So what exactly happens if the US doesn't raise the debt ceiling

[Razgovory]

What's to keep the GOP from going through this whole thing again next time the Debt Ceiling needs to be raised?  Or the time after that?  It's like Blackmail.

[Admiral Yi]

So you figure the public will hold Obama and the Democrats responsible for the cuts in SS if it starts hurting them?

By the public you mean retirees or near retirees I assume.  Pretty hard for the Republicans to demagogue the cuts since they proposed cuts to Medicare first (and because it won't pass without their votes).  There could be some backlash from AARPists but I don't see where they woud channel it.  Are they going to form a Gray Panther Party?

Incidentally, I would like to point out that none of this would have been possible if Ryan hadn't had the cojones in the first place to touch the third rail.

Okay. What are the repercussions of this?

Massive law suits from people who recieve federal checks.  Most of the others think the US's credit rating would take a hit and interest rates on Treasuries would rise.

[Admiral Yi]

What's to keep the GOP from going through this whole thing again next time the Debt Ceiling needs to be raised?  Or the time after that?  It's like Blackmail.

All kinds of things.

Political self interest.  Loss of majority status in the House.  Elimination of deficits.  Changes in the debt ceiling law.  Indifference to deficits.  Military dictatorship.  Human extinction.

[Jacob]

By the public you mean retirees or near retirees I assume.  Pretty hard for the Republicans to demagogue the cuts since they proposed cuts to Medicare first (and because it won't pass without their votes).  There could be some backlash from AARPists but I don't see where they woud channel it.  Are they going to form a Gray Panther Party?

Yeah sure. If they hold the Republicans responsible and the Democrats campaign on "vote us in and we'll reverse this heinous Republican engineered assault on seniors" would there be enough of a swing in the senior vote to make a difference?

Incidentally, I would like to point out that none of this would have been possible if Ryan hadn't had the cojones in the first place to touch the third rail.

Seems accurate, yeah.

Okay. What are the repercussions of this?

Massive law suits from people who recieve federal checks.  Most of the others think the US's credit rating would take a hit and interest rates on Treasuries would rise.

It sounds almost bland when you put it like that

What will come of that? Will the lawsuits do anything other than make some lawyers richer? What sort of impact would a hypothetical credit rating drop and attendant interest cost on Treasuries have in the US and the world at large?

Some of this is pretty murky waters to me, so if you have any idea I'd love to hear it.

[Jacob]

Political self interest.  Loss of majority status in the House.  Elimination of deficits.  Changes in the debt ceiling law.  Indifference to deficits.  Military dictatorship.  Human extinction.

Arranged in order of least to most likely, yeah?

[Razgovory]

What's to keep the GOP from going through this whole thing again next time the Debt Ceiling needs to be raised?  Or the time after that?  It's like Blackmail.

All kinds of things.

Political self interest.  Loss of majority status in the House.  Elimination of deficits.  Changes in the debt ceiling law.  Indifference to deficits.  Military dictatorship.  Human extinction.

None of these seem likely to happen before the next time the debt ceiling will have to be raised, which will probably happen within the next year.

[Admiral Yi]

Yeah sure. If they hold the Republicans responsible and the Democrats campaign on "vote us in and we'll reverse this heinous Republican engineered assault on seniors" would there be enough of a swing in the senior vote to make a difference?

For similar reasons I don't see how the Democrats could demagogue it either.  Proposed by a Democratic president, passed by a Democratic Senate.

But yes, if seniors swung massively Democrat I think that would change the power dynamic quite significantly.

It sounds almost bland when you put it like that

What will come of that? Will the lawsuits do anything other than make some lawyers richer? What sort of impact would a hypothetical credit rating drop and attendant interest cost on Treasuries have in the US and the world at large?

Some of this is pretty murky waters to me, so if you have any idea I'd love to hear it.

Actually I take back the part about the massive law suits.  California stiffed vendors for a while and Illinois has been stiffing its vendors massively for years, but I'm unaware of any legal procedings forcing their hand.

It would definitely not be pretty.  If a GI doesn't get paid is he still bound by the terms of his enlistment?  Are doctors going to stop seeing Medicare patients?  Are retirees going to die of starvation?  Is everyone at the CIA going to be furloughed?  The Border Patrol?  Customs and Immigration?  Airport screeners?  Will Amtrak shut down?

[Admiral Yi]

None of these seem likely to happen before the next time the debt ceiling will have to be raised, which will probably happen within the next year.

Probably not.  The short answer to your question Raz is there is nothing preventing the Republicans (or the Democrats) from using the debt ceiling as blackmail.  Just as there was nothing to prevent Clinton from using a government shutdown to blackmail the Republican Congress.

[Razgovory]

None of these seem likely to happen before the next time the debt ceiling will have to be raised, which will probably happen within the next year.

Probably not.  The short answer to your question Raz is there is nothing preventing the Republicans (or the Democrats) from using the debt ceiling as blackmail.  Just as there was nothing to prevent Clinton from using a government shutdown to blackmail the Republican Congress.

  You are drinking way to much of that Koolaid.  The GOP forced a government shutdown because they were using the same tactics as they are now.  Keep in mind that Clinton's poll numbers fell quite a bit because of this.  Many in the GOP voiced their approval about the government shutdown.

[Razgovory]

Incidentally, I would like to point out that none of this would have been possible if Ryan hadn't had the cojones in the first place to touch the third rail.

When has it taken cojones to use a political strategy that proved successful before?  Perhaps if Ryan had touched third rail back in 2002 or2003 it might have taken some cojones, but as it stands he's just using politics that are popular with the base.

[Martinus]

Geithner says he won't or can't prioritize.  He is full of it.  If the ceiling isn't raised, he will in fact prioritize interest payments on debt and some other stuff. 

The biggest immediate impact is that all the rating agencies will downgrade US sovereign debt.

If he prioritizes interest I don't see why the raters would downgrade.

If I lend you money to buy a car, and you keep making payments to me but stiff other people who you owe money to, I'm going to start getting nervous.

But it would be OK if he made his car payments with a credit card?

Your credit rating would decrease if you were just taking more credit to pay off interest on the car payments.

[Admiral Yi]

  You are drinking way to much of that Koolaid.  The GOP forced a government shutdown because they were using the same tactics as they are now.  Keep in mind that Clinton's poll numbers fell quite a bit because of this.  Many in the GOP voiced their approval about the government shutdown.

Congress passed a spending bill and presented it to Clinton for his signature.  He vetoed it.  Congress didn't force him to do that.

[Admiral Yi]

When has it taken cojones to use a political strategy that proved successful before?  Perhaps if Ryan had touched third rail back in 2002 or2003 it might have taken some cojones, but as it stands he's just using politics that are popular with the base.

Show me where the Republican base was screaming for Congress to voucherize Medicare and limit increases to inflation.  74% of Americans polled said they don't want Medicare touched.  If you have some secret information that the Republican base are all dying for Medicare spending to be capped please share it with us.

[Razgovory]

When has it taken cojones to use a political strategy that proved successful before?  Perhaps if Ryan had touched third rail back in 2002 or2003 it might have taken some cojones, but as it stands he's just using politics that are popular with the base.

Show me where the Republican base was screaming for Congress to voucherize Medicare and limit increases to inflation.  74% of Americans polled said they don't want Medicare touched.  If you have some secret information that the Republican base are all dying for Medicare spending to be capped please share it with us.

Rank and file Tea party types shout for spending cuts.  From the group that believes in death panels, I don't expect them to actually know what's really being cut.  84% of Republicans support the Ryan plan.  http://www.gallup.com/poll/147287/americans-divided-ryan-obama-deficit-plans.aspx  So he's not really biting the bullet here.  I imagine if you broke it down to each particular item you would find less support, though you are just as likely to be called lackay of the liberal media or so such nonsense.

[Razgovory]

  You are drinking way to much of that Koolaid.  The GOP forced a government shutdown because they were using the same tactics as they are now.  Keep in mind that Clinton's poll numbers fell quite a bit because of this.  Many in the GOP voiced their approval about the government shutdown.

Congress passed a spending bill and presented it to Clinton for his signature.  He vetoed it.  Congress didn't force him to do that.

The GOP isn't forcing Obama to disagree with him now either.  Gingrich threatened not to raise the debt limit then too.