US Debt Ceiling

[BradK]

The United States will crawl with news about the debt ceiling raise in the next few weeks, as the August 2 deadline looms for an agreement between the Republicans and Democrats.

There are some pretty hardline Republicans out there such as Eric Cantor calling for deep spending cuts and no new taxes.

Barack Obama went on CBS news last night and suggested that he could not guarantee that Social Security cheques will go out on August 3 if agreement is not reached.

Will they reach an agreement? What will be the consequences if they dont?

Discuss

 

[Tyler Durden]

If the ceiling is raised, I bet you there'll be a rise in the market (at least temporarily), which doesn't make sense to me at all. It's like a person saying "look, I maxed out my credit card at $10,000 and can't pay it back in time, but can you raise my limit to $15,000 so I can spend more and have more time to possibly pay it back?"...and that's going to be read as 'good' news.

 

[Bigukraine]

Hi Bradk,

So that you know i believe that they have to reach agreement to lift the debt cieling by the 22nd of july due to the process involved in the senate and admin. they really only have a week to sought it before 2nd august ,they are being backed into a corner by the rating agencies now.... fix it or they will lose their "AAA" rating and if this happens watch the markets tumble.....

 

[basilio]

The American debt ceiling crisis is serious sxxx. With the European community in crisis it seems as if American treasuries are the "safest" place to park your money. If this starts to look wobbly (and it certainly is) I think confidence in the financial structure of the whole world economy would collapse.

At this stage the negotiations are not going well. The Republicans are determined to make Obama a one term President so they are resisting all efforts to come to a broad based long term attempt at a solution to this crisis. President Obama is proposing a big picture long term cut of $4trillion with savings from a all sectors of Government including medicare . But he also wants to have an increase in taxes on the wealthiest Americans as part of the budget balancing exercise. The Republicans have refused to consider this and furthermore the Tea Party republicans don't even want to increase the debt limit and are prepared to cause a financial catastrophe.

I think this is criminally deranged behavior.

I have a feeling President Obama will be making a big "Osama Bin Ladden" statement within the next few days if this deadlock isn't broken. I think he has to ensure that the debt limit is raised and that America does not default and does not stop paying it's social security pensions, wages ect. So he simply can't allow a rump of Republicans to destroy the financial system simply because they don't understand what they are doing.

Exactly how he does it I don't know but allowing a default to occur would be unthinkable so almost any other action would have to be better.

We'll see won't we ?

 

[Aussiejeff]

The American debt ceiling crisis is serious sxxx. With the European community in crisis it seems as if American treasuries are the "safest" place to park your money. If this starts to look wobbly (and it certainly is) I think confidence in the financial structure of the whole world economy would collapse.

At this stage the negotiations are not going well. The Republicans are determined to make Obama a one term President so they are resisting all efforts to come to a broad based long term attempt at a solution to this crisis. President Obama is proposing a big picture long term cut of $4trillion with savings from a all sectors of Government including medicare . But he also wants to have an increase in taxes on the wealthiest Americans as part of the budget balancing exercise. The Republicans have refused to consider this and furthermore the Tea Party republicans don't even want to increase the debt limit and are prepared to cause a financial catastrophe.

I think this is criminally deranged behavior.

I have a feeling President Obama will be making a big "Osama Bin Ladden" statement within the next few days if this deadlock isn't broken. I think he has to ensure that the debt limit is raised and that America does not default and does not stop paying it's social security pensions, wages ect. So he simply can't allow a rump of Republicans to destroy the financial system simply because they don't understand what they are doing.

Exactly how he does it I don't know but allowing a default to occur would be unthinkable so almost any other action would have to be better.

We'll see won't we ?

Maybe he'll declare himself "Sole Dictator" of the US? LOL

IMO Unca Sam is between a verrrryyyy Bigrock & a verrrryyyy hard place, no matter what the outcome.

The 10-15 years of "stabilisation of our finances" that Obamasan is proposing (entailing spending cuts of up to $US4 Trillion) is a soft con.

In reality, the loss of $US4 Trillion worth of spending throughout the US economy that he proposes would amount to 10-15 years of terrible STAGNATION. Forget GDP growth. Forget rising living standards. Forget employment growth. Forget rising house prices. Forget America?

The Empire is falling.....

*sniff*

 

[BradK]

Jim Rogers and Peter Schiff believe the whole thing is political opera.

Seems they will come up with an 11.59pm deal, and the day will be saved.

Still, I agree ... a) bodes bad for America either outcome

and b) doesn't seem to be worrying the investors... nor the ASF punters...

Brad

 

[Glen48]

USA has done in 80 yrs what the Roman empire took 200 to do , When parking meter's and the revenue generated has been sold to an over seas country some thing is wrong.

 

[explod]

USA has done in 80 yrs what the Roman empire took 200 to do , When parking meter's and the revenue generated has been sold to an over seas country some thing is wrong.

And there is plenty of big USA money invested in China so maybe they can do it in 20 years. Ten to go, or is that five.

 

[Starcraftmazter]

If the Obama administration chooses to suspend all congressional salaries, pensions and all other benefits as an interim budget deficit saving measure, I'm sure they will be able to reach a deal pretty damn quick.

Then again, congress gets so much money from lobbyists, that I suppose it's debatable just how effective that would be

 

[Aussiejeff]

If the Obama administration chooses to suspend all congressional salaries, pensions and all other benefits as an interim budget deficit saving measure, I'm sure they will be able to reach a deal pretty damn quick.

Then again, congress gets so much money from lobbyists, that I suppose it's debatable just how effective that would be

Hooorah! The "Gang of Six" have saved the day, let Mr Obamasan & Mr Market rejoice!!

President Barack Obama embraced a $3.7 trillion debt-cutting plan by a bipartisan group of senators that would combine tax increases and spending cuts, saying it could end a congressional deadlock over raising the U.S. borrowing limit.

“We now are seeing the potential for a bipartisan consensus,” Obama said today at the White House, where he called the proposal by the so-called Gang of Six “good news” and “a very significant step” in so far fruitless negotiations between Republicans and Democrats over boosting the $14.3 trillion’s borrowing authority before a threatened default on Aug 2.

http://www.bloomberg.com/news/2011-...ding-cut-bill-with-no-debt-deal-imminent.html

See? It was all just a bad dream after all!

Mmmm.... back to sipping champers again....

LOL

 

[springhill]

A chart of US spending over a generation.

 

[nulla nulla]

Hooorah! The "Gang of Six" have saved the day, let Mr Obamasan & Mr Market rejoice!!

http://www.bloomberg.com/news/2011-...ding-cut-bill-with-no-debt-deal-imminent.html

See? It was all just a bad dream after all!

Mmmm.... back to sipping champers again....

LOL

Is there enough left in the till for some canapes with the champers?

 

[Bigukraine]

Wouldn't count my" Obama's(chickens)" just yet.... mumbles around the senate and the vote still to come going to go down to the wire... US markets dipped last night ,ours today will prob. give back what it gained yesterday and no matter what deal is reached the "AAA" is still under threat.

I'd be putting the champs back in the ice bucket and reaching for some quickeze at the minute

 

[Calliope]

FAQ; America's Debt Crisis Explained.

http://www.news.com.au/business/uni...fault-threat-faq/story-e6frfm1i-1226106044741

 

[tech/a]

UK looks sick!

 

[Aussiejeff]

Wouldn't count my" Obama's(chickens)" just yet.... mumbles around the senate and the vote still to come going to go down to the wire... US markets dipped last night ,ours today will prob. give back what it gained yesterday and no matter what deal is reached the "AAA" is still under threat.

I'd be putting the champs back in the ice bucket and reaching for some quickeze at the minute

Obama Bin Debt Laden's 's Kentucky Fried Chickens have come home to roast, for now....

But, but, but..... Mr Market fell flat on his farce.... ooo-er.

Having digested this grist with some difficulty, I decided to *sniff* the Champers and pop the cork back in till 2025.

Orf to tha Eurozone Rave tonight artyman: for some more fun!

LOL

 

[Bigukraine]

Obama Bin Debt Laden's 's Kentucky Fried Chickens have come home to roast, for now....

But, but, but..... Mr Market fell flat on his farce.... ooo-er.

Having digested this grist with some difficulty, I decided to *sniff* the Champers and pop the cork back in till 2025.

Orf to tha Eurozone Rave tonight artyman: for some more fun!

LOL

More like chinese... makes you feel full for now but you'll feel a lot hungrier later

 

[Aussiejeff]

Awwww, shoot!

Not only did Mr Market fall flat last night, 'e started burrowing frantically down towards the fallout bunker...

Caught 'tween a rock & a hard place. What a conundrum the human race finds itself in. Next 20 years are going to be incredibly interesting for all sorts of reasons.... population growth pressure, energy shortage pressure, debt growth pressure, food shortage pressure, rare metals shortage pressure, just pressure, pressure, pressure all round.... all this Dud Debt Deal has done is reduce the pressure a teensy-weensy bit. For now.

Somethin's gotta give sooner or later?

 

[Calliope]

Where to Hide?

It's a reflection of how desperate things have become. The conundrum: where to put your money? Share markets are overvalued, especially now that the latest ructions will wreak all sorts of dislocations and current earnings forecasts will have to be reined in. Commodities are plunging on the diminishing prospects for global growth and demand. Gold is already sky-high and bond markets are groaning under an ever-rising weight of supply.

Many governments will struggle to just meet interest payments. Against this backdrop, US treasuries have rallied as investors flee for cover. It's the Armageddon play.
Now then, what's the plan? There seem to be two choices on the policy menu.

One, the deflation option: let market forces take over, let the defaults begin and provide a social safety net.

Two, the inflation option: keep splashing the cash to reduce the debts to zero. Kick the can down the road. This is clearly the Wall Street option. The proxies in Washington will duly deliver more stimulus, stimulus the public can ill afford, stimulus which could bring another Weimar Republic with its hyperinflation, but stimulus which will diminish the size of the debt.

Read more: http://www.smh.com.au/business/the-...ts-the-plan-20110805-1iemc.html#ixzz1U802ilXJ

 

[DB008]

Here we go again...

Obama to Ask for $1.2 Trillion Increase in Debt Limit

WASHINGTON ”” President Obama will ask Congress this week for $1.2 trillion in additional borrowing authority, which would raise the federal debt limit to $16.4 trillion and avoid the need for further increases before the 2012 elections, administration officials said Tuesday.

This would be the final increase allowed under the budget agreement reached in August after the government came close to default. Since signing legislation to codify that agreement on Aug. 2, Mr. Obama has obtained two increases totaling $900 billion.

The budget agreement largely pre-empts the partisan debate over federal deficits and debt that the request might otherwise have touched off in Congress.

More on Link above...