U.S. debt Cap

Brawl brewing on US debt cap

The main problem in regard to government is that politicians tend to think only in terms of 2 years max. This doesn't solve our long term debt problems. Unless we take a stance like England did where they completely bit the bullet we are screwed long term as a nation and I don't know if Republicans or Democrats or independents or even Tea party people can all get their group act together and stop yelling at each other long enough to really get serious so our nation can economically survive all this and our children and their children then actually would have a future and not just be indentured servants so to speak to other nations.

begin quote from "Brawl brewing on US debt cap" above.

The Treasury is warning it will reach its $14.3 billion limit on borrowing, known as the debt ceiling, in early May. Instead of a straight up-or-down vote on raising the cap, Republicans are threatening to attach policy measures on issues such as abortion funding and environmental regulation. Such "riders" were the main sticking point's in last week's budget showdown.


Anything that threatens to derail or delay the process of raising the debt ceiling is a red flag for markets. The longer it takes and the deeper the divide in Washington, the more markets will worry that the United States, the world's largest debtor nation, will default on its debt obligations with economy-rattling consequences. end quote.

So, if the Republicans succeed in attaching "political issues" to this process the likely end would be a lower credit rating for the U.S. and increased interest rates for everyone. If they do this I hope people blame them for it because this will hurt everyone.

Here's the evidence right here:

begin quote from same article above:

"Well, guess what, Mr. President, not a chance you're going to get a clean bill," said Boehner. "And I can just tell you this. There will not be an increase in the debt limit without something really, really big attached to it." end quote.

If that something big is political we are as a nation in for trouble. If it is ONLY and ONLY about reducing our debt something meaningful can occur. What is the most meaningful thing to say would be, "Everyone in the U.S. is watching. Everyone in the World is watching. This isn't the 1950s anymore where no one really noticed. This is all public. To make a mistake now regarding the debt limit would be the end of us as a nation. There is just too much at stake!"

Politics needs to be set aside and pragmatism needs to take its place. Otherwise it is like too many people trying to be the steersman (helmsman) on a ship heading for the rocks. In the end this fight will sink our ship if it is only politics as usual. Why can't more people see this?


Here is more of the problem in a nutshell: begin quote:
According to a recent NBC/Wall Street Journal poll, only 16 percent of voters said  Congress should raise the debt ceiling, while some 46 percent said they were opposed. When told that would mean the U.S. could default on its debt, 32 percent supported raising the limit. But 62 percent said they opposed lifting the cap even if it meant the Treasury would not making good on its debt payments.

 

So far, bond market investors apparently are not very worried; the United States has never defaulted on its debt and many have long thought a default unimaginable. On Monday, amid the rancorous aftermath of the budget battle that nearly shut down the government, bond prices were flat.
But some investors are betting that bond prices are headed lower. As the Federal Reserve wraps up a $600 billion round of bond buying designed to keep interest rates low, many investors are wondering what will replace that program when it expires in June. On Monday, the giant investment fund PIMCO, which recently dumped its holdings of U.S. Treasury securities, disclosed that it has gone even further and is now selling U.S. debt short — a bet that bond prices have further to fall.
Story: World's largest bond fund bets against U.S. debt 
end quotes. 

If it is true that 62% of the people in the poll agreed that the debt ceiling should not be raised even if the Treasury defaults then we see why the world's largest bond fund is betting against U.S. debt.


Though in theory people in debt don't want to borrow more, the reality is a markedly lowering of lifetyle in the U.S. will result in not increasing U.S. debt. However, I also suppose it could be argued that with the American people as obviously ignorant of international finances and cause and effect, I suppose it could be said that with the government having behaved badly for so long already, why give even more money to the badly behaving government? Yes. I also agree with this in theory. However, once we deny the government the capacity to raise debt it is obvious that we will then have for sure( I have no doubts about it at all at this point) the 2nd Great Depression and for real 25% unemployment this time with no end in sight. I just don't think the average person understands what a deadly situation this actually is. People might think, "It couldn't get worse." But that's not true, it could get hundreds and thousands of times worse than the last 3 years. Think about it! Study it! All our futures depend upon having a more informed populace right now. Wake up and survive as a nation! If not, it may be over for the U.S.