This is why the Democrats cannot - will not - "negotiate"

[shira]

T minus two days and counting. What do you think the over/under is that 100 Senators will pass by unanimous consent whatever deal Harry Reid is willing to agree to?

tl;dr We are going to hit the debt ceiling, and there's not a fucking thing Obama can do about it.

http://thehill.com/blogs/on-the-mon...-already-put-debt-limit-deadline-out-of-reach

You're a moron. From your own link:

The Treasury has not said the government would default Friday without a debt-limit boost, but warned that it could no longer guarantee the government would be able to pay all its bills on any given day.

At best, many outside experts believe the government could pay all its bills until Nov. 1, when roughly $60 billion in payments on things like Social Security and Medicare come due.

 

[compuwiz1]

The MSM is trying to scare people, nothing more than making people think that the reason we could default is because of those god damn republicans and those teaparty terrorists. Fact is there will be no default. The house needs to stand firm to prove this point.

 

[JEDI]

oh Christ.. CNN reporting that senate Dem leader Reid's negiotiating includes changes to Obamacare.

Delaying Obamacare’s “transitional reinsurance fee,” which would cost employers about $65 per employee per year for three years.


WTF?! What happened to no changes to Obamacare? How the hell are we going to pay for Obamacare w/o that $?
Reid just opened up a can of worms.

Now the House Repubs see that and going rabid and wants their own changes to Obamacare in their new GOP plan.
of course its diff from the Senate GOP plan.

2 days b4 default and the game of chicken has gotten worse

 

[glenn1]

oh Christ.. CNN reporting that senate Dem leader Reid's negiotiating includes changes to Obamacare.

Delaying Obamacare’s “transitional reinsurance fee,” which would cost employers about $65 per employee per year for three years.


WTF?! What happened to no changes to Obamacare? How the hell are we going to pay for Obamacare w/o that $?
Reid just opened up a can of worms.

Now the House Repubs see that and going rabid and wants their own changes to Obamacare in their new GOP plan.
of course its diff from the Senate GOP plan.

2 days b4 default and the game of chicken has gotten worse

That's to benefit their union buddies. It's not a concession from Democrats, it's a concession FOR Democrats.

 

[JEDI]

That's to benefit their union buddies. It's not a concession from Democrats, it's a concession FOR Democrats.

explain?

 

[werepossum]

Well the principal threat right now is a default. In the long term if we don't default then I would agree, as I said in my first post, that we need to spend less and tax more and balance the budget because the long term financials aren't good and will destroy the economy if left untouched. Edit: By long term I would give us another 5-10 years of running the country like we have since Clinton.


It doesn't matter how much we owe when we default, even owing "only" 16.9 Trillion when we default would destroy the economy, and perhaps worse. Owing twice that wouldn't make a difference. It's like defaulting on a 1.2 million dollar home or a 500,000 dollar home either way your home gets taken from you.

I agree with the first, but I'm not so sure about the second. There's an old saying, "If you owe the bank $10,000 it's your problem, but if you owe the bank $10,000,00 it's the bank's problem." Two different opposing forces here, the other being that generally speaking the shallower the hole the easier the climb. If we default and we honestly restructure government to repay all the debt, better to default sooner and minimize the pain. If on the other hand we default and we simply write off or monetize the debt rather than paying it off with something of value, maybe better to default later. My own philosophy is that a man or a country should honor debts and pay them off, which argues for defaulting earlier (while there is at least some outside chance of paying them off) rather than later, but there are arguments to be made on either side.

oh Christ.. CNN reporting that senate Dem leader Reid's negiotiating includes changes to Obamacare.

Delaying Obamacare’s “transitional reinsurance fee,” which would cost employers about $65 per employee per year for three years.


WTF?! What happened to no changes to Obamacare? How the hell are we going to pay for Obamacare w/o that $?
Reid just opened up a can of worms.

Now the House Repubs see that and going rabid and wants their own changes to Obamacare in their new GOP plan.
of course its diff from the Senate GOP plan.

2 days b4 default and the game of chicken has gotten worse

The Dems' own donors have been demanding that; this is a concession that actually helps them. Hopefully the Pubbies can accept that it helps them too and use it as political cover to get government back running while they negotiate more structural changes to limit future debt.

 

[glenn1]

explain?

http://thehill.com/blogs/healthwatc...ion/328459-labor-gets-obamacare-olive-branch-

 

[MagickMan]

That's to benefit their union buddies. It's not a concession from Democrats, it's a concession FOR Democrats.

Yep, that's a softball to the unions, but that doesn't stop the Left from knee-jerking over it.

 

[JEDI]

http://thehill.com/blogs/healthwatc...ion/328459-labor-gets-obamacare-olive-branch-

ahh.. reinsurance protects the insurance companies participating in ACA exchanges. that way they don't lose their shirt when large #s of old and sick are expected to enroll.

but to prevent this as a net substidy for the industry, the fed govt puts a fee on ALL healthcare insurance companies.
so those insurance companies that wont do the aca exchanges are substidizing those who do.


now I don't understand how this fee hoses unions?

don't unions use major insurance companies? and aren't these major insurance companies also part of the ACA exchanges?? so the fees are zero net?

 

[laspariahs]

I agree with the first, but I'm not so sure about the second. There's an old saying, "If you owe the bank $10,000 it's your problem, but if you owe the bank $10,000,00 it's the bank's problem." Two different opposing forces here, the other being that generally speaking the shallower the hole the easier the climb. If we default and we honestly restructure government to repay all the debt, better to default sooner and minimize the pain. If on the other hand we default and we simply write off or monetize the debt rather than paying it off with something of value, maybe better to default later. My own philosophy is that a man or a country should honor debts and pay them off, which argues for defaulting earlier (while there is at least some outside chance of paying them off) rather than later, but there are arguments to be made on either side.

Wait we should honor our debts but default on them, you know defaulting is the opposite of honoring your debts right?

Anyways the rest of your question is answered here: http://forums.anandtech.com/showpost.php?p=35606101&postcount=274

Unless you plan on paying off all debt as it comes due through some magical mechanism, borrowing must continue, even after default raises the rate of return for bondholders. Even with a balanced budget, rollover of debt demands borrowing. Basically, default compounds the problem, intensifies it by raising the interest rate.

In fiscal year 2013, the govt paid ~$416B in interest on the debt, at record low rates. If we default, even temporarily, that bill will go up, even if we quit borrowing entirely.

http://www.treasurydirect.gov/govt/r...ir_expense.htm

No need for me to restructure it. Once we default it'll make balancing the budget and paying off our debts a near impossible task, right now it's completely possible.


China's budget is balanced, so they don't have an issue, they are only at 20% of GDP, while we are at 107% of GDP. while it would be a hit, they can take it, plus they will get some of their money back when they sell their treasury bonds, it's not like it's just going to go poof.

 

[bshole]

What's sad is simple-minded buffoons pretending there are simple answers to complex questions.

Are you claiming that if faith in the US government is lost due to default, that Walmart will stop accepting USD? That they'll repost all the prices on their shelves in CAD?

The only thing lost in a default by the US government is faith in the US government. As the standard currency used by the American people, dollars will still be in demand because Americans accept them in trade for goods and services. The only losers are the idiots in congress when people stop buying their bonds to pay for our ridiculously oversized federal government.

Um, I dunno, china is holding billions of American bonds. They could easily strangle our economy. I can't imagine what would happen if American bonds couldn't be sold because nobody would buy them anymore.

If a default does happen, I can absolutely GUARANTEE violence (possibly deadly) against Tea Party leaning republicans. There would be MILLIONS of ruined lives and MILLIONS of seriously pissed off cititzens. There would be RIOTS and widespread VIOLENCE.

AMERICA KNOWS WHO IS BEHIND THIS. THERE WILL BE BLOOD!

Republicans are bearing the brunt of blame for the ongoing budget crisis in Washington more than ever, a new poll out Tuesday shows.

A new record high of 74% of Americans disapprove of the way Republicans in Congress are handling the ongoing dilemma, according to an ABC News / Washington Post poll out Tuesday.

http://www.nydailynews.com/news/pol...ican-handling-budget-crisis-article-1.1486576

 

[glenn1]

Um, I dunno, china is holding billions of American bonds. They could easily strangle our economy. I can't imagine what would happen if American bonds couldn't be sold because nobody would buy them anymore.

If a default does happen, I can absolutely GUARANTEE violence (possibly deadly) against Tea Party leaning republicans. There would be MILLIONS of ruined lives and MILLIONS of seriously pissed off cititzens. There would be RIOTS and widespread VIOLENCE.

AMERICA KNOWS WHO IS BEHIND THIS. THERE WILL BE BLOOD!



http://www.nydailynews.com/news/pol...ican-handling-budget-crisis-article-1.1486576

LOL, violence by whom? You think Tea Party supporters need to worry about violence from gun control supporting progressive authoritarians who wet themselves whenever they see an "assault weapon"? Hell, the Tea Partiers are the ones *with* the weapons. If anything those on the left should take precautions against violence directed at them by the inner city ghetto dwellers. We already know they don't have much problem with killing other folks, and probably wouldn't be any more bothered about shooting a white liberal yuppie than they would a rival gang member.

 

[werepossum]

Wait we should honor our debts but default on them, you know defaulting is the opposite of honoring your debts right?

Anyways the rest of your question is answered here: http://forums.anandtech.com/showpost.php?p=35606101&postcount=274

No need for me to restructure it. Once we default it'll make balancing the budget and paying off our debts a near impossible task, right now it's completely possible.


China's budget is balanced, so they don't have an issue, they are only at 20% of GDP, while we are at 107% of GDP. while it would be a hit, they can take it, plus they will get some of their money back when they sell their treasury bonds, it's not like it's just going to go poof.

Two kinds of default. First, I can't make this payment, but if you'll work with me I'll repay everything I owe. Second, I can't make this payment and you can go pound sand. The first is honoring the debt; the second is not. I'm assuming that if we do default, now or later, we'll go the first route. But the higher our debt, the less likely that becomes.

I'm not sure how you can say of paying off our debts that "right now it's completely possible". The Democrats don't even think it's worth doing or even discussing, just put the pedal down and drive on forever, faster and faster. The Republicans don't really think it's worth doing either; they are merely agitating to accrue debt a tiny bit more slowly. Yes, if we default it will make servicing the debt much more painful, but without default I see no possibility that we'll ever pay it off. I'm not at all sure it's theoretically possible even today; government is such a big portion of our economy that substantial cuts are likely to have equally large cuts in GDP and tax revenue. Many of the EU nations have already seen that same thing. It's not easy to ride the tiger, but it's not easy to dismount either.

 

[laspariahs]

Two kinds of default. First, I can't make this payment, but if you'll work with me I'll repay everything I owe. Second, I can't make this payment and you can go pound sand. The first is honoring the debt; the second is not. I'm assuming that if we do default, now or later, we'll go the first route. But the higher our debt, the less likely that becomes.

I'm not sure how you can say of paying off our debts that "right now it's completely possible". The Democrats don't even think it's worth doing or even discussing, just put the pedal down and drive on forever, faster and faster. The Republicans don't really think it's worth doing either; they are merely agitating to accrue debt a tiny bit more slowly. Yes, if we default it will make servicing the debt much more painful, but without default I see no possibility that we'll ever pay it off. I'm not at all sure it's theoretically possible even today; government is such a big portion of our economy that substantial cuts are likely to have equally large cuts in GDP and tax revenue. Many of the EU nations have already seen that same thing. It's not easy to ride the tiger, but it's not easy to dismount either.

No both of them are not honoring your agreement actually, since you agreed to one term and now think you should get a different agreement. The only reason CC companies do this is so they get their money back, China on the other hand is not a CC company, and the debt isn't CC debt. Whoever said that everyone that keeps trying to use simple personal credit analogies is correct it's insane to keep thinking of it like personal debt, it's not. Anyways china will get some of their money back, by selling the bonds for less than they bought them for.

I'm not going to get bogged down in a right vs left argument, I don't care about right vs left, and it's insane to care at this point, all I care about is that they figure it out.

 

[werepossum]

No both of them are not honoring your agreement actually, since you agreed to one term and now think you should get a different agreement. The only reason CC companies do this is so they get their money back, China on the other hand is not a CC company, and the debt isn't CC debt. Whoever said that everyone that keeps trying to use simple personal credit analogies is correct it's insane to keep thinking of it like personal debt, it's not. Anyways china will get some of their money back, by selling the bonds for less than they bought them for.

I'm not going to get bogged down in a right vs left argument, I don't care about right vs left, and it's insane to care at this point, all I care about is that they figure it out.

I actually said "honoring your debt", not "honoring your agreement". And I'm assuming that every T-bond and T-note holder will get all her money eventually; to do otherwise would seriously damage our nation and the world economy.

EDIT: I agree that the most important thing is that they work it out, not who wins, and for what it's worth I do not think the Pubbies should have made this stand at this time. Before the Senate Dems finally did their jobs, certainly; now it's not only the Pubbies who'll get the blame, but it's the Pubbies who deserve the blame, since they are now the ones not doing their jobs. I'm just saying that it's a fundamental problem between left and right. Regardless of which side is correct, this is why it is so difficult to fix, because the two sides don't even agree on what problem they should be trying to fix.

 

[cytg111]

As an outsider let me check if I got this right.
Republicans are holding the economic hostage.
Dems wont negotiate with terrorists.
Reps WOULD actually let the country default.
Dems would not.
Thus dems decide to negotiate anyway.
Those teaparty-reps is almost behaving like religious nutbags.. Wait they are, arent they? Just missing the suicide-vests. Wait.

 

[laspariahs]

I actually said "honoring your debt", not "honoring your agreement". And I'm assuming that every T-bond and T-note holder will get all her money eventually; to do otherwise would seriously damage our nation and the world economy.

Honoring your debt is honoring the agreement it was given to you in. If we default, if they are smart they will sell their bonds, and get what money they can out of them, which is the same as the smart CC company trying to get their money out of some sleazeball that won't pay what they owe in it's entirety.

 

[shira]

And - finally - there was this brilliant analysis of the situation by Johnathan Chait:

http://nymag.com/daily/intelligencer/2013/10/debt-ceiling-and-the-conservative-bubble.html

How Republicans Failed to Understand the Democrats’ Debt-Ceiling Logic

If you reside within the conservative news bubble, you probably had no idea before this crisis what the Democratic position on the debt ceiling and the shutdown is. You still probably have no idea now. On Fox News Sunday, George Will purported to locate an “absurdity” in Obama’s refusal to negotiate the debt ceiling. Obama, he told listeners, was arguing, “Default would be catastrophic — world-wide depression, political chaos, locusts, plagues, et cetera. But attach to the debt-ceiling construction of the Keystone pipeline, it’s better to have locusts, plagues, crisis, and war.”

That would be a crazy thing to believe, wouldn’t it? But of course Obama’s administration has a ready and oft-proffered explanation. They see the debt-ceiling fight as being mainly about the long-term question of whether Congress will cement into place the practice of using the debt ceiling to extort concessions from the president. The price of buying off a debt-ceiling hike would surely be less than the risk of a default. But doing so would enshrine debt-ceiling extortion as a normal congressional practice. This both skews the Constitutional relationship between branches — allowing an unscrupulous Congress to demand unilateral concessions at gunpoint rather than having to compromise — and creates endless brinksmanship that would eventually lead to a default.

The administration’s stance, then, is that submitting to ransom now creates the certainty of default eventually. Will is correct that paying a ransom would reduce the probability of a short-term default, but it would increase the probability of a long-term default.

I’d be interested in hearing a conservative rebuttal to this analysis, which I share. Maybe there’s an argument that it would be Constitutionally desirable to give Congress the ability to leverage unreciprocated concessions from the president by threatening global havoc, and that we can be confident that such negotiations could be undertaken regularly without any risk of failure. Unfortunately, I have not seen any argument rebutting Obama’s view, because rebutting it requires acknowledging it.

Will’s comment was introduced by host Chris Wallace asserting that Congress has negotiated over the debt limit 27 times before, which is laughably false — Congress has appended debt-ceiling hikes to separately negotiated budget legislation 27 times. It has threatened not to raise the debt ceiling in order to extort concessions only once before, in 2011.

The gambit worked for Republicans then, and so they assumed they could simply do the same thing again. (Which is why Obama misjudged so catastrophically by submitting to extortion, and is so determined to correct his error.) But some things have changed. Obama at the time interpreted Republican complaints about the debt as the prelude to a traditional negotiation with mutual compromises, which was never a plausible outcome. The afterglow of the midterm elections gave the GOP a quasi-mandate. The Republicans’ repeated framing of their policy demands as a desire for lower debt (which is not the same thing as its actual position, which defended lower tax rates and less social spending) likewise lent their hostage demands a sheen of bipartisan legitimacy. The deficit scold movement actually endorsed the use of the debt ceiling as a hostage, lending Republican demands a sheen of fiscally responsible, good-government legitimacy. Today, Democrats not only occupy a stronger position, they realize this is their only chance to stamp out the practice of debt-ceiling extortion.