Shutdown/Default in a Nutshell

[Ezechiel]

Riding the Tea Party tiger: Has it been worth it for GOP? - First Read

“It may be hard to understand why a person might jump off a cliff, unless you understand they’re being chased by a tiger,” McInturff said.

“That tiger is the Tea Party.”

Is Ted Cruz and his tea party radical enough to push the US into default ?

 

[Charlie Prime]

Default on what? What "default" are you talking about?

 

[Ezechiel]

Default on what? What "default" are you talking about?

If the debt ceiling isn't raised.... They won't be paying their bills... Thus.... Default.

Credit rating goes down... And currency gets devaluated.

Interest rates go up... Etc etc...

 

[Charlie Prime]

I'm sorry man. I don't follow the news so I'm really not familiar with what you are talking about.

The Federal Reserve prints whatever money it wants and the Open Market Committee sets interest rates.

M3 and the interbank rate can be whatever they want them to be. It has no relation to an actual market where there are bankruptcies and corrections.

I shouldn't have posted because I don't know what the memes are. Sorry.

 

[Gene Steinberg]

This is the problem with this subject. Most people in the U.S. do not understand what the debt limit means, or the consequences of default. It sets the maximum amount the U.S. Treasury can borrow to pay its bills. The process doesn't increase spending. It's all about paying the existing debts, although some talk show hosts are fear mongering about things that just aren't so.

That limit has never been exceeded, but any responsible economist will explain to you that the potential consequences are drastic. In 2011, when the U.S. government neared the threshold, the U.S. House continued to block resolution until the last minute. The credit rating for the country was downgraded for the first time in history.

Make no mistake about it. This sort of thing would not have happened if the country wasn't taken to the brink by by a radical group of legislators who hadn't a clue what they were doing, or the consequences of their actions.

One reason why there isn't more outrage is that people like you do not know how this country works or its obligations.

 

[Charlie Prime]

My cousin injects Heroin because she will become very, very sick if she stops.

There's your "responsible" Keynesian economics.