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"What If" the government does default ?
07-10-2011, 07:03 PM
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#1
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Thinks s/he gets paid by the post
Join Date: Oct 2002
Location: Chattanooga
Posts: 3,895
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"What If" the government does default ?
Does anyone really know or understand the ramifications and the potential impact for people say of our demographic, retired, debt free, and living off investment income, social security, etc. ?
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07-10-2011, 08:31 PM
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#2
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Thinks s/he gets paid by the post
Join Date: Sep 2010
Location: midwestern city
Posts: 4,061
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No. The stakes are too high, and the issues are too complex for us to be able to understand all the ramifications of a government default.
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Very conservative with investments. Not ER'd yet, 48 years old. Please do not take anything I write or imply as legal, financial or medical advice directed to you. Contact your own financial advisor, healthcare provider, or attorney for financial, medical and legal advice.
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07-11-2011, 07:47 AM
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#3
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Thinks s/he gets paid by the post
Join Date: Dec 2005
Location: Lake Livingston, Tx
Posts: 4,204
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I believe there are two questions here.
What happens if we do not raise the debt ceiling?
What if we default?
The first may lead to the second, but not necessarily. If the first occurs, it could have an effect on SS checks, and other government payroll checks including military. It could have an effect on government contracts. It could have and effect on federal and local government employees. i.e. and effect on payments to states. IMO, the reason it is impossible to say what will happen is that the government will have to prioritize its spending. Pay debtors first, the who knows. Most likely they will with hold the payments from the section of the populace that causes the biggest angst. Similar to local government that says Police and Fire are the first to go. Not the remodel of the politicians office's.
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07-12-2011, 09:54 AM
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#4
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Recycles dryer sheets
Join Date: Jun 2004
Posts: 229
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The thought that we may not get our SS checks is frightening indeed!
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07-12-2011, 10:25 AM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
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Quote:
Originally Posted by Glo
The thought that we may not get our SS checks is frightening indeed!
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I suspect this is a scare tactic. I don't see this happening even if there IS a default. I think any spending locked in by law would take first priority; it would be all the "non-essential" spending not locked in by law which would get eliminated. This is one of the last areas that would get hit.
Having said that, I think even the most intransigent folks on both sides realize default isn't a valid option. But they will play high stakes poker until the 11th hour hoping the other players will blink first.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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07-12-2011, 10:40 AM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2003
Location: Kansas City
Posts: 7,968
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Quote:
Originally Posted by obgyn65
No. The stakes are too high, and the issues are too complex for us to be able to understand all the ramifications of a government default.
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Dat's a no no.
But then again so was Katrina.
heh heh heh - The Corp of Engineers is once again 'managing' this time the wide Missouri. I live on a hill nowadays. What happens if they stop SS and Medicare? Interest rates on ?? duh everything ? the dollar in international markets
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07-12-2011, 10:53 AM
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#7
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Full time employment: Posting here.
Join Date: Mar 2008
Posts: 968
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I will admit to being nervous on this. We just retired in April, and the thought of a market slide does concern me.... have resisted moving everything to safety, and we are at least 7 years out on SS, but still....
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07-12-2011, 11:04 AM
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#8
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2006
Posts: 12,483
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The US govt will not default as long as our import export partners want to be paid in dollars, which pretty much everyone does. Oil is priced in dollars, and that will not change anytime soon...........
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07-12-2011, 11:18 AM
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#9
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gone traveling
Join Date: Sep 2003
Location: DFW
Posts: 7,586
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While I hope not, seems to me a short lived default is quite possible as each side looks for leverage to get their position accepted. Now if the President and members of congress stopped getting paid, they would have some real skin in the game, like the rest of us.
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07-12-2011, 12:00 PM
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#10
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Moderator Emeritus
Join Date: Oct 2007
Location: Portland
Posts: 4,946
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Quote:
Originally Posted by DFW_M5
While I hope not, seems to me a short lived default is quite possible as each side looks for leverage to get their position accepted. Now if the President and members of congress stopped getting paid, they would have some real skin in the game, like the rest of us.
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Look on the bright side.
You'll get a much higher interest rate on the remaining value of your Treasury notes or bond funds.
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07-12-2011, 12:19 PM
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#11
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gone traveling
Join Date: Apr 2009
Location: Eastern PA
Posts: 3,851
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Quote:
Originally Posted by bizlady
I will admit to being nervous on this. We just retired in April, and the thought of a market slide does concern me....
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Heck, I retired in May, 2007 (with no pension nor SS).
You know what happened a bit later in that year (and the year after )...
Nothing in life remains the same. I'm sure that you/me/everybody else in the early years of our retirement these days will be going through this flux on an ongoing basis throughout our respective retirements.
Assuming you retired from a private company (and have no pension), we're probably the first generation (of many to follow) that will have these challanges. Our parents/grandparents (in many cases) had pensions along with SS, and I doubt if few saved/invested for their own retirement.
They had their safety net; OTOH, I believe I can do better (financially) then they did in retirement, where most of their income was controlled by "outside managers", rather than having a stake in their own future.
Remember, it's the bullet you don't hear that will kill you. With all this "noise" we're currently hearing, I feel some type of solution to the current challange will come about.
Whether or not I agree, or like it is another question ...
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07-12-2011, 03:55 PM
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#12
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Recycles dryer sheets
Join Date: Jun 2004
Posts: 229
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Ziggy-you did make me feel a little better. You guys on these boards are a lot more savy about financial stuff than me!
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07-12-2011, 06:31 PM
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#13
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Full time employment: Posting here.
Join Date: Apr 2008
Posts: 702
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Yawn! Just a political maneuver as was the government shutting down a couple of months ago.
It is just too easy to raise the debt ceiling and to hard and unpopular to opt for the default. What politician wants to be remembered for not voting to keep the government from defaulting?
Each side is going to extract as much as it can from this bartering chip.
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07-12-2011, 07:51 PM
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#14
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Moderator Emeritus
Join Date: Oct 2007
Location: Portland
Posts: 4,946
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Quote:
Originally Posted by FreeAtLast
Yawn! Just a political maneuver as was the government shutting down a couple of months ago.
It is just too easy to raise the debt ceiling and to hard and unpopular to opt for the default. What politician wants to be remembered for not voting to keep the government from defaulting?
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Apparently there are a few.
Broun introduces 'Debt Ceiling Reduction Act' - Atlanta Headlines | Examiner.com
Yep. LOWER the debt ceiling. Starting in Oct 2011. The bill doesn't say where the 1.3 trillion dollars to pay down the debt between now and then comes from. Perhaps he found some extra cash under the seat cushions.
Then there's the 'tough love' approach.
Bachmann stands against raising debt ceiling
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