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This government shutdown could solve the deficit problem
Michael-AK
Registered User
User ID: 192424
10-01-2013 01:44 AM

Posts: 2,188



Post: #1
This government shutdown could solve the deficit problem
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If they never agree the deficit will solve itself and there will be no need to raise the debt ceiling either.
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36o58
Registered User
User ID: 192519
10-01-2013 01:53 AM

Posts: 1,737



Post: #2
This government shutdown could solve the deficit problem
Michael-AK  Wrote: (10-01-2013 01:44 AM)
If they never agree the deficit will solve itself and there will be no need to raise the debt ceiling either.

sure, in theory, in reality if they don't raise the debt ceiling an age of extreme austerity will set in beginning tomorrow.

But I say bring on the long awaited correction. Bring on a balanced budget bill.

Congress is required by law to pass spending bills, everything else is discretionary. Bring on a bill that prohibits all other legislation until the budget is passed and balanced.

And dock Congresscritters $5000/day for each day they fail to pass a budget. Cut their staff budget and their benefits and even their security until they do the one thing that the law requires them to do.
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KINKY BOOTS
Registered User
User ID: 192677
10-01-2013 01:58 AM

Posts: 2,167



Post: #3
This government shutdown could solve the deficit problem
The US government has 700 trillion Iraqi dinars. If that pops to $25.87, and the government doesn't make itself pay investment taxes or currency exchange fees, problem solved.
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Thunder Child
Raining Truth
User ID: 192604
10-01-2013 01:59 AM

Posts: 4,486



Post: #4
This government shutdown could solve the deficit problem
Yeah but it's not going to solve $17 trillion in debt and $100 + trillion in unfunded liabilities.

"You know you are over the target when you are receiving heavy flak..."
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36o58
Registered User
User ID: 192519
10-01-2013 02:01 AM

Posts: 1,737



Post: #5
This government shutdown could solve the deficit problem
Thunder Child  Wrote: (10-01-2013 01:59 AM)
Yeah but it's not going to solve $17 trillion in debt and $100 + trillion in unfunded liabilities.


write off the debt, default on the liabilities. Problem solved.
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LoP Guest
lop guest
User ID: 192717
10-01-2013 02:20 AM

 



Post: #6
This government shutdown could solve the deficit problem
Michael-AK  Wrote: (10-01-2013 01:44 AM)
If they never agree the deficit will solve itself and there will be no need to raise the debt ceiling either.

Due to the shutdown, economic output will become less, don't forget it has a multiplier effect.

E.g. 1 gov. employee will buy less at work and at home, his supplier due to less income will also buy less, and the supplier of the supplier will also buy less etc. etc. In economics this is called the multiplier effect. In essence, if you take $1 out of the economic output it will in total have a greater net effect on the GDP.

Given that less economic output means less income (taxes) for the gov. the deficit may well rise.

Economist already have modelled that each day the gov. is shutdown, the economy will shrink with certain points. I forgot the numbers, but after a while the whole economic recovery that has been achieved lately will be gone.
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The Evil AC
I am not a number!!!
User ID: 666
10-01-2013 02:23 AM

 



Post: #7
This government shutdown could solve the deficit problem
The Dinar has re-valued. That could solve the deficit problem too.
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roadtoad2
Registered User
User ID: 192602
10-01-2013 02:23 AM

Posts: 3,284



Post: #8
This government shutdown could solve the deficit problem
That's the silliest piece of boose-wah I've heard in a while.


Quote:

Put mind in gear before putting mouth in motion.
Your fingers on the keyboard are your mouthpiece for every post you make.
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LoP Guest
lop guest
User ID: 192495
10-01-2013 02:27 AM

 



Post: #9
This government shutdown could solve the deficit problem
LoP Guest  Wrote: (10-01-2013 02:20 AM)
Michael-AK  Wrote: (10-01-2013 01:44 AM)
If they never agree the deficit will solve itself and there will be no need to raise the debt ceiling either.

Due to the shutdown, economic output will become less, don't forget it has a multiplier effect.

E.g. 1 gov. employee will buy less at work and at home, his supplier due to less income will also buy less, and the supplier of the supplier will also buy less etc. etc. In economics this is called the multiplier effect. In essence, if you take $1 out of the economic output it will in total have a greater net effect on the GDP.

Given that less economic output means less income (taxes) for the gov. the deficit may well rise.

Economist already have modelled that each day the gov. is shutdown, the economy will shrink with certain points. I forgot the numbers, but after a while the whole economic recovery that has been achieved lately will be gone.

BS. The multiplier effect is trending down, for every dollar of new debt treasury issues it brings far less then a dollar in added GDP.

Extrapolating the trend you will see that interest and principle payments on the exponentially increasing debt will cause that multiplier to work in reverse, or for every dollar the treasury issues in new debt, more than a dollar will be removed from GDP.

.
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LoP Guest
lop guest
User ID: 192717
10-01-2013 02:35 AM

 



Post: #10
This government shutdown could solve the deficit problem
36o58  Wrote: (10-01-2013 01:53 AM)
...
sure, in theory, in reality if they don't raise the debt ceiling an age of extreme austerity will set in beginning tomorrow.

Not only that. If they don't raise the debt ceiling America will default. That means much higher interest rates, meaning less investments (output).

Given the austerity, high interest rates, less ouput, and less income (taxes) for the gov. the US may well go into a continuous spiral of economic recessions.

The FED had a policy of quantitive easing for a reason, to keep interest rates low and jumpstarting the economy.
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Don Draper
I'm a State of Mind
User ID: 192438
10-01-2013 02:38 AM

Posts: 3,986



Post: #11
This government shutdown could solve the deficit problem
LoP Guest  Wrote: (10-01-2013 02:27 AM)
LoP Guest  Wrote: (10-01-2013 02:20 AM)
Due to the shutdown, economic output will become less, don't forget it has a multiplier effect.

E.g. 1 gov. employee will buy less at work and at home, his supplier due to less income will also buy less, and the supplier of the supplier will also buy less etc. etc. In economics this is called the multiplier effect. In essence, if you take $1 out of the economic output it will in total have a greater net effect on the GDP.

Given that less economic output means less income (taxes) for the gov. the deficit may well rise.

Economist already have modelled that each day the gov. is shutdown, the economy will shrink with certain points. I forgot the numbers, but after a while the whole economic recovery that has been achieved lately will be gone.

BS. The multiplier effect is trending down, for every dollar of new debt treasury issues it brings far less then a dollar in added GDP.

Extrapolating the trend you will see that interest and principle payments on the exponentially increasing debt will cause that multiplier to work in reverse, or for every dollar the treasury issues in new debt, more than a dollar will be removed from GDP.

.

Jhikpghf

Would it really be possible to just default on debt? Wouldn't that completely destroy the current economic model of the world?

Not that I'm against that, I just don't see any other alternative - IE a system arising to replace it that relies on physical resources (Oil, gas, etc) which all the guys at the top already own anyway.

...

shit.

Srjceahd
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LoP Guest
lop guest
User ID: 192717
10-01-2013 02:42 AM

 



Post: #12
This government shutdown could solve the deficit problem
LoP Guest  Wrote: (10-01-2013 02:27 AM)
LoP Guest  Wrote: (10-01-2013 02:20 AM)
Due to the shutdown, economic output will become less, don't forget it has a multiplier effect.

E.g. 1 gov. employee will buy less at work and at home, his supplier due to less income will also buy less, and the supplier of the supplier will also buy less etc. etc. In economics this is called the multiplier effect. In essence, if you take $1 out of the economic output it will in total have a greater net effect on the GDP.

Given that less economic output means less income (taxes) for the gov. the deficit may well rise.

Economist already have modelled that each day the gov. is shutdown, the economy will shrink with certain points. I forgot the numbers, but after a while the whole economic recovery that has been achieved lately will be gone.

BS. The multiplier effect is trending down, for every dollar of new debt treasury issues it brings far less then a dollar in added GDP.

Extrapolating the trend you will see that interest and principle payments on the exponentially increasing debt will cause that multiplier to work in reverse, or for every dollar the treasury issues in new debt, more than a dollar will be removed from GDP.

.
I know what you mean with negative multiplier effect (the tax effect), but that is not the case here.

I am not interested to dig up some models that have been shown in the last days in various economic articles (plus it's already 2:39 am in the Netherlands, plus I have to go to bed soon but C-span with the discussion of the congress is more interesting). But I think you can google the up.
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Samurai Poodle
Subscriber
User ID: 192551
10-01-2013 02:43 AM

Posts: 1,876



Post: #13
This government shutdown could solve the deficit problem
LoP Guest  Wrote: (10-01-2013 02:35 AM)
Not only that. If they don't raise the debt ceiling America will default. That means much higher interest rates, meaning less investments (output).

I would LOVE to know where this meme about raising the debt ceiling or defaulting came from. Make no sense.
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LoP Guest
lop guest
User ID: 192495
10-01-2013 02:48 AM

 



Post: #14
This government shutdown could solve the deficit problem
Samurai Poodle  Wrote: (10-01-2013 02:43 AM)
LoP Guest  Wrote: (10-01-2013 02:35 AM)
Not only that. If they don't raise the debt ceiling America will default. That means much higher interest rates, meaning less investments (output).

I would LOVE to know where this meme about raising the debt ceiling or defaulting came from. Make no sense.

It's more socialist brainwashing. Treasury makes enough in tax receipts to pay down the debt, they just have to actually cut the fat out of the federal government. Since they have never really done that, the libtards like to scare the hell out of everyone.

.
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LoP Guest
lop guest
User ID: 192717
10-01-2013 02:48 AM

 



Post: #15
This government shutdown could solve the deficit problem
Samurai Poodle  Wrote: (10-01-2013 02:43 AM)
LoP Guest  Wrote: (10-01-2013 02:35 AM)
Not only that. If they don't raise the debt ceiling America will default. That means much higher interest rates, meaning less investments (output).

I would LOVE to know where this meme about raising the debt ceiling or defaulting came from. Make no sense.
There is some fear that this whole debate today will also result in not increasing the debt ceiling (which is a bigger fight). According to some estimates if the debt ceiling is not raised, this means mid October the US will default.

Anyway, I really must go to bed lol. But bloody C-span is soo interesting now (by the way I am Dutch :), and I am an economist).
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