Why Doesn't the US Just Default?

[San Lumen]

So that's a justification for spending obscene amounts of money on defense?

One nation spending more than all the others, so that war becomes obsolete and everyone else can spend on other things? I personally don't have an issue with that

We borrow tons of money to pay for defense contracts for ships and planes we don't need and the military has said so.

[USS Donald Trump]

One nation spending more than all the others, so that war becomes obsolete and everyone else can spend on other things? I personally don't have an issue with that

We borrow tons of money to pay for defense contracts for ships and planes we don't need and the military has said so.

The military doesn't get shit what they ask for. Congress makes the rules.

[The Liberated Territories]

Politics doesn't work the same way business does.
That's why.

Then give me the ability to print my own money! I could qualify as a government.

[San Lumen]

Politics doesn't work the same way business does.
That's why.

Then give me the ability to print my own money! I could qualify as a government.

Thats a ridiculous statement

[The Liberated Territories]

Then give me the ability to print my own money! I could qualify as a government.

Thats a ridiculous statement

Why not?

If you take the idea that governments are not like households, then why not let everyone print their own money? It'd solve a lot of problems...

[USS Donald Trump]

Politics doesn't work the same way business does.
That's why.

Then give me the ability to print my own money! I could qualify as a government.

You could print your own currency for use and if you can distribute it amongst a town, it could become legal tender anywhere its accepted. So, yes, you can.

[San Lumen]

No I didn't. What is your opinion of my OP?

Just what exactly do you mean by going back to simpler times exactly?

What I mean is going back to a time when one countries stock market dropped or economy contracted the rest of the world didn't suffer.

[USS Donald Trump]

Just what exactly do you mean by going back to simpler times exactly?

What I mean is going back to a time when one countries stock market dropped or economy contracted the rest of the world didn't suffer.

Its far too late for that.

[Britanania]

Just what exactly do you mean by going back to simpler times exactly?

What I mean is going back to a time when one countries stock market dropped or economy contracted the rest of the world didn't suffer.

That was pretty much never

[The Liberated Territories]

Then give me the ability to print my own money! I could qualify as a government.

You could print your own currency for use and if you can distribute it amongst a town, it could become legal tender anywhere its accepted. So, yes, you can.

Mmm mm, see we tried that with Liberty Dollars. The government didn't like that for some reason. Called it "terrorism."

Canadian Tire Money seems to be a better investment these days. Same with Bitcoin.

[Sack Jackpot Winners]

We borrow tons of money to pay for defense contracts for ships and planes we don't need and the military has said so.

The military doesn't get shit what they ask for. Congress makes the rules.

This.

It's an exceedingly common myth that the armed forces "get anything they want". No, they don't, and the inefficiency at which the funds are used is Congress's fault. You boost funding by 15-20% and then five years later you cut it again creates gaps. It costs a hell of a lot to keep that carrier group that you bought five years ago floating.

[San Lumen]

What I mean is going back to a time when one countries stock market dropped or economy contracted the rest of the world didn't suffer.

Its far too late for that.

How is it far to late?

[USS Donald Trump]

You could print your own currency for use and if you can distribute it amongst a town, it could become legal tender anywhere its accepted. So, yes, you can.

Mmm mm, see we tried that with Liberty Dollars. The government didn't like that for some reason. Called it "terrorism."

Canadian Tire Money seems to be a better investment these days. Same with Bitcoin.

[url]https://en.wikipedia.org/wiki/List_of_community_currencies_in_the_United_States
[/url]
https://en.wikipedia.org/wiki/List_of_community_currencies_in_Canada

[Greed and Death]

I needed a good laugh thank you.

Member of the G7, fourth highest military expenditure in the world, cultural powerhouse. UK is doing pretty well, in spite of once having a large debt. Sure, it isn't the Empire on which the Sun never sets anymore, but it's not like we're talking about Greece or God forbid Syria here

In the same way that Bucky did well with Captain America yes I know.

[The Liberated Territories]

Mmm mm, see we tried that with Liberty Dollars. The government didn't like that for some reason. Called it "terrorism."

Canadian Tire Money seems to be a better investment these days. Same with Bitcoin.

[url]https://en.wikipedia.org/wiki/List_of_community_currencies_in_the_United_States
[/url]
https://en.wikipedia.org/wiki/List_of_community_currencies_in_Canada

The fact is the vast majority of those currencies are local currencies, e.g. they don't circulate much at all. Those are legal, yea.

What is illegal is creating a currency and trying to sell it on a federal scale, like Liberty Dollars.

[Ashkera]

who cares about your company? the government is not a company. it is not a household either. stop comparing it to them.

it would really really really piss everyone off btw

so what? Why should we keep borrowing and going further and further into debt?

Americans want first world services from their government, but they don't want to pay for it. Also, it's unclear why but probably cultural, America's government isn't the most efficient, either.

Do you want to be the guy that has to tell American voters that either:
A) their taxes are going to go up, or
B) we're going to disband the military and cancel welfare?

Not going to happen. The supposed "party of fiscal responsbility" is committed to tax cuts regardless of whether they can actually pay for them, and their opposition seem unlikely to embrace programs that would bring about true government efficiency.

Completely cancelling all welfare would result in riots, and possibly revolution. People would not meekly sit around, waiting to starve to death in order to preserve the current order.

[San Lumen]

so what? Why should we keep borrowing and going further and further into debt?

Americans want first world services from their government, but they don't want to pay for it. Also, it's unclear why but probably cultural, America's government isn't the most efficient, either.

Do you want to be the guy that has to tell American voters that either:
A) their taxes are going to go up, or
B) we're going to disband the military and cancel welfare?

Not going to happen. The supposed "party of fiscal responsbility" is committed to tax cuts regardless of whether they can actually pay for them, and their opposition seem unlikely to embrace programs that would bring about true government efficiency.

Completely cancelling all welfare would result in riots, and possibly revolution.

Welfare would;t be completely cancelled nor would taxes go up. If you cut defense spending by 50 percent and taxed corporations like people you'd have more than enough to pay for stuff without having to borrow money that is never going to be payed back.

[Neu Leonstein]

How is it far to late?

How far back do you think we'd have to go? My sense is that people underestimate how old the globally interconnected economy and financial system is...

[Grand Britannia]

First off a country is by no means a corporation, and there are people who actually count on that debt (other nations). The debt ceiling itself is a moronic idea since it forces us to go through this issue over, and over again.

Why is it a moronic idea? And how to other nations count on our debt?

A good idea by itself. However, it's mostly a political tool used by Congress to make the President look bad.

[San Lumen]

How is it far to late?

How far back do you think we'd have to go? My sense is that people underestimate how old the globally interconnected economy and financial system is...

I would say the 1920s which in my opinion was of one best decades.

[Benuty]

How far back do you think we'd have to go? My sense is that people underestimate how old the globally interconnected economy and financial system is...

I would say the 1920s which in my opinion was of one best decades.

Uh...


https://en.wikipedia.org/wiki/Causes_of ... mic_policy

[Quokkastan]

How far back do you think we'd have to go? My sense is that people underestimate how old the globally interconnected economy and financial system is...

I would say the 1920s which in my opinion was of one best decades.

Which culminated in a global economic collapse, sort of proving that the economy was globally interconnected even then, and also that their economic policies at the time were probably not the best.

[Neu Leonstein]

I would say the 1920s which in my opinion was of one best decades.

Huh? You mean the same 1920s in which a financial crisis in one part of the world, caused by unstable international capital flows and dodgy monetary systems unequipped to handle them, literally brought down the entire world economy?

[American Imperial State]

When you legally default, the bank is forced to forgive your loans.

When a government defaults(says, 'we won't pay back our loans'), it's forcing other countries to give up the money they've given us. First of all, everything in the U.S. financial system relies on these loans. Interest rates for houses and credit cards, new cars etc would skyrocket. The housing market would crash, it would probably cause the stock market to crash because investor confidence would fall.

Countries would be hesitant to loan us anymore money, if they loaned us at all. So we'd be forced to cut government spending by huge margins which would probably result in massive layoffs and the shutdown of federal facilities all across America. Our economy would collapse. Since our economy is so large and interconnected, it would cause a worldwide meltdown unseen since Black Tuesday in 1929.

I would imagine it would result in many people losing their homes, all their savings would become worthless as a result of either the massive inflation or the crash of the stock market. Everything in your bank account would become worthless, and just like Germany in the '20s or Venezuela today, you'd need a wheel barrel full of money to buy a loaf of bread(if you could find some.) There would probably be a run on banks and they'd limit withdrawals(not that it would do you any good since the money would be worthless.)

Unemployment would skyrocket to astronomical amounts and large numbers of people would be out of jobs. Retirement benefits provided by city and state governments would probably be slashed, along with all other benefits(since States rely on debts from the feds, but no one will loan the feds money.)

I imagine it would be a worldwide depression. And that is why it's better to just pay off our loans.

[Plembobria]

Erm. Okay. Government debt does not work like personal debt. At all. Governments borrow by selling bonds. Bonds are simply a promise to pay a certain amount of money to the holder with interest at a given time. The US government can borrow at some of the lowest interest rates out there. And the government can, if it wants to, continually borrow money to pay existing bonds, so long as they don't default. As long as bond holders get their check on time, they're happy. The only thing that will discourage creditors is a default, or a threat of one. When that happens, our bond rating is lowered and our rates will go up.

What happened with Greece is they defaulted several times in history, therefore they pay an extremely huge interest rate compared to most Western countries, thus hampering their ability to borrow. That is why they must be bailed out.

We are "paying back our debt." The constantly rising national debt is not debt added to an existing pile of unpaid debt. We pay bonds when they are due, but we sell new ones. Since we sell more than we buy the debt increases. But the actual bonds comprising the national debt change all the time.

Furthermore, the US Government is constitutionally prohibited from defaulting per the 14th amendment which states "The validity of the public debt of the United States [...] shall not be questioned."