We heard deadbeaters like Rep. Michele Bachmann say in the 2011 debt ceiling fight that she'd never raise the debt ceiling which emitted catcalls from the Krauthammers, but now many of the so called suicide caucus are not even buying the effects that a default on our national debt will have to us or to the world.
The White House is sounding alarms about the fast-approaching Oct. 17 deadline for raising the nation's borrowing limit. Failure to do so, President Obama and Treasury Secretary Jacob Lew have warned, could result in a first-ever default on America's debt and trigger global economic calamity. But some Republicans in Congress aren't buying it.
Not only do some conservatives say Oct. 17 is an artificial deadline—"Nobody thinks we're going to default on Oct. 17th," said Rep. Tim Huelskamp, R-Kan.—but they also are attempting to narrowly define what would constitute default.
In interviews with more than a dozen GOP lawmakers, the Republicans rejected the notion that Washington could default on its debt unless a borrowing increase is approved before Oct. 17. For the United States to actually default, these Republicans argue, the Treasury Department would have to stop paying interest on its debts—something GOP lawmakers claim is inconceivable.
These folks forgot that in 2011, S&P downgraded our nations credit rating from our usual AAA status. While some of their reasoning is flawed they issued the down grade after the Republicans held America's debt ceiling hostage to their demands.
In July, S&P placed the United States' rating on "CreditWatch with negative implications" as the debt ceiling debate devolved into partisan bickering.
S&P also cited dysfunctional policymaking in Washington as a factor in the downgrade. "The political brinksmanship of recent months highlights what we see as America's governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed."
It's not just the actual results of negotiations, but the fact that these jackasses are doing so at the expense of the world's economy.
"The government shutdown is bad enough, but failure to raise the debt ceiling would be far worse, and could very seriously damage not only the U.S. economy, but the entire global economy," IMF Director Christine Lagarde said Thursday.
"There's always revenue coming into the Treasury, certainly enough revenue to pay interest," said Rep. Justin Amash, R-Mich. "Democrats have a different definition of 'default' than what we understand it to be. What I hear from them is, 'If you're not paying everything on time that's a default.' And that's not the traditionally understood definition."If this sounds familiar, it's because it has been Republicans' line of attack since their debt-ceiling battle with Obama in the summer of 2011.Then, as now, the GOP argues it's not the debt limit that would cause default, it's Obama. The country would have the funds to pay its creditors if the administration would just delay payments to certain agencies.
Bloomberg says that a default would be more cataclysmic to the world than Lehman Brothers.
Anyone who remembers the collapse of Lehman Brothers Holdings Inc. little more than five years ago knows what a global financial disaster is. A U.S. government default, just weeks away if Congress fails to raise the debt ceiling as it now threatens to do, will be an economic calamity like none the world has ever seen.
Failure by the world’s largest borrower to pay its debt -- unprecedented in modern history -- will devastate stock markets from Brazil to Zurich, halt a $5 trillion lending mechanism for investors who rely on Treasuries, blow up borrowing costs for billions of people and companies, ravage the dollar and throw the U.S. and world economies into a recession that probably would become a depression. Among the dozens of money managers, economists, bankers, traders and former government officials interviewed for this story, few view a U.S. default as anything but a financial apocalypse.
Maybe it's not just the federal government the suicide caucus wants to destroy. Maybe they really want to rush in the 'end times' for the world?
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