'Unprecedented And Catastrophic' Things Could Happen If The US Defaults

 

 

Gimme

Truthout.org

Last I checked Republicans  were  not the  only political party in Congress.  From the looks  of  it   the  democrats  are  more  than  happy  to  step in  and  play the  hostage  game.

So,  when  are  we  all  going to  wake  up and  understand  that  this is  not  a  political party issue? 

It is a corrupt  system and  government  issue  and both  sides  are  rotten to the  core.  This  blame  game  may  look good from  plush  offices and  homes  but  for  the  people  it stinks.   Government  spending  has  be   checked, not  something they  want  to  understand.   If the  citizens  are  expected  to  balance  their  budgets  without a  bail out then so  must  the  government.  Simply  because they have  been living  high  on the  hog  all this  time does not  excuse  them from their  lack  of  discipline  and  fiscal  responsibility.  They  have  played  fast  and  loose  with money  taken  from  the   Citizens wasting  it frivolously without a  second  thought  to  the  consequences.  Yet  again  it is   the  people  that  will pay the  price.  

The  poor  and the Working  Middle Class are  the ones  who will suffer  for  their  posturing  and manipulation.  None  of  the politicians  in  question,  and that  includes   Obama, have  to  worry  about  where  their next  meal   or  where the  money  for  rent is going to  come  from.  None  of  those  fat  cats  will have to  worry   whether  Grandma  will be  able to  afford  her medication  or be forced to choose  cat food  to  get  by  this month.  They  certainly won't have to  concern themselves about  the baby  having  enough  diapers or  formula  to  make  it  through the  month. 

But  guess  who  does ?

I am  sick  of  the  partisan B.S..  Republicans  and Democrats  alike  are  responsible  for  this  mess and  it is  time  they  were  both  held  accountable..  They are  destroying   this  Nation and taking   us  with them  for  what? 

For a grand political  pissing  contest,  only  "We The  People" are  the  damn  target!!

~Desert Rose ~

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'Unprecedented And Catastrophic' Things Could Happen If Republicans Force The US To Default

Business Insider
Jason Lange and Andy Sullivan, Reuters

REUTERS/Lucas Jackson

Broken glass covers an armed forces recruiting poster at the scene of an explosion outside the U.S. Armed Forces Career Center in New York's Times Square, March 6, 2008.

Read more: http://www.businessinsider.com/what-will-happen-if-the-us-defaults-2013-10#ixzz2gn83HaBK

WASHINGTON (Reuters) - Nobody knows exactly when America would default on its bills if Congress fails to raise a cap on government borrowing. But the recent past gives a pretty good idea of how a default could unfold.
Even the Treasury Department can't know how much tax revenue will come in each day after October 17, when it expects to hit its $16.7 trillion debt ceiling. Nor can officials anticipate exact costs, such as how many people will apply for jobless benefits that week.
Yet we can infer how quickly the government might run out of cash by looking at the equivalent of the Treasury's daily bank statements from that same period a year ago.
What follows is a timeline that shows what a default might look like, based on daily Treasury statements from October and November of 2012.
OCT. 17
The Treasury Department exhausts all available tools to stay under the cap on borrowing and can no longer add to the national debt. Treasury expects it would still have about $30 billion cash on hand to cover its bills. Among the many inflows and outflows that day, it takes in $6.75 billion in taxes but pays out $10.9 billion in Social Security retirement checks. By the end of the day, its cushion has eroded to $27.5 billion.
OCT. 18 - OCT. 29
Treasury's cash reserve quickly dwindles. Washington only takes in about 70 cents for every dollar it spends and is now unable to issue new debt to cover the difference.
The tide turns briefly on October 22, when the government takes in $3.5 billion more than it spends.
But that temporary gain is soon erased. October 24 is an especially rough day: Treasury pays $1.8 billion to defense contractors, $2.2 billion to doctors and hospitals that treat elderly patients through the Medicare program, and $11.1 billion in Social Security, while taking in only $9.6 billion in taxes and other income.
One possible wild card: Treasury could lose the trust of the bond market.
Even though the government cannot add to the national debt at this point, it can legally roll over expiring debt. Investors have the opportunity to cash out about $100 billion worth of U.S. debt every week but choose to reinvest it. If fear of default causes investors to steer clear of new debt offerings, Treasury's finances could unravel almost overnight.
"It's very hard to predict," said Brian Collins, an analyst at the Bipartisan Policy Center, which helped Reuters with this analysis. "It's the same thing that causes (bank) runs or credit markets to freeze."
OCT. 30
Default happens. By the end of the day, the government is $7 billion short of what it needs to pay all of its bills.
So who gets stiffed?
Everybody, according to the Obama administration.
Treasury says it doesn't have the ability to pick and choose who gets paid. The last time the government faced this situation in 2011, they planned to wait until public coffers were full enough to pay a full day's bills before cutting any checks, according to a Treasury Department watchdog report from 2012.

Read More Here

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Gross Says U.S. Will Avoid ‘Catastrophic’ Default on Debt

By Cordell Eddings - Oct 1, 2013 3:29 PM CT

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Pimco's Gross on U.S. Shutdown, Debt Ceiling

Pacific Investment Management Co.’s Bill Gross said the U.S. will avoid a “catastrophic” default on Treasury securities if lawmakers fail to extend the debt limit on the nation’s debt.

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Pacific Investment Management Co. Co-Chief Investment Officer Bill Gross said a default would trigger a “complex series of events worldwide” throughout financial markets. Photographer: Scott Eells/Bloomberg

“The U.S. Treasury is the center of the global financial complex,” Gross, manager of the world’s biggest bond fund, said during a Bloomberg Television interview with Trish Regan and Adam Johnson. A default would be “unimaginable,” as it would have “catastrophic” consequences on U.S. borrowing costs, and would trigger a “complex series of events worldwide” that would ripple through global financial markets.
The U.S. government began its first partial shutdown in 17 years after Congress failed to break a partisan deadlock by a midnight deadline. Congressional leaders have scheduled no further negotiations on spending legislation, raising concern among some lawmakers that the shutdown may have an impact on the more consequential fight over how to raise the U.S. debt limit to avoid a first-ever default after Oct. 17.
The odds of a default are “a million-to-one” as the Treasury Department will be able to take other measures to ensure it is servicing the country’s debt, Gross said.
“The Treasury is not going to default on their debt simply because the debt ceiling isn’t going to be raised,” Gross said. “There will be other repercussions like slower economic growth. But the Treasury is not going to default.”

Read More and Watch Video Here

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