United States Federal Government Shut-Down

Individual · Oct 18, 2013

Which bills are you inferring would not have been paid had the so called 'shut-down' continued?

MeAgain · Oct 18, 2013

Individual said:

Which bills are you inferring would not have been paid had the so called 'shut-down' continued?
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In my limited knowledge of the situation, as I understand it, if we had defaulted all bills such as Social Security, military pay, government payrolls, etc. would have eventually been met once the money had been raised by some means.
But in the mean time as the U.S. raises money by selling Treasury Bonds, it would loose its standing as the one of the safest investments in the world. U.S Treasury Bonds are one of the world's primary investment tools are are considered to be risk free as the U.S. always pays its bills on time.

Not raising the debt ceiling means no more bonds can be sold and holders of present bonds would not be paid on time. So what would have happened is debatable if we would have defaulted. Treasury Bonds and stocks may have been sold off as they were no longer deemed as safe investments, this might have triggered a panic sell off situation further wrecking the value of those stocks and bonds. Forced selling of bonds would probably have occurred as many institutions can not hold default bonds. Short term money market Treasury Bonds would be deemed as particularly unsound and so sold off. All this sell off would reduce the value of those bonds.

Credit rating firms would downgrade the U.S. credit rating, as Standard & Poor's did in the last debt ceiling debate. As the risk of buying Fed Bonds grew, the government would be charged higher interest rates to compensate the lenders. All this would lead to an increase in the Federal Debt, not a reduction.

In addition, other state, federal, and private lending institutions would raise their rates as confidence in the U.S. economic system fell. Credit would be harder to get and more expensive world wide.

Foreign nations may have choosen to invest elsewhere further draining capital from the U.S.

Or none of this may have happened, but the bet was that the world economy would have taken a tremendous hit. Clearly even the Republicans were afraid of "pulling the trigger" and finding out what would have happened as they backed off at the last moment.

StpLSD25 · Oct 18, 2013

Voyage said:

everyone that doesn't agree with his dystopian views. it's the old "you're either for me or against me" stance which means his "opponent" can never win.

it's like saying to STP "hey man, you're an alcoholic" he says "no i'm not". then i say "denial is the first sign you're an alcoholic". or in this case, you either agree with me or your an Obama supporter.

what worries me more than someones political leanings is an inability to think inbetween extremes. breaking down every issue to an either/or proposition turns said issue into an adversarial one instead of creating dialogue.
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Actually, It's like trying to tell Bush Supporters Bush sucks- They Deny and Deflect and totally ignore every bad thing he does. It's the exact same thing here. You guys know he kills/detains Americans, but you ignorantly support him/his policies. Obama is worse than Bush, because he is an extension of everything I hated about Bush. His supporters are too infatuated by his LIES they ignore ANY opposition, even if it is blatent FACTS.

Individual · Oct 18, 2013

Meagain said:

In my limited knowledge of the situation, as I understand it, if we had defaulted all bills such as Social Security, military pay, government payrolls, etc. would have eventually been met once the money had been raised by some means.
Click to expand...

So you were influenced by the default tactic?

Default during the so called government 'shut-down' was not a possibility unless it were to be done intentionally. The Federal governments budget is made up of debts owed due to past spending, essentially interest payments, social security, medicare, unemployment, and a few other spending items, which have incoming revenue streams making them contractual obligations mandatorily paid, and then there is spending related many other things which have yet become a debt owed, such as military, foreign aid, and a very long list of other things.

Those items in which money has already been spent or needs to be spent because government has previously collected revenue as the means of making them entitlements, are the debts which if unpaid would put the Federal government in default. However, even when the government is in a so called 'shut-down', the continuing incoming revenue stream is more than adequate to pay those debts, and still have money left over to spend on items which if discontinued would not be a default, but simply a corrective recession, which in the long term would be very good, while not something desirable in the short term, something that eventually will have to occur and the longer it is put off the greater the crisis it will create.

Meagain said:

But in the mean time as the U.S. raises money by selling Treasury Bonds, it would loose its standing as the one of the safest investments in the world. U.S Treasury Bonds are one of the world's primary investment tools are are considered to be risk free as the U.S. always pays its bills on time.
Click to expand...

Government can not live on debt perpetually.

Meagain said:

Not raising the debt ceiling means no more bonds can be sold and holders of present bonds would not be paid on time. So what would have happened is debatable if we would have defaulted. Treasury Bonds and stocks may have been sold off as they were no longer deemed as safe investments, this might have triggered a panic sell off situation further wrecking the value of those stocks and bonds. Forced selling of bonds would probably have occurred as many institutions can not hold default bonds. Short term money market Treasury Bonds would be deemed as particularly unsound and so sold off. All this sell off would reduce the value of those bonds.
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Essentially, government can not go deeper in debt without raising the debt ceiling. The massive increase of the money base has created a situation causing the Fed to pick up the purchasing of government bonds as foreign investors recognize the money they have used to purchase our debt will be repaid with money of much less value than was used to purchase them.

Meagain said:

Credit rating firms would downgrade the U.S. credit rating, as Standard & Poor's did in the last debt ceiling debate. As the risk of buying Fed Bonds grew, the government would be charged higher interest rates to compensate the lenders. All this would lead to an increase in the Federal Debt, not a reduction.
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The government sets the interest rate to an amount which will attract buyers, and as long as the Fed will buy them at nearly 0%, government is able to borrow up to the debt ceiling, but not so many foreign investors find low interest rates attractive. TIPS may be the only way to attract foreign investment in our Federal debt.

Meagain said:

In addition, other state, federal, and private lending institutions would raise their rates as confidence in the U.S. economic system fell. Credit would be harder to get and more expensive world wide.
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All this is based on default actually occurring, which it is not, will not, and would not have even while the government was supposedly shut-down.

Meagain said:

Foreign nations may have choosen to invest elsewhere further draining capital from the U.S.
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Many are doing that, myself included.

Meagain said:

Or none of this may have happened, but the bet was that the world economy would have taken a tremendous hit. Clearly even the Republicans were afraid of "pulling the trigger" and finding out what would have happened as they backed off at the last moment.
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Yes, they did, and now we are free to accumulate more debt, more rapidly than at any time in our past history for our future generations to contend with.

Maybe if you looked at how our government is working today is like each person born is being issued a credit card, with the charge limit a proportionate amount of the current debt ceiling relative to the population at the time of birth. Charges are applied proportionately to each persons credit card by the governments spending, and no principle is ever paid, but the interest is, and only by those who are gainfully employed and earning enough to actually owe and pay taxes.

At my birth my share of the debt owed was about $226. The average annual income at that time was about $1,600. An unemployment was about 20.1%.

Those born today would owe about $53,758 per person. The average annual income is now about $43,000. And I believe unemployment is now claimed to be about 7.3%?

RIPTIDE59 · Oct 19, 2013

While the figures are staggering , the jihadist in cheif does nothing but spend. Mostly overseas. It doesn't seem to bother most , you see, they got what want, a SNAP card and a partially black president. Screw debt right?

MeAgain · Oct 19, 2013

Individual said:

So you were influenced by the default tactic?
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I don't know what you mean by influenced.

Individual said:

Default during the so called government 'shut-down' was not a possibility unless it were to be done intentionally. The Federal governments budget is made up of debts owed due to past spending, essentially interest payments, social security, medicare, unemployment, and a few other spending items, which have incoming revenue streams making them contractual obligations mandatorily paid, and then there is spending related many other things which have yet become a debt owed, such as military, foreign aid, and a very long list of other things.

Those items in which money has already been spent or needs to be spent because government has previously collected revenue as the means of making them entitlements, are the debts which if unpaid would put the Federal government in default. However, even when the government is in a so called 'shut-down', the continuing incoming revenue stream is more than adequate to pay those debts, and still have money left over to spend on items which if discontinued would not be a default, but simply a corrective recession, which in the long term would be very good, while not something desirable in the short term, something that eventually will have to occur and the longer it is put off the greater the crisis it will create.
Click to expand...

I was talking about the failure to raise the debt ceiling, not the partial shut down that was already in progress. The partial shut down affected nonessential programs only such as museums, national parks and so on, a default would mean non payment into essential programs such as Social Security, military pay, all government workers, etc. While some money would still be available trough taxation a choice would have to be made as to which programs were funded in all or part, and which were not. Most claim that as the government makes millions of payments each day and as the system is highly automated reasonable choices would not be possible. In addition to the fallout I already mentioned.
Are you claiming that if the debt ceiling had not been raised we would have still had enough monetary income to make essential payments?

Individual said:

Government can not live on debt perpetually.
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The U.S government has been in constant debt since its inception except for about one year from 1835 to 1836. The problem is not the fact that we are in debt, but the size of the debt.

I have never argued that the size of our debt is a good thing, or that increasing it is necessary good. Only that the alternative is worse.
What we need is a constructive dialogue about how to reduce the debt. In simple terms one side wants to do it by changing contractual obligations to entitlements by cutting services, to which the public is already entitled and to which they have already paid their fair share. They refuse to consider ways to increase income by raising taxes on the wealthy, who are now paying the lowest rate of the last 80 years. They also refuse to fully fund S.S by merely increasing the payment cap on the wealthy. Etc., etc.

As per a recession:

A US debt default and the consequent tremors in the economy could plunge the world into another recession. The aftershocks will stymie global efforts to crawl out of the 2008 financial crisis. According to a Reuters projection, which extrapolates the impact of the Lehman Brothers collapse on the U.S economy, the level of US GDP would be 3-4% lower than what it would have been if a debt default had not taken place. Across the globe, a US default will result in around 1.5-2% less growth in GDP.
It is also important that China, a growth engine for the world, will be hit seriously by a US default.
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A US default and the resultant erosion in the value of China's pile of US Treasuries could make Beijing rethink on the structure of its foreign asset holding, so as to make it better guarded against dollar shocks in future. A sell-off by China can add more pressure on the dollar. Japan, the second largest holder of US assets, could follow suit as well, in order to diversify its foreign reserves.
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Analysts say the greenback could lose as much as 20% against most currencies as investors flee the US currency and invest in safe havens, including the Japanese yen and British pound.
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Global stock markets could be the first victim of a US default. In 2011, the US narrowly avoided a default by raising the debt ceiling at the last moment. However, as the showdown progressed, the S&P had index dropped as much as 17%.
"Some fear a quick drop of 1,000 points in the Dow Jones Industrial Average. Stock markets in Asia and Europe would likely be hit too. No stock market would be insulated," says a report by CNN Money.
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...and so on......

Individual · Oct 19, 2013

Meagain said:

I don't know what you mean by influenced.
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Into thinking that default was a possibility.

Meagain said:

I was talking about the failure to raise the debt ceiling, not the partial shut down that was already in progress. The partial shut down affected nonessential programs only such as museums, national parks and so on, a default would mean non payment into essential programs such as Social Security, military pay, all government workers, etc. While some money would still be available trough taxation a choice would have to be made as to which programs were funded in all or part, and which were not. Most claim that as the government makes millions of payments each day and as the system is highly automated reasonable choices would not be possible. In addition to the fallout I already mentioned.
Are you claiming that if the debt ceiling had not been raised we would have still had enough monetary income to make essential payments?
The U.S government has been in constant debt since its inception except for about one year from 1835 to 1836. The problem is not the fact that we are in debt, but the size of the debt.
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Working backwards on the above, I agree with the size of the debt being the primary problem which needs great attention.
Had the debt ceiling NOT been raised, all essential payments still could have been made.
Spending reductions should be no more difficult than spending increases in the automated system, and would only require working with the non-essential items. It that claim were to be persued, it would provide an excellent reason in support of repealing the 16th amendment, returning the primary source of taxation back to the States where it was intended, which would also serve to lessen the impact of a Federal government shutdown upon the Nation as a whole in the future.
I think none of the politicians, Democrat or Republican, had intent to NOT raise the debt ceiling, but only wished to lessen the amount it would have to be raised by reducing the budget deficit.

Meagain said:

I have never argued that the size of our debt is a good thing, or that increasing it is necessary good. Only that the alternative is worse.
What we need is a constructive dialogue about how to reduce the debt. In simple terms one side wants to do it by changing contractual obligations to entitlements by cutting services, to which the public is already entitled and to which they have already paid their fair share. They refuse to consider ways to increase income by raising taxes on the wealthy, who are now paying the lowest rate of the last 80 years. They also refuse to fully fund S.S by merely increasing the payment cap on the wealthy. Etc., etc.

As per a recession:
...and so on......
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The only way to reduce the debt is to reduce the principle owed.
We probably would not be able to agree on how we would define contractual obligations and entitlements. I have no bones to pick with those who have great wealth or earn large incomes, while the percentage tax they pay is seemingly low in comparison to the percentages imposed in the past, mainly as a result of wars, the amount in dollars they pay is significantly higher than what most middle class taxpayers pay, not to mention those who pay none at all, or those who government serves as their primary source of income. Social security remains solvent for the time being, although the excess funds have been spent and are not considered Public debt but government debt which the Public is ultimately held liable for. That's how they get away with claiming the Public debt is less than 100% of the GDP.

Anaximenes · Oct 19, 2013

Individual said:

The only way to reduce the debt is to reduce the principle owed.

That's how they get away with claiming the Public debt is less than 100% of the GDP.
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Maybe major corporations could get together and do that reduction of the principle payment. They would no doubt lower the GDP this way, and ... and the slave driven working could pull that up again... by the boot straps so to say.:biggrin:

Voyage · Oct 19, 2013

StpLSD25 said:

You guys know he kills/detains Americans, but you ignorantly support him/his policies.
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who you calling 'you guys' that ignorantly support him?
you have a cognitive deficiency Son.

RIPTIDE59 · Oct 19, 2013

I see voyage has joined the "oby fan club". Nice. Do you prefer oby , barry , or hizoner? We were never remotely close to default. Just as barrycare is is a programmed failure designed to "escort" us into nationalization. So much of the gubmint shit show becomes an obvous farce.

Voyage · Oct 19, 2013

it's almost like you've become my morning wake n bake entertainment, like watching youtube clips or finding gifs to post here at Hip.

RIPTIDE59 · Oct 19, 2013

Yup wake and bake with lib , PC , pro elitist shills. Fuckin priceless. Do you really have to look for gf's here? Amoungst the oby cheer section? Use the bama phone, dude. What about a dating site for 47%er's? Federal Funding For First Dates? Increase your subsidy , go inter-racial.

Fairlight · Oct 19, 2013

It's so much more attractive.Inside the moral kiosk.Shit I agree with everybody.It's all mixed up.Communism rocks!

Individual · Oct 19, 2013

Fairlight said:

It's so much more attractive.Inside the moral kiosk.Shit I agree with everybody.It's all mixed up.Communism rocks!
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While I don't agree in the context of these forum threads, I do thank you for being honest.

Fairlight · Oct 19, 2013

No it's not that.I just have too many problems to take politics seriously for some time now.

Individual · Oct 19, 2013

Fairlight said:

No it's not that.I just have too many problems to take politics seriously for some time now.
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Left winger born and bred?

Fairlight · Oct 19, 2013

Yes.I prefer left-wing humour.My Mum was very left-wing.It had a profound effect on me.I see the iniquities of capitalism from a very early age and always thought there should be something better.But I suppose there isn't really.But it could still be better,perhaps?

Individual · Oct 19, 2013

Fairlight said:

Yes.I prefer left-wing humour.My Mum was very left-wing.It had a profound effect on me.I see the iniquities of capitalism from a very early age and always thought there should be something better.But I suppose there isn't really.But it could still be better,perhaps?
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'It' could always be better, and 'it' can always get worse. Was it your intent to employ the word iniquities rather than inequities or perhaps even inequalities?

Fairlight · Oct 19, 2013

I used the word "iniquities" but "inequities" did come to mind.And "Inequalities".Of course it could be worse,but a lot of people have it really bad right now,as they always have,no doubt.It really is a conundrum.I try to see all angles.There are many people with more well informed stances than mine,but I am entitled to my opinion.I often keep what I really think to myself,as it's pretty radical and not practical,as such,although not theoretically impossible.I have basic core political tendencies,but sometimes find myself shifting slightly.There's no point in being an absolutist.I think different problems need different solutions.Not "One size fits all."

Individual · Oct 19, 2013

Fairlight said:

I used the word "iniquities" but "inequities" did come to mind.And "Inequalities".Of course it could be worse,but a lot of people have it really bad right now,as they always have,no doubt.It really is a conundrum.I try to see all angles.There are many people with more well informed stances than mine,but I am entitled to my opinion.I often keep what I really think to myself,as it's pretty radical and not practical,as such,although not theoretically impossible.I have basic core political tendencies,but sometimes find myself shifting slightly.There's no point in being an absolutist.I think different problems need different solutions.Not "One size fits all."
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Government, and many voters too for that matter, seem to feel that the solution to ALL problems is solvable by government spending.

But, how did you view the Federal government shut down?

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