Once upon a time, Congress didn’t want to raise the debt ceiling, and sent the country into default. It was bad, and we shouldn’t do it again. The end.

Back in 1979, Congress waited, and waited, and waited to lift the debt ceiling, because Congress never likes taking responsibility for the tax and spending decisions it’s already made. […] Congress did raise it right before defaulting on our obligations would have been unavoidable … but that didn’t let us avoid defaulting on our debt. At least not $120 million or so of it.
The government eventually paid back everyone what it owed with interest, but that didn’t erase this accidental default from the market’s memory. Short-term interest rates shot up 0.6 percentage points after the Treasury missed its payments, as you can see in the chart [above] from Terry Zivney and Richard Marcus, and remained higher than they otherwise would have been for a few months at least. It wasn’t the end of the world, but it wasn’t exactly something we want to repeat either.

But it would be much, much closer to Armageddon if we did this today. Blame shadow banking.

  1. Beer and Bobbo says:

    Not to worry, all the guns we have will protect us against such tyrannical action by our lawless gubment.

    -or- it could be Mass Hysteria of Biblical Proportions:


  2. BubbaMustafa says:

    Seniors can have a cat-food Valentines while we pay the Chiners.
    Thats the PRO AMERICAN WAY! (oh, did I mention that Congress and Senators WHO GOT US IN THIS MESS will get paid uninterrupted? Once again the American way, pass the buck.)

  3. dusanmal says:

    Default on the debt? Only if HRM Obama decides so. Congress have already passed legislation that would keep all essential parts of the Government AND debt payments covered by the existing direct income from taxes. Hence default can only happen intentionally by Presidential decision, it can’t happen from the refusal to raise debt ceiling.

    • Beer and Bobbo says:

      I’m not totally sure, but I think raising the debt ceiling is TOTALLY within the control/authority of the Congress …. meaning the Pres cannot even veto it.

      So—something that is TOTALLY the provence of Congress and totally fubared by the Right Wing Nuts is Obama’s fault because…….. YOU blame everything you don’t like on him?

      Well, at least that makes sense once we understand you have Obama Derangement Syndrome. Does it hurt or will aspirin take care of it?

      Stoopid Human.

      • Indy Nile says:

        It’s (still, and forever will be) all Bush’s fault, right?

        • bobbo, the pragmatic existential evangelical anti-theist says:

          Are you retarded …. or on drugs?

          I said what is only true: the debt ceiling is not Obama’s responsibility, its CONGRESS’ responsibility unless you think the President has an obligation to step on Congress’ authority and submit to their blackmale.

          How do you Get its BushtheRetards responsibility out of its Congress’ responsibility.

          You so stupid that you pay for stamps to send email.

          Yuk, yuk, YUK.

          ((Your are rather stupid.))


          • MikeN says:

            Your inability to read has once again reach conFusion levels. According to the poster above, who you think is on drugs, Congress has already passed a bill to avoid default, thus doing their responsibility. The President can sign a bill which would result in no default by the government, or he can not sign it, which would result in default or PERHAPS some other action to avoid default.

          • Derek says:

            Do not attack Bobbo’s messiah!

    • stormtrooper 651 says:

      Sure you mean HRH Obama? Unless you’re referring to Human Resource Management which would be similarly appropriate.

  4. The0ne says:

    No if and buts…zombies.

  5. Mr Diesel says:

    I wish someone in DC had a set of balls and just said no, we aren’t raising it. Let’s default go through whatever it brings and come out the other side.

    • msbpodcast says:

      Lets keep hitting ourselves in the head (electing 1%ers,) and see if our headaches go away…

    • McCullough says:

      How do I get out of this chickenshit outfit?

    • bobbo, the pragmatic existential evangelical anti-theist says:

      Poor Mr D==living that He Man fantasy again huh?

      Real Men==PAY THEIR DEBTS.

      What are you….. some kind of Welfare Queen?

      • McCullough says:

        I have no problem paying my debt…I do have a problem paying their debt.

        Big Fucking Diff.

        • bobbo, the pragmatic existential evangelical anti-theist says:

          Had to read that twice. The time to complain is when Congress runs up the debt NOT when its time to pay it.

          Shirley, you aren’t this easily taken in?

          • Mr Diesel says:

            I know the difference but unless someone grows a pair in DC we will continue to have these problems.

            Unfund ACA, cut several hundred agencies and reduce Medicare. Modest increase to military spending and bring all troops home to protect the US.

            National sales tax of around 12% with no increases ever and do away with income tax and the IRS.

            Balanced budget amendment unless there is a Congressional declared war.

            Congress only meets once every two years to work on things and term limits.

          • Derek says:

            Considering there is nothing we can do to stop the spending, the best we can do is cut up the cards.

          • Derek says:

            Sometimes, when the addict says “Just one more…”, it means they have no intent to stop being an addict. Sometimes you just have to say “No”, and let them sober up and come back to reality before they can start a new path.

    • Ryan says:

      You want a default? That’s the dumbest thing congress can do. Congress already approved the budget. Raising the debt ceiling is just allowing the government to pay the bills it’s already committed to! Doing what you suggest will cause interest rates to spike and force this country into a depression.

  6. Dallas says:

    My bet is we’ll raise it at the last minute but Teapublcans first have complete their ritual of masterbating each other.

  7. MikeN says:

    So they raise the debt ceiling and then refuse to pass spending bills for the upcoming year that add to the debt. Now what’s wrong with passing those at the same time?

  8. MikeN says:

    The deficit was coming down before Obama decided to raise taxes. All they needed to do was clamp down on the rises in Social Security Medicare and Medicaid spending that were accelerating their deficits, and they could have achieved balance in a few years assuming they didn’t spend the extra tax revenue. Now we have a likely reduction in tax revenue, though at least they held back on raising the capital gains taxes so perhaps they will end up OK.

    Meanwhile states like Louisiana and Wisconsin are looking to lower taxes. Louisiana is proposing to eliminate corporate and state income taxes, and Wisconsin wants to lower the state income tax as well. Do people here think this will be a boost for Louisiana or a loss?

    • deowll says:

      It has been a boost to those states with lower to no income taxes as any look and which states are growing and which states aren’t clearly shows.

  9. deowll says:

    There is enough money coming in to pay the interest. Not paying the interest would be the Presidents call. It just means he decided to spend the money some other way.

    Besides with 49 cents of every dollar spent being borrowed it’s just a matter of few years until we default one way or the other anyway.

  10. deowll says:

    Anybody know when the President is going to get around to submitting a budget? He’s going to miss the mandated date to present one again not that I guess it really matters. He hasn’t been able to get a single Democrat to vote for his budget in years.

    • Mr Diesel says:

      Last one was voted down 99 to zero in the Senate wasn’t it?

      The fucking retard in the Whitehouse.

      • bobbo, the pragmatic existential evangelical anti-theist says:

        Once again—blaming Obama for what is CLEARLY congress’ fault.

        Its more than 3 dots, so I won’t repeat the details.

    • bobbo, the pragmatic existential evangelical anti-theist says:

      Hey Bird.

      If I toss you a hand grenade with the pin pulled and it blows up, who is responsible?

      Childish the way our Politicians act like school children in the playground–why are you also in the mud?

      There is a range and time appropriateness for carry over issues anytime there is a transition of any kind.

      It is breathtaking though how the Pukes want to Take Credit for Osama’s Death after BushtheRetard said he had given up and it wasn’t important some 3 years after being out of Office, and yet won’t take responsibility for the Crash of 08 that occurred during their own term.

      Dontcha THINK?

      • birddog says:

        Liberals blame George W. Bush for the economic crash. Conservatives blame Barack Obama for the resulting high employment aftermath. Both are myths.

        The Glass-Steagal Act of 1933 separated commercial banks from investment banks and Savings and Loans. Glass-Steagal was enacted because of conflict of interests.

        Glass-Steagle was watered down throughout the 1990’s under Bill Clinton. The first blow was banks could loan money to businesses (commercial banking) and loan money to home owners (Savings and Loans). The second blow was allowing banks to also become investment banks (underwriting and selling securities). Bill Clinton signed both into law.

  11. Uncle Patso says:

    MikeN said, in part:

    “… Congress has already passed a bill to avoid default…”

    Huh? Did I miss reading the news one day? What bill was that?

    And why do so many non-zillionaires believe the thing to do is destroy the safety net and institute regressive taxes?

    “If we all just shoot ourselves in the foot, all will be well…”???

    • MikeN says:

      I have no idea. I missed it too. I’m merely referring to what the previous post said, which Bobbo misunderstood.

      I also missed that the House passed a way to avoid the ‘fiscal cliff’ way ahead of the Senate.

  12. bobbo, the pragmatic existential evangelical anti-theist says:

    Mickey==what you talkin’ bout? The issue is who’s responsibility is it to raise the Debt Ceiling?

    1. Obama?
    2. BushtheRetard?
    3. Or Congress?

    Congress thru adroit budget management is supposed to “control” the UNBUDGETED spending by an errant President. NOT BLACKMAIL a president who is simply implementing Congressional spending authority.

    See the Diff?

    • MikeN says:

      Your conFusion is getting worse. Perhaps you should go re-read the posts you responded to above. Then again such an action never helped Mr ConFusion either.

      How is it blackmail to have Congress adjust its spending under what you admit is its spending authority?

      • bobbo, the pragmatic existential evangelical anti-theist says:

        Well…we are both calling the other confused.

        while we could both be right, my money is on only one of us being clueless as to what the debt ceiling conflict is all about.

        That demonstrates an interesting conjecture: If A see’s “something” and B says they do not, is it more or less likely that something is there?

        Know what I mean?

  13. Captain Obvious says:

    The house Republicans will roll over. They’re going to spend the next two years finding electable Senate candidates and figuring out how to talk to black people.

    • bobbo, the pragmatic existential evangelical anti-theist says:

      Let me fix that: “talk to voting relatives of illegal aliens.”


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