US Could Default On Its Debt by June 1st, Janet Yellen Warns

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goldfish21
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21 May 2023, 5:57 pm

ASPartOfMe wrote:

goldfish21 wrote:

Plan b = ?

Plan b is negotiated spending cuts. But they won’t be as deep as the spending cuts caused by inability to pay.

Meanwhile Biden has reduced the deficit and thus has already cut spending while the bills the country is supposed to make debt payments on were racked up under trump.. so I also get democrats unwillingness to negotiate ridiculous spending cuts to pay for republicans' spending like drunken sailors.

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ASPartOfMe
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22 May 2023, 6:30 pm

Janet Yellen warns if debt ceiling isn't raised in just over a week, U.S. could face default

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Treasury Secretary Janet Yellen warned Congress in a letter Monday that the U.S. government might not be able to pay the bills in just over a week — as early as June 1 — if Congress does not act to raise or suspend the debt ceiling.

With an additional week of information now available, I am writing to note that we estimate that it is highly likely that Treasury will no longer be able to satisfy all of the government's obligations if Congress has not acted to raise or suspend the debt limit by early June, and potentially as early as June 1," Yellen wrote Monday.

The treasury secretary has been regularly updating Congress on when the U.S. could run out of borrowing authority. The department has been closely tracking funds coming in from tax receipts coming in and money going out to pay the nation's bills.

Yellen warned on Monday that the timeline was based on "currently available data, and federal receipts, outlays, and debt could vary from these estimates."

In a new report Monday, Wells Fargo economists took a only slightly more optimistic view than the Treasury Department of how long the government has before money runs out. But their assessment is that even in the best case scenario, the Treasury's general account would be "extremely low" — with less than $50 billion in the first half of June if the debt ceiling is not raised. They characterized a 50-50 chance of default in early June as "very concerning."

Politics Biden and McCarthy meet again on debt ceiling with time running short

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President Joe Biden and House Speaker Kevin McCarthy huddled in the White House once again on Monday evening, as time runs short for them to reach a deal on the debt ceiling.

After the meeting concluded, McCarthy struck an optimistic tone, and said he intends to speak with the president every day until a deal is done. And a deal is not done.

"There's nothing agreed to — everything's being talked about," McCarthy said when asked if work requirements are still on the table.

McCarthy said he hopes they can reach an agreement that both Republicans and Democrats will be able to vote for.

At the top of their meeting, the president said he and the speaker agree default isn't an option, and they agree on the need to reduce the federal deficit. But the president said Congress needs to look at tax loopholes. McCarthy said the two have disagreements, but can agree the United States' debt is too large.

"We're optimistic we may be able to make some progress," Mr. Biden said.

Republican Rep. Patrick McHenry of North Carolina told reporters after leaving debt ceiling negotiations Monday morning that talks are at a "sensitive" place.

A White House official says the speaker and the president agreed Tuesday that the final product must be bipartisan. But the official claimed that toward the end of the week, the speaker's team moved away from some of the options that were being discussed. For example, the White House official said, the speaker's team proposed an additional cut to food assistance that wasn't in the House-passed bill, and caps on annual funding three times longer than recent budget deals.

But McHenry said it's "not the case" that Republicans are pushing beyond the House GOP bill.

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22 May 2023, 6:46 pm

Meeting Between Biden & McCarthy Ends With No Deal On Debt Ceiling

https://www.reuters.com/markets/us/fresh-round-debt-ceiling-talks-kick-off-us-default-worries-grow-2023-05-22/

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goldfish21
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22 May 2023, 7:31 pm

So mccarthy is going all in on a trump dictatorship somehow magically saving the USA after he implodes the US dollar with this bunch of bs ? Costs of borrowing will go up for every American and somehow he thinks that trump, who ballooned the national debt, is somehow going to wave a magic wand and fix everything they muck up about $ and the economy ? He can’t be serious..

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22 May 2023, 10:38 pm

Where's Dark Brandon when you need him? Dark Brandon would invoke the 14th.

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goldfish21
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23 May 2023, 5:43 am

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Tim_Tex
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23 May 2023, 6:16 am

goldfish21 wrote:

But how do you convince people on the right of this, when they're screeching "soshulizum!! !" as if they just saw a 1950s propaganda film, and/or think that social programs are an excuse for black and brown people to "be lazy"?

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goldfish21
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23 May 2023, 12:53 pm

Are they really all THAT ignorant that random Canadians on the internet understand that the money being spent Now is to pay for things trump spent it on and they can’t possibly wrap their minds around these very basic facts?

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ASPartOfMe
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23 May 2023, 9:30 pm

Could the 14th Amendment solve the debt limit standoff? White House says it's not a fix

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The White House on Tuesday said invoking the 14th Amendment to work around the debt ceiling won't "fix the current problem" but wouldn't shut the door entirely on pursuing the unilateral strategy if a deal with Republicans isn't reached.

"It is not going to fix the current problem that we have right now," White House press secretary Karine Jean-Pierre said. "Congress needs to do its job."

Pressed whether the 14th Amendment is still on the table for Biden, Jean-Pierre wouldn't directly say. "This is up to lawmakers," she said. "Understandably, the president wants any action to be strongly supported by the law, and that's what you've heard him say."

Biden, during a press conference Sunday in Hiroshima, Japan, went further than he's gone before on the 14th Amendment, saying flatly that he believes it gives him the legal authority to bypass Congress and get around the debt ceiling, which sets a cap on the amount the U.S. can borrow.

At issue is Section 3 of the 14th Amendment, which says “the validity of the public debt of the United States … shall not be questioned.”

Some constitutional law experts − and an increasing number of Democrats in Congress − argue Biden should challenge the constitutionality of the federal debt limit based on the 14th Amendment by having the Treasury continue to issue new debt to fulfill its financial obligations even if Congress doesn't act.

Biden is racing to reach a budget deal with Republican lawmakers so they will join Democrats to raise the debt ceiling before June 1, when the U.S. is projected to run out of money, to avoid a potential default.

But progressive Democrats have raised concerns about spending concessions Biden might have to make to get Republicans on board as they urge Biden to instead pursue the 14th Amendment strategy.

“As disastrous as it would be to default on our debt, it would be equally disastrous to pass the outrageous Republican proposals,” said Sen. Bernie Sanders, I-Vt., who is among 11 senators in the Democratic Caucus who urged Biden in a letter last week to invoke the 14th Amendment on the debt ceiling.

Talks between the White House and House Republicans have centered on Republicans proposals for stricter work requirements for recipients of food stamps and other welfare benefits, annual caps on future discretionary spending, expedited permitting for oil and gas projects and rescinding COVID-19 funds.

Biden has indicated being open to components of each, but he's not gone as far as Republicans want.

goldfish21
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23 May 2023, 9:46 pm

republicans are nuts. When trump was in office he spent like a drunken sailor and racked up massive deficits and national debt.

Biden’s budget reduces deficits by $3 Trillion over 10 years.

Yet republicans expect Biden to cut government spending to the bone to make up for trumplestiltskin’s spending spree and they’re willing to hold the US economy hostage to try to force it to happen..?

Totally nuts. You’d think educated informed constituents would be tar and feathering these whackos and sending them packing.

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QuantumChemist
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24 May 2023, 11:44 am

One of the possible consequences of a government default:

https://abcnews.go.com/US/older-america ... d=99506742

Also, the local tv news talked about the stock market falling around 50% if a default happens, which is likely this time around. Hope people diversified well enough ahead for a recession.

ASPartOfMe
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24 May 2023, 1:04 pm

Amateur opinion=mine:

In 2011 we did not default but got close, the credit rating of the U.S. was dropped, the stock market crashed and that was enough to shock politicians into a making a deal. Some effects lingered for a couple of years. In 2008 Congress at first rejected the original bailout, the stock market crashed and the very next day Congress passed the very same bailout.

Most expect this will play out the same way, this is brinksmanship, no matter how much they hate each other when the shock realization that they are at the edge of the abyss a deal will be made. That is complacency, America is a much more polarized, dysfunctional country then it was then.

It’s default day plus one now what? The stock market won’t go down 50 percent because the computers will shut it down. There will bank runs and panic shopping. Hopefully the politicians will realize “OMG what have we done?” and make a deal. Maybe people will be relieved and move on but I doubt it. Getting close and doing it is vastly different psychologically. For years if not decades we won’t be trusted not only financially but generally. That will have a significant negative effect on Americans going forward.

If that is not enough to shock politicians to make deal in short order this will go on indefinitely and as the consequences metastasize hate between the two sides will increase. This means worldwide great depression. Those who survive will mark time before default and after default because life after default won’t resemble before.

Personal Note: This situation we put ourselves in is too hard for my mind to handle, it seems surreal. Hopefully in a week or two surreal is all that it ended up to be.

QuantumChemist
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24 May 2023, 3:17 pm

ASPartOfMe wrote:

You are right about the computers stopping the market as it starts to crash. The stock market will not go down 50% in one day, but it could be a several weeks event if it heads that way. Politicians would likely be one of the first people to dump their valued stocks if they know a crash is headed to the markets. Others would see that and follow along. Too many hardline cooks in the kitchen on this one to get a quick fix. My 2 cents about it. I hope I am wrong on that.

ASPartOfMe
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24 May 2023, 7:34 pm

Fitch puts United States’ AAA rating on negative watch, citing debt ceiling fight

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Fitch put the United States’ AAA long-term foreign-currency issuer default rating on negative watch Wednesday evening, pointing to brinksmanship over the debt ceiling.

“The Rating Watch Negative reflects increased political partisanship that is hindering reaching a solution to raise or suspend the debt limit despite the fast-approaching x date,” the rating agency said.

Futures linked to the Dow Jones Industrial Average briefly slipped about 100 points after Fitch, one of the big three ratings agencies, issued its note.

Fitch noted that it still expects Washington officials to arrive at a resolution before the deadline.

“However, we believe risks have risen that the debt limit will not be raised or suspended before the X-date and consequently that the government could begin to miss payments on some of its obligations,” the rating agency said.

The announcement arrives after debt ceiling negotiations between teams representing President Joe Biden and House Speaker Kevin McCarthy have fallen short of an agreement.

On Wednesday, McCarthy said that discussions over raising the debt limit were progressing toward a deal, but both parties continue to clash over spending. Republican leaders sent the House of Representatives home for the holiday weekend, but put members on notice that they could be called back for a vote.

All House Democrats sign onto measure to force debt-limit increase

Quote:

Leaders announced on Wednesday afternoon that Reps. Jared Golden (D-Maine) and Ed Case (D-Hawaii) joined 211 Democrats in signing onto the measure.

However, Democrats would need the backing of at least five House Republicans for the effort to be successful.

If a majority of the lower chamber backs the effort, Democrats could force a vote on legislation to lift the debt ceiling.

“We’re five signatures away,” said Rep. Pete Aguilar (Calif.), chairman of the House Democratic Caucus. “So for our Republican colleagues who give interviews and go back home and talk about how they want to work together, and talk about how they’re not extreme like Marjorie Taylor Greene, and how she doesn’t speak for them — this is their opportunity.”

“It takes a handful of members of the GOP to say, ‘Enough,’” Rep. Katherine Clark (Mass.), the Democratic whip, told reporters in the Capitol.

But Democrats face a tough challenge in trying to round up the necessary GOP backing for the plan, particularly as the party locks arms behind Speaker Kevin McCarthy (R-Calif.) amid tense debt limit negotiations with the White House.

“We’re not even close to anything like that,” Rep. Brian Fitzpatrick (R-Pa.), a co-chair of the centrist Problem Solvers Caucus, said last week.

goldfish21
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24 May 2023, 8:03 pm

Have these politicians all never seen the movie “Tropic Thunder” ?

I mean, I know they’re not soldiers and this is a different kind of battle.. but still seems absurd that every single republican with a vote on this matter are ALL going full ret*d ?

You’d think at least 5 would break ranks and do what’s right for the country.

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24 May 2023, 9:23 pm

goldfish21 wrote:

Have these politicians all never seen the movie “Tropic Thunder” ?

I mean, I know they’re not soldiers and this is a different kind of battle.. but still seems absurd that every single republican with a vote on this matter are ALL going full ret*d ?

You’d think at least 5 would break ranks and do what’s right for the country.

This whole debacle started in the 1960’s, when Nixon took the U. S. Off the gold standard. Then conned-gress “borrowed” (more like stole) money from the Social Security Trust Fund, with the intention of never paying it back.

In the 1990’s, Clit-tongue, challenged Conned-gress to consider a balanced budget amendment, which immediately got shot down, as well as a line-item veto, which conned-gress also shot down.

Now, we come to 2023, and we, the people, are f!cked, just like I was f!cked when I overspent in my youth. I finally got out of debt by 2021, no thanks to Trumpty-Dumpty. Now the rethuglicans want to put me back into that position, by withholding my SSDI, since there’s no sane employer will even look at me for employment.

I’m short, opportunity in the USA is a bald-faced lie. It’s not who you know, it’s who you bl!w!

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