How Will YOUR LIFE Change If The U.S. Government Can’t Borrow Anymore Money...?

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Johnny Oxygen's picture
Johnny Oxygen
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How Will YOUR LIFE Change If The U.S. Government Can’t Borrow Anymore Money...?

This is a video 'presentation' about a possible scenario from Agora.

Its very interesting and worth the time.

I'm unable to post it in its current format so here is the link.

http://agorafinancial.com/reports/AWN/cc/AWN_cc_alt_timeline_vp.php?code...

 

 

JAG's picture
JAG
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Pure Marketing
Johnny Oxygen wrote:

Its very interesting and worth the time.

Really? All I see is a marketing campaign for Agora Financial. 

dshields's picture
dshields
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The Question

--- How Will YOUR LIFE Change If The U.S. Government Can’t Borrow Anymore Money...?

That's the title of this thread.  I think it poses a very interesting question.  I think everybody's life will change.  This means the debt ceiling will not lifted.  It is hard to believe the repubs will have the courage to decide to stop the Fed Gov out of control spending.  If the dems could have done it they would have already increased it by a sizable amount, at least 2.5 trillion, so they would not have to face this issue again between now and the 2012 election.  But you never know, the repubs might just decide to not let them borrow anymore or at least not as much.  In the end the dems will sign any increase.  If the cut is big enough it will change everything.  We are over spending by 40% - a stunning  number.

1) The wars will have to end, the military will have to come home, and a sizable of amount of them will be let go.  Large military contracts with private sector companies will have to be canceled.  If you are in the military or work for a military contractor you could be in a world of hurt.

2) Obamacare will go - it simply can not be paid for.  It will either be repealed through some organized legislative process or it will collapse in chaos.  Either way it will go.  If you are in a depression, fancy expensive health care will be a privilege, not a right.

3) Social Security and Medicare will be cut back.  It is bad but maybe not a bad as you might think as stuff will start to actually cost less if the fed gov cuts are big enough.

4) The real losers will be the people who depend on the various "welfare" programs for their stability.  Food stamps, section 8 housing, and medicaid will also be cut.  So will a bunch of other ones.

5) Something not much thought about but will be impacted will be Fed Gov loan guarantees.   These will also have to be cut back.

6) Student Loans - cut big

7) The intelligent gathering agencies, and there are a bunch of them, will have to be cut back substantially.

People are calculating that cutting fed gov spending by 40% will result in a 8% reduction in GDP.  That is huge.  Everything will change.  A lot of people will lose their jobs - maybe a few million.  It will be a very serious thing.  They will not default, they will pay the interest and principle due on US Treasury instruments because they will have to or there will be a world wide collapse.  That will not be allowed.

What happens after that is what worries me the most.  If they do not rasie the debt ceiling the fed gov might declare a national emergency and start doing who knows what.  I know it sounds crazy but our government is already acting way outside the limits of the constitution or we would not be in this shape.  I can't imagine what they might try to do.  Desperate and powerful governments sometimes do surprising things in times of emergency.  It is something to ponder...

 

 

Damnthematrix's picture
Damnthematrix
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No wucking furries mate.......

The debt ceiling WILL be lifted.

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Poet
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The Debt Ceiling Will Get Raised Again
dshields wrote:

It is hard to believe the repubs will have the courage to decide to stop the Fed Gov out of control spending.  If the dems could have done it they would have already increased it by a sizable amount, at least 2.5 trillion, so they would not have to face this issue again between now and the 2012 election.  But you never know, the repubs might just decide to not let them borrow anymore or at least not as much.  In the end the dems will sign any increase.

It's funny that you still hold one party as a notch above the other. Especially considering they were happy to be instrumental in raising the debt ceiling 5 times for George W. Bush's signing pen.

Don't worry. The debt ceiling will get raised again. Both sides will talk like they won or find some way of spinning complicity into victory. Just like Bachmann has been completely silent on reducing Social Security and Medicare, just like our senior citizens who like to think of themselves as "conservatives" will scream bloody murder if the entitlement checks aren't in the mail.

Poet

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dshields
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damnthematrix and poet

I agree with both of you - they are going to raise the debt ceiling.  I am not sure about how much.  The dems want to raise it a lot so they do not have to visit this issue again before the 2012 election.  Why do you believe that is ?  The repubs want to increase it much less.  Why do you believe that is ?  Why would the dems not want to revisit this issue before the 2012 election ?

I know what the repubs used to do and they should hang their heads in shame - you are correct about that.  There are many examples of shameless repub behavior - no question about it.  However, since the 2010 mid-term election they have been doing somewhat better.  I think you have to admit that also.  Is it perfect ?  No.  Will it be perfect ?  No.  But right now they are actually trying to come up with a way to slow down the out of control spending spree.  Did a number of the repubs vote in the past for the same spending spree they are now trying to stop ?  Yes.  So it is a little weird as they voted for the spending spree they are now trying to control.  However, it must also be said that the at this point I do not see the dems doing any serious talking about making big cuts to spending.  They are strongly resisting the proposed repub cuts.  The dems appear to want to just keep the spending spree up until they cause a collapse.  I believe that is an irresponsible position on the dems part.

But I think if you take a hard look at what is going on right now between the two parties what you see is a general resistance by the dems to serious budget cuts and a general push by the repubs for serious budget cuts.  Am I wrong ?

The question the thread posed was what if they do not raise the debt ceiling.  If they do not raise it, I believe it will be a very serious thing.

 

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goes211
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It's too late already

Here is an interesting article in the Atlantic on what is the end game for Republicans and the debt ceiling. 

http://www.theatlantic.com/business/archive/2011/07/debt-ceiling-whats-t...

I've tried to roughly prioritize spending as I think is politically palatable to both tea partiers and others: the debt payments first, followed by military payrolls and family housing, VA benefits, Social Security, Medicare and Medicaid. After that, we hit the red bloc: funding for military operations. Somewhere in there, the money runs out. Anyone in line after that doesn't get paid.

The problem is, prioritizing strictly the way this chart does won't work. Are you really going to just stop funding current military operations on August 3rd? You're going to leave a bunch of guys sitting in Iraq and Afghanistan and Libya with tanks and automatic weapons and no way to get them home?

Going to empty the prisons? How many guards do you think turn up for work when you stop paying them?

How about border control? I don't think it's going to be popular with the GOP base when you cease border enforcement and invite anyone who wants to to stroll across our unmanned border checkpoints. However much you hate the ATF and the DEA, they are a small fraction of this sort of spending at the federal level.

If we cut all funding for "general government", who is going to collect the revenues that you need to pay for all the social security checks and Medicare payments you plan to move out?

How long are landlords going to let tenants ride when Section 8 checks don't arrive? Going to let kids sleep on the streets?

Is your kid planning to take out a student loan for college this fall? Not any more, they're not.

With joblessness going up, you're going to get an earful when unemployment checks don't arrive.

. . . and when the mortgage market shuts down because Fannie and Freddie and the FHA stop writing checks.

Also, all those laid off state and federal workers are going to make the jobless numbers jump.

To the extent that you fix any of these problems, it means cutting into the sacred four: military payrolls, VA benefits, Medicaid/Medicare, and Social Security. Or defaulting on our debt. Also, when you cut spending, GDP is going to fall, which means that tax revenue will also fall, which means that we probably have to cut even deeper into those politically untouchable programs.

Okay, maybe this will really suck in the short term, but it's necessary to get us on a long term sustainable fiscal path.

. . . er, what long term? Voters are telling pollsters they're going to blame the Republicans for the shutdown. And the spending cuts you're going to do won't even be that popular with the tea party, who aren't much more enthusiastic about Medicare/Medicaid cuts than the rest of the country.

To me that sounds like "huge Democratic victory in 2012". I know, I know--if it's so "great for Democrats", why aren't they urging this course? Well, one school of thought says that they are--and neatly maneuvering the blame onto the GOP, thanks to the tea party's very vocal intransigence. But if that's a little too Machiavellian for your taste, the simpler answer is that this can be lose-lose. If we shut down the government, key social programs get hurt, the economy contracts, and the Democrats have to cut spending in a recession in order to make the budget balance after this little contretemps raises our interest rates. But the fact that the Democrats are worse off doesn't mean that the Republicans are better off. The Democrats can lose while the Republicans lose even bigger.

It is my opinion that the buget is already too out of wack to be fixed.  If that is the case then question then becomes is a default sooner going to be less painful than a default later.  I think the answer to this is probably yes, but even if that is the case, I don't think the average person will see it that way. 

At this point the system is a house of cards but the inevitable failure will probably be blamed on who ever did the final shake that caused the cards to start tumbling down.

tictac1's picture
tictac1
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I'm surprised people on this

I'm surprised people on this board still talk "republicans and democrats".  It's all theatre guys!  A magician's distraction.

This "house of cards", as it was so aptedly put, was built card by card, by every single president and congress, donkey or elephant, for at least the past 80 years.  Currency debasement and war are what built present-day America, sorry to say.  Because it works, if only in the short-term.

As for the Constitution, that got thrown under the bus before the ink was dry.  Look it up.  Check out the Whisky Rebellion, or Alexander Hamilton's "contributions" to this country.

Thinking that we will vote our way out of this mess is simply naive.

The debt ceiling WILL be raised, because it has to be to continue the status quo.  The money printing WILL continue, because it also has to.  Once this path is taken, you cannot turn around, you must follow it to its logical conclusion, collapse.  The only variable is time.

And yes, the history books will blame the collapse on the last one holding the bag, thus learning nothing, and dooming society to repeat the mistake within a few generations.

Gotta love human nature...:)

dshields's picture
dshields
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Posts: 599
tictac1 wrote: I'm surprised
tictac1 wrote:

I'm surprised people on this board still talk "republicans and democrats".  It's all theatre guys!  A magician's distraction.

This "house of cards", as it was so aptedly put, was built card by card, by every single president and congress, donkey or elephant, for at least the past 80 years.  Currency debasement and war are what built present-day America, sorry to say.  Because it works, if only in the short-term.

As for the Constitution, that got thrown under the bus before the ink was dry.  Look it up.  Check out the Whisky Rebellion, or Alexander Hamilton's "contributions" to this country.

Thinking that we will vote our way out of this mess is simply naive.

The debt ceiling WILL be raised, because it has to be to continue the status quo.  The money printing WILL continue, because it also has to.  Once this path is taken, you cannot turn around, you must follow it to its logical conclusion, collapse.  The only variable is time.

And yes, the history books will blame the collapse on the last one holding the bag, thus learning nothing, and dooming society to repeat the mistake within a few generations.

Gotta love human nature...:)

The constitution was thrown under the bus some time back like you said.  However, if you were to graph it I think you would find the "hockey stick" behavior.  For a long time we did pretty good with the constitution.  Then we got worse and worse and worse and now it really has been thrown under the bus and this a major contributing factor to many of the issues we face today.  We should be operating under a reasonably balanced budget and there should be minimal national debt.  If this was the case, we would be much much better off than we are now.  We would actually be a decent position to address the problems we face now.  With massive debt and crazy spending we are in trouble.  Many of the things we have done have been either just flat out unconstitutional or clearly not within the spirit of the constitution.  Almost all of these things have cost big money and have not contributed to the well being of the United States.  We have fostered an enormous class of dependency and that mistake is going to cost us dearly.  If the Fed Gov had not spent the SS funds we would be a lot better off now.  There is crazy spending every where you look.  Stopping the crazy spending is going to be very painful.  I guess I agree with you, the politicians simply do not have the wisdom or the intestinal fortitude to rein in the spending.  So, we are going to eat poop here in a while - I do not really see any way around it.

As far as the parties are concerned, I agree to a certain degree.  However, there does seem to be a marked difference as of late.  The dems are basically just pushing for continued spending.  The cut, cap, and balance bill being pushed by the repubs would actually take direct action against the out of control spending starting immediately - not a bunch of big talk with cuts pushed out into the future where they simply will not happen.  The reason the dems object strenuously to that bill is it would actually be effective.  The fact it would be effective, if not watered down, is pretty much a guarantee it will not be approved by the senate and if by some freak accident it was, then Obama would veto it for sure.  Repealing Obamacare, rolling back spending in a big way and thus reducing the power of the Fed Gov goes against everything Obama believes in.  He will veto anything that is effective in reducing the power/scope of the Fed Gov.  Right now that bill is scaring the crap out of the dems so they have leaped upon the so called gang of six thing which as far as I can tell does not reduce the scope and power of the Fed Gov at all.

 So, in the end, I agree with you - we are heading for the big reset.  Hang on to your hat, it may not be as far away as one might think.

 

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