Default means

1. 61

   tirelesstravelerposted 10 years ago

   If the government doesn't raise the debt limit we are going into default according to the mainstream media and the Democratic Party.  Default according to the dictionary: a failure to make a payment (such as a payment on a loan).  Where did all the tax money, the government collected, go?

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      Brenda Durhamposted 10 years agoin reply to this

      Ah, good question.
      Perhaps it went to hire more IRS agents to take money from people who don't buy into Obamacare's "tax" (actually a criminal fine) mandate.
      And/or all those "navigators" he hired to enforce (eh..."help people understand"  ) Obamacare.
      
      
      If America defaults, it will be de fault of its "President".

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      1. 61

         Disappearingheadposted 10 years agoin reply to this

         Brenda this is nothing to do with obamacare. Your nation's debt has been rising inexorably for decades and is the result of living beyond your means and financial mismanagement through successive administrations.
         
         Debt always increases faster than credit because it incurs a higher interest rate than that offered to lenders, the balance being retained by financial institutions. That's where all your country's money has gone.
         
         Ultimately this system of debit and credit is unsustainable as the economic system simply runs out of money. It is happenstance that this inevitable event has occurred during obama's time in office.

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            Beth37posted 10 years agoin reply to this

            I knew I shouldn't have bought that indoor pool.

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            Brenda Durhamposted 10 years agoin reply to this

            It does indeed have something to do with Obamacare.
            Of course there was debt before Obama.
            But he is intentionally and forcefully adding to that debt in several ways.
            So please try to understand that "my" Nation's debt is something that I probably have a better view of understanding than you do?

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   2. 49

      Ericdierkerposted 10 years agoin reply to this

      Many a household defaults on a credit card but keeps the car payment current.

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      1. 61

         tirelesstravelerposted 10 years agoin reply to this

         So they pick and choose what to default on.  I have listened to family members talk about what bills to pay, but they always make sure they have their comfort items.

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   3. 84

      psycheskinnerposted 10 years agoin reply to this

      All that matters is that the US has more money than it could ever pay back in one or two fiscal years even if they cut all costs and expenditures.  So they need to raise the debt ceiling, or they will default.  This is what could be call, [cough], a large debt.
      
      No government has balanced the budget since Reagan. Democrat or Republican.  I would have a lot more patience with the GOP if they did the one thing they should when they are in power, not spend more than they earn.

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         Beth37posted 10 years agoin reply to this

         I love your sense of humor... it's always hiding beneath your impressive intellect. Ive never had that issue.

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      2. 61

         tirelesstravelerposted 10 years agoin reply to this

         So true.

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2. 72

   Reality Bytesposted 10 years ago

   Even with the tax revenue, we have to borrow money just to cover the interest payments on the debt!
   
   That is completely sustainable...not!

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   1. 52

      AnalogousMethodposted 10 years agoin reply to this

      We don't have to borrow to pay our interest. We could easily pay our debts without raising the debt ceiling, but Obama's administration doesn't want Americans to know that. They want to make it sound like the government won't have any money, but even without raising the debt limit they will have $2.5 trillion for the year. The debt interest is only like $0.2 trillion, so I think we can afford it.

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      1. 84

         psycheskinnerposted 10 years agoin reply to this

         Um, no.  They would have an order of magnitude too little money to start paying down debt, with or without Obamacare.
         
         And in any case defaulting would get very costly very quickly because it will put a landmine under all of the structures that provide economic stability.

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         1. 52

            AnalogousMethodposted 10 years agoin reply to this

            You don't pay down government debt by paying it early. You pay down government debt by paying scheduled payments. Our current payments hover around $250 billion per year. If we didn't issue any new debt, we would slowly pay off all of our debt over the next 30 years.
            
            We have more than enough to pay our debt obligations, it's a manufactured crisis.

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            1. 57

               Education Answerposted 10 years agoin reply to this

               We only have plenty to pay for it if we balance our budget.  The budget is certainly not a manufactured crisis.  We've balanced our budget, what five times, in the past fifty years?  That's a crisis that is manufactured by our leadership in Congress, on both sides of the aisle.

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3. 60

   s4y g00dby3posted 10 years ago

   Think of it as a car payment, like someone said. If you don't pay for it for long enough, whoever lent you the money will now take ownership of it, because you defaulted on it.
   
   This is why you hear many people talk about how China will 'own' America and such.

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4. 81

   Dr Billy Kiddposted 10 years ago

   Nice question. There is an international part to default that many bloggers do not write about. It is the fact that the dollar is the world's currency. International markets use the dollar to figure the value of commodities, such as oil. If  there is a default on U.S. Treasury bond payments, the value of the dollar suddenly drops--for being unreliable.
   
   When the value of the dollar drops on the international market in a large why, economic chaos takes place. Every internationally traded good must be revalues using some new measure--perhaps the Euro. Meanwhile, the value of American's savings and retirement plans tumble because the value of the saved dollars drops.
   
   This is just example of why the government cannot let default happen. Politicians can extract concessions for their vote in raising the debt ceiling, however.. Last time around the default battle took place (2011), the deficit was cut about 800 billion over a ten year period. And that is why the yearly deficit in last 2 budgets were smaller than the year before.
   
   Worst case: The president could be pushed on this by a Congressional vote to default on America's debts. The president could actuallly keep borrowing money to pay U.S.A.'s debts if Congress votes for default. But the president could not use the money for new spending, only on past-due bills. This would have a political impact similar to the first shots fired during the Civil War. That's why no one really wants to go there except nihilists and people who have little knowledge of international economics, along with those who have a "rebel yell" ideology and want to kill off the U.S. government--and some of it's people.

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5. 0

   alexsaez1983posted 10 years ago

   I don't understand why people are up in arms about being "forced" to get health coverage. Isn't everyone "forced" by law to get car insurance? I'm also pretty certain that people can keep their own plans if they have them. So really, this leaves the uninsured, and I don't see why any uninsured person would want to not have health insurance.
   
   And Brenda, you're quick to blame Obamacare for the debt, but you and your kind seem to neglect the massive debt incurred by Bush for his multi-trillion dollar war. If you honestly think your healthcare is cheap, then you need to do some research. The U.S. spends more per capita on healthcare than any other developed nation - most of which use universal healthcare. Over 17% of America's GDP goes to health costs. If anything, Obamacare has the potential to reduce the debt.

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   1. 95

      wildernessposted 10 years agoin reply to this

      Of course you are not forced to get car insurance to protect the people around you from your actions.  It is completely your choice, determined by whether you choose to drive a car on public roads or not.  Or are you insinuating that you have a "choice" to live or not just like the choice to drive?
      
      I would love to health insurance, but already know that if I buy into Obama care there is nothing left to pay the copays and deductibles with.  A problem, then, in that I cannot afford the "Affordable Care Act".  I'll probably buy it rather than be penalized, but it will not change the fact that a large bill will still bankrupt me.

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      AnalogousMethodposted 10 years agoin reply to this

      Not only am I forced to get healthcare coverage, but I'm forced to pay more than double what it costs me this year, because I'm not only being forced to pay for myself, but I'm being forced to pay for someone else on top of that.
      
      No, people can't keep their plans if their plan goes away, and that is happening to millions. Millions more are seeing their coverage go down or their premiums go up.
      
      Just imagine, how would you like to be paying $1,000/month for great insurance this year, and because of the ACA, having your premiums go up to $1,500/month, and your deductibles double?

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      Education Answerposted 10 years agoin reply to this

      Owning a car is a choice.  Thus, auto insurance is not necessarily forced upon everybody.  Obamacare, on the other hand, forces either health insurance or a penalty just for being alive.  There is a difference.
      
      I'm part of Brenda's "kind."  I'm even more disappointed when a Republican borrows and increases the debt!  Plenty of blame belongs to Republicans.  Still, President Obama, at his current level of spending, will borrow more money than all forty-three presidents before him, combined!

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         Brenda Durhamposted 10 years agoin reply to this

         haha I just now saw this.
         I'm in good company if you're my "kind",  education answer!  haha.  Thank you. 
         I dunno what the other poster meant by my "kind",  but I know you meant "Republican" or "conservative", not just me personally,  but please allow me to take this personally and be happy, okay?   So good to meet "my kind" in that jungle out there!   Moments like this are few and far between for me around here! 

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            Education Answerposted 10 years agoin reply to this

            Well, our "kind" have to stick together. 

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            1. 0

               Brenda Durhamposted 10 years agoin reply to this

               
               

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