"What If" the government does default ?

[frayne]

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. ?

 

[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.

 

[Rustic23]

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.

 

[Glo]

The thought that we may not get our SS checks is frightening indeed!

 

[ziggy29]

The thought that we may not get our SS checks is frightening indeed!

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.

 

[unclemick]

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.

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

 

[bizlady]

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....

 

[FinanceDude]

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...........

 

[eytonxav]

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.

 

[M Paquette]

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.

Look on the bright side.

You'll get a much higher interest rate on the remaining value of your Treasury notes or bond funds.

 

[rescueme]

I will admit to being nervous on this. We just retired in April, and the thought of a market slide does concern me....

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 ...

 

[Glo]

Ziggy-you did make me feel a little better. You guys on these boards are a lot more savy about financial stuff than me!

 

[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?

Each side is going to extract as much as it can from this bartering chip.

 

[M Paquette]

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?

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