4 ms·

Capital will never let either scenario occur. It's all just theatre. The US will never default on debt, it's a convenient negotiation tactic to waterdown more

Capital will never let either scenario occur. It's all just theatre. The US will never default on debt, it's a convenient negotiation tactic to waterdown more progressive legislation. Just like how there's always 1-2 democrats that just can't get behind progressive legislation.

function_seven 3y ago
Yeah, I'm asking a hypothetical to see where it goes. Lots of things that would "never happen" seem to be happening, so I wouldn't be too sure of it. So, Treasury decides to punch through the debt ceiling. What happens next?
joelthelion 3y ago
> Capital will never let either scenario occur. It's all just theatre. The US will never default on debt, it's a convenient negotiation tactic That's true until it isn't. I hope you're right, but I worry that you're probably overestimating our politicians. They're not all playing 5D poker. Some are just plain stupid.
- Eji1700 3y ago
  Yep. Maybe when this started it was theater, but more and more i'm wondering if we've got enough idiots who think they stand to gain from something like this. It won't be some shadowy cabal of actors trying to overthrow things, it'll just be a bunch of headline hunting lunatics who can't think past the next hour.
  - ryandrake 3y ago
    Yea it would be great if it was just stupidity, but we have elected officials actively working to sabotage and undermine the government and economy. Our system of checks and balances didn’t really account for what happens when a sizable minority in government are bent in destroying it.
    - MichaelZuo 3y ago
      Have you even read the Federalist papers? A huge amount of consideration was spent on making sure a vocal and scheming minority could not usurp their design.
- MisterBastahrd 3y ago
  Defaulting on the debt would be an erasure of an entire political party nearly overnight. There is only one party that even attempts to hold the country hostage via debt ceiling tactics, and they are incredibly beholden to their corporate masters who would go absolutely nuclear on them should they actually follow through with that threat.
friend_and_foe 3y ago
The US will absolutely default on it's debt eventually. The debt ceiling debates every year are certainly theater though.
- topspin 3y ago
  The US can supply whatever amount of money is necessary to service any conceivable amount of debt. The US absolutely will debase its currency into toilet paper, but default is not a certitude. And it's not theater. When these debates occur the legislature is forcing the executive to face taking extraordinary steps. That's leverage used to negotiate budget deals.
  - immibis 3y ago
    The Federal Reserve can choose to print the money the Government spent. They're not the same entity and they don't have the same goals. If the Government spent the money and the Federal Reserve doesn't want to print it, that's uncharted territory.
    - topspin 3y ago
      > that's uncharted territory Thus, the "extraordinary steps" I mentioned. Some have argued the executive has the authority to do any conceivable thing necessary to ensure that the "validity of the public debt ... shall not be questioned," to include ordering the Fed to honor Treasury overdrafts. Another extraordinary step by the Treasury would be minting legal tender and depositing it with the Fed. The so called "trillion dollar coin" scheme. At the end of the day they'll do what they have to do. This story makes it very clear that the Fed is not interested in becoming the political target over US default, so don't imagine they're going to take some heroic stand.
      - JumpCrisscross 3y ago
        > include ordering the Fed to honor Treasury overdrafts The Treasury hasn't come close to proposing over drafting. It would sell Treasuries and then have cash. If that became problematic, it would mint. The Fed cannot, by law, lend money to the Treasury. It can't even purchase Treasuries from them directly.
deleted 3y ago
[deleted]
rufus_foreman 3y ago
>> The US will never default on debt The US has defaulted on its debt several times. For example FDR defaulted on the debt when he refused to pay back bonds denominated in gold with their face value and instead paid them back in devalued currency. The Supreme Court ruled that he had acted unconstitutionally, but also did not force the government to pay back the full value as FDR had said he would ignore such a ruling.

function_seven 3y ago

Yeah, I'm asking a hypothetical to see where it goes. Lots of things that would "never happen" seem to be happening, so I wouldn't be too sure of it. So, Treasury decides to punch through the debt ceiling. What happens next?

joelthelion 3y ago

> Capital will never let either scenario occur. It's all just theatre. The US will never default on debt, it's a convenient negotiation tactic That's true until it isn't. I hope you're right, but I worry that you're probably overestimating our politicians. They're not all playing 5D poker. Some are just plain stupid.

Eji1700 3y ago
Yep. Maybe when this started it was theater, but more and more i'm wondering if we've got enough idiots who think they stand to gain from something like this. It won't be some shadowy cabal of actors trying to overthrow things, it'll just be a bunch of headline hunting lunatics who can't think past the next hour.
- ryandrake 3y ago
  Yea it would be great if it was just stupidity, but we have elected officials actively working to sabotage and undermine the government and economy. Our system of checks and balances didn’t really account for what happens when a sizable minority in government are bent in destroying it.
  - MichaelZuo 3y ago
    Have you even read the Federalist papers? A huge amount of consideration was spent on making sure a vocal and scheming minority could not usurp their design.
MisterBastahrd 3y ago
Defaulting on the debt would be an erasure of an entire political party nearly overnight. There is only one party that even attempts to hold the country hostage via debt ceiling tactics, and they are incredibly beholden to their corporate masters who would go absolutely nuclear on them should they actually follow through with that threat.

friend_and_foe 3y ago

The US will absolutely default on it's debt eventually. The debt ceiling debates every year are certainly theater though.

topspin 3y ago
The US can supply whatever amount of money is necessary to service any conceivable amount of debt. The US absolutely will debase its currency into toilet paper, but default is not a certitude. And it's not theater. When these debates occur the legislature is forcing the executive to face taking extraordinary steps. That's leverage used to negotiate budget deals.
- immibis 3y ago
  The Federal Reserve can choose to print the money the Government spent. They're not the same entity and they don't have the same goals. If the Government spent the money and the Federal Reserve doesn't want to print it, that's uncharted territory.
  - topspin 3y ago
    > that's uncharted territory Thus, the "extraordinary steps" I mentioned. Some have argued the executive has the authority to do any conceivable thing necessary to ensure that the "validity of the public debt ... shall not be questioned," to include ordering the Fed to honor Treasury overdrafts. Another extraordinary step by the Treasury would be minting legal tender and depositing it with the Fed. The so called "trillion dollar coin" scheme. At the end of the day they'll do what they have to do. This story makes it very clear that the Fed is not interested in becoming the political target over US default, so don't imagine they're going to take some heroic stand.
    - JumpCrisscross 3y ago
      > include ordering the Fed to honor Treasury overdrafts The Treasury hasn't come close to proposing over drafting. It would sell Treasuries and then have cash. If that became problematic, it would mint. The Fed cannot, by law, lend money to the Treasury. It can't even purchase Treasuries from them directly.

deleted 3y ago

[deleted]

rufus_foreman 3y ago

>> The US will never default on debt The US has defaulted on its debt several times. For example FDR defaulted on the debt when he refused to pay back bonds denominated in gold with their face value and instead paid them back in devalued currency. The Supreme Court ruled that he had acted unconstitutionally, but also did not force the government to pay back the full value as FDR had said he would ignore such a ruling.