Should the U.S. claim Bankruptcy?

Should the U.S. claim Bankruptcy? (Full Version)

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popeye1250 -> Should the U.S. claim Bankruptcy? (1/25/2008 8:57:47 AM)
I mean we're in debt up to our ears. What is it, $7-$9 Trillion Dollars in debt? It may as well be $100T we can't pay it anyway. And all this was just to run our government? This is what happens when we have lobbyists and lawyers in Washington writing legislation and going after Taxpayer Dollars voraciously. Take away the titles and fancy names, "Williams and Jones LLC", and what we have is total corruption in Washington. Those people are ROBBING the Taxpayers without a gun! And they're using Taxpayer dollars to buy votes. I'd love to see the Bloods or the Crips do some "drivebys" on "K" street.

Muttling -> RE: Should the U.S. claim Bankruptcy? (1/25/2008 9:08:18 AM)
What exactly do you mean by "claim bankruptcy"? Do you mean default on our national debt? That's really the only option for a country since international courts don't have bankruptcy laws. Do you have any clue as to what that would do to our economy? Just look to late 1920's Germany if you want to understand.

popeye1250 -> RE: Should the U.S. claim Bankruptcy? (1/25/2008 9:16:56 AM)
Muttling, yeah, bankruptcy, default, whatever name you want to give it. If we can't pay it anyway what difference does it make? Are we just supposed to keep pretending we can pay it? It would be good for our economy comming out of bankruptcy with a clean slate as long as we outlaw lobbyists and lawyers in Washington as a "condition." One thing is for certain, we cannot continue on this road we've been traveling.

Nosathro -> RE: Should the U.S. claim Bankruptcy? (1/25/2008 9:22:07 AM)
Actually it not so far fetched. There are many Counties like the one I am in that under Bankruptcy, Orange County California. The US under Regan foregave El Salvador for it debt, meaning they did not have to pay us. With a 7 Trillion Dollar debt and growing the government has to borrow more money just to pay the interest, more debt. At some point there will not enough money then what...have a yard sale?

Stephann -> RE: Should the U.S. claim Bankruptcy? (1/25/2008 9:22:40 AM)
Not paying our national debt will throw our economy into depression. It would be the 1920's all over again. Every dollar bill in your bank account and wallet would be less valuable than newspaper, and every bank that held your dollars would collapse (taking your money with it.) Not such a bad deal if you don't actually have any money, mind you; it would be the fatcats who would lose the most. Of course, we all remember what happened that pulled us out of the Great Depression... Stephan

Muttling -> RE: Should the U.S. claim Bankruptcy? (1/25/2008 9:30:18 AM)
On a side note, we CAN pull ourselves out of this hole but it first requires a BALANCED FUCKING BUDGET. The Federal government is a bit different than you and me as inflation will deflate the pinch of the debt even if we don't make headway on it. All we have to do is keep a fucking balanced budget and inflation will do the rest. Of course, by keeping a balanced budget we can also make headway on the debt. I totally agree that we can definitely NOT avoid default if we keep on the current track. It is really sad, but the year of my birth is a magical number...1969. That was the last year we had a balanced budget with the excpetion of the Clinton era and Clinton had to shut down the Federal government several times to make it happen. Republican or Democrat, we need a president who is THAT serious about balancing the budget.

DomKen -> RE: Should the U.S. claim Bankruptcy? (1/25/2008 9:30:24 AM)
You really have no idea what you're talking about Popeye. Let's say we do what you suggest. Everyone holding T Bills, T Notes and the like now have valueless paper. Which wipes out a lot of wealth both here and abroad. It would hit me personally for about 10K directly since I own a T Bond with about that much value. Secondarily it completely shuts down virtually all infrastructure construction projects nationwide, those are almost all paid for by issueing bonds which no one anywhere would buy. This puts tens of thousands of construction workers out of work. That ripples through the economy costing thousands more their jobs. Due to the complications of such an immense nation paying taxes and without the ability to issue short term T Bills, no one will buy them at any sort of reasonable interest rate, the US government cannot meet payroll in the short term without either simply creating lots of new dollars or by selling those T Bills at whatever interest rate the market demands. Either way causes serious inflation. Read up on the Weimar republic for the details.

popeye1250 -> RE: Should the U.S. claim Bankruptcy? (1/25/2008 9:31:11 AM)
quote: ORIGINAL: Nosathro Actually it not so far fetched. There are many Counties like the one I am in that under Bankruptcy, Orange County California. The US under Regan foregave El Salvador for it debt, meaning they did not have to pay us. With a 7 Trillion Dollar debt and growing the government has to borrow more money just to pay the interest, more debt. At some point there will not enough money then what...have a yard sale? Nos, yeah, and what the hell is the U.S. doing "forgiving third world debt?" What happened there was that the U.S. Taxpayer Dollars bailed out big banks that made bad loans to third world countries! And guess what, these very same banks are again making loans to third world countries who won't be able to pay them back! Can you say, "Fuck the Taxpayers up the ass and break it off?" And of course at some point in the future those same big banks will expect to be bailed out of those "new" bad loans again! So who's going to "forgive" the U.S. Taxpayers debt that the lawyers and lobbyists have gotten us into?

popeye1250 -> RE: Should the U.S. claim Bankruptcy? (1/25/2008 9:34:08 AM)
quote: ORIGINAL: DomKen You really have no idea what you're talking about Popeye. Let's say we do what you suggest. Everyone holding T Bills, T Notes and the like now have valueless paper. Which wipes out a lot of wealth both here and abroad. It would hit me personally for about 10K directly since I own a T Bond with about that much value. Secondarily it completely shuts down virtually all infrastructure construction projects nationwide, those are almost all paid for by issueing bonds which no one anywhere would buy. This puts tens of thousands of construction workers out of work. That ripples through the economy costing thousands more their jobs. Due to the complications of such an immense nation paying taxes and without the ability to issue short term T Bills, no one will buy them at any sort of reasonable interest rate, the US government cannot meet payroll in the short term without either simply creating lots of new dollars or by selling those T Bills at whatever interest rate the market demands. Either way causes serious inflation. Read up on the Weimar republic for the details. DomKen, well, we can't pay it back so what's your solution?

Muttling -> RE: Should the U.S. claim Bankruptcy? (1/25/2008 9:46:59 AM)
Popeye....Please refer to my post above. We can get out of this mess, just read some of Alan Greenspan's writings on the subject. However, Greenspan's dire warning as he left office was balance the damned budget.

DomKen -> RE: Should the U.S. claim Bankruptcy? (1/25/2008 9:48:34 AM)
We have to stop having defecit budgets. Once we have a decade or so of balanced budgets the long term debt will have declined significantly. Short term "cash flow" type debt is a fact of life for an organization as large and as complicated as the US government. Equally if not more important is changing who holds our debt. At present the trade imbalance with China is huge. The Chinese banks are holding all these dollars and show no sign of wanting to go on a shopping spree of Us landmarks like the Japanese did back in the 80's and 90's. Instead they're buying US long term debt. We need a much lower trade imbalance which will greatly reduce the amount of foreign ownership of our long term debt which reduces the chances that enough debt could be dumped on the world market for political purposes to have almost as bad a result for our economy as a default. Basically shut down Wal Mart until China opens their markets to our goods and services.

popeye1250 -> RE: Should the U.S. claim Bankruptcy? (1/25/2008 9:55:42 AM)
quote: ORIGINAL: DomKen We have to stop having defecit budgets. Once we have a decade or so of balanced budgets the long term debt will have declined significantly. Short term "cash flow" type debt is a fact of life for an organization as large and as complicated as the US government. Equally if not more important is changing who holds our debt. At present the trade imbalance with China is huge. The Chinese banks are holding all these dollars and show no sign of wanting to go on a shopping spree of Us landmarks like the Japanese did back in the 80's and 90's. Instead they're buying US long term debt. We need a much lower trade imbalance which will greatly reduce the amount of foreign ownership of our long term debt which reduces the chances that enough debt could be dumped on the world market for political purposes to have almost as bad a result for our economy as a default. Basically shut down Wal Mart until China opens their markets to our goods and services. Well Gee, that's going to require us to start MANUFACTURING things in this country again, isn't it? People who make $400 per week in "service" jobs don't pay a lot of taxes which would greatly improve our chances of getting out of debt like someone in manufacturing making $1,200 per week would. I'm with you on Walmart. I keep hoping that young people will start a new fad of lighting fires.

Muttling -> RE: Should the U.S. claim Bankruptcy? (1/25/2008 10:06:13 AM)
You guys are mixing up a LOT of unrelated terms here. Let me through out some definitions. I know MOST if not all of the posters on this thread know some of them, but those are for the benefit of the lurkers.... National Debt - This is what our government currently owes in loans. Federal loans are issued as bonds on the open bond market and there is a variety of kinds of bonds they issue. Mostly, it's how long the bond takes to mature that matters. Deficit Spending - This is when the government spends more money than it takes in during any given year. When we spend more, the national debt goes up as we must issue more bonds to make up the difference. (In short, we're spending money on the Federal government's credit card.) Who Holds Our Debt - We have absolutely NO control over WHO holds our debt and it really doesn't matter. The bonds are traded on the open bond market for anyone to buy and the terms are set by the U.S. government who issues the bonds. China holding most of our debt is really meaningless other than the fact that the interest payment on the debt goes out of country. They can't suddenly demand payment on the debt, they have to wait until the bond matures to request payment. Trade Deficit - This has absolutely NOTHING to do with the federal budget or the national debt or the topic at hand. This just means we buy more tangible goods from China than they buy from us. HOWEVER, services such as engineering design word are not included in the calculation and China buys a LOT of technical services from us.

popeye1250 -> RE: Should the U.S. claim Bankruptcy? (1/25/2008 10:13:16 AM)
Muttling, as long as we have Lobbyists and lawyers in Washington none of this is going to work.

Muttling -> RE: Should the U.S. claim Bankruptcy? (1/25/2008 10:21:34 AM)
quote: ORIGINAL: popeye1250 Muttling, as long as we have Lobbyists and lawyers in Washington none of this is going to work. Sure it can. We just need a president with the balls enough (or vagina enough) to shut down the Federal government to force a balanced budget. It has been proven that it can be done and was done by an attorney.

ChainsandFreedom -> RE: Should the U.S. claim Bankruptcy? (1/25/2008 10:32:01 AM)
quote: ORIGINAL: popeye1250 quote: ORIGINAL: Nosathro Actually it not so far fetched. There are many Counties like the one I am in that under Bankruptcy, Orange County California. The US under Regan foregave El Salvador for it debt, meaning they did not have to pay us. With a 7 Trillion Dollar debt and growing the government has to borrow more money just to pay the interest, more debt. At some point there will not enough money then what...have a yard sale? Nos, yeah, and what the hell is the U.S. doing "forgiving third world debt?" What happened there was that the U.S. Taxpayer Dollars bailed out big banks that made bad loans to third world countries! And guess what, these very same banks are again making loans to third world countries who won't be able to pay them back! Can you say, "Fuck the Taxpayers up the ass and break it off?" And of course at some point in the future those same big banks will expect to be bailed out of those "new" bad loans again! So who's going to "forgive" the U.S. Taxpayers debt that the lawyers and lobbyists have gotten us into? Popeye, 'declairing bankruptcy' would be EXACTLY the same thing as FORCING other countries 'to forgive our debt'. And then nobody will buy our governments debt every year we run over-budget, which is basically every year. And then we wont make billions off of 3rd world debts in interest every year. And then the US will be too poor to matter and the forigen version of you will make broad, overgenerallizing statements about Americans not being worth international investment and aid, and the economy which supports your stocks will turn to shit.

ChainsandFreedom -> RE: Should the U.S. claim Bankruptcy? (1/25/2008 10:36:15 AM)
Oh yeah, and if we stopped paying our debts, foriegn countries would make it a crime to do bussiness with America and we even more screwed. Which is exactly what we threatend to do to solve the debt-rebellions of all those south american countries who decided they couldn't afford to do bussiness with us in the '70s. My solution? travel back in time 50 years and make a constitutional amendment requiring all investors to pass a test on recent history before they could touch world markets.

popeye1250 -> RE: Should the U.S. claim Bankruptcy? (1/25/2008 10:58:56 AM)
quote: ORIGINAL: ChainsandFreedom quote: ORIGINAL: popeye1250 quote: ORIGINAL: Nosathro Actually it not so far fetched. There are many Counties like the one I am in that under Bankruptcy, Orange County California. The US under Regan foregave El Salvador for it debt, meaning they did not have to pay us. With a 7 Trillion Dollar debt and growing the government has to borrow more money just to pay the interest, more debt. At some point there will not enough money then what...have a yard sale? Nos, yeah, and what the hell is the U.S. doing "forgiving third world debt?" What happened there was that the U.S. Taxpayer Dollars bailed out big banks that made bad loans to third world countries! And guess what, these very same banks are again making loans to third world countries who won't be able to pay them back! Can you say, "Fuck the Taxpayers up the ass and break it off?" And of course at some point in the future those same big banks will expect to be bailed out of those "new" bad loans again! So who's going to "forgive" the U.S. Taxpayers debt that the lawyers and lobbyists have gotten us into? Popeye, 'declairing bankruptcy' would be EXACTLY the same thing as FORCING other countries 'to forgive our debt'. And then nobody will buy our governments debt every year we run over-budget, which is basically every year. And then we wont make billions off of 3rd world debts in interest every year. And then the US will be too poor to matter and the forigen version of you will make broad, overgenerallizing statements about Americans not being worth international investment and aid, and the economy which supports your stocks will turn to shit. Chains, that's what will happen anyway if we keep going down the road we're on. Comming out of bankruptcy you get a "fresh start."

ChainsandFreedom -> RE: Should the U.S. claim Bankruptcy? (1/25/2008 11:20:21 AM)
But seeing as countries can't declaire bankruptcy anyway and defaulting on our loans would be stealing money we're supposed to doll out over time, balancing the budget/generating new economic income would be far less radical and far more likely to work in our favor. the world has always been more than happy to buy US debt as long as they still make money off the interest- don't worry that isn't going to change any time soon. There's no need to go rouge nation and cripple world economies. Brazil, India, China, Germany, ect. are all done nicely bringing themselves up out of poverty and we arnt nearly as bad off as they were/are. Though it would be a good idea a quater century after Reagan to admit neo-conservativism and turning our nation into a corporate surfdom has done nothing but make most americans poorer and drag as further into debt.

Nosathro -> RE: Should the U.S. claim Bankruptcy? (1/25/2008 11:27:23 AM)
Stephenn I do agree that a Depression would not be good. However if you look at the world currentancy exchange the US Dollar is almost worthless. A Balance Budget would be a great idea however the last time we actually had surplus Congress spent all of it and more on pork barrel projects for their special interest friends. To balance the budget Congress is going to have to be controlled, unlikely. They are always inventing ways of getting around such things. One of the fastest ways Congress spends money is by "Earmarking" funds. A member of congress during budget talks simply writes into the budget "Earmark" funds of an amount to a specific company. No hearing are conducted as why this money should be given out. Every Congress member does this, why..simple in return for the earmark funds they get a campaign contribution.

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