It is not, it is only going to make things that much worse.

Default is a mathematical certainty. What form that default takes is what is in question. The most common approach governments take is to default by debasing the currency. That is to say print money to pay the debt – the more money you print the less value less valuable the currency becomes (aka Inflation) Printing up 14 trillion will significantly debase the currency not question but that would still be much better than printing 20 trillion or more.

Currently the Federal Government is taking in enough revenue to pay the interest on the debt (no default) and “Mandatory spending” with about 36 billion left over for discretionary spending. End the Wars, suspend foreign aid, close foreign military bases, shut down non-essential government programs (as Clinton did during his term) and that buys some time to get the fiscal house in order without defaulting or raising the debt limit. In addition to the 36 billion in revenues after Mandatory spending, the Government has 5 billion parked in the Federal Reserve and about 90 billion in mortgage backed securities that can be liquidated. This would give the Federal Government about two years to reform Social Security (which will become insolvent at that time if not addressed), rebuild the US Manufacturing infrastructure, and make the hard choices that have to be made.

The Current size of the Federal Government and growing entitlements is not sustainable, hard decisions about the legitimate role of the federal government have to be made. The People who champion entitlements need to understand that if they want to keep the entitlements it will have to be paid for with taxes and that the people collectively are only going to be willing to be taxed so much. (to keep the current system the average income tax rate would need to be raised to about 75% – that would be on the middle class not the wealthy – I don’t think the people will agree to that)

Raising the debt ceiling is paying for money that was agreed to be spent in the last budget. If the US defaults on the debt it will result in mortgage increases, the cost of borrowing for businesses, personal loans etc.. If that occurs more houses will be foreclosed on, employees will be laid off, people will default on their loans, manufacturing will plummet even worse than it has been and it will lead to the next great depression. If that happens revenue will be lost and there will be no more safety next for the nation to cushion the blow as the US spirals into the ground.

The debt ceiling CAN be raised. But in order to help the debt problem there has to be a bigger cut in spending than the ceiling is raised. For example, you can raise the ceiling by 2 trillion dollars BUT, there has to be spending cuts of MORE than 2 trillion dollars.

The difference between the parties is that the Republicans want to put provisions into the bill that would REQUIRE spending cuts by the House over a certain period of time. Without that provision, 2, 3, 4 years or more down the road, they could decide NOT to reduce spending anymore and we would be back to the same problem we have now. The Democrats do not want to do that. They do not want to be held to any required spending reductions in the future. That’s why most Democrats hate the idea of a balanced budget amendment.

It stops the government from selling bonds which are basically loans to pay for our bills. Apparently we have to raise the debt ceiling so we can be further in debt. Makes no sense.

They don’t want to know and therefore think somehow it will disappear if they ignore it. Sadly ignorance is not bliss

A debt is still a debt whether due today or tomorrow and therefore has an effect on any future borrowing. Enron, Worldcom and American Airlines should tell you that. Everything was going fine until some cash actually had to be paid out. Nothing worse than looking at a CEO with his pockets turned inside out talking about “Gee, Am I embarrassed.”

FYI the quickest way to take over a company is through the backdoor by buying their debt. It worked extremely well for Federated when they bought Macy’s debt.

T-Bills are not the same as the $100, $50 etc savings bonds grandma buys. She’s not going to buy millions or billions at a clip, but a government can. Since the U.S. is not going to buy its own debt that leaves FOREIGNERS:
“T-Bills or Treasury bills are a debt obligation backed by the U.S. government with a maturity of less than one year sold in BULK. T-bills are sold in denominations of $1,000 up to a maximum purchase of $5 million and commonly have maturities of one month (four weeks), three months (13 weeks) or six months (26 weeks).”
If you look at this in terms of the $10 TRILLION deficit we currently have. This is a case of robbing Peter to pay Paul btw. Better known as a pyramid scheme taking new money to pay off an old debt. In private circumstances illegal. Just thought I’d point that out. Considering the substantially reduced tax revenue to spending I can’t even make the case for revenue matching against the principal. So the debt continues to grow while the dollar weakens. Any sane person would believe it’s time to raise some interest rates and taxes boys. Oddly enough for all the low tax crap both Reagan and Papa Bush realized that and did. Papa Bush was a little more transparent than Reagan. Reagan called them “Revenue Enhancements”

Also if the faith in the U.S. is so great why is the dollar so poor?
Obviously enough countries seem to be in agreement concerning the U.S. creditworthiness and therefore the true value of a dollar is not as great as we think it is. So you are correct in one respect any investment in the United States is at the investors risk. Which is why we really don’t have any outside of real estate. With interest rates so low and the dollar so weak it is a poor investment strategy. The interest rate required for a decent return and conversion into the home currency is far greater than the interest a CEO or anyone is willing to pay. Better if you can to make investments outside of the United States. I guarantee if you were to look at the portfolios of wealthy individuals most are outside the U.S. I know mine are. Also looking at the sales of U.S. companies most are coming from outside the country.

Payment at the Freewill of the U.S. eh? An economist made mention of this. If the U.S. should decide to renege on the debt owed to these foreign countries I think all Americans maybe not Republicans are well aware that militarily speaking China and India are in a position to collect. That is one hell of a margin call. So gee I guess we better pay up. Comparing the U.S. to France is like apples and oranges smacking of b.s. like Republican unemployment numbers.

We have no choice but to raise the debt ceiling.

But right now Republicans in the House are using that necessity to blackmail Democrats into accepting cuts, and hopefully systemic changes into how congress spends money it does not have going forward.

What they can’t see them, can’t hurt them… or so they think. This is especially true with liberals.
They have the same idea with foreign policy. If we don’t look, we won’t see Iran and Russia preparing to do something horrible. Lets just stay home and pretend like there isn’t any problem.

Most Americans do the same thing with their own debt. Swipe that card, go on, its easy! Then just peek at the bill and pay the smallest number that appears (minimum balance due.)

First of all our debt isn’t anywhere near a crisis level. Many solvent nations have a higher debt as a percentage of GDP. Just winding down the wars and letting the Bush tax cuts expire will go a long ways toward getting our budget in good shape again (like it was under Clinton). That said, we have obligations that must be paid and failing to raise the limit would bring economic catastrophe the likes we have never seen. Our bond rating would be junk and interest rates would go sky high. There really is no choice but to do it. Hopefully, eventually, a Democratic Congress will just do away with this insane “debt ceiling”. Most all other countries don’t have one and do just fine.

because right now the government has to raise the debt to pay the intrest (shows you that this problem should have been dealt with long ago). however you are right, if all we do is raise the debt limit then all we will do is postpone the inevitable to when we are even more in debt and it will hit us even harder (if that is possible). we need to drastically cut spending to even hope to get out of this mess.

Why are Americans still attacking each other?

US I.O.U. the new film explains that we are now $50 TRILLION in debt.

Warren Buffet funded the film. It’s sold out already.

We are going into being a third world country as soon as Bush leaves and the weak strings he is holding are broken. He let his friends steal this nation blind, and I mean BLIND. No one was noting what was happening.

Your great great grandchildren will still be paying it off. America will be dust. That’s not fair.

So let Bush continue to fund your money to the war profiteers, to torture, to his mercenary army so they can tell you to leave your home one day.

He is building for a future empire that will control every American and tear down every right while we watch TV and populate chat rooms.

Remember, Bush said, “The Constitution is nothing but a piece of paper.” We have forgotten how to defend that piece of paper.

The foreigners who helped him to to this to US are laughing all the way to the “federal bank.”

If you attack Americans who are different from you, you are simply a propagandist for the global empire!