Pm's And The US Debt Ceiling

I think it should be. I'm actually a little surprised that there isn't another run up again right now. Seems to be treading water last few weeks. As we get closer to Aug 2 with no deal, we could see another run up, so maybe folks should buy now while they can.

As far as I know the US has never defalted, so there isn't really any precedent set for how things will or could unfold. Interesting times ahead I'm afraid but the majority voted for change...and we got change.

Indeed we did, Thunder. As most people are now aware, change is not necessarily a good thing. It is merely a different thing. A few years ago, we had 4.5% unemployment. We sure got change in that department!

The government's funny numbers say that there is 9.1% unemployment in the US now. This is not a real number because they stop counting the folks who have quit looking for work. They ASSUME that they found work when in fact most of them have not. A number of web sites out there are saying that the REAL unemployment number is in the 16-18% range.

If under-employment is added to this mix, the number rises to 24-25%. This is very similar to what we had back in the 1930s. Only difference between then and now is that they were honest enough to do a real count back then and not a fake one like we do today.

We see the same thing with inflation. Uncle Ben says that unless it drags on for a year or so, it's not real inflation. All well and good... except that REAL people are getting financially mauled by this "temporary" inflation and cannot simply wait it out. Bills are due and those to whom they are owed have no interest in waiting to get paid. Uncle Ben says that we have 1.5-2% inflation... as long as we do not count the prices of food or fuel. Well, now. Just who would have to buy those items? If you answered "everybody", you win the prize. Removing these necessities from the inflation calculation is absurd and completely unscientific. One cannot eliminate data from a calculation merely because it is difficult to model. A scientist would change the model until the data can be modeled accurately. Uncle Ben wants to change the data (or ignore it) so that it supports his theory. If this seems backwards to anyone else, then I am in good company!

I agree junior, but I think Ozzie was asking if they don't raise it...in other words if we were to default. What happens to PMs then?

That would be one way to do it and it's probably the likely one. Another way is to take a page from the Europeans of WW II and just not repay the debt. They might or might not decide to honor all US bond redemptions of less than $250k so as to not whack grandma and grandpa but who knows what odd-ball ideas lurk in the minds (?) of the politicians.

As other politicians have pointed out, there IS money to pay debts if they will just prioritize them and not be building tunnels for turtles, million dollar outhouses in national parks, shrimp treadmills, ketchup research, and thousands of other useless ideas. What we are facing is not so much a financial collapse as an awakening of the collective intelligence of America that we MUST live within our means and cannot continue to waste tax-payer money foolishly. Pulling the hogs heads out of the trough WILL result in a lot of kicking and squealing but eventually, bacon... er, progress... WILL be made!

The shock to the world economy if the US defaulted on our debt would make the Great Depression look like the good old days.

Buff, there really isn't ANY other place for the hurt to go. The government? No, not really. Like any business, they cannot absorb higher costs so MUST pass it along to their "customers"... which is to say their citizens.

The bizarre aspect of the US financial situation is that there are any number of things that could be done to improve the situation but there is also so much wrangling over the fine points that it is unlikely that a good solution will be found anytime soon. Rather than starting with the fine tuning, we really should be starting with the gross aspects of it and then fine tune later on as needed. But wait! That would be practical and reasonably simple. Can't have that, now, can we?

When we fought and won World War II?

I agree that their usual tendency is to try all manner of bizarre ideas first and only do the obvious when all other avenues have been exhausted. :-/