I'm getting very tired of this - isn't there some sort of law about intentionally misleading people to their detriment? Isn't doing that called fraud?
WASHINGTON (AP) — The United States has never defaulted on its debt and Democrats and Republicans say they don't want it to happen now. But with partisan acrimony running at fever pitch, and Democrats and Republicans so far apart on how to tame the deficit, the unthinkable is suddenly being pondered.
No it's not.
The government now borrows about 42 cents of every dollar it spends. Imagine that one day soon, the borrowing slams up against the current debt limit ceiling of $14.3 trillion and Congress fails to raise it. The damage would ripple across the entire economy, eventually affecting nearly every American, and rocking global markets in the process
That's not a default. Watch the (intentional) misdirection here:
A default would come if the government actually failed to fulfill a financial obligation, including repaying a loan or interest on that loan.
Uh, no.
"Including"? No, not at all.
In fact a default is only the failure to pay interest or principal on a loan. Nothing else is a default.
If the U.S. starts missing interest or principal payments, borrowers would demand higher and higher rates on new bonds, as they did with Greece, Portugal and other heavily indebted nations
The United States takes in about $2 trillion in taxes a year. The total interest paid last year was about $180 billion, a ridiculously low blended rate, but that's what ZIRP (zero interest rates by The Fed) get you.
Let's assume for a moment that the blended rate was to more than double, to 4%. That would be about $560 billion in interest a year, including interest on the Social Security and Medicare "trust funds" (which aren't trust funds, but I've been over that before.)
$560 billion is about one quarter of the tax revenues that the government takes in. So even were interest rates to more than double The United States would not default.
Investment bank J.P. Morgan Chase recently concluded that any delay in making an interest or principal payments by the Treasury "even for a very short period of time" would have large "long-term adverse consequences for Treasury finances and the U.S. economy." The analysis is being circulated on Capitol Hill by supporters of raising the debt limit.
There is no risk of default. What JP Morgan is putting forward would be a default, but a failure to raise the debt ceiling would not cause one, because the Government takes in far more money in taxes than it must spend on interest. JP Morgan knows this.
Therefore, running this line of crap is an intentionally false claim and those who are doing so must be identified by specific name, title and position and then be PERMANENTLY EJECTED by the people from the public conversation and debate on this issue.
Even though GOP leaders say they want to avoid more economic chaos, there is a large crop of tea-party aligned Republicans threatening to refuse to raise the cap under almost any circumstance. Polls suggest a large percentage of Americans oppose raising the debt limit.
The people are smarter this time around. They were lied to last time; we were told that "Armageddon" would occur if TARP wasn't passed. The people said "bullcrap!" to the tune of three hundred to one among callers to Congress, but Congress passed TARP anyway.
Now the banks are running the same lie that Henry Paulson and Ben Bernanke ran in 2008: Either do this or the United States will "default."
No it won't. A default only occurs if you can't make the interest and principal payments.
The United States Federal Government takes in more than ten times the amount of interest paid in fiscal 2010 in the form of taxes. It is therefore more than able, without any increase in the debt ceiling, to meet its lawful obligations to creditors.
What it cannot do without an increase in the debt ceiling is continue to increase the amount of borrowed money that it does not have.
In other words, a refusal to raise the debt ceiling is a Congressionally-imposed balanced budget amendment.
Since people like Jim DeMint have said they will not vote for the increase without a Constitutional Amendment requiring a balanced budget, the simplest way to get what they claim they want is to refuse to raise the debt ceiling.
Such a refusal is a balanced budget mandate that can be imposed by Congress right now and which cannot be avoided or otherwise tampered with.
STOP LYING TO THE AMERICAN PEOPLE YOU BAND OF BANKSTER JACKALS!
If there IS such a thing as a fiscal responsibility party (whether it is called "Tea" or not) they must rise right now and refuse to pass ANY increase in the debt ceiling - period.
They must make clear that ANY lawmaker who votes for such a thing will be targeted for defeat in 2012 and will lose their job - no exceptions, no ifs, no ands, no buts and no maybes.
Refusing to raise the debt ceiling will not cause a default - it will, instead, force the government to live within its means.
This is the sort of legal ruling that makes you see red:
Bank of America Corp. (BAC) was dismissed from a lawsuit brought by investors who bought mortgage-backed securities sold by Countrywide Financial Corp., the home lender Bank of America acquired in 2008.
U.S. District Judge Mariana Pfaelzer granted Bank of America’s request to dismiss the claim against it on grounds that it can’t be held liable for actions of a unit, according to an April 20 order filed in Los Angeles.
Here's the problem with this ruling: It appears to apply only to these sort of too-big-to-fail banks.
Why do I say that? Because there is a long line of decisions that say otherwise in other industries. Asbestos, for example, where there were firms that were nearly bankrupted by acquisition of a company that had unknown-to-them at the time liabilities in this regard.
This is a more-egregious set of circumstances in that Bank of America was well-aware of the conduct of Countrywide prior to the acquisition. Indeed, the entire purpose of the acquisition was to prevent Countrywide's collapse as the firm's stock and debt were essentially deemed worthless by the market due to the company's prior conduct.
So when Bank of America took over Countrywide, it did so with full knowledge that the firm had engaged in these questionable acts.
It's simply amazing, isn't it, that when ordinary firms take over one another and there's a successor liability issue, they get stuck with it. But when it's a big bank that takes over a company that they know was engaged in questionable conduct before they consummate the purchase, the courts say "oh that's ok, you're not responsible."
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