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Thread: The US will not default on August 2.

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    The US will not default on August 2.

    Not unless the President chooses to do so--which he might.

    On or about August 2, the debt ceiling will have been reached. Without an increase in the ceiling, the federal government will not be able to borrow money to pay its obligations and that which it chooses to do. It will still have tax revenues coming in. The numbers have been run. There will be enough money for debt service (avoiding default), to send out social security checks, and to keep the military functioning in its role--with money left over.

    We will experience a partial government shut-down. The government will be forced to operate within revenues generated. Not raising the debt ceiling would have the effect of a Balanced Budget Amendment. The government will be forced to live within its means. That is good.

    When will the media finally stop pushing the tax-borrow-and-spenders rhetoric that not raising the debt ceiling will result in default? It won't necessarily result in default. However, the president may use the inability to borrow as an excuse to cause a bigger crisis--one that won't be wasted--by choosing not to service the debt.

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    Campaign Veteran Schlitz's Avatar
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    I say let it default. Maybe the pain is what Americans need to wake up.

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    never.



    Something far more frightening could happen. The needed money could simply be printed; we would see the beginnings of hyperinflation. I'm not saying getting more loans would stop hyperinflation, it would delay it at least some though. Of course things might be better if we face high inflation sooner instead of letting the monetary problems build only to be released in a flood.
    Don't believe any facts that I say! This is the internet and it is filled with lies and untruth. I invite you to look up for yourself the basic facts that my arguments might be based upon. This way we can have a discussion where logic and hints on where to find information are what is brought to the forum and people look up and verify facts for themselves.

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    Quote Originally Posted by Schlitz View Post
    I say let it default. Maybe the pain is what Americans need to wake up.
    *sigh*

    The point of my post was that the federal government won't default, whether or not the debt ceiling is raised. If there is a default, it will be because the president chose to default, not because anyone "let" it happen.

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    Quote Originally Posted by eye95 View Post
    *sigh*

    The point of my post was that the federal government won't default, whether or not the debt ceiling is raised. If there is a default, it will be because the president chose to default, not because anyone "let" it happen.
    Well according to Obama we will default because it seems congressional appropriations and budgeting for bureaucrats is debt that must be paid as well and the same for anything congress has said money should go to. He is redefining debt to include much more than what anyone else would consider debt.


    Maybe the 14th amendment should be repealed in part. Of course this would make what passes for the American dollar worthless as it is not coinage nor backed by coinage; it is debt.
    Don't believe any facts that I say! This is the internet and it is filled with lies and untruth. I invite you to look up for yourself the basic facts that my arguments might be based upon. This way we can have a discussion where logic and hints on where to find information are what is brought to the forum and people look up and verify facts for themselves.

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    Quote Originally Posted by Daylen View Post
    never.



    Something far more frightening could happen. The needed money could simply be printed; we would see the beginnings of hyperinflation. I'm not saying getting more loans would stop hyperinflation, it would delay it at least some though. Of course things might be better if we face high inflation sooner instead of letting the monetary problems build only to be released in a flood.
    Borrowing the "money" has the same effect as printing it. Most of the new debt will be purchased by the Federal Reserve and converted into Federal Reserve Notes. The government does not directly print currency (it hasn't for a while). Any borrowed money will still result in inflation (an increase in the supply of currency) If the government were to print it directly it could arguably be better than borrowing it, because we would at least avoid paying interest.

    I believe that Eye is absolutely correct on this.
    If I recall correctly. I read that with current revenue levels, after paying the interest on the debt the government will still have enough money left to match the spending levels of the mid nineties. So yeah, any default that happens will be by choice.
    A wise and frugal Government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government.- Thomas Jefferson March 4 1801

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    Quote Originally Posted by Daylen View Post
    Well according to Obama we will default because it seems congressional appropriations and budgeting for bureaucrats is debt that must be paid as well and the same for anything congress has said money should go to. He is redefining debt to include much more than what anyone else would consider debt.


    Maybe the 14th amendment should be repealed in part. Of course this would make what passes for the American dollar worthless as it is not coinage nor backed by coinage; it is debt.
    I am not sure what you mean by repealing the 14th amendment. I think you may be refering to Section 4 of that amendment. Repealing Section 4 of the 14th amendment will not effect congresses ability to borrow money. Congress gets the power to borrow money from Article 1 section 8 clause 2 of the Constitution for the United States.
    A wise and frugal Government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government.- Thomas Jefferson March 4 1801

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    Quote Originally Posted by END_THE_FED View Post
    I am not sure what you mean by repealing the 14th amendment. I think you may be refering to Section 4 of that amendment. Repealing Section 4 of the 14th amendment will not effect congresses ability to borrow money. Congress gets the power to borrow money from Article 1 section 8 clause 2 of the Constitution for the United States.
    That would be the correct section. Eliminating that part would pave the way for no longer recognizing fiat money or honoring any value in it. Fiat dollars were a large portion of debt from the civil war and likely the debt referred to in that amendment.
    Don't believe any facts that I say! This is the internet and it is filled with lies and untruth. I invite you to look up for yourself the basic facts that my arguments might be based upon. This way we can have a discussion where logic and hints on where to find information are what is brought to the forum and people look up and verify facts for themselves.

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    Quote Originally Posted by Daylen View Post
    Well according to Obama blah blah blah blah blah.

    Maybe the 14th amendment should be repealed in part. Of course this would make what passes for the American dollar worthless as it is not coinage nor backed by coinage; it is debt.
    There, I fixed it for you :-) Who cares what Obama or any other politicians says, right? Interesting idea on the 14th amendment though. How do you see that playing out?
    Last edited by thebigsd; 07-26-2011 at 02:36 PM.
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    Regular Member Gunslinger's Avatar
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    Quote Originally Posted by eye95 View Post
    Not unless the President chooses to do so--which he might.

    On or about August 2, the debt ceiling will have been reached. Without an increase in the ceiling, the federal government will not be able to borrow money to pay its obligations and that which it chooses to do. It will still have tax revenues coming in. The numbers have been run. There will be enough money for debt service (avoiding default), to send out social security checks, and to keep the military functioning in its role--with money left over.

    We will experience a partial government shut-down. The government will be forced to operate within revenues generated. Not raising the debt ceiling would have the effect of a Balanced Budget Amendment. The government will be forced to live within its means. That is good.

    When will the media finally stop pushing the tax-borrow-and-spenders rhetoric that not raising the debt ceiling will result in default? It won't necessarily result in default. However, the president may use the inability to borrow as an excuse to cause a bigger crisis--one that won't be wasted--by choosing not to service the debt.
    The debt must be serviced, per the 14th Amendment. If obooba tried to duck that the SC would soon set him straight. It now looks like revenues are higher than expected, so the BS 2 Aug date has been shown to be exactly that. Debt service is about 1/4 of revenues on a monthly basis. I'm still looking for the crisis...shut down the SS, I mean the batfe...there's a good start.
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    Quote Originally Posted by Gunslinger View Post
    The debt must be serviced, per the 14th Amendment. If obooba tried to duck that the SC would soon set him straight. It now looks like revenues are higher than expected, so the BS 2 Aug date has been shown to be exactly that. Debt service is about 1/4 of revenues on a monthly basis. I'm still looking for the crisis...shut down the SS, I mean the batfe...there's a good start.
    never mind
    Last edited by PrayingForWar; 07-26-2011 at 03:56 PM.
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    Quote Originally Posted by thebigsd View Post
    There, I fixed it for you :-) Who cares what Obama or any other politicians says, right? Interesting idea on the 14th amendment though. How do you see that playing out?
    Don't be so rude and arrogant as to assume you need to fix what I write. If you have nothing to contribute or think what I post doesn't matter then ignore it and scurry away. Stop being a pest.
    Don't believe any facts that I say! This is the internet and it is filled with lies and untruth. I invite you to look up for yourself the basic facts that my arguments might be based upon. This way we can have a discussion where logic and hints on where to find information are what is brought to the forum and people look up and verify facts for themselves.

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    Quote Originally Posted by Gunslinger View Post
    The debt must be serviced, per the 14th Amendment. If obooba tried to duck that the SC would soon set him straight. It now looks like revenues are higher than expected, so the BS 2 Aug date has been shown to be exactly that. Debt service is about 1/4 of revenues on a monthly basis. I'm still looking for the crisis...shut down the SS, I mean the batfe...there's a good start.
    At this point I'm not sure there is an agency that needs to keep getting funding. There is simply a need for priority, which to cut FIRST. I am concerned he will try to consider the issued debt to be less important to pay than the "debt owed" to liberal patrons and government agencies. There is no certainty in what the SCOTUS will do or even if it can do anything soon enough.
    Don't believe any facts that I say! This is the internet and it is filled with lies and untruth. I invite you to look up for yourself the basic facts that my arguments might be based upon. This way we can have a discussion where logic and hints on where to find information are what is brought to the forum and people look up and verify facts for themselves.

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    While listening to his address last night, I caught him in several serious distortions of the truth, including a couple out and out lies. Scare tactics galore! Is there any hope our fellow countrymen have heard enough to know it's time to change the channel? For anyone not a complete nincompoop, yes.

    Obama's dismal ratings indicate that's a majority, so there's some relief in sight. Any more relief from this administration will require another round of Tuck's...
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    Quote Originally Posted by Daylen View Post
    Don't be so rude and arrogant as to assume you need to fix what I write. If you have nothing to contribute or think what I post doesn't matter then ignore it and scurry away. Stop being a pest.
    First and foremost, I apologize if I offended you, I was not intending to be rude or arrogant. Don't assume that I was being such. I did contribute in the second part of my post where I asked how you thought the elimination of the 14th amendment would play out. I meant it as a thought exercise, simply because so many court rulings are based off the 14th amendment. Would those laws become invalid? Which parts in particular do you think should be repealed?
    Last edited by thebigsd; 07-27-2011 at 02:33 AM.
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    Quote Originally Posted by Schlitz View Post
    I say let it default. Maybe the pain is what Americans need to wake up.
    The problem is, there has already been a constructive default. Happened years ago when Nixon took us off the gold standard. The promise was to repay in gold the promissory note represented by the dollar.

    Some financially intelligent people are saying that all this money printing by the Federal Reserve is a constructive default. "We can't pay you in dollars of the same value that you loaned to us. So, we're going to print lots more, and pay you in depreciated dollars." The depreciation being the important point. The Chinese were already making noise about this last December or so when Bernanke was making noise about QE2 (quantitative easing round two = code words for printing money out of thin air, and lots of it). The Chinese recognized that the dollars being used to pay them would be worth less than the dollars they loaned in the first place. When your're talking about (trillions?) in government debt, the depreciation adds up to billions.

    The real problem is the "correction" from the pre-2008 bubble is being prevented from occurring. Big bubble? Then there must be a correction. All the mal-investment and ugly ramifications must sort out. Its been prevented by TARP, QE2, etc. The losses are being shifted around from where they belong (bailouts) and delayed (money printing). When the Federal Reserve prints money out of thin air, it drives up prices. The loss then hits consumers by reducing the value/purchasing power of their money. Essentially, the value is transferred away from taxpayers and consumers (stolen from them) and transferred to banks and whoever gets the new money first.

    The only fair way out is to let the crash finish in all its gory glory. Anything else is just delaying the pain, worsening the landing when it does occur, and transferring the losses to consumers and taxpayers. It is immoral, unethical, criminal. It is central banking at its finest.
    Last edited by Citizen; 07-27-2011 at 03:00 AM.

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    i wont comment at this point, i will let my current avitar express my views.

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    Just think if formal president Kennedy that he wanted the u.s. mint to print u.s dollars in stead of federal reserve dollars it would saves us lots of interest. But the super rich didnty like that as soon as he was shot and kill his vice president took over and resented the order and order federal reserve money. And they shall never took our money off the gold standry and made plastic (credet cards) that hurts us also.

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    Huh!

    Quote Originally Posted by onestar 50 View Post
    Just think if formal president Kennedy that he wanted the u.s. mint to print u.s dollars in stead of federal reserve dollars it would saves us lots of interest. But the super rich didnty like that as soon as he was shot and kill his vice president took over and resented the order and order federal reserve money. And they shall never took our money off the gold standry and made plastic (credet cards) that hurts us also.
    these dont look like standard spelling errors.
    is your parrot doing the typing for you, are you slurring your speech, are you lucid????
    whats the difference between u.s. dollars, and federal reserve dollars?
    maybe you are referring to silver certificates.
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    Quote Originally Posted by 1245A Defender View Post
    these dont look like standard spelling errors.
    is your parrot doing the typing for you, are you slurring your speech, are you lucid????
    whats the difference between u.s. dollars, and federal reserve dollars?
    maybe you are referring to silver certificates.
    Or US Notes.

    A United States Note, also known as a Legal Tender Note, is a type of paper money that was issued from 1862 to 1971 in the U.S. Having been current for over 100 years, they were issued for longer than any other form of U.S. paper money. They were known popularly as "greenbacks" in their heyday, a name inherited from the Demand Notes that they replaced in 1862. They were called United States Notes by the First Legal Tender Act, which authorized them as a form of fiat currency, but because their value derives from their status as legal tender they bear the inscription "This Note is a Legal Tender" and are often called Legal Tender Notes.
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    Quote Originally Posted by thebigsd View Post
    First and foremost, I apologize if I offended you, I was not intending to be rude or arrogant. Don't assume that I was being such. I did contribute in the second part of my post where I asked how you thought the elimination of the 14th amendment would play out. I meant it as a thought exercise, simply because so many court rulings are based off the 14th amendment. Would those laws become invalid? Which parts in particular do you think should be repealed?
    Debt from the war paved the way for modern monetary policy. Fiat money being accepted as real money is a huge portion of that. I think it would help to invalidate the laws requiring fiat money being good for "all debts public and private", with emphasis on the private part. I highly doubt such an amendment would pass; however if enough support could be given to such an effort we might get some other amendment that would stop the printing presses. As it is I think we've seen that control over inflation is too much power for the federal government; they can tax money in your bank account and under your mattress with it and without any chance of someone not paying the tax.
    Don't believe any facts that I say! This is the internet and it is filled with lies and untruth. I invite you to look up for yourself the basic facts that my arguments might be based upon. This way we can have a discussion where logic and hints on where to find information are what is brought to the forum and people look up and verify facts for themselves.

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    Quote Originally Posted by Daylen View Post
    Debt from the war paved the way for modern monetary policy. Fiat money being accepted as real money is a huge portion of that. I think it would help to invalidate the laws requiring fiat money being good for "all debts public and private", with emphasis on the private part. I highly doubt such an amendment would pass; however if enough support could be given to such an effort we might get some other amendment that would stop the printing presses. As it is I think we've seen that control over inflation is too much power for the federal government; they can tax money in your bank account and under your mattress with it and without any chance of someone not paying the tax.
    I think the easiest bill to get passed (and which I believe was reintroduced again this year) is to simply get rid of the taxes on gold and silver (some silver doesn't have tax already like coins and rounds) and once again giving them legal tender status. This way you wouldn't have to try to pass a hard to swallow bill that gets rid of the fiat currency. Instead you have a competing currencey and we can let the market decide. I'll take the gold please!
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    Quote Originally Posted by Brass Magnet View Post
    I think the easiest bill to get passed (and which I believe was reintroduced again this year) is to simply get rid of the taxes on gold and silver (some silver doesn't have tax already like coins and rounds) and once again giving them legal tender status. This way you wouldn't have to try to pass a hard to swallow bill that gets rid of the fiat currency. Instead you have a competing currencey and we can let the market decide. I'll take the gold please!
    That is along the lines, of which I was referring; though I'm not sure what taxes you are talking about on gold and silver.
    Don't believe any facts that I say! This is the internet and it is filled with lies and untruth. I invite you to look up for yourself the basic facts that my arguments might be based upon. This way we can have a discussion where logic and hints on where to find information are what is brought to the forum and people look up and verify facts for themselves.

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    Quote Originally Posted by Daylen View Post
    That is along the lines, of which I was referring; though I'm not sure what taxes you are talking about on gold and silver.
    I know in some states you have to pay sales tax on gold or silver bullion.

    Also, you may have to pay capital gains when you sell your gold and silver. I don't know the tax law on this; just speculating. God, could you imagine the headaches just trying to keep track of the transactions in order to pay such a tax? "Lets see, I paid $845 for that Krugerrand. And, bought a $900 refrigerator with it, and got $500 change, so my capital gain was $555. But, do I pay the capital gain tax on the refrigator amount or the whole thing, because really, the cash is just going to depreciate again. Or, maybe I could buy a few $5 Gold Eagles with the $400 change, in effect rolling over the $555. Hmmmm. How do I count this? And, why won't IRS let me deduct inflation from my so-called gain?"

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    Quote Originally Posted by Gunslinger View Post
    Or US Notes.

    A United States Note, also known as a Legal Tender Note, is a type of paper money that was issued from 1862 to 1971 in the U.S. Having been current for over 100 years, they were issued for longer than any other form of U.S. paper money. They were known popularly as "greenbacks" in their heyday, a name inherited from the Demand Notes that they replaced in 1862. They were called United States Notes by the First Legal Tender Act, which authorized them as a form of fiat currency, but because their value derives from their status as legal tender they bear the inscription "This Note is a Legal Tender" and are often called Legal Tender Notes.
    IIRC, they were also payable upon demand with the metal of their face value ... gold and silver?
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