So we hit the debt limit...

[grumbler]

Obviously not raising the limit is a default, and obviously that is Armaggedon.

Neither of those are obvious to me. As long as they keep paying the interest payments with current revenues, there's no default.

How do they pay the people who are using the revenue that would normally go for pay as interest payments? 

[alfred russel]

Obviously not raising the limit is a default, and obviously that is Armaggedon.

Neither of those are obvious to me. As long as they keep paying the interest payments with current revenues, there's no default.

You think we may have a balanced budget in a few months?

[alfred russel]

Obviously not raising the limit is a default, and obviously that is Armaggedon.

Neither of those are obvious to me. As long as they keep paying the interest payments with current revenues, there's no default.

How do they pay the people who are using the revenue that would normally go for pay as interest payments? 

I guess instead of paying people their social security, or medicare, or fund our military, we will make our interest payments.

[DGuller]

Obviously not raising the limit is a default, and obviously that is Armaggedon.

Neither of those are obvious to me. As long as they keep paying the interest payments with current revenues, there's no default.

That's like saying that as long as you keep making your credit card payments from your rent money, you're not in default.  You are, just to a different party.

[MadImmortalMan]

Stopping paying for non-obligations isn't default, even if it hurts. Not paying the rent is not a good comparison. It's more like putting off repairing the roof and eating only ramen. It hurts, but it's not an obligation. You guys don't seriously think the government revenues are so small that during a shutdown they couldn't keep paying SSA, MC, military salaries and debt service. The deficit is huge, but they're still collecting something like 20% of GDP in receipts. I could be wrong, of course.

[Tonitrus]

Stopping paying for non-obligations isn't default, even if it hurts. Not paying the rent is not a good comparison. It's more like putting off repairing the roof and eating only ramen. It hurts, but it's not an obligation. You guys don't seriously think the government revenues are so small that during a shutdown they couldn't keep paying SSA, MC, military salaries and debt service. The deficit is huge, but they're still collecting something like 20% of GDP in receipts. I could be wrong, of course.

When that last shutdown was being threatened, we weren't going to be paid.  And even that last-minute deal that averted it did not prevent the admin/paperwork with our pay, that was anticipating a shutdown) from making a noticeable hiccup.

[MadImmortalMan]

Hmm. Likely the same thing would happen again. Did the administrative hiccup happen with SSA? I think it didn't, but I dunno. I remember preparing to float my brother some cash while he was at sea on a rescue operation for Japan. Still. You don't think Republicans would hold military pay hostage. That's gotta be some kind of sacrilege for them.

[alfred russel]

Stopping paying for non-obligations isn't default, even if it hurts. Not paying the rent is not a good comparison. It's more like putting off repairing the roof and eating only ramen. It hurts, but it's not an obligation. You guys don't seriously think the government revenues are so small that during a shutdown they couldn't keep paying SSA, MC, military salaries and debt service. The deficit is huge, but they're still collecting something like 20% of GDP in receipts. I could be wrong, of course.

Our budget may be worse than you think.

http://en.wikipedia.org/wiki/2011_United_States_federal_budget

The highlights:
Estimated Revenue: $2.17 trillion
Estimated Expenditures: $3.82 trillion
Deficit: $1.65 trillion

[MadImmortalMan]

Wow...

Well no I didn't think it was that bad.

[Monoriu]

Wow...

Well no I didn't think it was that bad.

Me too.  I was shocked after reading those numbers.  I keep hearing about big deficits in the US, but this is the first time I read some concrete numbers. 

[alfred russel]

But to be fair, the deficits are way up from where they were before the financial crisis, and are projected to go back down in the coming years.

[Neil]

The US is simply Greece writ large, and the Americans are a failed race.

[Slargos]

The US is simply Greece writ large, and the Americans are a failed race.

Difference of course is that Greeks are much smarter.

They're spending their money on pensions and recreation, while the Americans are getting nothing but guns and ammo for their money, which they waste on tasks which do not actually destroy their enemies very effectively.

[Admiral Yi]

Well no...it isn't status quo ante. First, the debt limit has been negotiated. Obviously not raising the limit is a default, and obviously that is Armaggedon. That is a terrible precedent, and I'm not sure where it ends. That rubican has been crossed.

Second, just the threat of a default--even if it is just missing a couple payments which are made up at a later date--is going to affect interest rates. I'd say even at this point, but certainly the longer this goes on, people are going to begin looking at government debt as potentially unstable during parts of the calendar. It isn't the kind of thing that helps keep a currency as the world's reserve currency (admittedly our major rival is doing its best to exit the competition atm).

You utterly and totally lost me Fredo.  I thought we were talking about whether Obama could end the game of chicken by telling the GOP to do whatever they wanted with the debt limit.

[Camerus]

How did the US come to be so badly mismanaged?