What default means

The result is a double whammy on all levels of government. To wit, governments across-the-board will see less revenue coming in due to the economic slowdown and more money going out because without the Aaa rating it will be more expensive for all of those entities to borrow money.

“If you have less money coming in and more going out to service debt there’s less money to spend on public services,” he said. “You’ll feel it in a lack of new text books and less funding for new programs in school districts.”

Not to mention public safety and infrastructure.

Meanwhile, as the cost of borrowing for big debt issuers -- governments, banks and corporations -- rises everywhere as all manner of debt is downgraded, the costs will inevitably be passed on to consumers in the form of higher interest rates on everything from mortgages to car loans.

http://www.foxbusiness.com/markets/2011 ... very-home/

I think many cheer on the possibility of default without realizing it will make the problem worse, not better. We need to raise the debt ceiling, pay our debts and elect a Truly conservative majority in the house so our next budget will be within our means.

Agree, we can't default. Right now we are getting our loans pretty cheap, near 0%. Imagine how much more expensive credit will get if it simply goes up to 5%.

SS109 wrote: Agree, we can't default. Right now we are getting our loans pretty cheap, near 0%. Imagine how much more expensive credit will get if it simply goes up to 5%.

And since a huge portion of the national debt is funded by short term loans, the amount we'd have to spend paying the interest on that debt would become simply crushing.

I have never understood why all this debt it short term, and it isn't only the US, Britain has also chosen to fund themselves with short term notes.

it is so silly... Congress already APPROVED the spending and we spent the money. The debt ceiling just says "we will now pay our bills". Now, folks are trying to lay it all on Obama. I wish he'd grow a pair and just tell everyone that... DO YOUR DAMN JOB, CONGRESS

The history of debt ceiling goes back to 1939 when they (Congress) decided to aggregate the spending approval to a once a year approval vote. Before that, every little thing that was needing money went before Congress for approval.

We will not default. It is all for show. Know that. Now, let's get back to jobs.

We wouldn't default on our credit obligations initially even if the debt limit isn't raised, though I do agree that Congress will have to increase the debt limit at some point if they hope to have any of the very little faith that exists in the institution left and there is something of an obligation to provide for the appropriations that it earlier approved. They did, after all, know that the limit would have to be increased for the appropriations they were approving. What is it they need for the rest of fiscal 2011, something like $900 Billion? They could raise it by an even Trillion dollars to accomplish that and save all of the current battles for the 2012 budget, which is currently sitting in the Senate waiting for Reid and the Democrats to address. 'Course Obama pledged to veto that idea as well. Seems the only short term fiscal bills he is interested in signing are those proposed by his own party when he is looking to give them some cover for upcoming elections.

the bruhaha is causing instability everywhere... they need to knock it off, quit posing for the camera and get back to work

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Wily Fox aka Angela wrote: the bruhaha is causing instability everywhere... they need to knock it off, quit posing for the camera and get back to
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spending! lol