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Debt Ceiling Debacle 2013: It's the End of the World As We Know It and the GOP Feels Fine
Posts
http://www.teapartypatriots.org/2013/01/americas-opportunity-with-the-debt-ceiling/
in short, a curious certainty that the automatic outcome will be slashes to programs they dislike rather than actual debt default
Both would suck pretty fucking hard. I don't think it matters how hard either of them would suck in relation to one another.
Because an article whose link I have lost said that the economic fallout of the US defaulting on its debt the way the Teapers want us to would be equal to a limited nuclear exchange in Europe.
the federal reserve owns treasuries and tons of other miscellaneous assets already. The coin idea basically recycles treasuries. It's "actual capital" insofar as the original Treasuries were "actual capital". There is no default in the proposal.
Ohhh okay, I guess I missed that. If you find the link though, I'd be interested in reading it. These threads always have the best articles.
The coin, as an artificially constructed solution to an artificially constructed problem, is ingenious. As a talking point in an already dysfunctional media, it will likely embolden the right into COMPLETE GLOBAL OBSTRUCTIONISM in a bid to stop what they'll say is an existential threat.
Assuming those outcomes are true, a World War of somekind is certainly not out of the question. We got WWII out of the last mass global depression. Which, I believe reinforces your argument.
What are they going to do? Refuse to re-elect him for a third term?
Within that context, the politically "best" solution is probably just to dare the Supreme Court to rule on a default first, then use the coin as a fallback position - I've not heard a reason why this couldn't be done (though the reality there I suppose is that it's a "soft landing" on the idea that the US is definitely going to default at some point in the next 10 years, and it gives the markets time to gracefully tank the dollar's value unless the problem is fixed).
Ronya, I mean this as respectfully as possible, as you are the smartest dog I have ever met. But the moment you used the word "Treasuries" you lost 75% of the voting population.
So, option 4!
If you can describe that plausible scenario that manages not to exist in a vacuum, please do. In the meantime, those concerns are absolutely because of the nature of American hegemony. Is American economic strength--indirectly, directly, and tangentially through that, the world economy--completely insulated from European investors and consumers? Of millions or tens of millions of them being killed, and further tens being mobilized into war? Because that's what any incident far less severe than "nuclear exchange" entails. I absolutely do think this would lend itself to a situation worse then the early onset of the Great Depression (then again, I assume the same about the the definitive conclusion by the rest of the world of an American default). The Progression, over time, is something I don't want to speculate about because it's so open to variable (which makes it an unfortunate comparison, given that the Depression grew over years).
I don't think avoiding underestimating the horrific costs associated with a war--much less a nuclear war--isn't being too caught up in logistics. We are literally talking about details here, aren't we? If you're honestly describing a really fantastic scenario where a handful of missiles are just exploded over unoccupied portions of Europe, like the combined arsenals of France and Germany just being demolished for the hell of it, that could be it, but that really doesn't say "limited nuclear exchange" to me in the least. There's a reason I hate metrics like this. It's like saying "If every bank in Europe (or elsehwere) was robbed in a massively successful heist." It may be as simple as a case of "deliberate, disastrous choices leading" and "deliberate, disastrous choices that involve fifty or more times the explosive power used in Hiroshima," assuming we were only talking about a really small number of missiles.
Could you expand upon "miscellaneous assets"? I'm genuinely interested in this--here I'm thinking of its influence over the course of spending alongside the immediate wealth it can call upon, but I could be off base. Foreign currency reserves, bonds, its portion of corporate ownership...?
No, but when anyone with an ounce of circumspection asks "Why aren't you governing?", they don't even have to pretend that they are anymore- they can just say pout and say Obama had to be stopped.
I don't actually think this is all that different than what they have been doing, it's just that the Republican party is so close to having a massive meltdown that giving them something to reunite against might be too charitable.
If the media is misrepresenting the issue (HI FOX) then the President, Democratic Caucus, and anyone who understands needs to constantly and consistently set them straight. Yes, it's complicated but sorry 'merica you'll have to put on your thinking caps.
My father used to have these little economic primers, they were cartoons but they gave a basic understanding of monetary policy all simple but relatively thorough. I'm not sure about the intended audience, but I could follow it well enough as a child. What is money, what is the Fed, things of that nature. I wish I could find them. I'd scan 'em all.
This
this person doesn't know how anything works at all
It owns a whole bunch of mortgages, for a start!
However our system is designed so congress can pass a budget the designates spending then later refuse to raise the ceiling to pay for the exact same budget.
This situation is created by shitty political optics on the part of our media really. If the GOP really wanted this fight they should have had it when we passed the last continuing resolution to fund the federal government. The reality is 1: they don't have the political power to control the budgetary process 2. They have a bad track record with shutting down the government in the past. so ywe arrive at the debt ceiling which they can try to force policy changes they couldn't during the budgetary process AND pretend its about the debt.
So its dipping into the piggy bank? How long can we float on the trillion dollar coin?
Otherwise the uncertainty starts creeping back up and we get the same panic anyway.
...what if we constructed a large wooden badger?
It's okay, we don't need to pay our government workers during that time, and the Federal government doesn't do anything important other than SS,.Medicare, and defense anyway.
It would be funny to see what happens when states with high Tea Party representation stop getting any federal funding for anything though.
A trillion dollars worth of spending, but the uncertainty will start to eat away if it goes on longer than, say, six months or so.
So mint 100x trillion dollar coins?
And we can technicly keep doing it as long there is bonds to exchange it for, right? I dont get how we figure out our quantity/quality of bonds though.
The coin is really a one and done deal.
It isn't something we're going to be able to use routinely.
THIS IS WHY YOU DON'T VOTE FOR REPUBLICANS
Well you can't literally do a 100 of them, and really if you start doing it too much you WILL cause inflation we don't want.
It's one and done.
While I normally agree with this sentiment and generally think that second term presidents don't do enough during their second term there is a recent example in history that gives me pause.
Al Gore backed away from the wildly popular President Clinton because of the whole impeachment debacle. Clinton is largely left out of campaigning because Gore distancing himself and Gore ends up "losing" a close race that didn't have to be all that close.
Now I doubt that Obama being Obama would actually lead to this situation in 2016 but you never know.
We should be so lucky to have an impeachment of Obama to campaign on in 2016. No chucklefuck would be able to Both Sides Are Bad that shit.
here, have a throwaway TV reference instead:
Are you kidding? The entire republican house could engage in child sacrifice to the Great Old Ones and emnme and spool32 would be going on about how both sides are bad because obama is takin' our guns.
until the GOp regains some semblance of sanity or loses the House we're going to have nothing but temporary fixes anyway.
Yes, but the American people aren't that dumb.
If they try to impeach Obama over TDC, well, God just let us keep the Senate at the very least.
Unless Democrats fold into themselves like the worthless vapor they used to be.
GIS'ed graph:
Some private, some public.
The Fed selling Treasuries is the most straightforwardly kosher; the Fed selling its private assets to fund the Treasury is dubious. The distinction doesn't matter from the Fed's own perspective - the Fed just wants to own whatever it needs to get traction on monetary aggregates. The point of the Fed balance sheet is not to earn money from the portfolio! But it would affect the amount of Treasuries versus other securities in the market if the Fed chose to sell non-Treasuries instead, and then the move would have Real Effects rather than just being accounting trickery.
The platinum coin option would just be tantamount to scratching out some amount of "US Treasury securities" and substituting "peculiar form of Treasury currency".
No; it's dipping into an accounting fiction. The Federal Reserve would still own the same amount of Treasury liabilities (which show up as assets on its own balance sheet). Only this liability is of a kind that doesn't count against the debt ceiling.
It's almost like they don't give a shit about the debt
*gasp*
see also the Ryan budget which guts every major federal program but still manages to lose money because it cut taxes so much
Why would it cause inflation if none of those coins enter circulation?
Because, as should be the title of the thread, it's not about the deficit or the debt. It's about stealing money from the poor and elderly.
Warren 2020
Because the coins *do* cause inflation, but it's about equal to increasing the debt ceiling. If it's just once, that's not so bad. If it is 100 trillion or a reasonable number, things start getting tricky.
And the more we lean on it, the more the world is going to start looking for a different reserve currency.
Which would be pretty bad for the dollar.