Olde Hornet
Well-Known Member
The only stock that should fair well with this issue will be oil stocks - they will go through the roof as the dollar falls and oil prices rise.
the President should call their bluff. Make a speech next week stating that he will not be party to blackmail. Explain to the public so they can't claim to be naive about the consequences reneging on our promise to pay the money that we borrowed. Tell the American people that the Conservatives' claim to be concerned about spending will be more than offset by the Trillions of dollars of extra interest that we'll have to pay because of increased interest rates on the national debt. If the economy slows down further, they can look to the Congress people who refused to increase the debt limit. Moreover, announce that all Social Security, Veterans benefits and other federal expenditures will stop being paid as of (whatever day in early August when we completely run out of borrowing capability).
Obama does not have the balls to do this - somewhere in his head he thinks they will compromise.
http://news.yahoo.com/s/nm/pl_nm/us_usa_debt_skepticism
WASHINGTON/NEW YORK (Reuters) – An idea once confined to the fringe of the Republican party is seeping into its mainstream -- that a brief default might be an acceptable price to pay if it forces the White House to deal with runaway spending.
An increasing number of Republicans do not believe the Obama administration's dire predictions of economic "catastrophe" if the debt limit is not increased. They argue a period of technical default can be managed without plunging markets into chaos.
Establishment Republicans including Tim Pawlenty, the former Minnesota governor who announced his presidential candidacy last month, are backing a short-term default if it leads to deep, immediate spending cuts.
Jeff Sessions and Paul Ryan, the top Republicans on the Senate and House Budget Committees, have also said failure to raise the debt limit would not trigger immediate catastrophe.
Republican Senator Pat Toomey has even introduced legislation directing the Treasury to prioritize debt service over other payments if the debt limit is not raised. It has 22 Republican co-sponsors in the Senate and 98 in the House of Representatives, although no members of the Republican leadership have backed it.
[ For complete coverage of politics and policy, go to Yahoo! Politics ]
David Frum, a former speechwriter for President George W. Bush and a Republican advocate for raising the debt limit, said he holds regular question-and-answer sessions with Republican congressman over a beer.
"I have yet to meet one Republican who actually says a failure to raise the debt limit scares them," Frum said. "It is deeply, deeply troubling the number of Republicans I now talk to -- and I include the mainstream -- who think a technical default is manageable.
Many on Wall Street disagree. They fear even the briefest default would cause a steep climb in interest rates worldwide and a tumbling dollar, which would tip a fragile economy back into recession and cause financial market upheaval on a scale not seen since the collapse of Lehman Bros.
Fueling skepticism over this outcome is an argument made last month by legendary investor Stan Druckenmiller, a one-time ally of George Soros, who said he would favor a short-term default if in exchange lawmakers in Washington struck a deal for massive spending cuts and a medium-term plan to tackle the $1.4 trillion deficit.
"That had a lot of impact on Republicans," said Vin Weber, a veteran Republican strategist and party moderate. He said the idea that a short-term default would not be a problem "is definitely becoming a mainstream belief."
the President should call their bluff. Make a speech next week stating that he will not be party to blackmail. Explain to the public so they can't claim to be naive about the consequences reneging on our promise to pay the money that we borrowed. Tell the American people that the Conservatives' claim to be concerned about spending will be more than offset by the Trillions of dollars of extra interest that we'll have to pay because of increased interest rates on the national debt. If the economy slows down further, they can look to the Congress people who refused to increase the debt limit. Moreover, announce that all Social Security, Veterans benefits and other federal expenditures will stop being paid as of (whatever day in early August when we completely run out of borrowing capability).
Obama does not have the balls to do this - somewhere in his head he thinks they will compromise.
http://news.yahoo.com/s/nm/pl_nm/us_usa_debt_skepticism
WASHINGTON/NEW YORK (Reuters) – An idea once confined to the fringe of the Republican party is seeping into its mainstream -- that a brief default might be an acceptable price to pay if it forces the White House to deal with runaway spending.
An increasing number of Republicans do not believe the Obama administration's dire predictions of economic "catastrophe" if the debt limit is not increased. They argue a period of technical default can be managed without plunging markets into chaos.
Establishment Republicans including Tim Pawlenty, the former Minnesota governor who announced his presidential candidacy last month, are backing a short-term default if it leads to deep, immediate spending cuts.
Jeff Sessions and Paul Ryan, the top Republicans on the Senate and House Budget Committees, have also said failure to raise the debt limit would not trigger immediate catastrophe.
Republican Senator Pat Toomey has even introduced legislation directing the Treasury to prioritize debt service over other payments if the debt limit is not raised. It has 22 Republican co-sponsors in the Senate and 98 in the House of Representatives, although no members of the Republican leadership have backed it.
[ For complete coverage of politics and policy, go to Yahoo! Politics ]
David Frum, a former speechwriter for President George W. Bush and a Republican advocate for raising the debt limit, said he holds regular question-and-answer sessions with Republican congressman over a beer.
"I have yet to meet one Republican who actually says a failure to raise the debt limit scares them," Frum said. "It is deeply, deeply troubling the number of Republicans I now talk to -- and I include the mainstream -- who think a technical default is manageable.
Many on Wall Street disagree. They fear even the briefest default would cause a steep climb in interest rates worldwide and a tumbling dollar, which would tip a fragile economy back into recession and cause financial market upheaval on a scale not seen since the collapse of Lehman Bros.
Fueling skepticism over this outcome is an argument made last month by legendary investor Stan Druckenmiller, a one-time ally of George Soros, who said he would favor a short-term default if in exchange lawmakers in Washington struck a deal for massive spending cuts and a medium-term plan to tackle the $1.4 trillion deficit.
"That had a lot of impact on Republicans," said Vin Weber, a veteran Republican strategist and party moderate. He said the idea that a short-term default would not be a problem "is definitely becoming a mainstream belief."
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