On the debt ceiling

[nadinbrzezinski]

Look people it is not about whether they are going to let it happen or not. For the record the tea party wants to default, for similar reasons as some on the other side.

It really is not about that. THEY ARE PLAYING WITH FIRE... anybody care for the evidence of this? Check the Carter era interest rates. One of the things I learned from Tom Hartman... the republicans are doing the exact same thing they did to Carter. Yes, there was the same fracking argument and back then they TECHNICALLY did default for 12 hours or so. Care to tell me where interest rates went?

The economy right now cannot take that shock.

So to all of you saying but, but... realize what they are playing is a very dangerous game.

And yes, perhaps they will walk back from the ledge... the consequences are starting to be felt. Anybody care to tell me where food prices are right now? Yes, they are going up, and it is not funny. THat is the very early effect of an unstable situation.

And to those of you going but this does not affect me... yes, yes it will... in ways you probably cannot conceive off. We are not exceptional and if we default, best case Carter Era interest rates will be a cheap consequence... world wide depression is the worst case... and reality is it will be somewhere in between that gamut... Oh and real people will die.

But this is the truth... them pols in DC ARE PLAYING WITH THE KIND OF FIRE THEY DO NOT UNDERSTAND.

[DJ13]

1. My concern is once you give in to blackmail, they'll never stop

[nadinbrzezinski]

2. They gave to it in December

that door is open already.

And as I said they are playing with fire. I am willing to bet that most of the pols in DC, right, left, center... have truly no clue what they are playing with.

That said the Rs have lost control of the message and half their caucus.

[Amonester]

3. The world economy of today is a lot different than it was in the Carter Era.

Worldwide communication of financial data is instantaneous today.

Stock market places around the world are way bigger than they were.

Yes, they are playing with fire. BUT, the Executive branch will not allow a 1 second default.

[nadinbrzezinski]

6. I hope they don't

but even if we get close it will have effects that most folks, INCLUDING those in DC, don't get.

THat is the point I am trying to make.

[Amonester]

8. I am not a hundred percent sure they don't, but IMO, the Exec. must

'protect' the country from getting in harms way, and a financial "armageddon" (as they say) could definitely put the country "in harms way" in this worldwide economy. And I cannot think that the Exec. would have engaged in all that Kabuki theater without having a solid plan B already in place, just in case the hostage takeR$ would be foolish enough to go the distance on their irresponsible behavior.

But who am I to know?

[nadinbrzezinski]

9. This is why I do not think this is kabuki theater

any longer. It crossed into something far more serious already... and for all our collective sakes, I hope the adults in the room prevail... no, I am certainly not talking of Mr. Cantor at this point.

[Make7]

4. Six tenths of one percent.

 

Zivney, T. L. and Marcus, R. D. (1989), The Day the United States Defaulted on Treasury Bills. Financial Review, 24: 475–489. doi: 10.1111/j.1540-6288.1989.tb00353.x

Abstract
Because of severe technical difficulties, the U.S. government was unable to repay investors in Treasury bills (T-bills) in late April through early May, 1979. This incident led to a 60 basis point increase in T-bill rates at the initial occurrence of the default. Unlike other information effects of that era, such as Henry Kaufman's predictions or Paul Volcker's "Saturday night special," this increase in rates was not offset by a subsequent decrease in rates after the Treasury cured the default. The default apparently warned investors that Treasury issues were not completely riskless, which translates into a $12 billion annual increase in federal interest payments as a result of the 60 basis point permanent increase in interest rates.


http://onlinelibrary.wiley.com/doi/10.1111/j.1540-6288.1989.tb00353.x/abstract

[Make7]

12. To further elaborate...

... if the debt limit was raised on April 2, 1979 (source), how could that responsible for the failure of the government to repay some Treasury bills on April 26, May 3, and May 10?
 

[AndyTiedye]

5. They Don't Care. They'll Make a Killing on Their Ultrashort ETFs

:grr::grr::grr::grr::grr::grr::grr:

[nadinbrzezinski]

7. You are right on a few of them

why I used the term nihilist. Not just those making tons on ETFs... A few, on both sides, don't care.

[liberalla]

10. Nadin, what do you think of the possibility of eliminating

the debt ceiling? Could this be a way out for the Repugs without appearing to "cave" to the Teabag clan?

http://www.reuters.com/article/2011/07/18/us-usa-debt-moodys-idUSTRE76H0WH20110718?feedType=RSS&feedName=topNews&rpc=71"> Moody's suggests U.S. eliminates debt ceiling

(Reuters) - Ratings agency Moody's on Monday suggested the United States should eliminate its statutory limit on government debt to reduce uncertainty among bond holders.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x1512997

[nadinbrzezinski]

11. IT is not in the Constittion

we are obligated to pay our debts in there. The ceiling was artificially created in the early part of the past century, so yes, if need be.. that is what they should do.