Debt limit : What do you think (serious)

[|ceman]

Curious as to what you guys think regarding which outcome is more dangerous to the average middle income American taxpayer.

Vote in the poll and post your opinions, if so inclined.

[Starkk]

in b4 pole

[|ceman]

in b4 pole

Lol. I tried as fast as I could but I knew someone would get that first post in before I could create the poll on my iPhone.

[Starkk]

I think raising the debt ceiling would be best for now, but only as a short-term solution.

Americans as a whole need to learn to give up the things they enjoy in order to fix the problem. It's just a hard decision and harder to get everyone on board.

That might be a very simplified response, but those are my thoughts on the matter.

[Sldge]

For middle income it probably isnt much better either way. A lot of middle income people will have money in bonds because they dont trust stocks. A default could go either way for the bond market because stock likely will take a quick dive driving people into a save haven type equity, in this case being the same thing that was just devalued. Financial markets go in to the toilet and the middle income gets hardest hit.

The raise the limit (definitely going to happen but may not happen by Aug2) prior so they dont default but without SERIOUS cuts to programs like medicaid, medicare, social security etc we are just kicking the can a little bit farther down the street. Someone has to pay for not doing the cuts and that also usually falls on the middle class.

By some miracle they raise the limit but by reaching an agreement where they make serious cuts to the programs I listed above, then the middle class "likely" finally gets a break.

Cut the programs, legalize drugs (ie tax them), switch to a domestic fuel source (methane and oil) (stop spending the 800 billion on foreign oil and spend the exact same amount in our own country), reduce govt size and we could pay off the debt instead of just re-raising our fake limit every 10-36 months.

[AlphaTauMuscle]

For middle income it probably isnt much better either way. A lot of middle income people will have money in bonds because they dont trust stocks. A default could go either way for the bond market because stock likely will take a quick dive driving people into a save haven type equity, in this case being the same thing that was just devalued. Financial markets go in to the toilet and the middle income gets hardest hit.

The raise the limit (definitely going to happen but may not happen by Aug2) prior so they dont default but without SERIOUS cuts to programs like medicaid, medicare, social security etc we are just kicking the can a little bit farther down the street. Someone has to pay for not doing the cuts and that also usually falls on the middle class.

By some miracle they raise the limit but by reaching an agreement where they make serious cuts to the programs I listed above, then the middle class "likely" finally gets a break.

Cut the programs, legalize drugs (ie tax them), switch to a domestic fuel source (methane and oil) (stop spending the 800 billion on foreign oil and spend the exact same amount in our own country), reduce govt size and we could pay off the debt instead of just re-raising our fake limit every 10-36 months.

I could have said it none better

[laneanders]

I'm really torn on this situation, I think that either way there will be significant repercussions. In all likelihood, the best scenario would be an increase of the debt limit, although I am personally against it. Followed by the loosening of government reigns, which will probably not happen.

We are currently over-regulated, over-governed, and under-privileged. If those in power would just look in the mirror and realize the reason for the situation we are currently in is the sheer amount of legislation and regulation I think we could pull through. The market would eventually self-regulate itself back to a normal position if it were just left alone.

I think that a lot of the problems we currently have are just from our government wanting to have it's hand in every single thing that a United States citizen does on a daily basis. Imo leave us the **** alone and go back to small government. Far to much and to many limitations and restrictions on our rights for me to consider myself free any longer.

I think that they will probably have to raise the debt ceiling to have the time required to fix these things, but at the same time I am personally against any additional debt accumulated.

[Chill Will 33]

I think we take away tax returns until the debt is gone. We pay that stuff anyways, why get any back, just keep it to kill our debt.

[|ceman]

I think raising the debt ceiling would be best for now, but only as a short-term solution.

Americans as a whole need to learn to give up the things they enjoy in order to fix the problem. It's just a hard decision and harder to get everyone on board.

That might be a very simplified response, but those are my thoughts on the matter.

Well put. It's an extremely complex issue and the average American doesn't seem to comprehend the macro economic issues at play when a country (and especially one as large and influential in the world economy) defaults on it's debt obligations.

Some interesting consequences of even a reduction of the "platinum" AAA credit rating would have VERY damaging effects on cost and availability of credit, job creation and value of assets.

This is huge and if the credit rating of the US is dropped, it likely will never be restored to AAA status. One way ticket to the end.

It is frightening how the average person does not see how precarious this situation is. It's not just a matter of "tightening the belt".

[laneanders]

Well put. It's an extremely complex issue and the average American doesn't seem to comprehend the macro economic issues at play when a country (and especially one as large and influential in the world economy) defaults on it's debt obligations.

Some interesting consequences of even a reduction of the "platinum" AAA credit rating would have VERY damaging effects on cost and availability of credit, job creation and value of assets.

This is huge and if the credit rating of the US is dropped, it likely will never be restored to AAA status. One way ticket to the end.

It is frightening how the average person does not see how precarious this situation is. It's not just a matter of "tightening the belt".

Lowering our credit rating will be extremely damaging. We really need to avoid that if possible. We are definitely in a difficult situation.

[Hyruliangoat]

The govt should sell their muscle pharm stocks

[yCat]

The govt should sell their muscle pharm stocks

lmfao.

srsly tho default would be terrible. they gotta raise it for now and hope they can fix it somehow going forward (which is going to be rough).

let canada rent out your military so we can conquer the world. this was our plan all along.

[SheWulf]

Lower tuition costs of higher education!

[eldawg]

http://www.zerohedge.com/article/rosenberg-debt-ceiling

[EntropyIncrease]

Increase the limit by a smaller amount while also setting a plan to reduce the debt the same amount. buy some time (for what, idk. our govt is so f'ed right now its sad)

[xR1pp3Rx]

no one want to talk about increasing the economy as a way to get the budget under control

fuk it . kill the epa and remove the capitol gains tax.. put incentives on conpanies willing to relocate back to the US...
make the economy bigger and the problem goes away.
we need some one like herman cain to hold that office next.
and FFS bring on the fair tax!

[EntropyIncrease]

Lower tuition costs of higher education!

Id have to agree. the sad thing is people graduating from 4 year schools with BS's or BA's cant get work. so their loans go into default and they get screwed for life.



cant tell you how many people I know that have fallen into this scenario. Even people with masters degrees are unemployed out of school (I found work thankfully. in the field of my degree no less!)

[History in Effect]

brb paying attention in Moody who gave good ratings to Enron and subprime mortgages in the past

[Shermanatorx]

Is it really going to matter?

Come 2012 we'll all be wiped out.

Except for Kre Alk, because it's buffered to withstand the apocalypse.

[Frank784]

For middle income it probably isnt much better either way. A lot of middle income people will have money in bonds because they dont trust stocks. A default could go either way for the bond market because stock likely will take a quick dive driving people into a save haven type equity, in this case being the same thing that was just devalued. Financial markets go in to the toilet and the middle income gets hardest hit.

The raise the limit (definitely going to happen but may not happen by Aug2) prior so they dont default but without SERIOUS cuts to programs like medicaid, medicare, social security etc we are just kicking the can a little bit farther down the street. Someone has to pay for not doing the cuts and that also usually falls on the middle class.

By some miracle they raise the limit but by reaching an agreement where they make serious cuts to the programs I listed above, then the middle class "likely" finally gets a break.

Cut the programs, legalize drugs (ie tax them), switch to a domestic fuel source (methane and oil) (stop spending the 800 billion on foreign oil and spend the exact same amount in our own country), reduce govt size and we could pay off the debt instead of just re-raising our fake limit every 10-36 months.

You need a job in our administration.

[Frank784]

Id have to agree. the sad thing is people graduating from 4 year schools with BS's or BA's cant get work. so their loans go into default and they get screwed for life.



cant tell you how many people I know that have fallen into this scenario. Even people with masters degrees are unemployed out of school (I found work thankfully. in the field of my degree no less!)

I'm back in school after getting my BS. Getting my CPA, so its only a good thing, but starting out 30k in the hole is no fun, and I know plenty much deeper.

[AlecGaspari]

I'm back in school after getting my BS. Getting my CPA, so its only a good thing, but starting out 30k in the hole is no fun, and I know plenty much deeper.

30k aint ****

[urdaddyishere]

kinda in the middle right now. A default could be the best thing in the long term as far as people finally realizing we need to do something and getting something done. Short term however, raising the debt limit is the easy way out and will just prolong the inevitable. It's hard to say where we would be in 15-20 years having gone down either road. I do know that when we do raise the debt limit, 16.3 trillion looks a whole lot worse than 14 trillion we are at now.

[Frank784]

30k aint ****

Yeah I know, but its only for one year of classes. At least I stayed in state for undergrad. Either way, its 30k more than most anyone else I know.

[|ceman]

Any of you guys that think default would be less damaging need to realize that if the US goes into default it will be the first step on the demise of the US as the primary world power and that power vacuum will be filled by China. And I don't think the Chinese would gladly hand back world supremacy once the US has restructured enough to make another run at it.

Food for thought.

[Frank784]

Any of you guys that think default would be less damaging need to realize that if the US goes into default it will be the first step on the demise of the US as the primary world power and that power vacuum will be filled by China. And I don't think the Chinese would gladly hand back world supremacy once the US has restructured enough to make another run at it.

Food for thought.

While thinking about this a couple of hours ago, I thought of Orange county. When looking for virtually risk-free investments, government bonds have always been a way to go. The exception that I always think of is Orange county and their default in the 90s. I definitely agree that if we default on these, our reputation is permanently damaged; something that we can never come back from as it will always be in the back of investors' minds.

[Marshall28]

We as Americans need to learn how to control our spending PERIOD. Most Americans seem to have a sense of entitlement. We have people making 30K a year driving a brand new 30K car, but leaving in section 8 housing with food stamps, etc. People have to live within their means.

[eldawg]

Any of you guys that think default would be less damaging need to realize that if the US goes into default it will be the first step on the demise of the US as the primary world power and that power vacuum will be filled by China. And I don't think the Chinese would gladly hand back world supremacy once the US has restructured enough to make another run at it.

Food for thought.

One thing to clarify; even if the debt ceiling isn't raised, the US does not have to default on its interest payments. Your current revenues can cover ~10x the interest payments. Certain parts of the government would have to be shut down.

[VPX_Sports]

30k aint ****

troof.

Anybody think the US will split up? i.e, a state seceding from the Union? I could see Texas doing it

One thing to clarify; even if the debt ceiling isn't raised, the US does not have to default on its interest payments. Your current revenues can cover ~10x the interest payments. Certain parts of the government would have to be shut down.

I vote FDA

[|ceman]

One thing to clarify; even if the debt ceiling isn't raised, the US does not have to default on its interest payments. Your current revenues can cover ~10x the interest payments. Certain parts of the government would have to be shut down.

However, the credit ratings agencies wouldn't hesitate to downgrade the AAA credit rating of the US in this scenario. Just because the US is still paying some of it's creditors doesn't mean that it's still AAA.

And I remember seeing an interview with a Sr. Gov't official (I don't remember if it was Geithner or someone else) and the concern was that they system for issuing government payments and checks is so complex that they may not be able to correctly prioritize payments. It's not like your personal online bill pay where you just uncheck the box for some creditors and skip paying them that month. Essentially, the system was never built with the capacity for only paying some creditors, as it was never considered that the US would default on even one of it's debt obligations. So in this scenario, the problem becomes one of the software used to issue payments and how it may react in unexpected ways (possibly not paying social security, military service men/women, medicare, etc).