Will a U.S. Debt Default Really Mean Disaster?

Jim Jubak MSN Money July 19, 2011

7/18/2011 8:22 PM ET

By Jim Jubak

Failure to raise the debt ceiling would inflict immediate pain on many Americans and long-term damage to the nation's finances. But there's a chance the fallout could be far worse.

President Barack Obama says a failure to raise the U.S. debt ceiling would be Armageddon.

"The idea that this is catastrophic is wrong," Sen. Tom Coburn, R-Okla., rejoins. On "Meet the Press" on Sunday, Coburn said, "What is catastrophic is to continue to spend money we don't have." Besides, he added "the debt limit doesn't really mean anything because we've always extended it."

Well, which is it? A failure to extend the debt ceiling would seem like it is either a catastrophe or not. You can't be just a little bit "Armageddon" any more than you can be a little bit pregnant.

The latest debt ceiling news

Frankly I think the catastrophe claim is justified -- but not on the evidence that anyone is offering.

Arguments that a failure to raise the debt limit will raise interest rates, slow U.S. economic growth, increase inflation and ultimately cost the United States its AAA credit rating are all true, but they don't add up to an ultimate end-of-the-world battle. The inability to deal with something as relatively simple as raising the debt ceiling is a symptom of fiscal dysfunction in Washington that will push the U.S. further down the road to economic stagnation. But the image that comes to my mind is that of a frog cooking to death in a pot of water that heats up so slowly the frog never jumps out, rather than fire blasting from heaven to devour Gog and Magog.

Jim Jubak

Mind you, there is a possibility that failure to raise the debt ceiling could set off a catastrophe in the financial markets along the lines of the Lehman Brothers meltdown. But no one seems to be talking about how that could happen -- maybe because it's too complicated for us rubes to understand or maybe because it's another example of why the current system of global finance needs to be torn down and completely rebuilt. Come to think of it, it couldn't be that second reason, though -- Wall Street and Washington would be fine showing everyone how the sausage is made. Really, they would.

The problem posed by the debt ceiling is actually pretty simple. Every month the United States takes in less than it spends. The gap has averaged $125 billion a month in 2011. In February, the monthly deficit hit $223 billion, which was a record. May, a very good month for revenue inflows, saw the lowest deficit for that month in five years -- but that deficit still hit $59 billion. It was also the 32nd consecutive monthly deficit. The cumulative red ink pushed the federal government right up to the current debt ceiling of $14.29 trillion on May 16. The U.S. Treasury has been juggling accounts ever since by, for example, delaying internal transfer payments, but it will run out of gimmicks on Aug. 2, according to its calculations. At that point, the federal government will have to stop spending more than it takes in -- unless Congress raises the debt ceiling to allow more borrowing.

Going cold turkey on debt is made more difficult because some parts of federal spending are climbing automatically. As of May, spending formulas increased the cost of Social Security, Medicare and Medicaid by 3.6%, 3.8% and 5.4%, respectively, in 2011 from 2010, according to the Congressional Budget Office. The biggest jump came from spending on the public debt, up 16% from 2010.

If the Treasury can't juggle cash internally to avoid running up against the debt ceiling, then it will have to juggle externally to bridge the average $125 billion monthly gap. In June, the interest due on the U.S. debt came to $110 billion, but most months it's closer to $30 billion. The government sent out about $60 billion in Social Security checks in May. Not sending out Social Security checks and not paying interest on Treasury debt would go a long way to closing the monthly gap.

The consequences of failure

Here are the five arguments Obama is making for raising the debt ceiling:

First, at least one core function of the U.S. government -- with lots of public support -- is going to take a big hit if the United States suddenly has to live within its revenue. What's it going to be? Social Security? Veterans' benefits? Pay for active-duty military personnel? Interest on Treasury debt?

Want to avoid hitting a big, politically powerful group hard in your efforts to fill the gap? Can't be done.

Eliminating the entire budget for the Smithsonian museums, for example, would save just $800 million over a year, or about $67 million a month. Completely zero out the NASA budget and you reduce the gap by about $1.6 billion a month. Cut the Environmental Protection Agency's budget completely and the monthly gain is $750 million. Even combined, they're peanuts compared with that $125 billion gap. To close the gap, you've got to go after the big programs that have been responsible for bringing the current negotiations over the debt ceiling to deadlock.

Second, cuts of this magnitude will, in the short term, send the U.S. economy back into recession. In the first quarter of 2011, the U.S. economy showed a 1.9% annual real rate of growth (after subtracting the effects of inflation on the value of goods and services produced here). That resulted in the U.S. economy growing (once again after subtracting inflation) by a whopping $64 billion. That's only about half as big as the monthly cuts that would be necessary to fill the revenue gap in the event of a failure to raise the debt ceiling. Yes, in the long run the U.S. debt of $14.3 trillion is a powerful drag on growth in the U.S. economy. But in the short run, reducing the government's spending by $375 billion a quarter in borrowed money will depress economic growth.

Third, trying to run a government without either a surplus or the possibility of adding additional debt to balance out month-to-month swings in revenue and spending will produce massive uncertainty. So what does Treasury do when interest payments balloon in June and December as they do every year? Does the government cut back on interest payments even more that month and then increase payments in January and July? Tax receipts don't come in evenly over the course of a year, either.

Fourth, all this uncertainty and chaos will add to the interest rates the United States must pay on its debt. Stands to reason, doesn't it? U.S. Treasurys have been used as the definition of a risk-free investment because buyers could count on the U.S. always paying its bills and behaving reasonably responsibly. Now both of those attributes deserve serious re-examination. And even if Congress does come up with a deal that extends the debt ceiling, major damage has already been done to U.S. credibility. Imagine that you're an overseas investor following the current debate in Washington. You've heard U.S. politicians say that a default is better than raising the debt ceiling. You've heard statements that have basically challenged you to find another place to put your money. And you've seen politicians willing to sacrifice bond investors to short-term domestic politics. Every investor in the world has got to be asking: "How soon can I find an alternative investment for some of my Treasurys?"

Fifth, none of this is good for the long-term trend in the U.S. dollar. Standard & Poor's has put the U.S. AAA rating on credit watch with negative implications. The credit rating company has said that if a credit downgrade happens, it could come within the next three months. This, like the uncertainty surrounding the debt ceiling fight and the demonstrated inability of U.S. politicians to come up with a plan for addressing the long-term U.S. debt problem, has eroded the desire of overseas investors to hold dollars. Until Washington can demonstrate a real plan to reduce the projected growth in U.S. debt, I think the dollar will be locked into a downward trajectory. That adds to the upward pressure on U.S. interest rates, of course, as well as the downward pressure on the U.S. standard of living.

All this adds up to serious pain for the average American. Even if you aren't a member of one of the groups that winds up paying for a failure to extend the debt ceiling, you're still going to pay the price in slower growth and higher interest rates.

But I don't see Armageddon here. Interest rates won't go up overnight. In fact, they may not go up at all until the euro debt crisis is "solved." And even then, U.S. interest rates are likely to climb slowly because U.S. Treasurys are such a big part of the global portfolio that it's hard to find alternatives overnight. (Nonetheless the U.S. debt ceiling crisis, like the larger U.S. debt crisis, is good for gold and other commodities and for currencies such as the Canadian and Australian dollars, the Swiss franc, and the Norwegian krone.)

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Mail"},"omniAccount":"MSNPORTALSCP","ratingsControlId":"ratCntrlBinary","ratingsItemId":"scp:bbcdiscussion:9f00d512-43cd-4fba-85af-973624730f21","appUri":"http://social.msn.com/boards","pageUrl":"http://money.msn.com/investing/would-a-us-default-mean-disaster-jubak.aspx","ratingTags":["00120065-0000-0000-0000-000000000000","00000065-02a6-0000-0000-000000000000","ART"],"fblkShow":true,"fblkAppId":"","fblkRef":"","fblkTrkName":"","fblkTrkVal":"","twtShow":false,"twtTrkName":"","twtTrkVal":""}); }); /**/ 443CommentsNewestOldestBestWorstControversial of 23 Polak8920 hours agoMany people have great ideas and comments on hear if only our spoiled politicians thought like this or read these comments. 0 0ReportSpamHANKS22 hours ago

There are only 2 reasons to even HAVE a government:

To protect us, Laws that stop citizen abuse or crime, and an army (navy, marines etc) to protect us from outside world dangers. To work towards the betterment of life for those citizens who pay to keep a government.

That's it.

Yet, we have to listen to PROFESSIONAL POLITICIANS and news pundants describe some of the people running for office as "too dumb" to do the job.................WHEN THE OFFICIAL SCORE BY ALL POLITICIANS THAT HAVE DONE THE JOBS SINCE WWII IS EXTREMELY CLOSE TO 100% FAILURE!

ARE THEY NOT SMART ENOUGH TO FAIL AND DISREGARD THEIR JOB REQUIREMENTS IN FAVOR OF THE PRIVATE PERSONAL MORAL IMPERATIVES THAT THE BUSH'S' (BOTH), CLINTON, OBAMA, REAGAN, KENNEDY, JOHNSON, CARTER, AND NIXON DID?

THE REVENUE TAKEN FROM THE PAYCHECKS OF THE PEOPLE, BY LEGAL MANDATE AND ITEMIZATION UNDER THE GUISE OF A SUPPLEMENTAL RETIREMENT INCOME, MONEY THAT IS STILL HELD IN AN ACCOUNT SEPARATE FROM THE GENERAL FUND BUT STILL IS ....1 TRILLION DOLLARS ...OVERFUNDED..., BUT PLASTERED WITH IOU'S....................ALL OF THOSE WHO INDEBTED THE CONSTITUENTS AND KNOWINGLY TOOK THOSE FUNDS AND REDIRECTED THEM TO ..........THE "MUCH BETTER IDEA OF WHAT TO DO WITH OUR MONEY WE HAVE SAVED FOR OURSELVES", AS WELL AS THE BETTER IDEA OF RAISING THEIR OWN INCOMES ...........WITH MORE OF ...OUR MONEY!!!!!

BOTH PARTIES SHOULD HAVE TO GO BACK......REVERSE CHRONOLOGICALLY (LAST ONE THAT PASSED AS LAW), AND COUNTERMAND ..............EVERY SINGLE UNFUNDED LAW THAT WAS PUT IN PLACE BY VIRTUE OF EACH OF THOSE PARTIES......THEMSELVES............(NOT UNLIKE RUBBING A PUPPY'S NOSE IN HIS MISTAKES)!

THIS EMBARRASSMENT WOULD BE A SURE CURE FOR THOSE WHO IMAGINE THEMSELVES AS SOMEONE HIRED TO HAND OUT OUR MONEY TO WHOMEVER.............THEY DEEM ............

MORE WORTHY THAN ........US.......TO HAVE ......OUR .............MONEY!

1 1ReportSpamtoysahs524 hours ago

@ Someone (Geno65)

I like the thought process. The internet and all it's means is a voice, but I do understand that WE talk lots and WE are not being productive at doing so. So, how does one actually start? Honestly, I am just now realizing what has been going on for years. The reason I know now about this current event is because of this article. Yeah, I'm slow at understanding. Maybe others are not aware. Maybe we don't really understand. Giving a voice or voting, what do we do otherwise? How and what do we write our congressman who is not one sided and has only his/her special interest stuck in the special interest. It is usually the voice of the people, but how do we know that all of our voices are being heard? The need to post our thoughts is because WE may feel as if someone is listening, someone who can guide us to where it is we need to go. I don't know. We have voiced our disapproval through votes and public rallies, to some degree, but who is listening to the people who voted the big guys in?

1 0ReportSpamGENTILEWed 10:01 AMThere is zero risk of a default to the creditors of US debt. The federal government takes in about $170 billion each month in revenues, but pays less than $29 billion each month in interest on the debt. The Bipartisan Policy Center has laid out a plan where the Treasury could pay: all debt interest, all Social Security obligations, all Medicare and Medicaid obligations, all Defense contractor bills, all Veterans payments, all active duty troops; and still have almost $7 billion left over every month for other items.Obama is using pure political scare tactics to deceive uneducated voters into supporting his position. There is no risk to "the full faith and credit of the United States" unless Treasury chooses to default. Not raising the debt limit will cause a limited government shutdown, not a default, as Obama insinuates.　 5 5ReportSpamPoisonous RabbitWed 4:24 AMWake up people!! our government doesnt have the power anymore its the large coporations hidden in the shadows controling everything. (EX.) if you were to give president obama a billion dollars as a bribe for anything , would he say no??? BS!!, he would take that billion and bend over for em. In the end its like having pets, you give em something to eat and they will obey their master. im not trying sound crazy or paranoid, just do some research on your own and youll see. 6 1ReportSpamDORIS ROTOLO (jingle bingle) Wed 3:04 AM

Obama wants to pay our bills...I admire that. It takes money to make money...and I know .

NO CREDIT....EVER is my motto. I own so much and I have so much and I dont owe a cent to anyone.......NEVER pay interest ...that is wasted money......Obama knows how much more we can all have if our debt is paid in full...and he can do it....an he will tax the right people to do it.

The interest alon e can pay for all of our programs for food shelter....medical....medicare...Social security....and the future.....Why give it to China?????? Mexico??????? Or REPUBLICANS??????? Unless you just love to be poor and pay for other peoples good lives ....wise up!!!!!!!

4 8ReportSpamDORIS ROTOLO (jingle bingle) Wed 2:32 AM

Common sense is not common knowledge. Most people are so impressed with words...and it takes only a few in most cases. If you dont believe me look at divorce stats....same as political lies and failures. The seduction is the game....it sucks in people who are very needy mentaly ....they have sucky lives...and so they dream big....and hope and gamble..on any commercial, political promise....words of God...( the fakes)......anything that says ...I will make it better. People who weigh 500 lb .....think a pill over night will make them into thin gods and goddesses.....or a sex symbol....NO you are fat...ugly...and hopless....It is the same with political promises. Tell me how a Republican who wont spend the buck is going to help you get rich? Next tell me they will get rich and give you some...hehheehehahhaahaha......when was the last time????? What happens if you dont pay your credit card???? Pay the house note????? Your foreclosed house is already rented ...by the republican banker who took it...and your equity with it......Buy it all.....fall for all of the bullshyt...and see how good life is in the next years......or better still....get on your knees and pray....for months....years ....make no difference.....LOUDER...maybe he can't hear you....or see you...or ...WTF cant you see it is usless???? You live on a 5 trillion year old planet....and god was invented less than 3,000 years ago....can t you add? He invented what????? Out of mud?????

Get a grip.He flew off an left you ..and said he would be back....so did the guy who knocked up your mother.........or the filly who took your wallet....still waiting for them to come back??? They are with Jesus.....poof....thin air. Grow up Americans .......open up your eyes.....your ears...your nose....smell any rats ??????????

4 4ReportSpamDORIS ROTOLO (jingle bingle) Wed 2:07 AM

The Republicans speak of the businesses who willl suffer if we raise taxes...they are talking about themselves.I am sick to death of hearing about how our children and grandchildren will suffder ...is this what was planned for mine? No one can forsee natural disasters, or wars, or weather that destroys crops, or oil spills,power plants, fires. The Republicans have a 14 day memory, and blame our President for everything .His spending has been for very real reasons...but they make it sound like he threw it in the air...... They hate his being black and sitting in so powerful a seat. The real truth is they will see a President of Spanish decent one day, an openly gay person, a female,and more blacks will be elected ahead of them, and they had better get over seeing it as an insult.

It is embarrassing to see so many Republicans hide behind religion, and are so phony. they even look different than normal people( so pasty, so weird looking,) trying to pull the wool over our eyes with looks, and we don t like the looks of them. they have a crazy look on their faces ;;;;look closely and you will see it.It is in the eyes....like they are all on the same drug. The dream of making us a nation of Jesus freaks is a dream never to be true....and we will not pinch pennies so they can be rich....the thinking is just plain nuts. It is a Hitler Nazi kind of mentality that says ....kill off the ones who no longer work and provide for us.....they only see most people as drones....and any who no longer contribute are to be killed. Contribute to their causes of course. Mostly are southern born who still have a desire to keep slaves....of any color....sex...or thinking. if you are not the rich, and one of them,you are disposable. They are the real terrorists. they want to take away your privacy, livelihood....and next comes the deaths. You are in the way. A Morman Bishop lives across from me. Not one has spoken to any of the rest of the neighborhood in 19 years....we are not Mormon so we are heathens...and they will run you over with a car if you are in the way. They bring derilicts home...from jail or mens shelter....feed them and pray....and they work for free in the car lots, resturants, Dary queen......fix the roofs.....paint.....slaves. until they run off....SLAVES. You can't get ajob because the word is out ...do not hire....we will run them out of office.....then you will work for us......for peanuts.Kill off unions....and make them be....SLAVES

AMERICANS fight hard for your lives.

4 7ReportSpamBill WWed 1:04 AM

also depending on forgein oils is what led us to this??? , Cmon guy get a grip or get your head out your rear end . GREED is what led us down this path Along with irresponseability in choosing how a president is picked . I say hook them to a poloygraph machine which is linked to an electric chair in which they sit and are asked how would they run this country and whats is your concerns . See how many back off ?

6 2ReportSpamBill WWed 12:54 AM

TO THE REPUBLICANS , gET OFF IT !!!! YOU HAVE TO BLAME A DEMOCRAT ? Thats is so childish but then again apparently thats what you are , SURE OBAMA DOESNT KNOW WHAT HE IS DOING BUT GET A GRIP ON REALITY . It was george bush jr who put this country in a tailspin with increasing gas prices when all he had to do was put a price freeze on everything. This would have halted a lot of things the Taxpayer like me and you have to pay for. Another thing , We need to pull our troops back home , We need them here and not fighting some stupid holy war , We have killed bin Laden and others like him . Time to leave !!! Cut our militery back , Cut All of the Congressmans Pay in half and these alone should pull us out of debt . Then for those people where welfare and constant unemployment is a way of life , make the rule they have to have had worked 75% of their life after age 20 in order to receive help . I became unemployed for 2 years and wasnt able to get a dime from anyone , I had to fish and hunt and take whatever lil jobs i could to survive and i have worked and paid taxes since i was 14 years old and yet when i go to get help I am denied but Lord Forgive if some dam bum who refuses to work and hold a job walks in dfacs , unemployment offices and can get food stamps , unemployment and financial help . what the hell is wrong with this picture ?

I say lets kick the bums out and go back to the kings and queens .

9 2ReportSpamjesse-usaTue 9:47 PM

The USA debt and depending on foreign oils is part of what led to the decline in the American dollar .

The reason why we got in the Debt was because of all the extra programs for the lazy and selfish: welfare, disability, food stamps etc, I've known and seen many people who abuse these programs and milk off the taxpaying citizens . We should have programs motivating these people and helping them get back in to work, instead of keep them in a crutch. Send out government workers to see who really needs these programs or not. The ones not qualified, put them on a program allowing them to be subbed out for the work of their field , making a decent wage while they look for a job motivating them, At this point you save about 1 trillion dollars or more for the budget from the first year, people who were hurting America are now helping, making instant growth in the economy. and raising the budget even more. Before you dismiss this, note only 47% of Americans work. Why work when I can milk of the government ,I mean the tax payers!!! .

Foreign oil plays a big part in this , because we spend lots of our money on it; these countries know , we will always pay what we are charged, cause we have no choice. Businesses have gone bankrupt over the oil prices. many businesses depend on importing and deporting of goods, you and I do too; This increases the prices we spend at the store and among other places. so as a result the oil prices will influence some of the inflation rate. even worst these others countries have to charge us more and more money as the dollars weakens. See where this is going?

If we keep borrowing money, we get to keep living comfortably for a while, the dollar will keep descending and we will see more and more inflation , and the rate will be slow at first, but will accelerate faster and faster, as we have nothing to back it up with.

We need to stop borrowing money now . It will be tough for the country and we will go through some very hard times , A lot of people will be upset and a lot of programs will not get the funding they need. The dollar will eventually stop declining and inflation would stop or even reverse .But we stop the problem before it's too late and don't do any permanent damage.

OR we can keep going at this and see how long we can keep it up, hoping that although it has never worked before our economy will somehow magically pickup, while we throw trillions more in, where at some point we become able to pay $15.000.000.000.000+ off. what is more probable is we keep doing this holding out as long as we can maybe we reach 17trillion or 22 trillion and maybe we hold out for another 2 or 6 years ,then other countries stops buying our debt, we end up in an irreversible black-hole of debt, that will be in-possible to get out of. At this point nearly all programs will have insufficient funding. Our dollar would be too weak to do any useful external trading, we will be vulnerable to attack by many countries, why?[ I'm sure you can figure this one out] .Our country will face famine and martial law. Then our country falls apart. forcing the current system of global finance to be torn down and completely rebuilt, into one world economy. I am rarely wrong , but I hope I am, cause we know they are going to raise the debt ceiling.

10 1ReportSpamRhinoceros7Tue 8:53 PM

RightTurn,

Yes, Obama would rather cut off money for old people than to stop paying out foreign aid. His ObamaCare will cut off much health care for old people, so why not cut off their social security now? He will simply blame it on Republicans. As for foreign aid, we are giving hundreds of millions to the Palestinians, who are giving much of it to Hamas, a terrorist organization, which wants to destroy Israel and the US. He woudl much rather starve old people than stop helping our enemies to harm us. Understand that this is not an "American" in teh White House, not as far as his heart goes. He grew up in Indonesia, attending Muslim schools. He has always sided with and embraced communist principles and tactics, even teaching them to ACORN members and others in Chicago. He does not care for America and our way of life and has said and shown as much time and again. Our worst enemy is in control of our country. Sad, but true.

11 8ReportSpamRhinoceros7Tue 8:48 PMIt's very simple. Obama wants the economy to worsen. If it improves, that improves his slim chance of reelection. If it fails, that improves his odds dramatically, because his primary goal is not reelection but destruction of our free market economy. He campaigned on redistribution of wealth. He has shown time and again that he wants this. What do you think taxing "the rich" is all about, and Obama's statement that he can't allow people to keep more of their own money than they "need." He is flat out a Marxist and wants to destroy our economy, so he can take complete control of it and reshape it into the socialist disaster like they have in Cuba, Venezuela, and other communist countries/dictatorships. Why do you think he shows so much admiration for Castro, Chavez, and other tyrants? It is Obama's idology, pure and simple. Accept total control from this shameful excuse for a president, or do all you can to persuade Republicans and Democrats to stand up to him, to slow down his takeover of America, and then vote him out next November. 11 8ReportSpamLostOnEarthTue 8:43 PM

Armageddon? What are the Bankers of the world going to do? Kill us???

No,... just the opposite, we will be killing all of them! The "Great Revolution of 2011" comming to a town near you on August 2nd.

12 1ReportSpamdiscuss.debateTue 8:15 PM

According to the "Economist" magazine (UK): Our "Planetary Debt" is 39.8 trillion dollars; divide that by almost 7 billion people on the planet!! In 10 minutes (while writing this), the debt has reached $42.6 trillion.

This is how fast debt compounds. It is not a fixed rate... the more debt the more it must be financed by taxes, the more money we must make to service it. So ask yourself, "Who when all loans are called in... Who will be the recipients of the $50 trillion dollars out of the 7 billion people???"

Armageddon? What are the Bankers of the world going to do? Kill us???

INTEREST = Nonexistent (not printed) dollars since the FED was started… compound that by people, time and so on.

WE CAN NEVER PAY BACK THIS MONEY ...WAKE UP MEDIA AND ALL YOU ****et's!!

2 3ReportSpamRIGHTTURNTue 8:14 PMI FIND IT VERY HARD TO BELIEVE THAT OUR PRESIDENT WOULD RATHER MAKE OUR OLDER PEOPLE SUFFER, RATHER THAN CUT OFF FOREIGN AIDE. WE SPEND MONEY HELPING PEOPLE OUTSIDE THE US - - IN MY BOOK -- HOME SHOULD COME FIRST 19 2ReportSpamJoe-AmericanTue 7:54 PMIts time to listen to Main Street America. Focus on the USA and its economy as priority number one. I remember growing up and listen to my family say "its not the president its the party" that make a difference. It seems to me that the last few presidencies have been nothing short of lame and maybe our current president can call out everyone of the greedy politicians ( regardless of party) and get them to do the peoples work. I'd toast to that. In these times - its time to stop special interest, get back to basic math. Invest in our future not some foreign country. Anyone with the thoughts of a one world, one government mentality - get over it. Its not going to happen ,and if it ever is to happen, I would think that we should have financial books stable, have a financial surplus without any worry of our children having to pay for this debt and live by example of how wonderful a one world system would work before trying to accomplish. Our country fathers had a vision of a new world, a government that is for the people, by the people and everyone seems to just forget that small detail. This is why the vote is so important. Today - I think our country is being ran for the fortune 500, with a piss poor effort to server the people of our great country. 16 1ReportSpamGrammaJ66Tue 7:49 PMAll I can say is if we don't get our social security checks, our creditors will have IOU's in their payment envelopes. Hmmmm...what will that do to the economy? When will our government leaders recognize that we seniors have worked and paid into the system for 40 or 50 years...we depend on our monthly payments to pay our bills. The term 'senior citizen' does not automatically equate with "rich"! 19 2ReportSpamDC Ivy (catxx1) Tue 7:25 PM

One of the groups that the fed is indebt to is not mentioned that being the Senior Citizens of America, it seems that Social Security has had its pocket picked way back when the national debt started getting out of hand. One first step would to tighten or enforce social program benefits be available only to US citizens. If you are here illegally we will give you a bowl of oatmeal and return you to your native country. If you are hear illegally and you are hurt we will give you a band-aid and return you to your native country and charge your native country for the band-aid. If you are a company incorporated in the USA but your manufacturing facilities are off shore we will impose a tariff on your products that would reflect a price equivalent as to the cost of making those products in the USA. If you are a country which is in debt to the USA we will call in that debt if you can not pay the debt you will get no more US aid until it is paid, or we will accept land and population transferred as a protectorate or colony of the USA.

Though these measures and others of similar vent will not put us in the black immediately it will stop a good deal of the rupturing of our economy. I disagree with the article in that, that is how we got in this mess. We must live with in our means, we have been borrowing money since the thirties, we have even picked our own pocket time and time again. Yes it will be painful for all Americans but we created this situation by repeatedly putting off the day of reckoning. If we put it off again, we will put it off again and again and again as we have been doing for the past 50 years. At one point we will become slaves in gilded chains, but slaves none the less.

The belt tightening begins at home. Stop using credit cards for "humdrum" items, if you don't have the cash you can't afford it. Reserve credit for major purchases like a home. Put a minimum of 15% of your earnings in savings and at the paltry interest rates banks are paying and the volatility of the markets I suggest to sew it into your mattress.

24 2ReportSpammylanta419gottaminuteTue 7:12 PM

Thomas Jefferson was a very remarkable man who started learning very early in life and never stopped.At 5, began studying under his cousins tutor.At 9, studied Latin, Greek and French.At 14, studied classical literature and additional languages.At 16, entered the College of William and Mary.At 19, studied Law for 5 years starting under George Wythe.A

Here are the five arguments Obama is making for raising the debt ceiling:

Want to avoid hitting a big, politically powerful group hard in your efforts to fill the gap? Can't be done.

There are only 2 reasons to even HAVE a government:

That's it.

THIS EMBARRASSMENT WOULD BE A SURE CURE FOR THOSE WHO IMAGINE THEMSELVES AS SOMEONE HIRED TO HAND OUT OUR MONEY TO WHOMEVER.............THEY DEEM ............

MORE WORTHY THAN ........US.......TO HAVE ......OUR .............MONEY!

@ Someone (Geno65)

Obama wants to pay our bills...I admire that. It takes money to make money...and I know .

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Will a U.S. Debt Default Really Mean Disaster?

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