Debt issue...

Am I the only one who thinks this debt thing is just a bunch of hooplah. All this scare stuff and end of the world crap seems a lot like any other time there was a media frenzy. Like <insert animal here> Flu, or global cooling, global warming.

Plus, lets say that the financial issues do cause a crash, I have entire confidence that America will bounce back. Look at our history of doing what needs to be done when <poopy> hits the fan. Its what makes America a country of bad<butts>.

Maybe I'm Crazy.

Not crazy, just ignorant.

And the reason this SHOULD be a big deal, aside from the consequences we will face, is because we brought it upon ourselves.


Edited by High Voltage - 29 July 2011 at 11:05am

Monk, you aren't the only one, I can count at least 18 teabagggers in congress who also don't believe it's a big issue. Unfortunately, it actually is a big issue. Scratch that, a HUGE issue.

The reality of the situation is even worse than what is being reported by most media outlets. Even if this thing gets passed, congress has pulled enough crap to prove to the ratings groups that the US is unreliable in it's debt handling. That means that we will more than likely face a downgrade in our rating, just not a severe as if we were to actually default.

Now, what happens when we get downgraded? Well, for one, our very own interest rates get jacked up by the countries we are borrowing from because the dollar is less reliable, meaning worth less. The dollar will probably quit being the "standard" currency because it won't be seen as secure anymore. That will mean that foreign and domestic investors will start investing in things like the Yuan or the GBP rather than the USD. This means that every dollar you earn is worth even less. Ultimately this can lead to hyperinflation if not checked by forces outside of our control. So, unless you want everything you've ever worked for to be worthless, I suggest you urge your senators and representatives to put aside the partisan bull-crap and remember that their interest is in the people of the US, not some partisan bickering. Both sides are at fault big time.

On the bright side, I went over to Walmart in Maine the other day and actually got money back because our dollar is worth more.

Monk wrote: Also adjustable rate is a bad idea bro.

Unfortunately, when building a house it's the only way it's done up here. They will not lock into a fixed rate until the house is completed and a final inspection and appraisal is done. I checked with three seperate lending institutions. One would only give us a 15yr fixed and then we would have to refinance at whatever the going rate was at that time. I didnt see any reason for the interest rates to jump up when we initially took out the loan. Figures

Monk wrote: Interesting. See, I needed that dumbed down version of things. I can understand my finances, but when talking about massive amounts of money and how it works with the rest of the world I am straight up dumb. I still dont see how congress can actually change our debt. Raise taxes = the people getting screw/the rich getting screwed  Cut taxes = no money to pay debts  Cut spending = reduced programs which screws the people who need it.I am partial to Cutting spending, but then again I like a smaller government. I feel some issues are just not a government concern. But then again I have no idea how national finances work again.Also adjustable rate is a bad idea bro.

The reality is that the status quo simply isn't going to work and that we're going to have to do all of the above. We need to simplify the tax code, eliminating loopholes and shelters for both corporations and individuals. We need to reduce spending, especially on outmoded and pet projects which have no viable financial or social output. And finally, we need to not only balance our budget, but pay off our debts in entirety.

If you really want to know what happens when a country defaults on its loans, take a look at post WWI Germany and post 1991 Russia. Both had worthless currencies which led the weak central governments and massive corruption. Both were eventually brought out of horrible depressions by cults of personality which have put them at odds with the rest of the civilized world. Life in Russia outside the capital cities (Moscow, Petrograd, Kazan) is still pretty damned miserable for all concerned while life in said cities is only decent for the vast majority. The only reason that Russia isn't in a continued state of upheaval is that they paid off their debts after they defaulted on them, and haven't borrowed since. Still, 20 years just to get to where they are now, not a great outlook for us if we do the same.

The problem is the people in power around the world don't want to give up that power, so they don't care if it hurts your business/housebeingbuilt/personal finances.

tallen702 wrote: Now, what happens when we get downgraded? Well, for one, our very own interest rates get jacked up by the countries we are borrowing from because the dollar is less reliable, meaning worth less.

... and when the interest rates on US debt goes up, so does the interest rate on everything else, because it is all tied to the t-bill rate.  Credit cards, Target cards, mortgages, Franky "the Tooth", car loans, business loans, EVERY kind of debt in the US becomes more expensive.  Basically, by not raising the debt limit, the US will suddenly be MORE in debt than before.

And when corporate debt is more expensive, that extra cost of money goes into the price of goods.  So now stuff gets more expensive.  ALL the stuff.

Is it the end of the world?  Not really.  But is it a really, really bad thing for the US and all the people living here? Yes.

tallen wrote: The dollar will probably quit being the "standard" currency because it won't be seen as secure anymore. That will mean that foreign and domestic investors will start investing in things like the Yuan or the GBP rather than the USD.

That would certainly be bad, and may yet happen, but I am not convinced that this debt issue would be sufficient to trigger such a change....   But details.

Donald Blake wrote:  ALL the stuff.

Everything will be okay people. There is plenty of government cheese to go around.

I'm kind of feel left out. Seems like every country but ours has had massive protest and riots.