[gromitt82]

The problem America was facing for the last 15 days of reaching default today has provisionally been postponed until next February, when it may reappear like a new tsunamy flooding the whole western World...

The question lies on whether both Republicans and Democrats may find the necessary common sense to reach some kind of definitive agreement that may eliminate for good he risk of default and its global consequences.

What do you think?

Gromitt82

[smearcase]

Not likely. First, there is no such thing as definite with regard to politics.
Secondly, the fiscal deadlines were put in place for a purpose. It is one last chance to possibly save the country in circumstances that are just about impossible to envision.
The cliffs will get higher and more dangerous every day in my humble opinion. Ignoring the cliffs and hoping for the best is not a strategy. The current sequester has been estimated to result in a 49 trillion dollar deficit in ten years instead of a 50 trillion dollar deficit- in ten years. That would be one step forward and about 32 steps back.

[gromitt82]

I am willing to accept that there is no such thing as definite as far as politics are concerned.
I'm 86 years and since 1936, on occasion of the Spanish civil war (I'm Spanish) there has not been a single year without a war or a bleeding conflict somewhere in the world. WWII, Korea, Viet Nam, Cambodia, Laos, Congo, Balkans, SriLanka, Iraq/Iran, Israel/Siria/Egypt, Somalia, Sudan, India, Pakistan, Central America, Chili. Again Iraq, Afghanistan... you name them...

Because of my job I have had the opportunity of visiting most of these countries before they were in the clutches of some conflict or other and some of them after they were trying to overcome what we now like to call the collateral consequences of them.

And right now it is still going on somewhere, somehow...

And why is it so? Because governments promises are never DEFINITE! Out of greediness for power and control of as much world as possible they do not mind lying and spending billions in weaponry should they may eventually need them.

The problem among donkeys and elephants in your country lies, of course, on the fact Republicans want Mr. Obama to cancel his Obamacare program. Mr. Obama's presidency will definitely end in 2016, but as it usually happens, he wants his name to be credited with this health program which should certainly benefit a large amount of Americans.
On the other hand, the radical Tea Party idea of how these Americans should be treated is well known all over the world.
So here, again, we have a struggle for power on both sides. One is fightig for posterity and the other for their philosophy, which is that of the wealthy american industries and multinational corporations.
That, of course, is only my humble point of view. I may be all wrong. But as I say, throughout 66 years and a lot of travelling, I have come to accept my instincts.
Gromitt82

[tomder55]

The Republicans surrendered ,gave Emperor Zero a victory ,and got nothing in return (except perhaps some pork money to McConnell's state ) .Beltway Republicans always talk about being outsiders in DC ,and that they are there to do the people's business to shrink the size of the national government ;to have the government live within it's means ,to be fiscally responsible.But when push comes to shove ,they fold like cheap tents ,more content to be losers who are still invited to the DC cocktail circuit than to stand on their stated principles . It's the type of behavior expected from the Dems . But Republicans go there with a supposed different agenda. When 1 or 2 of the actually decide to stick to their principles ,the old guard attacks them more viciously than the Dems.
I already exposed on another discussion the fallacy that the US has never defaulted before (1933 being the most prominent one in the last century ) . I further contend that the manipulation of the currency by the Fed ,weaking it to the strength of toilet paper is defacto default that is already rippling throughout the world market .
What is worse for the country is the out of control accumulation of debt . Default now by comparison ,in the long run ,would be a blessing compared to the heights our economy will crash from unless the out of control debt is addressed.

[smearcase]

I doubt that you are wrong in your observations.
There are plenty of wars on the horizon and maybe the biggest one ever (Iran/Israel/U.S. , then shortly thereafter everybody else) is yet to start- but it could be tomorrow. It will happen on the day that Israel decides that there is no turning back. They said about one year ago, they would wait until summer and summer is gone.
Nothing will change in the U.S. Until we get rid of the career politicians feathering their own nests, and only taking actions that increase their chance of re-election. Best example right now-- the senate leader touted as the hero that ended the shutdown, managed to get 1.2 billion for a dam in his state as part of the final debt agreement. In the past he has generally been against infrastructure for other areas of the U.S. But now he is being challenged heavily for the next election and needed a plum to bring home to sway voters. It never stops and there is no level to which they won't stoop.

[tomder55]

U.S. debt jumped a record 8 billion on Thursday, the first day the federal government was able to borrow money under the deal President Obama and Congress sealed this week.

The debt now equals .075 trillion, according to figures the Treasury Department posted online on Friday.
The 8 billion increase shattered the previous high of 8 billion set two years ago.

The giant jump comes because the government was replenishing its stock of “extraordinary measures” — the federal funds it borrowed from over the last five months as it tried to avoid bumping into the debt ceiling.
Under the law, that replenishing happens as soon as there is new debt space.

U.S. debt jumps a record 8 billion

Well that explains how the US government can go months at a time without increasing the debt above the previous levels . We all knew that they couldn't curb their insatiable desire to spend money they don't have . Not to worry... there is currently no debt limit so they can gorge on their lust to spend spend spend without any restrictions .
Tell me again how default is worse than feeding the addicted beast .

[paraclete]

U.S. debt jumps a record 8 billion

Well that explains how the US government can go months at a time without increasing the debt above the previous levels . We all knew that they couldn't curb their insatiable desire to spend money they don't have . Not to worry... there is currently no debt limit so they can gorge on their lust to spend spend spend without any restrictions .
Tell me again how default is worse than feeding the addicted beast .

Tom you can default when you bring your budget into surplus

[tomder55]

[paraclete]

Are you seeking to tell us what we already know? There is a way out of this you know? It is called divestment. It is capitalist based strategy so you should adopt it immediately. Your government simply does what any prudent organisation would do to reduce debt. It sells assets. So you could start with the capital building and do a lease back. You can use the funds released to pay down debt. The Chinese would love some aircraft carriers, so you can sell your old ones to them and lease them back or just let them be mired in outdated technology. in any case, you can pay down debt. Your interstate highways should be worth much as toll roads, and bridges a definate cash cow. It works, look what it has done for the Chinese economy where every asset earns its keep

[tomder55]

So you could start with the capital building and do a lease back

There are many assets they could divest of besides the Capitol building . Heck ,most of the land in the Western States is Federal Government owned.
But I'd prefer to preserve as many assets as possible . So that isn't really an option. However ,with some tax reform ,flattening rates and reducing deductions and exemptions , privatizing or partially privatizing some government programs Amending the constitution to mandate a balanced budget and a hard debt cap are a few things we could do.

[paraclete]

There are many assets they could divest of besides the Capitol building . Heck ,most of the land in the Western States is Federal Government owned.
But I'd prefer to preserve as many assets as possible . So that isn't really an option. However ,with some tax reform ,flattening rates and reducing deductions and exemptions , privatizing or partially privatizing some government programs Amending the constitution to mandate a balanced budget and a hard debt cap are a few things we could do.

You are talking about talk and I'm talking about action. You want to keep assets that have proven they have no value, the Capital building is a case in point

We have had these discussions before and what they avoid is the issue that in whatever form taxes have to be raised significantly to deal with the budget deficit and the debt, or there has to be significant reduction in government spending. Here's an idea. The debt limit plus the interest burden cannot be greater than the GDP for the next ten years, so no growth, no growth in debt and if your Rating falls so automatically does the limit. That should keep the pork barrellers in check, remove all adjustment for inflation from government programs. In other words peg them at their current level and remove all discretionary spending. Either it is identified in the budget or it doesn't happen and no staples, etc. So no budget, no spending

You want to privatise government programs, in other words you are fine with raising taxes under a fee for service regime, you just avoid calling them taxes. You could also ensure that all unemployments benefits come with mandated community work, so no work, no dole. A day a week street sweeping and cleaning community toilets and sewers should persuade some unemployed that they have better things to do, do the same with all prison sentences, no work, no eat with all drug offenders (personal posession) on a community work program instead of prison

[tomder55]

The emperor reversed bipartisan welfare reform that was enacted in the 1990s involving work requirements.

Addressing privatization ,I was speaking generally of entitlements ,especially reversing the coming untold increases ,and future unfunded liabilities in government spending related to socializing health care .As you know ,I've also been a proponent of returning the right of choice to the individual in the social security system. These do not require "taxes " under a different name .Instead it removes a huge burden of long range debt obligation to the government .

[paraclete]

The emperor reversed bipartisan welfare reform that was enacted in the 1990s involving work requirements.

Addressing privatization ,I was speaking generally of entitlements ,especially reversing the coming untold increases ,and future unfunded liabilities in government spending related to socializing health care .As you know ,I've also been a proponent of returning the right of choice to the individual in the social security system. These do not require "taxes " under a different name .Instead it removes a huge burden of long range debt obligation to the government .

Please! We are all adults here. You want a corporation to administer pensions. I expect what you thought should have been done was instead of offering an insurance option the poor (read uninsured) should have been treated in charitable clinics no doubt funded by government. Perish the thought they might actually pay something for the privilege. Wait, wasn't that essentially what was happening. Now that you are opposed to this big new tax is commendable but I was sure you didn't believe in the free ride. You can have just so many options you know, and I respect it hurts when your minimalist cover is overturned and you have to pay more, but one day you might actually use that cover

[tomder55]

Your "adult " system of governance is collapsing all over the world . We won't be the 1st to go down ,but inevitably ,the European social welfare state system is a failure. If you don't believe me ,then listen to King Willem-Alexander of Holland .

'The shift to a "participation society" is especially visible in social security and long-term care,' the king said in a speech to MPs written for him by Prime Minister Mark Rutte's government.'The classic welfare state of the second half of the 20th century in these areas in particular brought forth arrangements that are unsustainable in their current form.'

He said that nowadays, people expect and 'want to make their own choices, to arrange their own lives, and take care of each other.'

Dutch King Willem-Alexander declares 'welfare state of the 20th century over' | Mail Online

[paraclete]

Tom one swallow does not a summer make. We have to pursue a fairer society and it might be out of your grasp but it is not out of ours. Capitalism and the free market must be controlled to prevent excesses and avoid the worst problems that stem from poverty and disadvantage

Our society has not sunk under to weight of hubris as has yours. Your society has produced a corrupt society with a very thin veneer

[excon]

Hello gromitt:

What do you think?

Their callous and stupid act cost us $24 BILLION. But, that's NOT enough for them.. I PROMISE you, they're gonna DO it AGAIN.

Just read what my friend tom is posting.. Does he sound happy?

excon

[paraclete]

Hello gromitt:
Their callous and stupid act cost us $24 BILLION. But, that's NOT enough for them.. I PROMISE you, they're gonna DO it AGAIN.

Just read what my friend tom is posting.. Does he sound happy?

excon

No ex he is fully pissed

[gromitt82]

[QUOTE=tomder55;3571437]


You are right. According to information available in the Net, in 1933, default on the national debt was sparked by the nation’s abrogation of the gold clause, which allowed investors who had purchased U.S . Bonds to help finance WWI, to be repaid in gold coins.

“In effect, the U.S. refused to pay Panama the annuity in gold due to that Nation according to a 1903 treaty. The eventual dispute was settled in 1936, when the U.S. paid the agreed amount in gold balboes” (Panama’s currency at the time).

The “slight” difference, though, is that in 1933 the debt ceiling was situated at some 45 billion dollars, whereas in Feb. 2010, it was (accordig Official figures available in the Net) of 14.294 trillion dollars, that is, some 317 times higher.

It is interesting to know that also in 1933 (May 6th) Germany ceased as well payments on long-term borrowings, and that was 3 months after Hitler became the new Chancellor of Germany. The default helped cement Hitler’s power following years of political instability as the Weimar Republic was struggling was its crushing debts.

No need to enter into any details as to how Hitler reacted to his new powerful status and his final destruction...

Defaults show how excesive debt (as it also happens in domestic family economies) may provoke capricious results, suc as the civil war and despotism that ravaged Florence after England’s Edward III refused to pay his obligations from the city-state’s Banks in 1339, or the French Revolution in 1789, that followed the French Crown’s defaults in 1770 and 1788.

However, the situation right now is much more dangerous. Failure by the world’s biggest economy (the U.S.A.) to pay its debt in an interconected gloalized World would risk an array of devastating consequences that could lay waste to stock Markets from Brazil to Zurich, and bring the $5 trillion market in Treasury-backed loans to a halt!

Borrowing costs would soar, the dollar’s role as the world reserve currency would be in doubt (some countries like China already have some doubts) and World economies (including yours, naturally) would risk punging into recession, and potentially depression...

In short, the Lehman’s Bros and subprime morgages problems that launched the 2008 crisis all over the western world, would just look like a children’s game.

So we all better hope that both Republicans and Democrats may finally conclude their present struggle is not really worthwhile for anybody...

Gromitt82

[gromitt82]

Hello gromitt:
Their callous and stupid act cost us BILLION. But, that's NOT enough for them.. I PROMISE you, they're gonna DO it AGAIN.

Just read what my friend tom is posting.. Does he sound happy?

excon

I may be “fully pissed” as our friend Paraclete so “nicely” points out.

Still, the fact remains in December 1919, when WWI was over, the U.S. Debt ceiling was of $43 billion. When WWII ended, the debt ceiling was of $300 billion. Whe the Korea war was over, the debt ceiling was $281 billion (despite de war it had been somewhat reduced). By the end of the Vietnam war, the debt ceiling was of $600 billion (nice increase!). After the Desert Storm (1991), the debt had soared to well over $4.100 trillion... And by the 2010, when the Irak war was more or less over. The ceiling was at 14.237 trillion...

Pissed or not these are oficial figures.

In “The American Spectator”, Alex J. Pollok already described in 1933, “default on the national debt as an "intentional repudiation of its obligations."

Under President Barack Obama the debt ceiling has been raised on three occasions. When he was sworn into Office, in Jan. 2009, the ceiling already was $11.315

• by $789 billion to $12.104 trillion in February 2009, Obama's first year in office, under the American Recovery and Reinvestment Act;

• by $290 billion to $12.394 trillion ten months later, in December 2009;

• and by $1.9 trillion to $14.294 trillion two months later, in February 2010.

Another fact. The Pentagon budget has the world’s largest military budget, largest than all the combined rest of the world military expenses. And keeps on growing... For 2014, President Obama has requested the “insignificant” amount of $526.600 billion..

Perhaps it would be about time to try and somewhat reduce that colossal expenditure unless, of course, Mr. Obama has in mind some other war in the near future...

Gromitt82

PS: Have you seen the documentary "The untold history of the U:S.", directed by Oliver Stone? If you have not, you can see it in YouTube.

[tomder55]

Gromitt82 ,
You make my point .The game of chicken that was played was by Obama . He threatened defaut unless the debt ceiling is raised. And the Repubics rolled over and played dead . The truth of the matter was that there was no way that the nation was going to default unless Obama allowed it . There is more than sufficient revenue coming in to service the debt . Oh he would've had to make some hard choices with what was left... but we would not have defaulted . What we have now that the Repubics caved is essentially no debt limit... and what you saw in the day after the deal was reached was perhaps the single largest US debt increase in a single day.

I hate to break it to the Dems who think this situation can go on forever... this is not sustainable . We are left with a situation that a greater and greater percentage of the revenue will be for debt service ;and less to support the nanny state that in itself has an insatiable appetite to consume the wealth of the nation.

So yes ,a default would be a disaster . Will it come now or later ? That is the only question unless our spending is reigned in ,and in a hurry .