drastic after the campaign then promised , due to reality's of the situation and the welfare of the country, as our current POTUS hjas found out in making campaign promises. It's one thing to promise whatever on the campaign trail and another if actually sitting in that chair in that small office, and if they lose then they can work it out as they normally do in the politics of the country. The heavy spending will be over, until and if the economy picks up, revenues are back if ever, and then they start spending again, but not till the debt is cut... BUT THE ceiling has to be raised ..not is a no brain er...cannot default.
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floridayankee
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Post by floridayankee on Jul 21, 2011 7:11:27 GMT -5
Thank you, some one gets it, it's been suggested if the interest penalty went up just 1 % , it would add $150 Billion per year to our debt. I get it. Some feel it's more important to raise the debt ceiling and add trillions to our debt to avoid adding billions to our debt. Good thinking right there. No wonder we haven't had a reduction in debt in 50+ years.
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rockon
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Post by rockon on Jul 21, 2011 7:27:48 GMT -5
Number one lie today: If the debt ceiling is not raised we will default on our debt. Defaulting on our debt would be a choice that could be made but not an advisable one. (not going to happen) Number one threat of the day: If the debt ceiling is not raised we can not send out Social Security checks. Stopping Social Security check would be a choice he could make but again it would never happen because the political fall out would be too large. (not going to happen) Number one fear of the day: They won't reach a deal to raise the debt limit. (not going to happen unfortunately) Number one mistake of the day: They reach a compromise deal, raise the debt ceiling everyone claims a victory goes back to campaigning and our countries financial future is degraded even more. (most likely to happen)
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floridayankee
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Post by floridayankee on Jul 21, 2011 7:41:29 GMT -5
Nice fear mongering article. I pretty much agree with the consequences of default, but that would be the choice of our elected officials though. Keep servicing our debt or studying gay men's penis sizes...it's their choice.
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