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Moody's Says No Default If Debt Limit Not Raised

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10-09-2013, 08:49 PM
  #1
Jebby
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Moody's Says No Default If Debt Limit Not Raised

Obama is a liar when he says we will lose our credit rating.

Quote:
We believe the government would continue to pay interest and principal on its debt even in the event that the debt limit is not raised, leaving its creditworthiness intact. The debt limit restricts government expenditures to the amount of its incoming revenues; it does not prohibit the government from servicing its debt. There is no direct connection between the debt limit (actually the exhaustion of the Treasury’s extraordinary measures to raise funds) and a default.

http://blogs.barrons.com/incomeinves...g-isnt-raised/

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10-09-2013, 08:57 PM
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Ilkka Sinisalo
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10-09-2013, 09:21 PM
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Troy McClure
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The last time this came up, S&P did downgrade the US when we didn't even hit the debt ceiling. Flirting with a default was enough for them.

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Originally Posted by S&P in 2011
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. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. Despite this year's wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently. Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures. It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability.
You're also missing the point of what the guy at Moody's said. He wasn't saying that the debt ceiling is no big deal. He also sure didn't call Obama a liar. What he said was that missing the October 17th deadline would not mean anything actually happens on October 17th. He was explaining how the debt payments work so you know when the **** really starts to hit the fan.

If you paid attention in 2011, you'd already know this because the government had laid out a plan for how it would prioritize payments to try to keep satisfying debt payments even after the debt ceiling was reached. This was not a plan that did away with the need for a fix. It was a plan to buy the government more time before an actual default would occur.

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10-09-2013, 09:50 PM
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Ilkka Sinisalo
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Yeah, I think pretty much everyone has acknowledged that the US isn't going to immediately start defaulting on its debts on October 17th. But it will start to miss payments on things like Medicare, Social Security, etc. In addition to still not paying over a million federal employees. Obviously taking money out of the pockets of millions of people who need it is going to severely damage the economic situation.

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10-09-2013, 10:05 PM
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Quote:
Originally Posted by Ilkka Sinisalo View Post
Yeah, I think pretty much everyone has acknowledged that the US isn't going to immediately start defaulting on its debts on October 17th. But it will start to miss payments on things like Medicare, Social Security, etc. In addition to still not paying over a million federal employees. Obviously taking money out of the pockets of millions of people who need it is going to severely damage the economic situation.
Why would it miss payments on SS and Medicare? The federal government is expected to bring in $2.9 trillion this year, while SS+Medicare+Medicaid amount to $1.8 trillion. Add in debt financing and it's approx $2.07 trillion. Add in DoD and it comes up to about $2.6 trillion. Add in food stamps and you're at about $2.7 trillion.

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10-09-2013, 10:20 PM
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Troy McClure
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Man, the way you tell it, there is no spending problem, so why the shutdown?

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10-09-2013, 10:50 PM
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It's really nauseating that we're starting to talk about the debt ceiling/default issue as if it's not a big deal.

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10-09-2013, 10:56 PM
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Ilkka Sinisalo
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Quote:
Originally Posted by Yoshimitsu View Post
It's really nauseating that we're starting to talk about the debt ceiling/default issue as if it's not a big deal.
JebbyXC is another "independent" who routinely trots out the exact talking points that are making the rounds of the GOP and right-wing media.

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10-09-2013, 11:53 PM
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Quote:
Originally Posted by Ilkka Sinisalo View Post
JebbyXC is another "independent" who routinely trots out the exact talking points that are making the rounds of the GOP and right-wing media.
Jebby is a paid shill for a think tank or PAC.

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10-10-2013, 01:07 AM
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Concordski
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There might not be a default immediately, but the panic on the dollar will likely start a day or two in.

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10-10-2013, 12:34 PM
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Right wingers don't care about the full faith and confidence of the gov't because in their view, there's nothing for it to lose. It's really that simple.

Why give lip service to the idea that the Government is certainly able to accurately predict daily cash flow so that there will NEVER be a problem? (And that includes predicting tax receipts, and therefore the economy). If the government were that good, who needs a stock market?

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10-10-2013, 01:30 PM
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10-10-2013, 01:40 PM
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nyrfonmoni
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Obviously Moody's has to say that, they don't want the markets to go bat**** before they actually are going to go bat**** ...

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10-10-2013, 01:40 PM
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10-10-2013, 01:45 PM
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10-10-2013, 02:19 PM
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Bieber gets smoked? Where is that picture from?

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10-10-2013, 03:02 PM
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Quote:
Originally Posted by Ugmo View Post
Bieber gets smoked? Where is that picture from?
He was in an episode of CSI:

http://www.youtube.com/watch?v=m0zx3N4lOt0

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10-16-2013, 10:22 AM
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Troy McClure
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Quote:
Originally Posted by Jebby View Post
Obama is a liar when he says we will lose our credit rating.
Fitch Puts U.S. ‘AAA’ Credit Rating on ‘Watch Negative’

Quote:
Fitch Ratings placed the United States’ ‘AAA’ credit rating on negative watch late Tuesday following intense back-and-forth negotiations among policymakers about how to raise the nation’s borrowing limit before Thursday’s deadline.

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