U.S Government Debt Crisis !!!

[cressydrift]

Originally Posted by Hehe

This is not an educated summary of what's going to happen.

The thing is that US has reached the debt ceiling (meaning US government can go on and borrow to fund its expenses) and there is a big political debate going on in DC (Republican wants BIG expenses cuts, while Democrats wants to raise taxes) and conclusion can't be reached as of today.

What is going to happen?

To be honest, no one knows. It would be the first time ever in modern history that US defaults its debts. Catastrophic? Yes, but what's interesting is how much?

For those thinking this collapse would make China the new world super power should go back and do Econ101 again.

The intensity of such an event would drag the entire world down. Canada for sure won't be safe from it given the dependency on US trades. China's trillion dollars worth of US notes becomes toilet paper overnight (the value would be up to the negotiation with the debtor, in this case, the US) and will sure lose much business from US.

The currency market would be in turmoil as this might trigger a massive selloff for bonds shifting money everywhere.

All I can suggest is that, especially those with funds to invest. Hold on tight, we might witness an once in the lifetime opportunity to become rich.

For those who don't, you might want to pay attention to the news and your work to minimize any impact and if possible, save up some money for the absolute worst situation.

IMHO, US congress will reach some sort of agreement. But given current possible plans, we will see deep reduction in consumption for the short-mid term from US (the biggest economy) regardless how their agreement work out. So, there won't be any good news for the market. Just prepare yourself for the worst and you would be fine.

I only read this because you quoted me. If I had wrote all that crap down no one would care. I bolded stuff I had already said in my extremely condensed summary of cliffs which were the MAIN POINTS. So I guess your post is an uneducated summary of my post?

Oh and of course no one knows what would happen. Thanks for pointing that out to us.

[cressydrift]

I think some of you guys are missing the point. The US government owes 14 trillion dollars.


14,000,000,000,000

See its like a fat person, at some point they were 200 lbs but now they have really filled out to like 800lbs. It doesn't just happen over night ethier. Now your at 800 lbs and your doctor is telling you if you don't stop now your going to die. You still don't listen and you pack on another 200lbs (2008 1 trillion dollar bailout). Now the doc is saying any minute, you might just keel over and die. You need to cut, BAD.

If they take another loan they are officially the dumbest people ever. They need to go back to basic math. You don't get out of debt with more debt.
Serious changes need to made. END THE FUCKIN WAR, SELL SOME GOLD, SELL SOME LAND, SELL SOME HOT ASS BITCHS. Cut every stupid government program... ETC ETC. Sell and cut, sell and cut. Thats what I would do if I had lots of debt. So what if the markets take a shit, it will feel good when its all done.

This is real life, don't give me formula's.

[GabAlmighty]

Originally Posted by cressydrift

I think some of you guys are missing the point. The US government owes 14 trillion dollars.


14,000,000,000,000

See its like a fat person, at some point they were 200 lbs but now they have really filled out to like 800lbs. It doesn't just happen over night ethier. Now your at 800 lbs and your doctor is telling you if you don't stop now your going to die. You still don't listen and you pack on another 200lbs (2008 1 trillion dollar bailout). Now the doc is saying any minute, you might just keel over and die. You need to cut, BAD.

If they take another loan they are officially the dumbest people ever. They need to go back to basic math. You don't get out of debt with more debt.
Serious changes need to made. END THE FUCKIN WAR, SELL SOME GOLD, SELL SOME LAND, SELL SOME HOT ASS BITCHS. Cut every stupid government program... ETC ETC. Sell and cut, sell and cut. Thats what I would do if I had lots of debt. So what if the markets take a shit, it will feel good when its all done.

This is real life, don't give me formula's.

Your You're. Please, for the love of god.

Secondly, everyone has a perfect solution to the worlds troubles. It all seems very easy in your head (hell, my ideas make perfect sense and i'm just as frustrated as you), that doesn't mean that anything is going to happen.

Chances are, the way the world is working our lives aren't going to change very much over the next few decades (just my gut feelings).

And no, don't cut. I want my F35's bitches.

[q0192837465]

lol, where can I buy shares of the Federal Reserve Bank?

[iEatClams]

Originally Posted by cressydrift

I think some of you guys are missing the point. The US government owes 14 trillion dollars.


14,000,000,000,000

See its like a fat person, at some point they were 200 lbs but now they have really filled out to like 800lbs. It doesn't just happen over night ethier. Now your at 800 lbs and your doctor is telling you if you don't stop now your going to die. You still don't listen and you pack on another 200lbs (2008 1 trillion dollar bailout). Now the doc is saying any minute, you might just keel over and die. You need to cut, BAD.

If they take another loan they are officially the dumbest people ever. They need to go back to basic math. You don't get out of debt with more debt.
Serious changes need to made. END THE FUCKIN WAR, SELL SOME GOLD, SELL SOME LAND, SELL SOME HOT ASS BITCHS. Cut every stupid government program... ETC ETC. Sell and cut, sell and cut. Thats what I would do if I had lots of debt. So what if the markets take a shit, it will feel good when its all done.

This is real life, don't give me formula's.

14 Trillion is huge, but that can't be eliminated overnight. Almost every company or country has debt. Debt can be good, but too much where you can't make payments is bad. Debt is generally cheaper in terms of financing than equity.

the US GDP is over 15 Trillion a year. We can't cut everything.

Your post is illogical on soo many levels. I think of that scene from Billy Madison.. . .

[Carl Johnson]

Originally Posted by q0192837465

lol, where can I buy shares of the Federal Reserve Bank?

NYSE:JPM

[zulutango]

They need 20 billion per month to pay the interest on the debt, they take in 200 billion and even after paying medicare, ss, military pay, vets etc, they have about 53 billion left over, so the story obama is spinning about a crisis unless they let them borrow even more money, is a crock. The main problem is that 50% of the US pays no federal income tax and they have huge entitlement programmes that he has increased since he got into power. Obamacare is unworkable and will cost them trillions that they can't afford under their current setup. He needs to cap borrowing, cut spending and get the 50% who are freeloading, to pay their fair share. He won't do that because it will be political suicide for his support base. Raising taxes in a recession will hurt any recovery...he said so himself back in 2008 when he was running for the job...he also voted against raising the debt ceiling back when he was spending his 140 days as a senator.

On the bright side, car parts from the US are cheaper than ever in Cdn dollars.

[RiceIntegraRS]

I got 3500 in US Dollars, wat do i do with it?

[cressydrift]

Originally Posted by GabAlmighty

Your You're. Please, for the love of god.

Secondly, everyone has a perfect solution to the worlds troubles. It all seems very easy in your head (hell, my ideas make perfect sense and i'm just as frustrated as you), that doesn't mean that anything is going to happen.

Chances are, the way the world is working our lives aren't going to change very much over the next few decades (just my gut feelings).

And no, don't cut. I want my F35's bitches.

Its not the perfect solution. Its the only solution. They have 2 options, take on more debt, or man up. The problem is 1000x more complex than that, but in the end my nerd to hood explanation works.

Thanks for the grammar reminder.

[belka]

Originally Posted by RiceIntegraRS

I got 3500 in US Dollars, wat do i do with it?

Roof mounted 50 cal. 3 of them.

[iEatClams]

Originally Posted by zulutango

They need 20 billion per month to pay the interest on the debt, they take in 200 billion and even after paying medicare, ss, military pay, vets etc, they have about 53 billion left over, so the story obama is spinning about a crisis unless they let them borrow even more money, is a crock. The main problem is that 50% of the US pays no federal income tax and they have huge entitlement programmes that he has increased since he got into power. Obamacare is unworkable and will cost them trillions that they can't afford under their current setup. He needs to cap borrowing, cut spending and get the 50% who are freeloading, to pay their fair share. He won't do that because it will be political suicide for his support base. Raising taxes in a recession will hurt any recovery...he said so himself back in 2008 when he was running for the job...he also voted against raising the debt ceiling back when he was spending his 140 days as a senator.

On the bright side, car parts from the US are cheaper than ever in Cdn dollars.

countries like Germany, and Scandanavian countries like Finland, Norway and sweden, who have literacy rates of 100% have higher income taxes than the US and those countries are much more well off. These countries also have the highest proportional amount spent on education and developing workers.

Raising income taxes for the RICH (not poor) is one of things that MUST be done. Money needs to be raised somewhere.

Lowering taxes and hoping they will use the savings to spur investments / create jobs - the trickle down theory - doesnt work becuase taxes are too low. Back then -- the Regan years taxes were super high and yes they needed to be cut then but now it's been decreasing and decreasing that it's reached too low. Companies paying workers less and shipping jobs overseas is not the key.

the United States has a top marginal income tax rate of 35%. That's dirt low compared to other western countries like Canada, Germany and the scandanavian countries.

[unit]

debt ceiling means very little.
the US gov has raised it 10 times since bush jr.

its like a credit card if you're terrible with money. you reach the limit, and then ask for a limit increase. right now they're extremely close to it, and you know they're gonna continue to raise it. this issue comes up at least once a year.

QE3 is definitely on its way, in one form or another tho.
they wont call it QE3 because it'll sound pathetic, but they are definitely going to inject some more fake money into the economy.

[taylor192]

Nothing bad will happen even if they reach an agreement. A few US states have been unable to agree on budgets and thus stopped paying bills. They made the payments they had to, debts, and just didn't pay anyone else, instead issuing IOUs to state employees and companies.

I suspect the US will do the same. They will pay who they have to, and suspend all other payments. Pensioners, medicare, welfare, military will be the first to suffer.

What will happen aside, the US is at an impasse. They spend more on entitlement programs (pensions, welfare, medicare) than they take in taxes. Then add the costs of government, military, ... and they are screwed. I understand wanting to raise taxes, yet the heart of the problem is the entitlement programs take up most off the budget. These need to be cut back even if taxes are raised, as just raising taxes only kicks the can down the road as these programs are set to grow far more that GDP, so taxes cannot keep up.

[BoredAtWork]

If anyone thinks US wants to or plans to repay the debt, you gotta be nuts. As with all politicians and their active term, Everyone is trying to take a share of it and pass the ticking time bomb to the next person in line. No one EVER has tried to reverse the debt problem, because they simply cant.

Be selfish for a moment and think of a government as a company. Its purpose is to survive and grow. Instead of share holders, you have the votes of citizens. If you pass a election, you pretty much have 4 years of undisputed income at your expense. Everything a government does is for the benefit of itself, not its citizens, but it requires the vote of the citizen to stay afloat.

In short and mid term, I see USD continuing to deflate. Its actually on a spiral cycle since 2009, and its quite easy to predict (every 3-4 months, like clockwork, most recent being around end of May this year). QE1 and QE2's full impact of currency deflation has not been seen yet, as US is still recognized as AAA. This status is coming under threat, and if downgraded, you will start to see mass degrade of USD value. Debtors will exit and are less likely to lend to US unless for higher interest rates. China for example in 2011 has already shifted attention to borrowing to Europeans than US. China is gearing up for US debt default, and are not renewing their loans.

Someone here posted previously that we will see a once in a life time chance to get rich is correct. However unlike 2009, I don't see the potential of a US rebound (If you invested in companies like JP Morgan, BAC, Ford, you would have made a killing). This time, I wont invest into US companies; instead I get into globally recognized and TRANSFERABLE commodities as gold, silver, etc.

Aside from the US, China (artifical GDP growth) and Europe (All countries except Germany are starting to see downgrades and cannot sustain their own loan interests); both are in crisis. Its turning into a wildfire rather then a localized hazard.

[bigG]

[Ferra]

Originally Posted by Carl Johnson

This will get resolved at the last minute like they have always done. Right now it's just political games been played on both sides trying to get the best deal.

+1
the republicans are holding out to bargain their demands...

On the other hand, the situation might NOT get resolved if one or both side decide to be an asshole and let everything burn, then blame the other side for the mess.

ugly politics

[Gridlock]

Originally Posted by azndude69

Agree.



Disagree, I think this kind of thinking is what's wrong with society today.
The US has been decreasing taxes for the longest time and it hasn't done shiet. Since the Reagan tax cuts the the rich has been getting richer and richer and the poor poorer. The gap between the rich and the poor is widening.

The richest 20% own 85% of the wealth. That does not sound right at all.

We've been told numerous times again and again by Corporations and lobbyists that tax cuts are great for corporations and generate jobs. The coffers of these companies get bigger, increase the wealth of the rich. But no new jobs have been created.

We need to INCREASE TAXES on the Rich.
OBAMA and the Dems want to increase taxes, but republicans, funded and lobbied by rich corporations wont have it that way.

For example , recently CISCO saved 7 Billion dollars in taxes due to tax loopholes set up by Republicans. This is a company whose cash reserves continue to INCREASE as US workers languish on the unemployment line. Only some 5 years ago it had less than $10B in cash reserves. Today OVER $40B.

When you have 40B in cash reserves, I think you can afford paying taxes cause they aint fucking creating any new jobs!

Bringing this home a little.

Do Christy Clark and Stephen Harper know how to spend your money better than you do?

[taylor192]

Originally Posted by BoredAtWork

If anyone thinks US wants to or plans to repay the debt, you gotta be nuts. As with all politicians and their active term, Everyone is trying to take a share of it and pass the ticking time bomb to the next person in line. No one EVER has tried to reverse the debt problem, because they simply cant.

That is not true, lookup the Clinton years.

[Gridlock]

Originally Posted by taylor192

That is not true, lookup the Clinton years.

Oh, lookup the Clinton years with love man. It's the last time the US made sense.

I was so hoping for Hillary to get it just for the chance to have a repeat.

The focus on him is the Lewinsky affair, but everything else was good.

He gave Bush a balanced budget after 8 years in office! He deserves credit. He borrowed from social security to do it, but it was balanced.

[Jsunu]

Just start by fucking stop with all the rich people tax breaks/cuts. I know by this point it is a political talking point but trickle down economics DOES NOT FUCKING WORK when the trickle is just reintroduced back into corporations/people's pockets.

[TheNewGirl]

There's two things here... first of all the US Currency IS going to collapse, it's just a matter of when.

This is going to happen. It's been predicted by economists for about 15 years now though everyone laughed at them in the Greenspan years and thought "Oh that will never happen" because they were rolling in the green but the commodities market set the US up to be in an unsustainable position and now they're paying the price for all those good years.

Secondly, the US political system has become a warzone of it's own. The Republicans are holding the Democrats hostage on any efforts to repair the economic situation. Essentially they've resorted to a Starve the Beast tactic, forcing Obama to accept consolations and bills that he would not other wise and threatening not to cooperate if he doesn't (one of these bills even redefines rape). In my opinion THIS IS TERRORISM of the worst kind but ultimately only hastens what is already inevitable.

Oddly the political climate is not unlike the middle east in the late 80s, early 90s where extreme conservatisim is becoming a rebellion of it's own, and ironically people are burning up their rights willingly in revolt against what they view as the elitist liberal evil. This behavior further forces polarization which further adds to the anger which forces more extremism and so on into a nasty cycle. Historically speaking in other cases where in this has happened the conservatives usually win, cause they use God as a weapon. Scary isn't it?

Superpowers don't stay global superpowers forever and when they cease to be so they crash spectacularly. This is financial reality. Invest in China (though I personally think China's created an artificially inflated economy already and is going to crash faster then the US did) and India. Buy some gold or silver.

[gdoh]

[Gumby]

From China Agrees To Erase Portion Of U.S. Debt If Americans Dress Up In Costumes And Perform Silly Dance For Them | The Onion - America's Finest News Source:

China Agrees To Erase Portion Of U.S. Debt If Americans Dress Up In Costumes And Perform Silly Dance For Them
BEIJING—In what it's describing as a magnanimous gesture toward an economy in decline, the Chinese government announced Monday it would forgive a portion of the staggering U.S. debt if Americans agreed to dress up in costumes and perform silly dances for their amusement.

With his nation holding $1.16 trillion in federal bonds and the U.S. showing no signs of ending its dependence on foreign credit, President Hu Jintao told reporters that allowing Americans to ease their fiscal burden in proportion to the number and quality of colorful dance numbers they perform is a mutually beneficial arrangement for both countries.

"Our great nation has generously agreed to decrease the considerable financial obligations of the United States," said Hu, standing before an enormous rack containing elaborate dance attire such as sequined vests and metallic lamé pants. "All we ask in return is that Americans put on outfits such as these and amuse us with buffoonish little kicks and twirls, preferably while slapping their big fat tummies. The U.S. will receive much needed debt relief, and China will enjoy watching the graceless flailing of decadent capitalists."

Addressing Americans directly, Hu continued: "In the seconds it will take you to object, your nation will slip hundreds of thousands of dollars further into our debt. That will mean 50 more of your countrymen having to put on a George Washington costume with a skirt and prance around with big smiles and heavily rouged cheeks while we pelt them with bits of your worthless currency from the windows of the Chinese embassy."

While Hu offered few specific rules to govern the debt-reduction scheme, he did provide a number of guidelines that he said would affect the amount deducted. Large, ambitious routines—the entire population of Ohio dressed in bright green leotards doing a high-stepping jig with Big Macs stuffed in their mouths, for example—could shave $20 billion from the debt in a matter of minutes. Meanwhile, smaller groups of Americans and even individuals could do their part by dressing up as cancan dancers and performing a kick line in front of the Vietnam Memorial, or by painting the Mandarin character for 'gorilla' on their faces and jumping up and down on their desks at work like "great big immoral apes."

Hu added that the dollar value of all dances could be increased by incorporating chants such as "I have no work ethic," "Look at what our pathetic democracy has done to us," and "I am so fat I must drive an SUV to go purchase a prostitute" into the routine. Conversely, acts may be disqualified entirely if professional dancers are employed or if participants do not seem suitably engaged in their performance.

Hu later confirmed that wearing brightly colored hats with bells on them could only help.

"All dancers will be required to demonstrate an exceptional level of commitment," said Hu, adding that, should a very large American dress up in a form-fitting outfit with his stomach hanging visibly over his waistband, and then pass out from physical exertion while his overweight children dance around him, an extra $12 million would be instantly knocked off the tab. "It will be insufficient to go through the motions. Any dancer who hand jives without proper rehearsal and a big smile is wasting his time."

"That is especially important," Hu added. "We want nice, big smiles from America."

Although any U.S. citizen is eligible to participate in the program, dances performed by members of the armed forces or practitioners of Tibetan Buddhism will be considered more valuable. Persons holding high office in the federal government stand to make the largest financial impact, especially, Hu said, if all 535 members of Congress perform a Yiddish bottle dance during his next state visit.

"I do not savor what I am going to do this evening," said a solemn President Obama, sitting at his Oval Office desk in the tiger-striped scoop neck he will wear for a salsa performance expected to cut the American debt by a whopping $30 billion. "I know that my partner, Speaker Boehner, shares my reluctance, but that we will both do what we must for the financial well-being of our country."

"But let me be clear," added a defiant Obama, the beads on his lacy sleeve jiggling as he emphatically pointed at the camera. "The United States will never dance for any nation on earth more than once. There will be no encore."

[Ruff Ryd@s]

Check out the keiser report on youtube or rt.com
The guy on the show is awesome and informative at the same time...
Most of his episodes have something relating to the us debt crisis, check it out

[taylor192]

Originally Posted by Jsunu

Just start by fucking stop with all the rich people tax breaks/cuts. I know by this point it is a political talking point but trickle down economics DOES NOT FUCKING WORK when the trickle is just reintroduced back into corporations/people's pockets.

Shutup. That is another dumb Main st vs Wall st argument. Main st's pensions are invested in Wall st. If you tax Wall st more, you tax your own pension/RRSP as most of us are not heavily invested outside Canada/US.

Look at entitlement spending in the US, its shot up exponentially to unsustainable levels. Taxes have nothing to do with that, that is Main st greed wanting more and asking others to foot the bill.