Politics & Propaganda

Well, if they don't pay social security out, they should allow the rest of us to stop paying into the damned thing.

The only thing that can save Social Security now would be for the baby boomers to start dying off faster than expected. Way faster. Sooner or later, every Ponzi scheme must collapse.

]
I'm sure there are plenty of municipal bonds that are not AAA rated. The AAA thing only really applies to Treasuries.

But basically, it boils down to this: you ran up your credit card too high. You still **pay the bill.* And fix your spending habits.

boomers to start dying off faster than expected. Way faster. Sooner

or later, every Ponzi scheme must collapse.

Donner Party 2012.

LS - I agree on the spending habit issue. IG - I only partially agree with the Ponzi scheme statement. Yes. It is a Ponzi Scheme. No. We wouldn't be close to having problems with it if the idiots in DC hadn't decided to raid the trust to pay for their spending habits.

It's like takign your kids college education fund to pay for your new house. You have a nice house, but your kid is going to grow up and IF you want to pay for their college you won't be able to. (Of course this doesn't entail the fact that the kid could work and go or do other things so it's not the greatest of analogies)

I like the Donner Party idea. Then we can go around saying "Congress Will Eat Itself"

The college fund analogy would work well if it was the child who was putting money into it, only to have the account raided by mom and dad to pay for a new house.

Now with the "deal" finished, we have a weird situation: all sides are simultaneously declaring victory *and* blaming the others for how bad the deal is. Particularly heinous was the Biden/Doyle series of comments calling the tea party hardliners "terrorists" because they "have made it impossible to spend any money." WTF?
The only ones who are actually serious about reining in spending are being compared to religious fanatics who kill innocent civilians?

No death boards for the tea party terrorists?

They were bluffing, all along...

Ya know, I think IG might be onto something when he says that the U.S. gov't should lose its AAA credit rating. I got in over my head with credit card debt. I tried to do the "right thing" by calling up the credit card companies and seeing if there was any way to negotiate a better interest rate, payment plan, whatever. None of them wanted to help. Until, that is, when I was no longer able to pay them. Then, all of a sudden, they were calling me up offerring low-interest payment plans.

If the U.S. gov't actually went ahead and defaulted, sure there would be some pretty dire consequences to our economy. However, with all the money that's owed, I'm sure someone out there would rather bite the bullet and negotiate a lower rate than to not get anything at all. Not a tactic I'd necessarily approve of as more as an option to consider if things really do hit the fan.
Default Binder

Well, the government did lose its AAA rating, despite not having defaulted.

S&P did the right thing. As I understand it, they were getting bullied by the White House over this, but they stood their ground and gave the US government the downgrade it deserves.

This will hurt but we deserve it. Are you paying attention, Moody's? DOWNGRADE US. Downgrade us until it hurts. Downgrade us until we start electing people who know how to balance a checkbook and pay off a credit card.

What does the downgrade mean? Not a whole heck of a lot, and everybody knows it. It's been called "outrageous" by both the left and the right (Krugman, Forbes) for different reasons. (Krugman because he doesn't believe the deficit is a problem, and Forbes because he does but maintains that we're still able to pay our debts.)

Some of the arithmetic is telling; if you buy Krugman's figures, 1 trillion of additional debt adds only 0.07% of GDB to the debt-service costs down the line. This leads to credibility problems for S&P.

All things being equal, I'd prefer to see a balanced budget or at least a slowing down of the growth of debt relative to GDP. But it's important to keep some perspective. You've got some serious mental patients that somehow got elected during the midterms, these are the ideologues who simply don't even support the Fed's existence and would never vote to increase the debt ceiling under any circumstances, even if not doing so meant default or economy-crippling tax increases.

Bluntly, these people are traitors.

Well, I think the downgrade will mean *something*.

I think it will impact your homebuying experience, because you won't get the really low interest rate you may have come to expect. And, honestly, that might be just about it. Maybe.

It's unprecedented, though. So it's hard to say precisely what will happen. Still, we're in a bad spot. If we do not correct our debt ratio soon, we'll be in the position of no longer being able to call the shots... and then things will suck.

Somewhat related to this, it's my understand that a lot of our debt will need to be paid back within three years. In those years, we'll keep the interest rates as low as possible, to avoid having to pay too much money back (when we sorta don't really have it). After those three years pass, though, we'll probably inflate our currency to make it easier to pay that debt down.

Soo... how do you prepare for that?

(Incidentally, those are the opinions someone else in Google+ said marked me as being an idiot about the financial world... maybe you guys will have something more useful to say about what I wrote than 'BS').

LS:

I think it's unfair to think of them as traitors. By logical extention, both the Democrats and Republicans are traitors for creating this ridiculous debt. Similarly, I think these people you describe intend to force the government to stop spending money like it's limitless, and correct its out-of-control spending habits.

I can't say whether or not this was the best way to do it, but we're in a pickle; both parties are stuck in this rut where they expand spending in an effort to get more votes from the folks who benefit from this expenditure.
In the end, though, our children pay the price for this irresponsibility.

So, how do you break the cycle? How do you correct this insanity, when neither party has the will to do it on their own? Apparently, you freak them the fuck out.

All of what fleeb said, plus one more bit: I find it outrageous that the Tea Party people, who are the *only* sensible voices in an otherwise out-of-control crowd, are being painted as troublemakers, as "terrorists" or as "racists"


All they're asserting is that we've had enough, this can't go on anymore (as is evidenced in this week's downgrade) and it's time to put a stop to it RIGHT NOW.

It's not a difficult problem to solve. The problem is that everyone wants it solved in ways that makes it someone else's problem. The liberals want more social welfare and union labor; the neocons want to meddle in unnecessary foreign wars. Guess what, folks? WE'RE BROKE. STOP SPENDING.

The news states things like "The Tea Party caused the downgrade" despite the fact that the downgrade was stated as caused by the government not having done enough to reduce its debt.

That's very sloppy journalism.

Somewhat related to this, it's my understand that a lot of our debt
will need to be paid back within three years. In those years, we'll
keep the interest rates as low as possible, to avoid having to pay too

much money back (when we sorta don't really have it). After those
three years pass, though, we'll probably inflate our currency to make

it easier to pay that debt down.

Not buying this, even remotely. The government is constantly issuing a variety of bonds with a variety of maturities. At any given time some are maturing and many new T-Bills and T-Bonds are being sold to replace them, I think it's all a wash.

a stop to it RIGHT NOW.

Yeah, the screaming, sky-is-falling RIGHT NOW part is the problem, whether you want to admit it or not... these are people who are so (erroneously, as it happens) so convinced that it needs to stop RIGHT NOW that they're willing to destroy the country, massively increase waste and inefficiency in order to see their preferred solution put in place. The simple fact of the matter is that the "right now" part is exactly what we don't need. What happens in the near term has very little bearing on the long term.


Whether you want to admit it or not, those who would condone default simply to avoid raising the real debt limit are, yes, terrorists and traitors. And since I'm on such a roll, Sarah Palin apologists are all SEXIST!!1

Perhaps, but it stands to reason that the Tea Party is now so well represented in the first place is because the American people have had enough of all the other (failed) approaches. How many more times can we say "ok, we'll raise the debt ceiling just this one more time, and then we'll cut spending, really, this time we mean it!"

We've seen that movie before, and we know how it ends: with yet another sequel.

With $1.17 of new spending for every $1.00 of new taxation, and no one else willing to actually tackle the real problem, I ca't say I blame the Tea Party patriots for taking such an uncompromising stance. Without them, it's likely that the debt ceiling would have been raised with either no cuts, with a tax hike, or both.