Today the Prez said he will not sign any last-minute stopgap-type of budget thing.  He's holding out for the Big Package.

I say bravo.  8)

(insert Anthony Weiner joke here)
;)

This is a scary game of chicken.  I'd like to say there's absolutely no way our gummint would be so irresponsible as to let the national debt default.  Now I'm not so sure.
http://www.inthe00s.com/smile/11/confused2.gif

What exactly happens if we default? Do we go back to 2008 and the worst of the recession?

Now I'm not so sure. http://www.inthe00s.com/smile/11/confused2.gif

Me either.  But the end of the world is still a crappy bet.  If the world ends, just exactly how do you collect?  Your counterparty's bones are being gnawed on for meat amidst the rubble of Chicago or New York, and it's a pretty safe bet his broker (who's bones were rendered for their marrow a few hours earlier) ain't exactly concerned about covering his debts.


What exactly happens if we default? Do we go back to 2008 and the worst of the recession?


Seriously?  Worse than that.  Which is why - despite all the bluffing - that I don't think we will.  There are really no winners in that scenario.

If the debt ceiling is hit, the FedGov effectively shuts down.  Medicare's shut down.  Grandma doesn't get her SS check.  Soldier, Sailor, Airman, Marine, get IOUs instead of paychecks.  NSA stops eavesdropping on the Internet.  BCIS stops blindly handing out visas to terrists, ICE stops deporting Mexican drug runners, because DEA stops busting potheads.  Dogs and cats living together, mass hysteria.  (Have I failed to offend anyone's pet political programme?)

Jackass and Elephant alike, everybody's ox gets gored.  (Which is why it won't happen.)

But the interest on the bonds gets paid.  (At least, as long as we keep going to work and paying our taxes.)

But the interest on the bonds gets paid.  (At least, as long as we keep going to work and paying our taxes.)

The name's Bond.  Paid Bond.

There would be no need to default.

Just stop spending more than is coming in and keep paying the bond interest.

It is called cash flow management.

If the debt ceiling is hit, the FedGov effectively shuts down.  Medicare's shut down.  Grandma doesn't get her SS check.  Soldier, Sailor, Airman, Marine, get IOUs instead of paychecks.  NSA stops eavesdropping on the Internet.  BCIS stops blindly handing out visas to terrists, ICE stops deporting Mexican drug runners, because DEA stops busting potheads.  Dogs and cats living together, mass hysteria.  (Have I failed to offend anyone's pet political programme?)

Jackass and Elephant alike, everybody's ox gets gored.  (Which is why it won't happen.)




This includes MY paycheck. I am trying not to spend too much $$$ because what I have in my checking & savings account may be all I have to live on if the government shuts down.


There would be no need to default.

Just stop spending more than is coming in and keep paying the bond interest.

It is called cash flow management.


Cuts will only make the problem worse. It was the Bush tax cuts that got us into this mess. If we eliminate those tax cuts and go back to the tax rate of 1999-the problem will correct itself. (Remember-in 1999 there was a surplus).



Cat

Cuts will only make the problem worse. It was the Bush tax cuts that got us into this mess. If we eliminate those tax cuts and go back to the tax rate of 1999-the problem will correct itself. (Remember-in 1999 there was a surplus).

Cat


CUTS?  Check out the trend of government REVENUE, only outpaced by SPENDING.

http://www.usgovernmentrevenue.com/downchart_gr.php?year=1950_2015&view=1&expand=&units=b&log=linear&fy=fy12&chart=F0-fed&bar=0&stack=1&size=m&title=&state=US&color=c&local=s

The concept that the Federal government has been somehow "starved" of tax revenues is a myth that the spendthrifts have successfully propagated.

If the debt ceiling is hit, the FedGov effectively shuts down.  Medicare's shut down.  Grandma doesn't get her SS check.  Soldier, Sailor, Airman, Marine, get IOUs instead of paychecks.  NSA stops eavesdropping on the Internet.  BCIS stops blindly handing out visas to terrists, ICE stops deporting Mexican drug runners, because DEA stops busting potheads.  Dogs and cats living together, mass hysteria.  (Have I failed to offend anyone's pet political programme?)


Don't worry about the military.  If we stop paying the soldiers, they'll just go to work for somebody who will pay them!
:o

CUTS?  Check out the trend of government REVENUE, only outpaced by SPENDING.

http://www.usgovernmentrevenue.com/downchart_gr.php?year=1950_2015&view=1&expand=&units=b&log=linear&fy=fy12&chart=F0-fed&bar=0&stack=1&size=m&title=&state=US&color=c&local=s

The concept that the Federal government has been somehow "starved" of tax revenues is a myth that the spendthrifts have successfully propagated.



Your link is broken.


I agree that some spending should be cut-like subsidiaries to oil & gas and other industries. The defense budget could also be cut-i.e. bring the troops home from Iraq & Afghanistan. 


Cat

Your link is broken.


I agree that some spending should be cut-like subsidiaries to oil & gas and other industries. The defense budget could also be cut-i.e. bring the troops home from Iraq & Afghanistan.  


Cat
Didn't we already start withdrawing troops from Iraq?

Didn't the GOP led House just pass a Defense Bill in the last couple of days where the spending growth of the Defense Department went up by a staggering 17%? I don't get why the spending growth of Defense went up that much.

(insert Anthony Weiner joke here)
;)

This is a scary game of chicken.  I'd like to say there's absolutely no way our gummint would be so irresponsible as to let the national debt default.  Now I'm not so sure.
http://www.inthe00s.com/smile/11/confused2.gif
Yeah it is a scary game of chicken.

This includes MY paycheck. I am trying not to spend too much $$$ because what I have in my checking & savings account may be all I have to live on if the government shuts down.

Cuts will only make the problem worse. It was the Bush tax cuts that got us into this mess. If we eliminate those tax cuts and go back to the tax rate of 1999-the problem will correct itself. (Remember-in 1999 there was a surplus).



Cat
Well, eliminating the Bush Tax Cuts will solve some of the problem but you still have to reform entitlement programs in some way I think.

BTW, Don't the Dems want to keep the 250,000 dollar earners and those making below that on the Bush Tax Cuts though?

http://blogs.abcnews.com/politicalpunch/2011/07/obama-this-may-bring-my-presidency-down-but-i-will-not-yield-on-no-short-term-extensions.html

Looks like Obama is going down with the ship if he has too. Guess he finally refused to cave in.

If the administration and the Congressional Republicans can't work this out and we default, they're all going to be out of a job come 2012. 

Well, eliminating the Bush Tax Cuts will solve some of the problem but you still have to reform entitlement programs in some way I think.

BTW, Don't the Dems want to keep the 250,000 dollar earners and those making below that on the Bush Tax Cuts though?


Yes.  That's where whatever stimulus you get from tax cuts will be felt

If the administration and the Congressional Republicans can't work this out and we default, they're all going to be out of a job come 2012. 

Yup they all fail!

This country is sinking like the Titanic, Bush rammed into the iceberg and now Obama is the captain of a sinking ship. Time to get on a lifeboat while there's still time!

This country is sinking like the Titanic, Bush rammed into the iceberg and now Obama is the captain of a sinking ship. Time to get on a lifeboat while there's still time!


White men with guns first!
http://www.inthe00s.com/smile/10/vamp2.gif

Money, money, money........most be funny, in a rich man's world!

And she was everything I dreamed of, she moved right up to #1 on my list,
And did I mention she's a world-famous billionaire bikini supermodel astrophyscist?
Yeah, she was so pretty she made Charize Theron look like a big fat slobberin' pig.
(The only caveat was one of her earlobes was just a little tiny bit too big...)

PtMU8nvZzOs

I said "HEY!  Are we doin' government work here?  No, I don't think we areBut Congress thinks they are."
You're close - so very very close (close!) - Oww, you're close (close!)
So close, but no cigar.


Money, money, money........most be funny, in a rich man's world!


Whether the lifeboats are cash (deflation) or gold (inflation) remains to be seen, but yeah.  It's kinda like that.  I don't care how it plays out, I just want to have bet correctly on red or black when the roulette wheel spins.  Since I've no interest in running for office, cocaine-and-hookers are off the table, but betting correctly on the flip of the coin could make the difference between Thunderbird-and-cat-food versus beer-and-pizza.

ETxmCCsMoD0

So I must leave, I have to trade,
On the New York Stock Exchange,
And win a fortune in a game,
My life would never be the same...

- With apologies to Weird Al Yankovic and ABBA.

Cuts will only make the problem worse. It was the Bush tax cuts that got us into this mess. If we eliminate those tax cuts and go back to the tax rate of 1999-the problem will correct itself. (Remember-in 1999 there was a surplus).



CUTS?  Check out the trend of government REVENUE, only outpaced by SPENDING.


May I suggest that you're talking at cross-purposes; immediate short-term spending of every form is still required to kick the can down the road and keep this craphouse of an economy afloat.  But longer-term spending in the form of infrastructure and education isn't necessarily evil; it's what differentiates genuine investment that will increase GDP down the road, from the  typical pork-barrel politics that plague Washington.

CatwomanofV: Technically, you're wrong.  Tax cuts didn't get us into this mess.  A housing bubble and overleveraged consumers - insulated by dumbass rating agencies - enabled overleveraged consumers to help banks to overleverage themselves, and *poof*, the world ended.  

LyricBoy: You're wrong too.  You're addressing her point, which is also wrong.  The collapse in revenue had little to do with tax cuts, and more to do with the collapse in capital gains and employment income that came along with the crash of 2008.  

And you're both right:

CatwomanofV: You're absolutely right.  You can't cut spending and simultaneously reflate an economy that's deflating due to a lack of consumer spending.  Keynes, regardless of his faults, was right in that the government is the lender - and spender - of last resort.  Spending money on rebuilding roads (rail, conventional truck, or electric vehicle) has a great ROI, but much like sending a bunch of Sputnik-terrorized kids to school in 1957 and landing on the moon in 1969, the time between the initial spending and seeing the positive ROI far exceeds the election cycle.

LyricBoy: You're also right.  Unproductive spending doesn't help increase GDP, it just devalues the dollar.  Great if you're long commodities or precious metals.  Pretty sweet if you're underwater on your home, which is built with commodities.  Not so great if you're a net saver, but that's their problem - anyone with enough surplus capital to invest can invest in something that would hedge themselves against inflation.  

Could we settle for somewhere in the middle?  A massive programme to raise a generation of of ditch-diggers, ironworkers, and railroad/automotive/aerospace engineers, as well as the teachers and professors to educate them?  Even if it fails, it keeps a bunch of people off the streets for a couple of years.  If it actually works, we reclaim the manufacturing and engineering territory we've lost to China, and we leverage that to go to the stars in the 2030s.

Blow a farkton of money in the next couple of years, devalue the buck temporarily if need be, because doing so is something that comes at the expense of our lenders, rather than to their credit.  Imposing austerity in the middle of a recession ends up with a situation like Greece or Argentina.  It's a position of last resort, and it's taken only under duress, and results in a fire sale of assets both private and public.  Insofar as we can print our own currency at the touch of a button, the US should be on the buying end of those sorts of deals, not the selling end.

LyricBoy: You're wrong too.  You're addressing her point, which is also wrong.  The collapse in revenue had little to do with tax cuts, and more to do with the collapse in capital gains and employment income that came along with the crash of 2008.  


Foo.. revenue has not collapsed.  Indeed it has steadily increased.  However, Washington has come up with new ways to spend money at a far higher rate that it is coming in.

Spending is now at 26%-27% of GDP.  Under the Bush years it peaked at 20.1%.

Tell you what.  I'll take the Obama-proposed tax increases if AND ONLY IF there are spending cuts such that the 2011/2012 budget becomes immediately balanced.

The concept of continuing with deficits is adolescent, childish, and dishonest.  The liberal class's vaunted largess involves nothing more than picking taxpayers' pockets, hustling worthless government notes on lenders.

Wow, Foo is acting as mediator.  ;) :D ;D ;D ;D


May I suggest that you're talking at cross-purposes; immediate short-term spending of every form is still required to kick the can down the road and keep this craphouse of an economy afloat.  But longer-term spending in the form of infrastructure and education isn't necessarily evil; it's what differentiates genuine investment that will increase GDP down the road, from the  typical pork-barrel politics that plague Washington.

CatwomanofV: Technically, you're wrong.  Tax cuts didn't get us into this mess.  A housing bubble and overleveraged consumers - insulated by dumbass rating agencies - enabled overleveraged consumers to help banks to overleverage themselves, and *poof*, the world ended.  



The housing bubble and the deregulation of banks added to the problem. The fact remains that this country had a surplus when Bush got into office and when he left, it had a record deficit. You can also make the argument that corporations sending jobs overseas also adds to the problem.



LyricBoy: You're wrong too.  You're addressing her point, which is also wrong.  The collapse in revenue had little to do with tax cuts, and more to do with the collapse in capital gains and employment income that came along with the crash of 2008.  

And you're both right:

CatwomanofV: You're absolutely right.  You can't cut spending and simultaneously reflate an economy that's deflating due to a lack of consumer spending.  Keynes, regardless of his faults, was right in that the government is the lender - and spender - of last resort.  Spending money on rebuilding roads (rail, conventional truck, or electric vehicle) has a great ROI, but much like sending a bunch of Sputnik-terrorized kids to school in 1957 and landing on the moon in 1969, the time between the initial spending and seeing the positive ROI far exceeds the election cycle.

LyricBoy: You're also right.  Unproductive spending doesn't help increase GDP, it just devalues the dollar.  Great if you're long commodities or precious metals.  Pretty sweet if you're underwater on your home, which is built with commodities.  Not so great if you're a net saver, but that's their problem - anyone with enough surplus capital to invest can invest in something that would hedge themselves against inflation.  

Could we settle for somewhere in the middle?  A massive programme to raise a generation of of ditch-diggers, ironworkers, and railroad/automotive/aerospace engineers, as well as the teachers and professors to educate them?  Even if it fails, it keeps a bunch of people off the streets for a couple of years.  If it actually works, we reclaim the manufacturing and engineering territory we've lost to China, and we leverage that to go to the stars in the 2030s.

Blow a farkton of money in the next couple of years, devalue the buck temporarily if need be, because doing so is something that comes at the expense of our lenders, rather than to their credit.  Imposing austerity in the middle of a recession ends up with a situation like Greece or Argentina.  It's a position of last resort, and it's taken only under duress, and results in a fire sale of assets both private and public.  Insofar as we can print our own currency at the touch of a button, the US should be on the buying end of those sorts of deals, not the selling end.



I totally agree with you that we (as a country) need to spend $$$$$ on infrastructure. It basically is a win-win situation. It puts people to work at the same time benefits the nation as a whole so we won't have bridges collapsing on us-or have we forgotten about THIS:

http://www.youtube.com/watch?v=osocGiofdvc



Cat

Wow, Foo is acting as mediator.  ;) :D ;D ;D ;D


...dogs and cats living together, mass hysteria!


Foo.. revenue has not collapsed.  Indeed it has steadily increased.  However, Washington has come up with new ways to spend money at a far higher rate that it is coming in.

Spending is now at 26%-27% of GDP.  Under the Bush years it peaked at 20.1%.


Eh?  Table 3-1 (page 54) of CBO budget outlook 2011-2021 (1.5MB PDF) says it peaks at 24.7% including off-balance-sheet expenditures, and 21.4% excluding the off-balance-sheet stuff).  It fades back to the typical baseline of 20% on-balance-sheet and 23% w/off-balance-sheet for the rest of the decade.  That 20% figure looks a lot like your 20.1% figure.  But I can't find anything over 24.7% of GDP even if I give you the benefit of the doubt on which figure to use.

Rant:  Crappy accounting, specifically failing to account for off-balance-sheet entities, is what killed Enron, and it's just as bad at the national level.  The situation is arguably worse than Enron; at least it's illegal when companies do it.  When the government does it, it's standard practice.  And when politicians comment on it, they pick either the "total" or "on-budget" figure as suits their needs.

Disclaimer: I don't regularly dig around the CBO budget outlooks.  You could well be right.  But are you sure you're (I'm?) not confusing on-budget spending as a percentage of GDP, or total spending as a percentage of GDP?  

What I was originally trying to say was that the spending spike from the last year of Bush II and the first year of Obama was Congress authorizing the Fed to throw money at the problem.  The point is that most of that spending spike was temporary, and much of it (except for interest on the debt) goes away of its own accord.  (If I'm wrong about politicians cherry-picking on-budget and off-budget spending-as-percentage-of-GDP figures for their own benefit, I'll retract that statement about it being a temporary spike.)


Tell you what.  I'll take the Obama-proposed tax increases if AND ONLY IF there are spending cuts such that the 2011/2012 budget becomes immediately balanced.


I'd take that trade, as long as you gave me a week to sell all commodity-related stocks and shovel everything into bonds for the short-term stock market crash, ensuing 2-3 year recession, and eventual spectacular recovery.  Since it involves short-term pain (and the worst kind of short-term pain; the kind that's still there during the next election!) for long-term gain, no politician on either side of the aisle will ever support it.

Eric Cantor and the boys just held it as a point of stubborn pride that they were not going to compromise.  Nobody wins if we default.  Mitch McConnell looked like a deer in the headlights.  He's just a twat.  Eric Cantor is the real demonic deal. 
Raising the debt ceiling is a legislative matter of course.  They're just trying to hurt Obama, but it's a little like playing punchbuggy with a hand grenade.
:D

Eric Cantor and the boys just held it as a point of stubborn pride that they were not going to compromise.  Nobody wins if we default.  Mitch McConnell looked like a deer in the headlights.  He's just a twat.  Eric Cantor is the real demonic deal. 
Raising the debt ceiling is a legislative matter of course.  They're just trying to hurt Obama, but it's a little like playing punchbuggy with a hand grenade.
:D



Don't you mean a turtle?


http://www.easttennesseepost.com/img/upload/mcconnell_turtle.jpeg

(Or should this go in the "Separated At Birth" thread?)



Cat

Don't you mean a turtle?


Seeing as how there's been no big package thus far this weekend...

"I WAS IN THE POOL!"
  -  Mitch McConnell

Don't you mean a turtle?



http://www.texastravesty.com/wp-content/uploads/2011/03/originalturt.gif

http://www.texastravesty.com/wp-content/uploads/2011/03/originalturt.gif


'k.

http://www.drawger.com/donkilpatrick/shows/art_test_Turtle.jpg

Well, I guess we're all outclassed tonight.

Seeing as how there's been no big package thus far this weekend...

"I WAS IN THE POOL!"
  -  Mitch McConnell


http://static.politifact.com.s3.amazonaws.com/photos%2FMitch_McConnell.JPG

What exactly happens if we default? Do we go back to 2008 and the worst of the recession?


I don't think we left that Recession.

BTW-How many Packages did FDR have? Because if Obama wants to win...he has to find the tactics that FDR once did.