U.S Government Debt Crisis !!!

[taylor192]

Originally Posted by goo3

Some ppl disagree with this approach. That's fine, but keep in mind Canada and many other countries have been doing the same thing. When a recession hits, the money the govt is committed to paying stays the same, but tax revenues drop quickly, throwing balanced budgets out of whack. They are afraid (rightly or wrongly) that cutting back too fast will make the recession worse, and the less bad alternative is to be in a deficit short term and paying it back when times are less harsh.

Keep in mind every time Keynesian Economics has been used we've been able to inflate our way out of the debt it created.

Almost 5 years after the housing bubble first popped in the US and there's no sign of inflating our way out of this mess. In fact the US keeps dropping even after all the Keynesian spending. Even in Canada with our stronger economy and Keynesian stimulus spending we're not back to pre-recession unemployment levels, nor is the TSX.

Its not going to work this time, a different approach is needed.

[gdoh]

i hope that they do not come to a deal before the deadline

[HonestTea]

^ Why?

[gdoh]

why should they keep pumping out money which they dont have and will never pay back just so that the rich can get richer and poor will become poorer while wiping out the middle class. all of these decisions right now each time they get thrown out its just more opportunity for the ridiculous wealthy to get more money in the markets. im just tired of it all really, i think its time for a big change

[taylor192]

Originally Posted by gdoh

why should they keep pumping out money which they dont have and will never pay back just so that the rich can get richer and poor will become poorer while wiping out the middle class. all of these decisions right now each time they get thrown out its just more opportunity for the ridiculous wealthy to get more money in the markets. im just tired of it all really, i think its time for a big change

Plus if it crashes the markets, those of us positioned in cash will have a field day buying cheap again like in 2008.

[Jermyzy]

Originally Posted by taylor192

Plus if it crashes the markets, those of us positioned in cash will have a field day buying cheap again like in 2008.

That's what I was I thinking too. I managed to buy a bunch of bank stocks super cheap during the last crash

[gdoh]

lol did i hear this right? they want to raise the debt by 900b and have tax cuts/spending/whatever of 900b over 10 years lol who comes up with these garbage plans

[taylor192]

Originally Posted by gdoh

lol did i hear this right? they want to raise the debt by 900b and have tax cuts/spending/whatever of 900b over 10 years lol who comes up with these garbage plans

Reps who want to see something pass. I don't think the majority of the Reps will vote for this... yet there is the threat that those Reps who do vote for this, if it fails, may vote with the next Dem proposal which may have even fewer cuts.

Regardless this was absolutely expected, a deal will be reached, and it will be shitty.

[Graeme S]

Interestingly enough, if we assume that nothing happens in the US and nothing gets settled, it is most likely that the stock market will experience a sharp spike downwards. Those who have invested in the US and have counted on either dividends or stock values will end up right along shit creek. those who are already marginal (employed, paying bills, not facing any major financial crises) will be negatively impacted much less than someone a position like your own, Taylor.


This kind of posturing and arguing is a lot like cutting off one's nose to snub the face: They are just fucking themselves over even more. A CNN commentator said something that I think is really true as well. "Not paying for the things you've already purchased and have been using is not at all fiscal responsibility. If you want to claim to be fiscally responsible, you need to pay your bills while working on your budgeting issues."




All of that having been said, I am kind of amused at the level of vitriol on both sides of the argument here on RS for something that we are essentially on the sidelines of it. I'd almost think we were in Scotland watching a Football (Soccer) match. Seems like people are almost ready to come to blows.

[taylor192]

Originally Posted by Graeme S

This kind of posturing and arguing is a lot like cutting off one's nose to snub the face: They are just fucking themselves over even more. A CNN commentator said something that I think is really true as well. "Not paying for the things you've already purchased and have been using is not at all fiscal responsibility. If you want to claim to be fiscally responsible, you need to pay your bills while working on your budgeting issues."

All these metaphors are so very simplistic and inaccurate.

The US has not purchased anything, they have promised their citizens certain things which they can nolonger pay for. Thus a much better metaphor would be "contracts" not "purchases". All those contracts come with a clause that they can be changed at any time - and that time is now.

[Culverin]

Fan-freakin-tastic.

Apple's now got more cash than the US Government.
BBC News - Apple holding more cash than USA

[taylor192]

Originally Posted by Culverin

Fan-freakin-tastic.

Apple's now got more cash than the US Government.
BBC News - Apple holding more cash than USA

A bum in the DTES with a nickle has more cash than the US government.

[TheNewGirl]

Originally Posted by Graeme S

All of that having been said, I am kind of amused at the level of vitriol on both sides of the argument here on RS for something that we are essentially on the sidelines of it. I'd almost think we were in Scotland watching a Football (Soccer) match. Seems like people are almost ready to come to blows.

I think you're underestimating how integrated our economy is with the Americans. If they bottom out this WILL have a rather large impact on our own economy and day to day lives, especially here in Vancouver.

Frankly, as someone who deals with small business I need the American dollar to be stronger, both so US clients will come up to us but also for the thousands upon thousands of dollars we're losing here in our local businesses to cross boarder shopping at the moment. Further more, if we lose the tourist dollars (which are flagging already) from Americans coming up here that has a massive impact on the service sector, which is one of the largest employers in this province. These things create trickle down that eventually effect all areas of business in our province.

[gdoh]

yeap if the US fails it will be a lot worse than 08

[Graeme S]

I wouldn't say I'm underestimating it, but I hold no illusions on the amount of influence that us Canucks have on the Americans. The number of people who are holding arguments over the potential downfalls of the American economy while sitting here comfortably protected in our socialist environment with decent taxes and a decently strong banking system.

We're not perfect, but right now in the world it seems nobody is.
Posted via RS Mobile

[taylor192]

There will be no default, yet there may be many Americans receiving IUOs.

Try this tool to see how you would spend the $172B/mn revenue on the $306B of programs the US runs. You'll notice debt repayment is only $29B and can easily be paid, its everything else that would suffer. There's easily $50B that could not be paid and most people would not notice the service cuts.

http://www.washingtonpost.com/wp-srv...-paid/?hpid=z2

[blkgsr]

Originally Posted by Culverin

Fan-freakin-tastic.

Apple's now got more cash than the US Government.
BBC News - Apple holding more cash than USA

apple should buy the US!!

[strykn]

House passes GOP bill to raise debt ceiling - MarketWatch

[Graeme S]

Originally Posted by strykn

House passes GOP bill to raise debt ceiling - MarketWatch

It's the double-jump debt limit bill; this'll fail in the senate easily. And if it doesn't, Obama's gonna veto it.

[tool001]

Senate voted it down, fucking us gov are like high school girls. So much fucking drama. They know they will have to negotiate & meet in the middle somewhere, why not just get it done! Idiots
Posted via RS Mobile

[gdoh]

thats politics for you

[taylor192]

Originally Posted by tool001

Senate voted it down, fucking us gov are like high school girls. So much fucking drama. They know they will have to negotiate & meet in the middle somewhere, why not just get it done! Idiots
Posted via RS Mobile

I keep wondering how real the threat of a rating downgrade is, cause they want proof the debt can be cut, while the Dems keep negotiating for more debt with little plan to reduce it.

It would be really interesting if Obama signs something then they get downgraded cause it effectively did nothing to reduce the debt. Even what was just shot down only planned to reduce the debt by what was being added over 10 years, leaving them in just as bad a place 10 years from now.

The Dems want $2,4T more, and I hate to say this, I think the Reps should give it to them and then demand their $4T in cuts, which would be better than this $900B and $900B back loaded shit.

[Culverin]

What about corporate sponsorship? We already do it to stadiums, train stations and sometimes even streets.

Wouldn't this help to alleviate the debt just a bit?

[StylinRed]

they struck a deal

[hirevtuner]

what does that mean?

raise the debt ceiling and have another crisis in 6 months (back in their old ways) or they found a new solution?