Is a short-term default by the U.S. ‘stupid’?

[Derechos]

The Post reports that Fitch Ratings threatened on Wednesday to downgrade U.S. securities to junk bond status if scheduled payments are missed. An event it described as an “extremely unlikely event.” I hope that’s not just wishful thinking.

Before “Weinergate” took over part of the national conversation, we were engaged in a debate over the potential default of the United States for the first time in its history. There are those like me who are shouting from the rooftops that the legal limit must be raised on how much the nation can borrow to meet the obligations it has already incurred. There are those who are willing to play chicken with the full faith and credit of the United States. And then there are those such as presidential candidate and former Minnesota governor Tim Pawlenty, who think a short-term default wouldn’t be so bad.

My friend Cliff Barr, who “was a Reagan Democrat once upon a time,” sent me an unsolicited and tart response to the latter group in an e-mail this morning.


Repbulicans lately have been talking about letting the US default on it’s debt. They say it won’t be a problem. What happens when YOU don’t pay your credit card on time? The banks JACK up your Rates to 29.99%. It’s called a penalty rate.
Stupid asses...

http://www.washingtonpost.com/blogs/post-partisan/post/is-a-short-term-default-by-the-us-stupid/2011/03/04/AGzHMKMH_blog.html

[HopeHoops]

1. In a word: Yes.

[Javaman]

6. I'm curious, please explain. nt

[HopeHoops]

8. I think the OP covered it rather well - "What happens when you don't pay your debts?"

This is nothing more than Republican whining to get their way. If the economy tanks over the next year and a half, they'll be happy. They don't give a shit about what's good for the country, just what works for them politically.

[muriel_volestrangler]

2. Stupid, or just possibly evil, the way the Republicans are doing it

When countries are in big, immediate, trouble, then default may be necessary (eg Argentina or Iceland, and now Greece and Ireland). But the US economy is still strong, and government deficits could be fixed just by getting richer people to pay tax at rates approaching those in most European countries. The bond markets, as Paul Krugman points out time and again, have not put up the yield for US government bonds - they know there are painless ways to fix the budget without defaulting.

The Republicans are either just stupid, or they actively want to cause a financial crisis (in which the dollar would lose value, and imports like oil get even more expensive) to get people feeling so poor that they kick out an incumbent president in 2012. It's quite possible a few Republicans are evil, in that latter way, and the rest stupid.

[Lasher]

4. Congressional Republicans are evil and people who vote for them are stupid.

There are painless ways to fix the budget, as you say, and they are obvious.



http://www.cbpp.org/cms/index.cfm?fa=view&id=3036

[Sinistrous]

3. The word "stupid" does not even begin to cover it.

[rucky]

5. I bet they found a way to make a boatload more money if this happens.

eom

[OHdem10]

7. Yes. It is not exactly a good thing when even China says the

US is playing with fire considering a default.

In politics there are lies and there are lies. Example
Boehner knows he is not going to let the country go into
defalult but even he says some crazy sounding things keeping
the Tea Party in tow. When it is down to crunch time, Sensible
Republicans will do the right thing. As I said there are lies
and there are lies.