Obama Warns of U.S. Debt Default Danger - BBC

US President Barack Obama has warned that Wall Street should be concerned that a conservative faction of Republicans is willing to allow the country to default on its debt.

The US government has partially closed after Congress failed to agree a budget and will run out of cash on 17 October unless its debt ceiling is raised.

In a TV interview on Wednesday, Mr Obama said he was "exasperated".


John Boehner (Republican) and Nancy Pelosi (Democrat) both spoke after the talks
He later held talks with Congressional leaders that ended without agreement.

U.S. Shutdown - Barack Obama Warns of Default Danger

reply to post by darkbake


Our economy is already in trouble, especially for people under 30. We are already experiencing a government shutdown. The Tea Party currently holds a large percentage of the House of Representatives.

The shutdown has left more than 700,000 employees on unpaid leave and closed national parks, tourist sites, government websites, office buildings, and more.

However, as one budget crisis raged in Washington DC, another one - potentially more dangerous - loomed in the coming weeks.

On 17 October, the US government will run out of cash to pay its bills unless the debt ceiling is raised.

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Chiefly, the Republicans demand the repeal, delay or defunding of a healthcare reform law - dubbed Obamacare - passed by the Democrats in 2010.

All the signs are that neither side is preparing to blink, quite yet. But while the president is staring hard and straight ahead, the Republicans' eyes are beginning to water, and they are glancing at the ground. ”

I don't really know much about this, and I can't even guess what is going on. So I asked some friends who are more educated than I am - one of them said that a debt default would result in a definite economic slowdown.

Don't forget, we would not be making our payments to other countries.

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Another friend of mine explained that the Tea Party and the mainstream Republicans might see a fissure over this. The problem really is arising from the Tea Party, he said - neither of us are entirely certain what is going to happen.

reply to post by darkbake


As a constitutional law professor or at least purported as such, the President should know damned well it's time to invoke the 14th Amendment and declare the whole federal government an essential service, and go to the FED window. It's not just his station but duty to jack the debt ceiling to wherever our financial obligations are until a real budget is passed... maybe this presidential term LOL.
A default is illegal and unconstitutional at the top. The wording and terms are plain... unless something quite nefarious is somehow otherwise intended.

There certainly was no "Default Danger" being 17 trillion in the hole to begin with. Nope. Now there is danger because the government shut down and nobody can go see the Grand Canyon....

I am one of those who does not understand how we can keep raising the debt ceiling, continue to go further in debt, but be ok. This puzzles me to no end and I know some people understand it. Maybe I just haven't studied it hard enough.

I think we are in default danger regardless of what opens or closes. I do not see how we can ever pay down what we owe and at this rate we just keep adding on more to it. Maybe we do need to default. I don't know. Something needs to happen and we aren't going to fix the debt while borrowing more money.

reply to post by derfreebie


The President and The White House has made a statement declaring that the use of the 14th Amendment would be unconstitutional - they do not appear to be looking at it as an option at this time.

Bill Clinton said that he would do it anyway, and then face the consequences in court later, if it were up to him.

reply to post by Kangaruex4Ewe


I agree - so... well... are we going to avoid it this time? It could happen rather fast.

reply to post by darkbake


It may be better to default that way they can't borrow unlimited money to sink the country, including enslaving our children to the central bankers.

reply to post by darkbake


They all seem to be like cats and land on their feet constantly. I think we probably will avoid it but I do think there will come a day when it will become unavoidable. If it keeps going at the rate it has, there really is no other way for it to go but the wrong way. Somebody is going to call in a debt in one day (and I would bet that there are a few folks biding their time for this) and we are not going to be able to pay. What happens after that would be anybody's guess (I guess) since we have never had to deal with something like that before. I imagine that it will be about as far from pretty as you can get.

It's kind of scary to think that government has been making backroom deals and bad deals with our money that we know nothing about and that we can't begin to pay off in our lifetimes. I don't know why it has been allowed to go on for so long really. It seems wrong to me.

reply to post by darkbake


Have you noticed that the US doesn't make anything anymore? That we do not export anything anymore? Except for food, that the US gov't has decided to pay farms subsidies to farmers to not produce, to keep what they do produce at a higher rate? Scarcity makes commodities more expensive?

In the constitution, we are only supposed to tax imports to our country. That was thrown away with the NAFTA - and other "free trade" agreements under Clinton, and others.

Our gov't is pushing for a default and bankruptcy - both dems and repubs - all to usher in a NWO and one world currency, and communism. Which won't do you or me any good - but it will certainly keep the wealthy - still very wealthy.

All of this distraction - with WW3, the obozocare debacle, and the gov't shutdown - is too keep stupid people from realizing what is really going on - the end of the USA. And the US dollar.

Anyone who has some sort of knowledge can see every bit of their plan falling into place - and it will not be pretty.

All they've got to do to fund EVERYTHING in perpetuity is demote the Pentagon to 'defense' posture only (it's not like they can protect YOU from anything, since on 9-11 they couldn't even protect their own fookin' headquarters!); they certainly don't need to be out bombing the third world and having military bases in almost every country on the planet.

Mothball a couple submarines and aircraft carriers, put Congress on Bread and Water and poof!

Problem solved.

Kangaruex4Ewe

I am one of those who does not understand how we can keep raising the debt ceiling, continue to go further in debt, but be ok.

That's OK. It's just a case of ignorance. The national debt is simple to understand. let me outline a few concepts for you.

1. REVENUES Simply put, revenues are the sum of all income for the governmet, for taxes, fees, and income from any sales of government property. These are determined by laws set by congress and the course of events; for example, the congress sets the income tax, but the course of events determines people's incomes.

2. Expenditures Expenditures are the sum of all the things government spends money on: Social Security, Medicare, Military, Grants to state governments, et. These are determined by acts of congress and the course of events. For example, congress determines federal funding for unemployment benefits, yet the course of events determines how many people are unempoyed.

4. DeficitDeficit Given as an equation,

Deficit(for the year) = Revenue(for the year) - Expenditures(for the year). Deficits by law must be made up by borrowing. This is accomplished by selling government bonds, which may be redeemed by purchasers for a higher value later.

5. This Years Debt is simply (last year's debt) + (this years deficit).

6. The Debt Ceiling is a maximum limit on the amount of outstanding bonds that the Government can have sold but not paid off at a given time. It is set by act of Congress.

You'll notice that the debt ceiling, paradoxically does not limit the debt in any way. The debt ceiling is a limit defined b y act of congress as to the maximum borrowing that the government may do by selling bonds. The difficulty comes when the debt ceiling laws conflict with the laws concerning revenues and expenditures. If the Debt exceeds the Debt Ceiling, some law is going to have to be broken, either revenues must be generated contrary to law, expenditures must be cut contrary to law, or debt must be issued contrary to law. For this reason, customarily, the debt ceiling has normally been raised every time the debt comes near it- otherwise the laws will be in conflict.

Unfortunately, many people misunderstand the situation by assuming that the debt ceiling causes the debt to increase. This is false. The debt ceiling is a redundant law, because the debt is mostly controlled by acts of congress anyway. Laws that are contradictory will give the president a free hand; since he cannot obey all of them, he must choose which to obey.

Obama Warns of U.S. Debt Default Danger


OF Course he is *warning* everybody !!!!

As IF nobody knows this already.

We will be seeing every name in the book and in foreign languages too thrown at anybody opposing Obama and the Democrats.

Today even Senator Schumer called Boehner a puppet !!!
[ Hmmm... ]

Name calling always is the last resort when somebody is empty on genuine rebuttals.

We will be seeing the Saul Alinsky tricks amplified beyond belief.

With revenues still rolling in,

I bet they could *meet* plenty of obligations.

Limit spending to total revenues only.

No more borrowing.

Then get into surplus spending.

I know I know....

The Federal Reserve and the international banks *HATE* that.

They need to get this looking a little better.....
Real soon !!!!

xuenchen

The Federal Reserve and the international banks *HATE* that.

Why would the federal reserve 'hate' a balanced budget? I don't recall them flipping out when Clinton rana surplus in the 90's.

reply to post by DrEugeneFixer


Clinton ran a surplus due to the first house and senate being republican for the first time in 50 years - don't forget that-

Clinton won the presidency because Ross Perot split the republican vote - he won with less than 50 percent of the vote.

I wonder if they bothered to count the vote back then?

Happy1
reply to post by DrEugeneFixer

 

Clinton ran a surplus due to the first house and senate being republican for the first time in 50 years - don't forget that

Duly noted. Did the Federal reserve throw a fit, or give any sign of displeasure at that time? That was my question.

reply to post by DrEugeneFixer


You speak like a politician. This means that, that means this. Why don't you make it simple? The obligations of the federal government exceed the revenue they are taking in.

Simple.

reply to post by Kangaruex4Ewe


The reason we need to go deeper in debt to keep the government running is simple. We need the cash flow. On Oct. 17 we run out of cash if we don't raise the debt ceiling and borrow more cash to grease the wheels.

Once the debt ceiling is raised (oh, say 1.2 trillion so we can do it all again in 9-14 months), the government borrows the money from the Federal Reserve, who then 'turns on the money machine' and gives the money to the government.

This is a large part of how money gets started. Every single dollar in existence started as a loan from the federal reserve. Our federal debt (17 trillion+) is all the dollars loaned PLUS the interest they have accrued. The debt can never be paid off, that is a mathematical fact (money is always < principal repayment plus the interest). It is a debt based system where money = debt.

The wealth the uber elite gain from compounding interest is a runaway train that cannot be stopped. The main reason they altered the monetary base reports years ago was to hide the growing discrepancy between actual money in circulation and debt. It's just a matter of how long the elites can keep the system flowing with the government debt numbers per capita extremely high and the market price of living goods so comparatively low.

The only way the system can work is perpetual debt increases, or perpetual population growth.

I'm wondering if I get this right, Obama spends more money in a few years than all the presidents combined, and then complains that republicans are causing an issue paying this debt..

After hearing his psychopathic lying on a daily basis, it just keeps surprising me to hear the audacity of this person.. Amazing to study Obama's behavior as you would a small child's. His sense of responsibility compares very evenly with someone like an ornery defiant teen.. I wonder if his behavior will one day be studied by psychiatrists and sociologists..