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.

I say let it default. Maybe the pain is what Americans need to wake up.

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.

Schlitz said:

I say let it default. Maybe the pain is what Americans need to wake up.

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*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.

eye95 said:

*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.

Click to expand...

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.

Daylen said:

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.

Click to expand...

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.

Daylen said:

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.

Click to expand...

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.

END_THE_FED said:

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.

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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.

Daylen said:

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.

Click to expand...

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?

eye95 said:

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.

Click to expand...

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.

Gunslinger said:

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.

Click to expand...

never mind

thebigsd said:

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?

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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.

Gunslinger said:

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.

Click to expand...

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.

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...

Daylen said:

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.

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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?

Schlitz said:

I say let it default. Maybe the pain is what Americans need to wake up.

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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.

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

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.

Huh!

onestar 50 said:

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.

Click to expand...

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.

1245A Defender said:

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.

Click to expand...

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.