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View Diary: Government Shutdown: What It Is, and What It Isn't (Update x1) (88 comments)

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  •  There will be no default (1+ / 0-)
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    sayeth the 14th Amendment (along with the financial behemoths of the world). Partial shutdown, yes, but not default.

    And yet everyone, the President included, has default on his lips. Now why is that?

    Government and laws are the agreement we all make to secure everyone's freedom.

    by Simplify on Mon Jan 14, 2013 at 11:11:47 PM PST

    •  Because he has had all of his departments figure (4+ / 0-)
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      radarlady, kyril, Mayfly, Aspe4

      out what they can shut down and what they can't  so the OMB can put out that letter about what is closing and what is not, and as a preparatory measure is already into figuring that out, the cost, the consequences, and so forth, so that the day a month or so from now, perhaps Valentine's Day,

    •  If the 14th amendment really prohibits default (1+ / 0-)
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      how come we defaulted already?

      For a public obligation to be "invalid" means something entirely different than for a public debt to go into default. The holder of an invalid obligation is SOL, even if the issuer has plenty of assets. The holder of a defaulted but valid obligation can sue for payment and receive full or partial payment from the issuer's assets.

    •  Exactly (1+ / 0-)
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      We only fall $100 Billion short per month.  Revenues will still be coming in.

      The debt will get serviced and most things will be paid for.

      However, the credit rating of the US IS at risk.

      The credit agencies have already begun talk of downgrading us.. but not only because of a debt ceiling fight.. they will downgrade us if we do not get our debt under control.

      CNN Money - Weak debt deal would risk U.S. rating - Fitch

      The United States risks losing its AAA credit rating from Fitch if any deal to raise the legal borrowing limit does not include a plan to put public finances on a more sustainable footing, the ratings agency said Tuesday.
      We cannot continue spending over $1 Trillion per year more than we take in forever, as much as the President would like to.
      •  The AAA rating means nothing. (2+ / 0-)
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        cfm, radical simplicity

        Our rating dropped in 2011 and the bond market was still strong.  The rest of the world is in dire straits and as screwed up as we are, our economy is still very strong.

        The debt, in terms of ratio to GDP is bad only because, hello, we're in a recession and our GDP has tanked.

        All those tax cuts Bush passed failed to keep the economy strong (grow the pie higher) and we started two wars.   Raise taxes, end the wars and we're on a good path to an appropriate level of debt.  

        •  When everyone else is a worse risk (2+ / 0-)
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          cocinero, myboo

          We still look pretty good.

          Of course until the 2010 gerrymander can be corrected, we're likely to continue to have an unfunctional government.

          We get what we want - or what we fail to refuse. - Muhammad Yunus

          by nightsweat on Tue Jan 15, 2013 at 11:17:49 AM PST

          [ Parent ]

        •  For now, perhaps.. (0+ / 0-)

          But when the music stops and we are stuck with all this debt, I hope somebody's got a plan..

          •  The economy doesn't work like our home finances (0+ / 0-)

            It's not like the economy is preparing to retire in a few years, and needs to make all debt go away for a smooth landing; or like it has to worry about losing its job, and needs to shed debt "just in case."

            What we need are more, good paying jobs, and more taxes collected from the wealth hoarders. That will change the ratio of debt to GDP.

            The economy could continue to run a debt/deficit forever with little or no ill effect, as long as (a) it remains within bounds that allow the debt to be serviced via reasonable revenue measures, and (b) idiots don't keep playing games that cause the interest rates on the debt to go up so that the cost of debt service ends up outside of the aforementioned bounds, even if the dollar amount of the debt itself is within bounds.

      •  You think? (0+ / 0-)

        First off, it's clear that the president doesn't want to, and you're being kind of an ass to imply that he does. He very clearly wants to balance the budget, and largely on the backs of the poor and the middle class. So really, what you disagree with him about is, presumably, the pace.

        But don't worry, we're working on that, too. He's promised more cuts, and more tax increases, and soon. Which will almost certainly cause further weakening in our economy, which will in turn cause further decreases in tax revenues. Which will in turn cause further cuts. That's what you people want, right? More cuts? More austerity?

        After all, it's going so great for Ireland and Greece, who wouldn't want it here?

      •  Actually we can spend $1T more than comes in (1+ / 0-)
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        for the forseeable future, until the economy heals, at which point we won't be spending $1T more than income and all will be better.

        But We've got a bunch of lunatics that think the best thing to do when you are trying to bail out a leaky ship is to stop bailing.

        The bulk of the current deficit will disappear, on its own, when we fix the economy, food stamps go down, UE goes down, tax receipts go up.

        As for credit ratings, who cares, the rating agencies are corrupt to the core. Certifying crap as sirloin and making money, now passing judgement on whether the US can pay its bills, when we certainly can.

    •  Seems to me (1+ / 0-)
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      radical simplicity

      The debt ceiling and the continuing resolution are getting confused a lot, on TV as well as here.  Yesterday Marcia Blackburn seemed not to understand the difference.

      I guess if they failed to raise the debt ceiling a lot of the government would stop, but the risk is so high they aren't going to do it.  But right on the heels of that the current continuing resolution runs out.  They can shut the government down over that with much less risk.  But last time it was really bad for the Republicans.  Short memories.

      At the same time the sequester kicks in.  They really ought to be thinking about that.  They still can't figure out how to cut that much from the cost of government.  And I hope (and also think) the President is not going to do it for them.

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