So if the USA defaults August 2nd, what will happen?

[Bek359]

Short term, probably nothing immediately. Long term, we're pretty fucked.

 

[BNguyen]

Ah, so eight years of "fiscally responsible" conservatisism finally caught up to them.
Unfortunate and terrible in the short term, but maybe good in the long term, as long as they can see that it was Bush's fiscally irresponsible governement and not Obama's that caused this. Obama was left with a huge mess to clean. It was already too late by that time.

Let's just hope Canada wakes up and boots Harper sooner than later as he seems to read from the same playbook as the Republiscans.

But isn't it Obama who is
1. paying off huge companies who turn around and pocket the money only to get more because Obama can't remember if he gave it to them or they lost it, and
2. he continues to trip around the world spending evermore cash on his personal plane just to apologize to countries that the US barely maintains relations with

Who's more to blame?
Bush, who tried to warn the people of Katrina and get back at the terrorists (even if it became more focused on oil)
or
Obama, who believes crapping cash into the hands of greedy CEOs will help them get out of the debts they created and does nothing but try to extend the influence of the government into the people's already not so private lives?
I'd have to say Obama is who is sending this country to hell in a hand basket

But, in all honesty, it's not entirely the politicians' faults that the economy is trashed, say thank you to every man or woman who owns a large company and decided to gamble with the stocks or spend what little profit there is on more private jets

 

[BNguyen]

Edited for Space.

The tax on the >200k group can indeed hurt small business, but it's irresponsible to let the executive board of Goldman Sachs and such only pay as much as they do (~40%) when the US Government itself is dangerously close to default.

Although, they may just use one of the many loopholes in the tax system (no tax on trust funds!) to dodge paying anything much.

So the problem, then, is the line set by the government, yes? Would it be better if we changes the definition of rich to someone who makes over a million a year? Or maybe even THAT is too low. I'm not really sure.

As for loopholes, I really don't know.

Well, the real issue is that once you earn enough money to really be considered super-rich, it's cheaper to hire a team of lawyers and accountants than to actually pay your tax. Maybe the ideal situation would include a tax break for small business owners, and a new tax bracket for people earning >500k or 1 million. Then again, those people tend to have enough power to influence politicians, so this probably won't happen.

they just have to form the law before the super wealthy can have a say in the matter, which usually just turns into a tax break for them as well as a huge bonus, courtesy of the taxpayers
as soon as we can fire every corrupt politician and hire some honest men and women to sort everything out, there will be no such thing as a fair government left pure of the winds of big business

 

[GrimTuesday]

First world nations can't default. Stop listening to the fear-mongering bullshit that a certain part of your media likes to propagate.

You're wrong, as evidenced by the default of Greece, Spain, Portugal, and Ireland which has contributed to the almost complete meltdown of their economies.

Basically, the government doesn't take in enough money for all the programs it runs. So to make up for the gap in revenues and what is actually required, they issue what are called bonds. For the most part, these are only worth between 50 and a couple hundred dollars and are mostly bought by your average citizen. Now there are also a type that are worth much more than that and are bought up by other countries for the most part. Now, if we were to default on our loans this would make the US's credit score go down, thus showing potential investers that the US is a less than secure investment, thus driving up the interest rates we pay to those countries that have purchased the bonds. So really, it means the the government will either not have as much money because other entities aren't buying our bonds, or the government is having pay even more in interest due to the lowered credit rating.

There are other things at work, but that is a basic explanation of why a default would be bad.

The funny thing is....a country like china who invests in us....Cant really do much about it. They get paid what we pay them and they can't tell us THE INTEREST RATE IS UP MORE MONEY PER YEAR THANK YOU....because they cant harm us or take anything away...Besides most of the money for bonds is domestic

Um, actually, if we don't pay the interest, our credit rating would be downgraded, and then, in the future, we would have to pay a higher interest rate just to get anyone to buy our bonds. And even if the majority of bonds are domestic (Which I highly doubt), WE WILL STILL HAVE TO PAY A HIGHER INTEREST RATE.

Basically, the government doesn't take in enough money for all the programs it runs. So to make up for the gap in revenues and what is actually required, they issue what are called bonds. For the most part, these are only worth between 50 and a couple hundred dollars and are mostly bought by your average citizen. Now there are also a type that are worth much more than that and are bought up by other countries for the most part. Now, if we were to default on our loans this would make the US's credit score go down, thus showing potential investers that the US is a less than secure investment, thus driving up the interest rates we pay to those countries that have purchased the bonds. So really, it means the the government will either not have as much money because other entities aren't buying our bonds, or the government is having pay even more in interest due to the lowered credit rating.

There are other things at work, but that is a basic explanation of why a default would be bad.

Okay this is the only really accurate explanation of what would actually happen. It wouldn't be the end of the world but it would be pretty bad for America's economy, and what's bad for the American economy is bad for the world. What some people don't understand is that both parties, like someone else here said, really want to raise the ceiling; it's not like the republicans want the country to default. It's just a bargaining chip. The republicans feel disenfranchised and powerless so they're using their votes in order to get concession they've wanted for a while. The default almost certainly won't happen, and even if it did, the Supreme Court would probably just call up the 14th amendment and declare the ceiling raised themselves if they agree on it. Although the court is fairly conservative, it's still fairly likely that it would be raised either way.

Political science major FTW

 

[banksy122]

It won't happen. China relies to much on USA to let it default. If USA falls, China falls and the rest of the world follows. The senate or whatever will meet an agreement and china will fund them for a few more years and then this will happen all over again.

 

[Phlakes]

Some bad shit.

So, anyone know a good, relatively wallet-friendly university in another country?

Try Canada. I was kind of stunned to find that a term at the University of Alberta (where I am) cost about 10% of Yale or other Ivy League schools. TEN PERCENT. And it's not a bad education, either.

Damn... Even if we don't default, I'm looking into that...

 

[Gwarr]

First world nations can't default. Stop listening to the fear-mongering bullshit that a certain part of your media likes to propagate.
If the USA was even close to defaulting, they'd raise taxes, cut spending or, you know, just move out of Iraq.

Iceland . First world country ya?

 

[TheRundownRabbit]

ugh... I really hate our Dumb and Dumber two party system... Free election my ass.

A-fucking-men, I live in a very republican family, and used to go to a very democratic high-school, so I had a first-hand look at the utter stupidity of both sides.

To me, its pretty unclear what will happen after August 2nd despite what the decision will be.

 

[Thaluikhain]

after adopting some distinctly dirty tactics to rally public support ala techniques devised by the Nazis (create fear in the population, use that fear to control and adopt whatever policy you choose. Discredit dissenters as unpatriotic. People will believe you are controlling them for their own safety). Sound familiar? 911 - Patriot Act - Dixie Chicks - kiss your freedom and privacy goodbye...

To be fair, more or less everyone uses that to some degree, and Bush wasn't anywhere as extreme as Hitler was. On the other hand, part of that might be due to Hitler being more competent at what he shouldn't have been doing.

 

[Scenttree]

Well, I did read that millions would miss out on social security payments somewhere.

 

[OniYouji]

Default? USA? So, they are resetting their options to the default, like when it was preset in 1776? Well...that certainly does seem apocalyptic. That's losing like 235 years of progress. You have no idea how much time it took to get that kind of playtime.

I can only assume that The USA was sold in a used nations store, and the new owner wants to overwrite the only save file on the cart.

 

[Malo_Tux]

I, for one, will be finding my way to the British Embassy and applying for a Settlement Visa. Best of luck America, we had a good run.

 

[Wintermoot]

I,m not sure but I think economic collapse of the USA.

I'm not completely sure. Either nothing or the fucking rapture from what I've been hearing.

Here's some answers.

Cut down on unneeded spending.
Cut down on government corruption.
Legalize and tax drugs.
CUT OUR FUCKING DEFENSE BUDGET!!!!
STOP BORROWING SO MUCH GODDAMN MONEY WE CAN'T PAY OFF!!!

I agree with this

 

[JustJuust]

I always thought that the US was too big to fail, other countries have too much at stake if the US defaults, and would help the US out to get it back on its feet so that it can pay them back. However, confidence in the US market would plummet, rich will still be rich, and the working class people of the US will feel the most impact (many gov't programs would get kicked to cut spending)

 

[Samurai Goomba]

I can't bring myself to give a fuck. It sounds like Y2K/The Red Menace all over again. America is like the boy who cried wolf. We're so scared of our own shadows, I've gotten used to it, so I think every crisis will just be another dud.

We'll see, bro. I personally think there were probably a lot of options we could have taken (and still can) to cut funding to programs that aren't giving us much back, but partisan nonsense continues to color EVERYTHING over here. The world could be literally in flames, and the Republicans and Democrats would fight over which side should get more ashes.

I think it could be bad, but I don't know how bad. The thing is, it does not MATTER how bad it really is. In the stock market, perception becomes reality. If enough people THINK stocks are unsafe, it doesn't matter if they are or not. If I THINK salmon is poisonous, and I'm the biggest buyer of salmon in the world, it doesn't matter one iota whether it is or not. Because if I think so, and I stop buying, then the world takes its cues from me (plus I'm not buying salmon, so even if others buy it, stocks take a massive dive without my involvement.)

 

[JustJuust]

I'm not completely sure. Either nothing or the fucking rapture from what I've been hearing.

Here's some answers.

Cut down on unneeded spending.
Cut down on government corruption.
Legalize and tax drugs.
CUT OUR FUCKING DEFENSE BUDGET!!!!
STOP BORROWING SO MUCH GODDAMN MONEY WE CAN'T PAY OFF!!!

exactly! I mean yes the US has a reputation to keep, and reputation might mean a lot in the global scene, but damn, what's with all the foreign aids when people in your own country are suffering?

 

[008Zulu_v1legacy]

Unfortunately, the Euro is looking pretty weak right now, what with Greece and such. If the US defaults, it could mean serious damage to the EU. The world's favourite currency also cannot be the Chinese Renminbi, because the Chinese government fixes their currency to be worth some constant fraction (1/6, I think) of a US dollar.

Then again, according to wikipedia, China has been setting itself up to start trading the renminbi freely, instead of fixing it at a certain value. So who knows? Maybe it WILL be Chinese currency as the next international standard.

I think the country has to be generally well liked in order for it's currency to be adopted as the standard.

So far, in the EU, the strongest country is Germany. What with their bailout package for Greece. Maybe the Japanese Yen might be the new one. I bet all the Yakuza mobs that own the nation's banks will be happy about that.

 

[KapnKerfuffle]

Will it delay the release of Deus Ex? Then I'm not too concerned.

 

[meow]

I think its funny how people on a forum for a websites about games are coming to an agreement faster than the us government... the ones with the problem.

 

[Aizsaule]

The entirety of Congress is taken out back and shot and we bring in a new congress who will fix everything

That would solve a lot of problems in America.