Economic Meltdown...Again, and it's Worse This Time.

[John Wayne]

http://tpmdc.talkingpointsmemo.com/2...ly.php?ref=fpb

As the Treasury department has been warning -- and as House Republican leaders have promised -- the United States hit its debt limit Monday morning. The government can no longer meet its obligations by borrowing more money. And since incoming revenues aren't sufficient to pay for the services Congress has ordered and for interest payments on existing debt, the Treasury department is taking a series of ever-more extraordinary measures to pay all of its bills.

It can get away with this, according to Secretary Timothy Geithner, until August 2. If Congress doesn't lift the debt ceiling by then, the country will default, triggering a number of severe economic consequences.

Already, Geithner has stopped issuing securities to states that help them keep their books in balance and maintain infrastructure. Today, the government will defer payments to and investments in federal pension funds -- pensions Republicans want federal workers to pay more money into than they currently do.

But despite these difficult measures, you won't get the impression that time is of the essence from congressional Republicans.

They are refusing to raise the debt limit without substantial cuts to government spending and entitlement programs. GOP leaders on Capitol Hill continue to vacillate between claiming that the consequences of default would be smaller than the consequences of not cutting spending -- "failing to do something about the debt would be far worse in the long-run than failing to raise the debt limit," said Senate Minority Leader Mitch McConnell (R-KY) on the Senate floor Thursday -- and admitting that they're using the threat of a default to make good on long-standing conservative commitments -- "What better time to do something about the debt than in connection with raising the debt ceiling?" McConnell said at a press conference the same day.

For those who don't know what the debt ceiling is: Link.
History of raising the debt ceiling: Link.

So yeah, unless something happens RIGHT NOW, the economy gets royally screwed. Not just the national economy, but the international one as well; most of the debt is held in T-Bills, have been the soundest investment vehicle in the history of the world, and are held by financial institutions, governments, and investors pretty much everywhere. If the debt ceiling isn't raised, then an overnight 40% cut in spending would have to happen for things not to go into the frying pan.

[Armenum]

I'm sure they will come around and raise the debt ceiling. Not doing so is making a very serious blunder for America and the wider world.

[MathiasOfAthens]

Tea Party Republicans are less incline to raise it. They rather crash the economy than lose.

[Nationalist_Cause]

Tea Party Republicans are less incline to raise it. They rather crash the economy than lose.

Solution: Dig deeper hole. Yes?

[kentuckybandit]

Tea Party Republicans are less incline to raise it. They rather crash the economy than lose.

the tea party. It was hard enough to get anything done till they came along. If they keep leeching the life out of the GOP I will be forced to go downtown to the County Clerk and finally change my party affiliation. Independent would keep me out of any primaries though, and Democrat, well I was raised in a super psychotic conservative household. I don't know if my mind would let my hand do it, too many brain beatings.

[Menelik_I]

Tea Party Republicans are less incline to raise it. They rather crash the economy than lose.

This is a myth and scaremongering from the Dems, no crash will happen is the debt ceiling isn't raised.

Failure to raise the debt ceiling doesn't change the fact that the US can pay the interest.

[Big War Bird]

It seems the debt limit law is finally working as planned. Hopefully the GOP will hold its nerve and force the democrats to cut spending. Or do the democrats want to drive the country into default? It seems to me that current spending plans will just as assuredly bankrupt the country.

[sdjenkyn]

It seems the debt limit law is finally working as planned. Hopefully the GOP will hold its nerve and force the democrats to cut spending. Or do the democrats want to drive the country into default? It seems to me that current spending plans will just as assuredly bankrupt the country.

Hopefully the GOP will but if they dont make cuts in military spending then it really wont matter what Dems elect to cut.

[MathiasOfAthens]

Solution: Dig deeper hole. Yes?

the tea party. It was hard enough to get anything done till they came along. If they keep leeching the life out of the GOP I will be forced to go downtown to the County Clerk and finally change my party affiliation. Independent would keep me out of any primaries though, and Democrat, well I was raised in a super psychotic conservative household. I don't know if my mind would let my hand do it, too many brain beatings.

It seems the debt limit law is finally working as planned. Hopefully the GOP will hold its nerve and force the democrats to cut spending. Or do the democrats want to drive the country into default? It seems to me that current spending plans will just as assuredly bankrupt the country.

When the congress is split, nothing gets done and the states have free reign. Basically its a weak federal centralized govt. But whats more is Nothing can get done on the debt without compromise. Republicans are there standing saying we need to make hard choices? What? No we dont.

The Choice is easy. Raise the taxes back to clinton rates - nobody died and the economy was great. And cut spending.

But the Republicans have only One solution. Cry that its tough times and demand we cut taxes and offer more tax breaks and then say we have no money so we need to cut social spending for the poor and elderly.

MY god. It is far easier for the rich to survive paying a few more dollars than it is for a poor person or granny without her medicine. See the thing is Republicans or the Tea Party wont compromise on this one stance. Their base hates social spending... and the Democrats wont compromise on cutting social spending either because we believe and we know it is the right thing to do. That doesnt mean we wont make a few cuts in the department to lower spending and cut wasteful spending but to do what Ryan suggests and privatize the system is idiotic and attack on the poor and elderly and Democrats will never go for it. Same Republicans didnt go for a national universal healthcare PUBLIC OPTION (which was a ING OPTIONAL PROGRAM).

[Plan C]

MY god. It is far easier for the rich to survive paying a few more dollars than it is for a poor person or granny without her medicine.

You can't do this. I'm sorry but you can't do this kind of stuff, too rich even for the pit.

[Justice and Mercy]

Good. Melt it. A bigger house of cards only has a better chance of crushing you when it falls.

[spanish_emperor]

China has no interest in America defaulting but it does want the economy to collapse. I think China will soon come to the conclusion that it is better to stop lending so much money to America/.

[Justice and Mercy]

China has no interest in America defaulting but it does want the economy to collapse.

I don't think they really do. The Chinese are pragmatists.

I think China will soon come to the conclusion that it is better to stop lending so much money to America/.

I think so too. Further, I think they will stop holding on to dollars.

It is in the interest of both countries that they do just that. They need to stop taxing the money used to implement those policies so that their own citizens can start consuming their own goods, and they need to stop enabling our suicide.

[Matthias]

Republicans empty threat is just political posturing. They'll pass a "compromise" bill like the last one, which actually increased spending.

[Justice and Mercy]

Republicans empty threat is just political posturing. They'll pass a "compromise" bill like the last one, which actually increased spending.

Well, a cut to planned spending is still a cut, but I agree, they will compromise.

Which is unfortunate.

[Matthias]

Well, a cut to planned spending is still a cut, but I agree, they will compromise.

Which is unfortunate.

It's not unfortunate. Destroying the country over a failed ideology would be unfortunate.

[Mr. Scott]

China has no interest in America defaulting but it does want the economy to collapse. I think China will soon come to the conclusion that it is better to stop lending so much money to America/.

They would not mind at all to see the US economy to collapse, so long as it wouldn't hurt them. Which it clearly would.

[Chukada1]

They would not mind at all to see the US economy to collapse, so long as it wouldn't hurt them. Which it clearly would.

Stop believing in the your politicans say about other people. The Chinese kind of like the United States, but when you constantly on them and assume they want to rape your children, it kind of strains foreign relations.

Its like a guy trying to be your friend, but you constantly tell all your friends to be careful around him. USA needs to stop being such a and act more like a big confident country.

[Mr. Scott]

Stop believing in the your politicans say about other people. The Chinese kind of like the United States, but when you constantly on them and assume they want to rape your children, it kind of strains foreign relations.

Its like a guy trying to be your friend, but you constantly tell all your friends to be careful around him. USA needs to stop being such a and act more like a big confident country.

Relax.

Also, actions speak louder than words. When China goes around and starts developing military technology specifically directed towards American military technology then it clearly shows that China is taking aims to try and challenge US domination in East Asia. Which is clearly not friendly.
Not to mention that the spy activity by China in the US has dramatically grown in the past few years.
http://www.newsmax.com/Newsfront/Ste...5/07/id/395537
http://en.wikipedia.org/wiki/Chinese...ther_countries

China cannot say that they want to be friends, and then at the same time try and steal American technology.

The US has always, always, always, had self-doubt. Ask anyone from any period in American history and I bet the average American of that time felt that America would be in chaos within 50 years. Given the power and success the US has had, it is a nation with fairly low self-esteem.

So...they would mind our collapse.

Point?

Read what I was responding to.

[chamaeleo]

They would not mind at all to see the US economy to collapse, so long as it wouldn't hurt them. Which it clearly would.

So...they would mind our collapse.

Point?

I think people are generally very selfish, but where we differ is that you expect the state to "fix it", whereas I know that then change cannot conceivably come from above, it has to come from within. Extortion of charity will never have my support.

People = selfish. Check.
Fix = 'must come from within'. Check.

Something of a conundrum, methinks. Surely you've got a better solution?

How about this: charity = self preservation. Satiating the greed of the wealthy only persists as long as it is sustainable...there's only so much blood to be squeezed from the stone. Right now, it's not looking so sustainable. So, how do we convince the out-of-touch elite that our problems are also theirs, and they should back the off?