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Economists: Failure to raise debt limit could lead to recession


Some need to. A report out today notes that there was $17 billion in unemployment fraud last year. Maybe we will actually have to address the massive fraud. There is fraud in every government program. Maybe will will have to quit paying prison psychiatrists 850K a year. Maybe we won't be able to bail out corrupt banks.

The list goes on and on. Even if we do not raise the limit, we can pay our debts to where we will not default on anything.
 
1Perry said:
That is a fallacious arguement. Not raising the debt limit does not mean we will default on anything. Maybe we will have to quit bombing Libya.
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You must be surprised that economists do not see it your way.
 
1Perry said:
The list goes on and on. Even if we do not raise the limit, we can pay our debts to where we will not default on anything.
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Here is the problem. We can do all that stuff and it would be good. However, doing it all at once, under duress, will be too much of a shock. It will lead people to make bad decisions, based on knee-jerk reactions. Removing these programs slowly, is the best option.
 
Shadow Serious said:
Which is not quite the same thing as borrowing even more money to meet existing commitments. Sorry the keg is almost to the foam its tapped out.
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No argument that its past time to stop spending more than all the tax breaks we've given the wealthy over the last 30 years, but that doesn't give us the right to abandon previous commitments made by this country. Poor decisions in the past do not justify defaulting on your financial obligations, whether you are an individual or a country.

And why would it even be considered when we are trying to scramble our way back up from one of the worst recessions in history?
 
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Sen. John McCain, Victim of Epistemological Closure | MyFDL

 
A lot of the unemployment is generated because many people only want to work in what they've studied for. For example, if I have a degree in architecture, I want to work as an architect and I won't be made to work in any other field. If I'm unemployed, so be it. Society has to pay the price because they put me in this situation. This egoistical mindset is shared by most (not all) jobless people today and it's scary, because when they had a job and were earning money all the merit was theirs, and they surely criticized folks who couldn't find a job when they had a chance.

We have to start thinking outside the box here, folks. Americans have to learn to be more flexible and take jobs outside their area of expertise if none are available in it currently.

Also, so that the burden of the sacrifice doesn't fall just on one pole of society, rich people's taxes have to be raised. And raised properly. I'm not talking about a tiny raise, like 1% or something of that kind. Many people bought their products and this made them rich so they have to give back to society.
 
I think the GOP will eventually cave, because if they don't... the result would be horrendous and they'd get blamed. The GOP doesn't want that, but they don't want to alienate their base, so they'll argue with the dems to the point they can get some concessions and act like they are happy. They just have to appear to fight it for now to appease the base. The base = people who don't really understand the subject, and the GOP doesn't have the balls to stand up to them and promote knowledge over self destructive ignorance.
 

So, the Dems are going to hold out for a tax hike? They didn't have the balls to raise taxes when they owned Congress. How are they going to raise taxes now that own only half of Congress?
 
I don't see how defaulting on any of our debt is going to help the economy. I've read five pages into this thread and no one's done anything but bicker about the economists listed or something similar instead of actually discussing the effects of failing to raise the debt ceiling.
 

You want to know the effects? Great Depression version 2. I could explain why in detail, but all you really need to know is what caused the great depression (other than bad farming techniques) and you'll see the coming cluster ****
 
...and passing the debt ceiling will just be delaying the inevitable, as well as encourage more unwise spending.

I want to see a third option. Otherwise, let the whole system collapse. I'll grab popcorn.
 
Catawba said:
You must be surprised that economists do not see it your way.
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Not at all. They do not all have to see things the way I do. That's what makes things interesting. It would be pretty boring if everyone thought exactly alike.
 

Not at all. People would feel far better about our future and their ability to stave off large new taxes and then would act more normal.
 

Wow, and to think I thought I noted what would have to happen.
 
1Perry said:
Not at all. They do not all have to see things the way I do. That's what makes things interesting. It would be pretty boring if everyone thought exactly alike.
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Yep everyone has a right to their opinion. For myself, I'll go with the expert opinion of the economists that warned failing to raise the debt ceiling will only make the recession worse. That's not the direction I want the country to go.
 
Temporal said:
...and passing the debt ceiling will just be delaying the inevitable, as well as encourage more unwise spending.
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It will not lead to the delay if its being done in a responsible method. Neither party is currently advocating this.


CarlF said:
Please, do, otherwise there's really no point to this thread.
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To explain in detail would require me to write an entire 20-30 page essay. I will simply limit it to this one statement: The great depression was largely caused by a sudden and global retraction of credit which cause business to not be able to meet their day to day obligations, despite sound business practices. If the US default, the same will happen because the entire world's credit market is currently being upheld by USGOV debt.
 
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Not Raising The Debt Limit does not equate Default............

....The US Government has plenty of monthy revenues to pay its Foreign obligations........primarily interest on all our liberal subprime borrowing to nowhere.....and enough money to cover a majority of operating expenses and obligations here at home......everything else comes to a screeching hault.......unless The Kenyan Tyrant tries to go around Congress, which is probable.....unless Democrats cant manage to cut anything, not even a Cowboy Poetry Contest, and intentionally default.

$14,000,000,000.00 in the hole....my Grandchildren's grandchildren bankrupt........The Most Expensive President in History in the Whitehouse.........and 95 Debt limit increases later.........

......either make significant spending cuts or vote down the debt limit increase.....I say.
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I am just as concerned about the governments domestic obligations to our own people and the economy. Let Congress cut spending the honorable way, vote to cut wasteful spending in all programs including the military, and stop the 30 year practice of giving tax breaks to people just because they are rich, regardless of whether they contribute to the US economy or not.

And don't forget that most of that 14 trillion dollar debt was added under Republican Administrations. :sun
 
BDBoop said:
Economists: Failure to raise debt limit could lead to recession - The Hill's On The Money
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To be fair, I think that it's less Congress raising the debt ceiling that will lead to a recession and more of Congress' inability to do anything that will cause it.

Businesses like stability. Stability leads to less risk which means businesses better predict what will happen because of their actions. Because Congress refuses to take one road (raise the debt ceiling) or the other (cut spending) businesses are having trouble predicting the markets. Which means less money spent. Which means looming recession.

At this point, I think many businesses would even be fine with raising taxes and cuts in subsidies as long as Congress finally settled the matter and did something.
 
BDBoop said:
Okay. All of you who are claiming it's just democratic rhetoric: Find me a conservative/republican who thinks it's a good idea to default on the debt.
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Here we go again......That is NOT the arguement. Why does this continue? The arguements are 1. Not raise the debt limit and default or 2. Not raise the debt limit and take the necessary actions needed so we do not default on our loans.

Or wait, let's try this. Find me a liberal/democrat who believes we should borrow ad infititum?
 
What do you mean 'retraction of credit'? I thought it was caused due to people buying too much on credit and businesses over-producing in response which had to end somehow, the 1929 crash.
1Perry said:
Wow, and to think I thought I noted what would have to happen.
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What?
Well I could name one.. but he doesn't think defaulting is going to help us, just that it's better to do that than go further in debt and keep spending.
Then why does the treasurer tell us we have till the 22nd? You'd think he'd have accounted for all those revenue sources when he gave us that deadline?
 
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CarlF said:
What
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Go back and look. I noted where we may have to quit bombing Libya, Afghanistan and Iraq. We may have to actually get serious in addressing fraud. We might have to quit paying prison head shrinks $850,000 a year. We would have to make some serious decisions on what we are going to fund and what we aren't. We can continue making payments on our loans.

Then why does the treasurer tell us we have till the 22nd? You'd think he'd have accounted for all those revenue sources when he gave us that deadline?
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The deadline has moved 3-4 times.
 
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