The Liberal Gun Club Forum

"If U.S. borrowing hits the ceiling and lawmakers fail to raise it, Treasury would be prohibited from borrowing more money. Barring immediate and draconian policy changes, the country would be unable to pay its bondholders or fund programs and benefits in full. That's because there wouldn't be enough tax revenue coming in to cover all of the country's bills.
Experts say the cascade effect would be crippling not only to the U.S. economy but very likely to economies and markets worldwide.
At a minimum, a default could pummel U.S. bonds, the dollar and U.S. investors' portfolios."
http://money.cnn.com/2011/01/20/news/ec ... /index.htm

The Repugs will not let the U.S. default on what has been, historically, the most stable investment one can make. Throughout history government bonds have been a secure investment during bad times. The corporate overlords have a lot invested in those "stable" bonds. They will not let them go into default. No matter how much they posture. The Repugs will have a few pander to the winger base and the rest will vote to raise the cap because they have to.

MetalSlugIV wrote:The Repugs will not let the U.S. default on what has been, historically, the most stable investment one can make. Throughout history government bonds have been a secure investment during bad times. The corporate overlords have a lot invested in those "stable" bonds. They will not let them go into default. No matter how much they posture. The Repugs will have a few pander to the winger base and the rest will vote to raise the cap because they have to.

Agreed. According to the article, the ceiling has been increased 74 times since 1962 and 10 of those times was after 2001. All they're going to do is take political advantage of this moment (by directing more blame to the Democrats, even though Republicans ran into the same trouble) and then raise the ceiling.

I'm so sick and tired of everyone falling for the old Republican tricks: "Let's just cut spending, it'll solve all of our problems" or "Let's lower taxes for everyone, that'll solve the problem" or "trickle down theory works." Republicans love to target earmarks, even though earmarks constitute a grand total of 2% of our budget. In reality, the heavy hitters are medicare, medicaid, social security, and defense spending. No politician will dare to make serious cuts to any of those programs. Cutting anything else won't do much for our deficit or our budget.

Trickle down theory doesn't work either because businesses often just give jobs to their friends/family or the CEOs just pocket the extra money. Wealthier Americans also have a higher propensity to save, so that's money that just stays in their savings accounts rather than being spent in the economy.

I have mixed feelings about the tax system. It definitely needs to be more progressive and wealthier Americans should not be put in the same boat as middle class Americans (aka, just because the middle class should enjoy tax cuts, doesn't mean the rich should too). Although I would prefer to lower taxes for the middle class during recessions, the reality is that we will need to increase income taxes afterwards in order to lower our debt. Like everyone else, I abhor taxes; however, they are absolutely necessary in order to sustain our budget.