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How Bad Could it Be? (Shutdown/Debt Limit)

How Bad Could it Be?

  • Dems cave in again, allowing the debt to be used as a political tool

    Votes: 3 11.5%
  • Landslide election for one side in 2014

    Votes: 7 26.9%
  • Republican rebellion forces Boehner down

    Votes: 4 15.4%
  • House impeaches Obama

    Votes: 4 15.4%
  • Economic slump

    Votes: 8 30.8%
  • Recession

    Votes: 11 42.3%
  • Depression

    Votes: 15 57.7%
  • Civil War

    Votes: 0 0.0%
  • World War

    Votes: 0 0.0%
  • End of USA as we know it

    Votes: 1 3.8%

  • Total voters
    26

aberrant85

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Given the trajectory our country is, I ask you: what is the worst possible development that could happen in the event that either the country defaults on its debt or President Obama unilaterally lifts the debt limit?

Keep in mind, the former is warned to create an economic crisis, the latter a constitutional crisis.
 

CalGun

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This crisis is equivalent to all the other non crisis' called out by this failed regime. We take in $3 trillion or more in taxes and that wouldn't stop. That would continue to pay for 80% of the govts obligations. I personally think its fine to operate with 20% less and within our means for a while. It'd do the country good.
 

Dickieboy

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You left off the 'planet splits to the core' option.


...and none of the above
 

joG

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Given the trajectory our country is, I ask you: what is the worst possible development that could happen in the event that either the country defaults on its debt or President Obama unilaterally lifts the debt limit?

Keep in mind, the former is warned to create an economic crisis, the latter a constitutional crisis.

The worst possible is hard to say. On German state radio they had a political adviser speculating an a "7 Days in May" scenario the day before yesterday. Obama did, after all, promise to keep up payments to the troops. That sounds like the worst case to me.
 

Goshin

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Meh. I've seen several of these alleged "shutdowns", and am not impressed.
 

Harshaw

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Meh. I've seen several of these alleged "shutdowns", and am not impressed.

We have a ways to go to match the longest of them (several under Carter).
 

WCH

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Given the trajectory our country is, I ask you: what is the worst possible development that could happen in the event that either the country defaults on its debt or President Obama unilaterally lifts the debt limit?

Keep in mind, the former is warned to create an economic crisis, the latter a constitutional crisis.

I voted "end of the USA as we know it" cause that would likely be the worst (throw in a little war/strife and there you have it}
 

Dickieboy

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Ok, just in an effort to put things into perspective and propose options I’ve made some ‘back of the envelope’ calculation.

Annual revenue = ~$2,400b
Monthly revenue = ~$200b
Debt = $17,000b
Annual interest on debt = ~$415b
Monthly interest on debt = ~$35b
It seem obvious that our monthly revenue would cover the monthly interest thus preventing ‘default’.

Consider further that debt = debt held by public + intragovernmental debt (SS trust fund)
Current monthly social security payments = ~$62b

So we take $62b from monthly revenue reimburse SS trust fund, which reduces current debt, which would then allow an additional $62b in borrowing OR not and prevent hitting the ceiling. This can occur infinitely. Will the shutdown continue and necessarily expand due to insufficient revenue, yes but default is off the table. The burden of his expansion of the shutdown would ultimately cause the public to pressure the POLs to solve it…but the global economic calamity associate with default is avoided.
 

Perotista

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Given the trajectory our country is, I ask you: what is the worst possible development that could happen in the event that either the country defaults on its debt or President Obama unilaterally lifts the debt limit?

Keep in mind, the former is warned to create an economic crisis, the latter a constitutional crisis.

I have been through 17 of these, this being the 18th. Ford 1, Carter 5, 7 Reagan, 1 under Bush the First and 2 under Clinton. These lasted anywhere from 1 to 21 days. All ended up being no big thing. In my opinion there is way too much hyperbole over this one coming from both sides.

Fact is most Americans are going about their daily business as usual as the government being shutdown isn't effecting them. Now from the political partisan die hards, you think the world has come to an end. If our politicians in Washington would start putting country over party, then perhaps our problems as a nation could get solved. But as long as it is more important to those in D.C. to be Republicans and Democrats instead of Americans, this country will flounder and soon give up its ghost.
 

DaveFagan

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Given the trajectory our country is, I ask you: what is the worst possible development that could happen in the event that either the country defaults on its debt or President Obama unilaterally lifts the debt limit?

Keep in mind, the former is warned to create an economic crisis, the latter a constitutional crisis.

I think that irregardless of either option the trajectory of the USA is into "Depression." Either option leads to economic catastrophe as a future inevitability. I see the "GWBush Great Recession" was just an inevitability postponed by financial trickery. More to follow.
 

Unitedwestand13

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I have been through 17 of these, this being the 18th. Ford 1, Carter 5, 7 Reagan, 1 under Bush the First and 2 under Clinton. These lasted anywhere from 1 to 21 days. All ended up being no big thing. In my opinion there is way too much hyperbole over this one coming from both sides.

Fact is most Americans are going about their daily business as usual as the government being shutdown isn't effecting them. Now from the political partisan die hards, you think the world has come to an end. If our politicians in Washington would start putting country over party, then perhaps our problems as a nation could get solved. But as long as it is more important to those in D.C. to be Republicans and Democrats instead of Americans, this country will flounder and soon give up its ghost.

But governing from crisis to crisis, in a peicemeal fashion is no way for a modern country to be run.
 

Carjosse

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Well Canadian news is already calling it a civil war between the far right Republicans and the centre-right Democrats.
 

Perotista

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But governing from crisis to crisis, in a peicemeal fashion is no way for a modern country to be run.

You are correct, but as I said when both major political parties are only looking out for only themselves, when they are trying to make the other party look as bad as possible and the only thing important to them is whether Republicans or Democrats get elected instead of governing and making our political system work. We will continue to have exactly what you described.

There has been quite a lot of past presidents who have worked across the aisle with success. Eisenhower did it with LBJ, LBJ was senate majority leader back then. JFK and LBJ worked closely with Everett Dirksen, the republican senate minority leader. Reagan and Tip O'Neil exploits are famous. Even Clinton after the 1994 elections worked with first Gingrich, then Hastert along with Trent Lott. All accomplished quite a lot.

Clinton learned and knew to get things done and done smoothly he had to change tactics and strategy and work with Republicans after 1994. President Obama hasn't done that. He has tried to govern like both chambers are still in the hands of the democrats and by huge margins which they are not. Now I am not placing all the blame on the president, the house republican's hold more than their share of the blame, so too does Senator Reid and the democrats in the senate. politics is said to be the game of the possible. To move forward three steps, sometimes one has to step back one or two steps. One has to be willing to give in order to take. This my way or the highway approach by both parties and the president isn't working. Our political system is broke and it is those in elected office today that has broken it.
 

ashurbanipal

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Odd question. The worst that could happen would be, I suppose, that all nations on earth unleash all of their weapons of mass destruction at once, annihilating most life on the planet. Now, do I think that's likely? Of course not. But it is possible.
 

Helix

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Given the trajectory our country is, I ask you: what is the worst possible development that could happen in the event that either the country defaults on its debt or President Obama unilaterally lifts the debt limit?

Keep in mind, the former is warned to create an economic crisis, the latter a constitutional crisis.

if we default, it has the potential to be a long term nightmare. the ironic part is that taxes will have to be raised significantly to deal with the increasing interest and the fact that it will be more difficult for us to borrow. if we lose global reserve currency status, then it's economic game over for the foreseeable future. think gas is expensive now? just wait.

as for the trillion dollar coin idea, it sets a horrible precedence, and my opinion is that it's a nonstarter. we either will or will not default. my guess is that they do what they always do and kick the ball down the road. those throwing a tantrum in the house will get the medical device tax repealed as a bone, and then we'll go further into debt.
 

CalGun

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Fail. The dictator has to keep his golf course open, his essential 3 white house chefs, and then make it hurt on the people so they'll blame the other party.


Ok, just in an effort to put things into perspective and propose options I’ve made some ‘back of the envelope’ calculation.

Annual revenue = ~$2,400b
Monthly revenue = ~$200b
Debt = $17,000b
Annual interest on debt = ~$415b
Monthly interest on debt = ~$35b
It seem obvious that our monthly revenue would cover the monthly interest thus preventing ‘default’.

Consider further that debt = debt held by public + intragovernmental debt (SS trust fund)
Current monthly social security payments = ~$62b

So we take $62b from monthly revenue reimburse SS trust fund, which reduces current debt, which would then allow an additional $62b in borrowing OR not and prevent hitting the ceiling. This can occur infinitely. Will the shutdown continue and necessarily expand due to insufficient revenue, yes but default is off the table. The burden of his expansion of the shutdown would ultimately cause the public to pressure the POLs to solve it…but the global economic calamity associate with default is avoided.
 

CalGun

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Could you explain how we could default with monthly revenues of $250 billion and interest costs of 33 billion?


if we default, it has the potential to be a long term nightmare. the ironic part is that taxes will have to be raised significantly to deal with the increasing interest and the fact that it will be more difficult for us to borrow. if we lose global reserve currency status, then it's economic game over for the foreseeable future. think gas is expensive now? just wait.

as for the trillion dollar coin idea, it sets a horrible precedence, and my opinion is that it's a nonstarter. we either will or will not default. my guess is that they do what they always do and kick the ball down the road. those throwing a tantrum in the house will get the medical device tax repealed as a bone, and then we'll go further into debt.
 

polgara

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I have been through 17 of these, this being the 18th. Ford 1, Carter 5, 7 Reagan, 1 under Bush the First and 2 under Clinton. These lasted anywhere from 1 to 21 days. All ended up being no big thing. In my opinion there is way too much hyperbole over this one coming from both sides.

Fact is most Americans are going about their daily business as usual as the government being shutdown isn't effecting them. Now from the political partisan die hards, you think the world has come to an end. If our politicians in Washington would start putting country over party, then perhaps our problems as a nation could get solved. But as long as it is more important to those in D.C. to be Republicans and Democrats instead of Americans, this country will flounder and soon give up its ghost.[/QUOT

If recent history is any indication, they'll continue in DC doing as they are currently doing... blaming the other side all the way down to the bitter end! :2mad:.... :sigh:

Greetings, Pero. :2wave:
 

Helix

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Could you explain how we could default with monthly revenues of $250 billion and interest costs of 33 billion?

the way i understand it, we could go on short term by diverting money from other things to pay the most important bills. there are also a few treasury options that don't seem to be on firm legal footing. however, the biggest danger is perception; it's almost certain to lower our credit rating, which means more interest. if that happens, we will be in a situation where taxes will be increased. also, if our currency is in question, the globe starts looking for the next best option. this cannot be allowed to happen.
 

Cyrylek

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Dems cave in again, allowing the debt to be used as a political tool?

You mean, "normally" overspending and skyrocketing national debt should have nothing to do with politics?

Then I am just curious, what all these politicians are supposed to do over there, in Congress? Hold hands and sing The Star-Spangled Banner all day long?

The level and pattern of federal spending is the number one issue in the country right now. And Dems better "cave in again", and allow some minimal responsibility to seep in.
 

Dickieboy

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the way i understand it, we could go on short term by diverting money from other things to pay the most important bills. there are also a few treasury options that don't seem to be on firm legal footing. however, the biggest danger is perception; it's almost certain to lower our credit rating, which means more interest. if that happens, we will be in a situation where taxes will be increased. also, if our currency is in question, the globe starts looking for the next best option. this cannot be allowed to happen.

But during the last squabble, S&P downgraded our credit...the interest rate dropped...the market slid ~500pts only to gain it back in a couple of weeks to go on to records...lending continued to ease...jobs continued to be created and the economy continued to rebound (per the Administration)...basically a great big nothing!
 

CalGun

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The world has no alternative to the dollar. There is no currency big enough to manage world trade. Elites are still buying dollars more than PMs. Most of our debt is to the Fed, Social Security and ourselves. Raising interest rates could happen, but revenue still exceeds debt interest payments by 8 to 1. It's not even close to default. That is so much obamahyperbole it's sick. The pain will be on the DOD, Medicare, social security, and all of that before the dictators chefs and golf outings!


the way i understand it, we could go on short term by diverting money from other things to pay the most important bills. there are also a few treasury options that don't seem to be on firm legal footing. however, the biggest danger is perception; it's almost certain to lower our credit rating, which means more interest. if that happens, we will be in a situation where taxes will be increased. also, if our currency is in question, the globe starts looking for the next best option. this cannot be allowed to happen.
 

Helix

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The world has no alternative to the dollar. There is no currency big enough to manage world trade. Elites are still buying dollars more than PMs. Most of our debt is to the Fed, Social Security and ourselves. Raising interest rates could happen, but revenue still exceeds debt interest payments by 8 to 1. It's not even close to default. That is so much obamahyperbole it's sick. The pain will be on the DOD, Medicare, social security, and all of that before the dictators chefs and golf outings!

if our currency looks insecure, other currencies start looking better and better. the renminbi is a long term contender.

on the global stage, it's about keeping up appearances. people vote with their money, and so do nations. the entire first world is looking at this and is shaking its collective heads.
 

CalGun

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Please take a look at the money supply of the renminbi or any of the world's currencies and let me know when you find one capable of handling the world's trade - even coming close? Then we should worry.


if our currency looks insecure, other currencies start looking better and better. the renminbi is a long term contender.

on the global stage, it's about keeping up appearances. people vote with their money, and so do nations. the entire first world is looking at this and is shaking its collective heads.
 

Helix

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Please take a look at the money supply of the renminbi or any of the world's currencies and let me know when you find one capable of handling the world's trade - even coming close? Then we should worry.

here's a fairly exhaustive analysis of the potential default and what might happen :

Absolutely everything you need to know about the debt ceiling

there's no upside to this. we need to agree that we will not default under any circumstances.
 
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