Republican Mainstream Flirts with Brief US Default

[AAAintheBeltway]

Quote from achilles28:

That's not correct. The FED's Maiden Lane asset buy-back programs expanded their balance sheet by ~1.5 Trillion. That was straight-up monetization without a commensurate increase in the debt ceiling. Lincoln printed green-backs which was debt-free currency, as was colonial script. Not that it matters, but there's little difference between monetization and bank-issued credit if it's used to purchase debt, which is later sold or repayed, and the principle destroyed.

Politics aside, thi sis an interesting point. I had wondered about it before. Teh Fed couldn;t just issue money to agencies, eg to pay salaries, because either they would get an IOU back, which would reflect an increase in the debt, or it would be a gift, which I doubt the Fed is authorized to do. So it would have to be some sort of asset purchase, perhaps buying bonds from the SS trust so they could pay benefits.

 

[piezoe]

Quote from Scataphagos:

...

Hideous as our national debt is, the interest on it is still covered 12:1 by tax receipts. To prevent default, all they have to do is "pay the interest first"... the items to then be "defaulted upon" would be social spending... and of course the DemoCraps will never want to do THAT.

You are, of course, right! The "DemoCraps" will never do that, and for that matter why would anyone in their right mind want to do THAT? Practically all of this social spending is owed to the citizens of the United States, and the remainder is minuscule compared to the budget and essential to keep desperate people off the streets. (You are probably too young to remember the World War I bonus marchers, or "Boners" as they were called. That was one of the events behind the origin of Social Security. Who would ever what to return to that situation?

The U.S.A. can neither default on its debt obligations nor its "social spending". Its only reasonable option at present is to cut spending and to increase revenues. A reasonable way to accomplish the latter, given the current economy, is to reverse the ridiculous Bush II tax cuts. The best option, however, would be to not only reverse but to also further increase the uppermost tax bracket sufficient to compensate for a decrease from 28% to 18% in the lower bracket. This would have a much needed positive impact on jobs and the economy without overburdening, by historical standards, the wealthy. At the same time the Social Security contribution rate must be raised by 2 cents on the dollar to adjust for changing demographics.

The current mess can be laid squarely on the absurd Bush II wars which made the simultaneous Bush II tax cuts equally absurd! The Bush administration had the order of taking action exactly backwards. First you cut spending, then you cut revenues, not the other way round. (I never thought I would say this, but I now realize that the damage done by Phil Gramm, Alan Greenspan and Wall Street pales by comparison to the damage done by the Supreme Court when they ignored the 20th Amendment and put a playboy buffoon and evil neo-fascist into the White and Blair Houses, respectively. Our resulting national nightmare continues.

 

[piezoe]

Quote from achilles28:

House Democrats only need to 23 'swing' Republicans to get a majority. Dems already control the Senate. Looks like the McConnell plan will pass if it comes down to the wire. Maybe one of ET's political aficionados can comment on this...

Are there 23 that did NOT sign the Norquist pledge? It's a curious thought, but there is an opportunity here for that fellow Norquist to go down in history along side the likes of Phil Gramm, Alan Greenspan, George W. Bush, and Dick Cheney as being instrumental in the demise of the "American" empire.

 

[MKTrader]

Quote from piezoe:


The U.S.A. can neither default on its debt obligations nor its "social spending". Its only reasonable option at present is to cut spending and to increase revenues.

Or, as I said earlier, they could get rid of tons of pork, redundant welfare/entitlement programs and agencies who have done nothing but waste money since Carter started them (Depts of Energy, Education, etc.). There's also a ton of waste at the Pentagon.

All of that should be done long before a so called "revenue increase" is considered.

It's noteworthy on your list of America's financial demise that you didn't mention FDR, LBJ, Carter, Frank, Obama, et. al. That shows how shortisighted you are. Better stick with imaginary trading and hope all those "greedy rich" keep paying your entitlements...

 

[Lights]

Agreed. People like Ron Paul and the tea party aren't Republicans. They're white protectionists who are flirting with the idea of divide and conquer.

Quote from failed_trad3r:

No they didn't. QE1 and QE2 was added to the debt ceiling. USA has never "simply printed money"

That said, republicans will heighten the debt ceiling. It is inevitable. Since 1960 every year debt ceiling has been raised. Even in the years a republican was president. GOP = keynesians. Claiming not be keneysians after 40 years of republican keynesianism is not only stupid, it betrays their history.

 

[MKTrader]

Quote from Lights:

Agreed. People like Ron Paul and the tea party aren't Republicans. They're white protectionists who are flirting with the idea of divide and conquer.

So you're saying Ron Paul is a Keynesian? Wow, of all the inane stuff on here, your comment ranks near the top.

It reminds me of when someone interviewed people on the street and asked if Obama was a Keynesian. Many were immediately angered and said, "No, he's not a Kenyan!" You rarely go broke underestimating the intelligence of the American public.

Your other comment isn't even worthy of a response.

 

[nitro]

After that presidential speech, DEFCON 4 may be warranted.

 

[nitro]

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[Lights]

No, I agreed with the original comment that GOP policy has essentially been Keynesian for decades and Ron Paul & the tea party shmucks such as Glenn Beck and Bill O'Reilly who oppose this, are just socialists puking subverted slavery era libertarianism to gain the poor white vote. You may consider taking Adderall to help follow a dialog.

Quote from MKTrader:

So you're saying Ron Paul is a Keynesian? Wow, of all the inane stuff on here, your comment ranks near the top.

It reminds me of when someone interviewed people on the street and asked if Obama was a Keynesian. Many were immediately angered and said, "No, he's not a Kenyan!" You rarely go broke underestimating the intelligence of the American public.

Your other comment isn't even worthy of a response.

 

[piezoe]

Quote from MKTrader:

Or, as I said earlier, they could get rid of tons of pork, redundant welfare/entitlement programs and agencies who have done nothing but waste money since Carter started them (Depts of Energy, Education, etc.). There's also a ton of waste at the Pentagon.

All of that should be done long before a so called "revenue increase" is considered.

It's noteworthy on your list of America's financial demise that you didn't mention FDR, LBJ, Carter, Frank, Obama, et. al. That shows how shortisighted you are. Better stick with imaginary trading and hope all those "greedy rich" keep paying your entitlements...

It is OK to be annoyed when someone says something negative about some of your favorite politicians. It's a natural reaction, and I understand.