What Will Happen if Debt Ceiling Isn't Raised?

[freeatlast]

We will lose our credit rating. Not much else.

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That answer is too shallow. Our credit rating determines at what rate we (the government) can borrow money. If we lose it the rate at which we borrow goes up and adds to the debt drastically which will escalate our final default. Right now the world is trying to shore up little old Greece to keep this all from coming tumbling down around the world. You can bet when we finally default for real, and we will, it will be a total crash and we will lose just about everything we have as even our savings will be worthless because of a devalued dollar.
It is true that a total default will not happen next month, but a short term one will speed up our demise.

 

[tinytim]

How about 5 million? Start aggressively defending the borders. Bring our boys home, and stick them on our borders where they belong. Begin a VERY aggressive deportation program...if you are caught, and you are illegal, you go back the next morning. Start checking documentation. You can''t speak English? You get checked. You get pulled over and you don't have a license? You get checked.

If this was employed, life in this country would improve exponentially in just a couple of years.

WOW!... Just Wow... do away with the bill of rights while we're at it...

 

[freeatlast]

How about 5 million? Start aggressively defending the borders. Bring our boys home, and stick them on our borders where they belong. Begin a VERY aggressive deportation program...if you are caught, and you are illegal, you go back the next morning. Start checking documentation. You can''t speak English? You get checked. You get pulled over and you don't have a license? You get checked.

If this was employed, life in this country would improve exponentially in just a couple of years.

That would be a good beginning as we now have over 50 million in this nation of Spanish origins and many are here illegally. I go further and would deny their children citizenship up to the third generation and send back all who are hear illegally after they served a prison term.

 

[mandym]

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That answer is too shallow. Our credit rating determines at what rate we (the government) can borrow money. If we lose it the rate at which we borrow goes up and adds to the debt drastically which will escalate our final default. Right now the world is trying to shore up little old Greece to keep this all from coming tumbling down around the world. You can bet when we finally default for real, and we will, it will be a total crash and we will lose just about everything we have as even our savings will be worthless because of a devalued dollar.
It is true that a total default will not happen next month, but a short term one will speed up our demise.

No crash, such a notion is all hype. But I have some news for ya, we cant pay our debt now. My point is nothing will be any different.

We need to repeal much of our spending, cut all areas from entitlements to military. Bring all our troops home, lower taxes and focus on our economy. Oh and greece is crashing because it refused to cut its entitlements.

 

[InTheLight]

No crash, such a notion is all hype. But I have some news for ya, we cant pay our debt now. My point is nothing will be any different.

I'm not so sure 'nothing' will happen. If social security payments are not made, and military payroll does not go out, we are looking at about 8-10% of GDP being removed from the economy. Millions of people would not have money to spend.

If anyone reading this thinks that is 'nothing', you are sadly mistaken. Of course, this presumes that social security payments would be missed. Even if they continue, and the government prioritizes payments using existing revenues, there will be money removed from the system and that will have a huge effect on the economy .


Also, if you think 'nothing' will happen, you better adjust your argument against raising taxes on the wealthy. Because if you think that raising taxes on the top 2% of earners will cause the economy to falter because the rich won't be spending and investing that additional slice of income if the top rate went up from 35% to 39.6%, you've got to believe that removing the entire entitlement incomes from millions of people SIMULTANEOUSLY would have a devastating effect on the economy.

Just think about it--most retired people would immediately switch to survival mode, their spending on things besides food and household utilities would virtually cease.

Also, there would be no safe haven for your investments. Suppose you are ahead of the game and you want to get out of the stock market, you want to switch your 401k elections out of the equity markets and into something safe, where are you going to put your money? The traditional safe haven is U.S. Treasuries, but if the U.S. defaults how safe are those U.S. Treasuries?

The more I look at this issue, the worse it looks. Don't you think foreign governments are wondering about alternative places to invest besides U.S. Treasuries?

 

[freeatlast]

No crash, such a notion is all hype. But I have some news for ya, we cant pay our debt now. My point is nothing will be any different.

We need to repeal much of our spending, cut all areas from entitlements to military. Bring all our troops home, lower taxes and focus on our economy. Oh and greece is crashing because it refused to cut its entitlements.

You make my point. What you are proposing cannot happen and will not happen. Our debt is to a point that makes it impossible to correct because the fix is impossible to implement. We will default at some point and lose our world standing. The question is how far down the road?
You mentioned bringing the military home. All that would do is flood the welfare roles as there is not enough work to sustain them. So it is not a fix. As to entitlements it depends on what you mean since SS is not a drain on the system. Medicare is but you still have to deal with retired and their health care some how so you still have no fix.
As to welfare I agree there needs to be a fix, but that is a very small part of the problem and would not even be a drop in the bucket. We will default. If it could be fixed it would be done, but all that can be done is push back what is going to happen as there is no fix.