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HonestChieffan
07-18-2011, 12:41 PM
I find this to be incredibly stupid if it is true. Probably dangerous if its true. And demonstrates the incompetence of the people at the highest levels if its true.

Would you not expect a series of alternatives to have been developed, evaluated and in place should the ceiling not be raised?

Would you not have started the process globally in the financial community to explain the steps in play to deal with the issue if congress does not raise it?

Would you not have made those contacts thorough treasury and the fed to contain any adverse reaction?

This is not a jab because he is Obama's guy, its a very real fear that regardless, R or D, if we have elevated people to this level who are this grossly incompetent we are more screwed than I thought.

http://thehill.com/blogs/blog-briefing-room/news/171983-geithner-no-back-up-plan-if-debt-limit-not-raised

(Briefing Room) — Treasury Secretary Timothy Geithner said Monday there is no backup plan if Congress does not raise the debt ceiling, but expressed optimism that talks were moving towards a deal.

“Our plan has been — and it’s the only plan available — is for Congress to act,” he said Monday on CNBC. “Their plan and our plan is for Congress to raise the debt limit.”

Geithner, who said he spent both days of the past weekend, “all day,” at the White House, said that “despite what you hear … people are moving closer to together” in debt-ceiling negotiations.

He said that leadership of both parties has taken default “definitively off the table.”

Geithner praised Senate Minority Leader Mitch McConnell’s (R-Ky.) recent fallback proposal to raise the debt limit as a means to avoid default by “making sure the politics can’t stand in the way of very sensible fiscal reforms.”

alnorth
07-18-2011, 12:50 PM
There is no possible backup plan. If we cant pay our bills, we cant pay our bills, and no amount of spin or bullcrap is going to un-spook the markets.

It is silly to even suggest a backup plan is possible.

HonestChieffan
07-18-2011, 12:56 PM
There is no possible backup plan. If we cant pay our bills, we cant pay our bills, and no amount of spin or bullcrap is going to un-spook the markets.

It is silly to even suggest a backup plan is possible.


This should be in the hall of fame of stupid posts.

There is always a back up plan even if the plan is how do we deal with the possible consequences of the ceiling not being raised. Since we clearly know there are major disagreements in exactly what the reaction would be, there are huge needs to evaluate each, understand the potential consequences, and be prepared to manage them in the most effective manner.

2bikemike
07-18-2011, 09:59 PM
This should be in the hall of fame of stupid posts.

There is always a back up plan even if the plan is how do we deal with the possible consequences of the ceiling not being raised. Since we clearly know there are major disagreements in exactly what the reaction would be, there are huge needs to evaluate each, understand the potential consequences, and be prepared to manage them in the most effective manner.

Yep, There is money coming into the Govt. daily Its not like there won't be any money whatsoever come Aug. 2nd Sit down and prioritize what gets paid and what doesn't.

While it may not amount to much I would first stop any payments to all of congress and the Whitehouse. I would stop paying all those who sit in the seat previously and are enjoying those fat retirement checks. They all have had a hand in the train wreck. Don't pay anything other than the bare essentials.

Hell thats what I would be doing if it were my personal budget.

chiefforlife
07-18-2011, 11:00 PM
The "back up plan" is what do we do after the debt ceiling is raised. No one, truly believes the debt ceiling wont be raised, except maybe you.
Seriously who would purposely default on anything that would ruin an "AAA" credit rating? That alone would amount to an incredible tax increase that no one can afford.

HonestChieffan
07-19-2011, 10:51 AM
The "back up plan" is what do we do after the debt ceiling is raised. No one, truly believes the debt ceiling wont be raised, except maybe you.
Seriously who would purposely default on anything that would ruin an "AAA" credit rating? That alone would amount to an incredible tax increase that no one can afford.

Of course it should be raised. The money is already spent and allocated. But, crazy stuff happens and its possible that the votes are not there....thats why you have contingency plans.

trndobrd
07-19-2011, 11:14 AM
Of course it should be raised. The money is already spent and allocated. But, crazy stuff happens and its possible that the votes are not there....thats why you have contingency plans.


This is the "Hope".

orange
07-19-2011, 12:48 PM
It's not as if we've seen something like this before...

... oh, wait. http://en.wikipedia.org/wiki/United_States_federal_government_shutdown_of_1995_and_1996

HonestChieffan
07-20-2011, 06:06 PM
Everything the administration turns into a damn lie.

http://www.reuters.com/article/2011/07/20/us-usa-debt-fed-idUSTRE76J6IT20110720?feedType=RSS&feedName=topNews&rpc=22&sp=true


FU Obama. FU Geitner.

alnorth
07-20-2011, 06:29 PM
This should be in the hall of fame of stupid posts.

There is always a back up plan even if the plan is how do we deal with the possible consequences of the ceiling not being raised. Since we clearly know there are major disagreements in exactly what the reaction would be, there are huge needs to evaluate each, understand the potential consequences, and be prepared to manage them in the most effective manner.

Whatever, your post clearly implied we should have some magical plan to keep the markets from panicking.

That is impossible. There is no possible way to avoid a panic, crash, and double-dip recession if the ceiling is not raised for an extended period of time. There is no possible backup plan to prevent that.

OBVIOUSLY prioritization plans have been made on who gets paid before who, and stories today have said as much with Treasury and Fed banks having already met to discuss who will get paid.

If you seriously thought there was no discussion on who should get paid first, that is a pretty looney thought. I presumed you didn't mean that because that would be pretty nutty even for this board.

Calcountry
07-20-2011, 07:38 PM
I find this to be incredibly stupid if it is true. Probably dangerous if its true. And demonstrates the incompetence of the people at the highest levels if its true.

Would you not expect a series of alternatives to have been developed, evaluated and in place should the ceiling not be raised?

Would you not have started the process globally in the financial community to explain the steps in play to deal with the issue if congress does not raise it?

Would you not have made those contacts thorough treasury and the fed to contain any adverse reaction?

This is not a jab because he is Obama's guy, its a very real fear that regardless, R or D, if we have elevated people to this level who are this grossly incompetent we are more screwed than I thought.

http://thehill.com/blogs/blog-briefing-room/news/171983-geithner-no-back-up-plan-if-debt-limit-not-raised

(Briefing Room) — Treasury Secretary Timothy Geithner said Monday there is no backup plan if Congress does not raise the debt ceiling, but expressed optimism that talks were moving towards a deal.

“Our plan has been — and it’s the only plan available — is for Congress to act,” he said Monday on CNBC. “Their plan and our plan is for Congress to raise the debt limit.”

Geithner, who said he spent both days of the past weekend, “all day,” at the White House, said that “despite what you hear … people are moving closer to together” in debt-ceiling negotiations.

He said that leadership of both parties has taken default “definitively off the table.”

Geithner praised Senate Minority Leader Mitch McConnell’s (R-Ky.) recent fallback proposal to raise the debt limit as a means to avoid default by “making sure the politics can’t stand in the way of very sensible fiscal reforms.”You sunsabitches should have listened, and got food insurance.

Who spent us here? Screw the debt ceiling. I mean, if it mattered, then why the fug did he spend the money?

Amnorix
07-20-2011, 07:56 PM
This should be in the hall of fame of stupid posts.

There is always a back up plan even if the plan is how do we deal with the possible consequences of the ceiling not being raised. Since we clearly know there are major disagreements in exactly what the reaction would be, there are huge needs to evaluate each, understand the potential consequences, and be prepared to manage them in the most effective manner.

What could the backup plan possibly be? You're either defaulting on the debt, not paying federal worker salaries (like all of them), not paying any military contractors (like all of them), not paying social security recipients, not paying anyone for Medicare, or cutting soemthing like 35-40% across the entire board.

No matter which option you take, you're talking about instant downgrading of America's debt, which opens the path to some sort of financial armageddon.

Because you cannot sugarcoat this, and because it is literally unfathomable that our political leadership would be so grossly irresponsible as to allow this to happen, I don't have much problem with not bothering to have some kind of contingent plan.


You also need to realize how credit markets work. The more you start acting like you MIGHT default, the more your creditors (and the credit markets) start acting like you WILL default, which means nobody buys your paper and you get downgraded debt, which effectively would be a multi-trillion dollar tax increase on all Americans, with no benefit in terms of deficit reduction or increased services.

alnorth
07-20-2011, 08:53 PM
You also need to realize how credit markets work. The more you start acting like you MIGHT default, the more your creditors (and the credit markets) start acting like you WILL default, which means nobody buys your paper and you get downgraded debt, which effectively would be a multi-trillion dollar tax increase on all Americans, with no benefit in terms of deficit reduction or increased services.

Exactly. The idiot Bachmanns of the world think that as long as we pay the interest on the debt, everything will be peachy. This line of thinking says that some people will scream about not getting paid and there will be a fight over the budget, but our credit will be fine.

Bullcrap. If we stop paying social security, or contractors who our army depends on, or the army themselves, or medicare, or federal employees, then our credit will be downgraded regardless of whether we miss an interest payment or not. Maybe not instantly, but if the situation persists for months where we voluntarily let a lot of people go through this pain, it will fall.

If I'm a bondholder and I see a nation who is willing to let, say an old person not get his social security check, not because the government was out of money, but just because the government didnt feel like paying, then why would I feel comfortable that my bond debt will always have higher priority? Congressmen and presidents who may have me #1 today may lose elections, and if the country crosses that bridge of voluntarily deciding not to pay their bills, they don't deserve a AAA rating because I could be next. The rating agencies would be insane not to downgrade us if we stop paying all our bills for an extended period of time.

If you stop paying 2 of your 3 credit cards and your mortgage, eventually your credit will tank, and your 3rd credit card, who you are still paying, will get nervous and cut their liability exposure to your flakeyness.