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What will happen when the US defaults on the national debt?

Discussion in 'The Okie Corral' started by rock_jock, Feb 14, 2013.

  1. JohnnyReb

    JohnnyReb Lifetime Member

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    That's what happens when the checks stop.
     
  2. Atlas

    Atlas transmogrifier

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    Social overhead..
    It is quickly becoming unsustainable.
     

  3. farscott

    farscott

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    Corrected in the quote below.

    That is why the delay in the payout of the Greek Law Bonds CDS was a big deal. The current ISDA Master Agreement calls for the settlement of the CDS (payout) ONE day after the "credit event" has been declared to have occurred. ISDA took their time in declaring the CDS has been triggered to allow the counterparties a chance to collect the necessary funds in an attempt to avert contagion. That action, combined with what happened to GM and Chrysler bondholders in their "bankruptcies", proved that loaning money to sovereigns and to companies "too big to fail" is much more risky than the coupons suggest. As someone who actually does loan money to the USG (I use TreasuryDirect) and at one time to GM, I was and am very concerned as some of my T-bond maturities are still 25-plus years in the future.

    Just about everyone and everything depends upon money being where it is supposed to be exactly when it is supposed to be there. Small delays have large consequences for both people and markets. The 1979 USG default is an interesting story, especially how much it really cost the taxpayers in terms of more debt service due to higher rates.

     
    Last edited: Feb 19, 2013
  4. railfancwb

    railfancwb

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    Japan isn't fighting multiple (how many? I lost count) wars and maintaining hundreds of bases around the world and almost a dozen carrier fleets and X boomers...


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  5. series1811

    series1811 Enforcerator. CLM

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    I've been trying to do this for a while. Everytime I go to the grocery store, I try and buy more than I need in long term storage food items, to put away. If I need it, I figure I am going to really need it. If it looks like magic fairy dust is going to fix everything, I will just eat it and save a little on groceries one day.
     
  6. Flying-Dutchman

    Flying-Dutchman

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    Why can private enterprise cut back and operate with reduced revenue yet the Government always threatens a complete shut down?

    The Government needs to apply triage to the budget.

    There is as pecking order as to the importance of programs.

    On another forum, someone was bragging about making $120k as a park ranger with high seniority rangers making $200K+.

    Many Government jobs do not add value to the economy and need to be eliminated.
     
  7. Atlas

    Atlas transmogrifier

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    And there we have it.
     
  8. Flying-Dutchman

    Flying-Dutchman

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    On a personal level, there is more opportunity than ever. It is an exciting time to be alive.

    But the numbers do not lie and as Atlas put it, the “magic” of compound interest is upon us.

    It will end better than Zimbabwe but worse that the Weimar Republic; well maybe not as the Weimar Republic officially ended in 1945 with millions dead and the cities a pile of rubble.
     
  9. Flying-Dutchman

    Flying-Dutchman

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    This is an outrageous figure.

    Somehow the FEDGOV cannot get by on $2.7 Trillion whereas the not exactly small US FEDGOV budget in 2000 was $1.8Trillion total.

    So no one in Washington has the intestinal fortitude to divvy up a mere $2.7 Trillion?

    So we would rather become Greece? A lot of thieving must be going on in Washington.
     
  10. certifiedfunds

    certifiedfunds Cosmopolitan Bias

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    I think it is about the short term velocity of money.

    The gov is very good at putting money into circulation. If the gov suddenly keeps taxing but stops spending, money slows dramatically.


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  11. series1811

    series1811 Enforcerator. CLM

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    It took WW2 to get us out of the last global depression. I wonder what it will take this time.
     
  12. TX OMFS

    TX OMFS Right wing nut Lifetime Member

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    Well said.

    Additionally, Series1811, I know reality is that status quo is likely to remain generally the same. Despite that, I too began buying a little extra food on each trip to the store. Dear Lord, I am now a closet, mild, hopefully not looney, prepper. :crying: :shocked:

    ETA: Haven't even told my wife about that little stash... :embarrassed:
     
    Last edited: Feb 19, 2013
  13. certifiedfunds

    certifiedfunds Cosmopolitan Bias

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    Relax. Even in bad times people need wisdom teeth extracted.