A U.S. Default on Debt Seen as Catastrophe, to Have Worldwide Affects

A U.S. default on it’s debt would be devastating to not only the U.S. but also it’s affects would ripple around the world. There is often talk of “slippery slopes” in politics, well this is one that the United States should not go down. Republicans are not letting on how devastating this could be to the U.S. economy, and worldwide economic stability and reliability standing. All of Congress needs to get their act together and repair what they have broken.

UPDATE: Senate Passes Bill to End Government Shutdown 10/16/2013

Congress End Government Shutdown!

Congress End Government Shutdown!

Bloomberg quote: “Failure by the world’s largest borrower to pay its debt — unprecedented in modern history — will devastate stock markets from Brazil to Zurich, halt a $5 trillion lending mechanism for investors who rely on Treasuries, blow up borrowing costs for billions of people and companies, ravage the dollar and throw the U.S. and world economies into a recession that probably would become a depression. Among the dozens of money managers, economists, bankers, traders and former government officials interviewed for this story, few view a U.S. default as anything but a financial apocalypse.” Read more here.

Rolling Stone: “Washington commentators saying both parties are to blame! “You’re paying attention, so you know that this all happened because about thirty Tea Party Republicans in the House gleefully blew up the budget process, and Boehner is too afraid of losing his job as Speaker to stand up to them. (If he let an unamended spending bill come up for a vote, it’d easily pass with bipartisan support.) Which is why it makes us want to jab hot forks into our eyes when the Washington Post blandly editorializes “Ultimately, the grown-ups in the room will have to do their jobs, which in a democracy with divided government means compromising for the common good.””  – Read more here.

Daily Beast: “Four in 10 Republicans say it’s more important to fund the government than defund Obamacare. By making the standoff a debate about them and their approach rather than the health-care law, “Republicans completely squandered whatever political advantage they may have had on this,” says Garin, “and they are really at the tipping point of making 2014 a referendum on their extreme and irresponsible tactics.”” Read more here.

Daily Beast: “Here’s a fact I’d bet no more than 2 percent of the American public knows: that “clean” continuing resolution the Senate passed, with Democrats backing it and Republicans opposing it? That CR carried the levels of funding for government agencies demanded by Republicans, not Democrats.” Read more here.

Washington Post:  “How Consumers would be effected by default:  It could become more expensive to get a loan. If the governments defaults on its debt, investors would demand that the Treasury pay them a higher interest rate to compensate for the added risk of lending money to the United States. That would send interest rates higher on mortgage loans, home equity lines of credit and car loans, because Treasury rates act as a benchmark for these and many other types of consumer loans.

Retirement portfolios might take a hitStock markets had remained relatively calm throughout the debt-limit negotiations because investors had priced in a very low probability of a default. But as the deadline approached with no deal in sight, markets posted their worst weekly performance in more than a year and major stock indexes ended July on their longest monthly losing streaks since the height of the financial crisis in 2008. If the United States defaults, retirement portfolios could take a hit, perhaps just as bad as the one in 2008.”

Read full list here.

 

Salon’s Joan Walsh article: “First, let me demolish Tyler’s claim that the ACA was “rammed through” Congress without deliberation or debate, part of  a pattern of Obama failing to negotiate with Congress. Well, I knew that was a lie, and I said so to Tyler and host Karen Finney. In fact, the ACA was the result of more than a year of congressional committee hearings in which progressive ideas like single payer or a public option were jettisoned, and hundreds of GOP amendments to the law were accepted, in exchange for zero Republican votes. Sen. Max Baucus, in particular, drove an eight-month bipartisan process via the Senate Finance Committee in which he and ranking Republican Chuck Grassley held dozens of hearings, released joint “policy option” papers and finally presided over 31 meetings lasting 60 hours with the so-called “Gang of Six” – Baucus and Grassley plus Kent Conrad, D-N.D., Olympia Snowe, R-Maine, Jeff Bingaman, D-N.M., and Mike Enzi, R-Wyo. — to try to hammer out a compromise that would attract GOP support. (A Twitter friend shared this helpful history of the Finance Committee’s tortuous process.)” – Joan Walsh, Salon, 10/7/2013, Read the full article here. Also read this.

Snippet of Remarks from President Obama’s FEMA speech on October 7, 2013: “What I’ve said is that I cannot do that under the threat that if Republicans don’t get 100 percent of their way, they’re going to either shut down the government or they are going to default on America’s debt so that America for the first time in history does not pay its bills.  That is not something I will do.  We’re not going to establish that pattern.

We’re not going to negotiate under the threat of further harm to our economy and middle-class families.  We’re not going to negotiate under the threat of a prolonged shutdown until Republicans get 100 percent of what they want.  We’re not going to negotiate under the threat of economic catastrophe that economists and CEOs increasingly warn would result if Congress chose to default on America’s obligations.

Now, the other thing I heard over the weekend was this notion that Congress doesn’t have the capacity to end this shutdown.  The truth of the matter is there are enough Republican and Democratic votes in the House of Representatives right now to end this shutdown immediately, with no partisan strings attached.  The House should hold that vote today.  If Republicans and Speaker Boehner are saying there are not enough votes, then they should prove it.  Let the bill go to the floor and let’s see what happens.  Just vote.  Let every member of Congress vote their conscience and they can determine whether or not they want to shut the government down.

My suspicion is — my very strong suspicion is that there are enough votes there.  And the reason that Speaker Boehner hasn’t called a vote on it is because he doesn’t, apparently, want to see the government shutdown end at the moment unless he’s able to extract concessions that don’t have anything to do with the budget.  Well, I think the American people simply want government to work.  And there’s no reason that there has to be a shutdown in order for the kinds of negotiations Speaker Boehner says he wants to proceed.  Hold a vote.  Call a vote right now, and let’s see what happens.

The second thing Congress needs to do is to raise the debt ceiling next week so the Treasury can pay the bills that Congress has already spent.  That’s what most Americans do if they buy something — if they buy a car or if they buy a house, if they put something on a credit card, they understand they’ve got to pay the bills.”

….So Democrats have said we are willing to pass a bill that reflects the Republicans’ priorities in terms of funding levels.  That’s a pretty significant compromise.  What we’re not willing to do is to create a permanent pattern in which unless you get your way the government is shut down or America defaults.  That’s not how we do business in this country, and we’re not going to start now.” – President Barack Obama, 10/7/2013, Read it fully here. or read and save printable PDF–> Remarks by the President at FEMA Headquarters _ The White House.

END THE GOVERNMENT SHUTDOWN AND PAY U.S DEBTS CONGRESS

DO YOUR JOB!

Congress End Government Shutdown!

Congress End Government Shutdown!

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