>

The difference between Republicans and Democrats is Republicans will take the country hostage and hurt it to win. Republicans voted to raise the debt ceiling 3 times under Trump, and Pelosi and Democrats helped them even as they added $8 trillion to the national debt, a good chunk of it before the pandemic.
It’s like clockwork, every single time: a Democrat becomes president, Republicans rediscover their selective fiscal concern after going on a spending binge while cutting taxes to pile it on the debt, and the gun gets pressed straight into America’s head again.
What will this mean for other government employees? Like state employees are often funded by state or county budgets but that is with money coming down from the feds. If we default, that money doesn’t come. >

It will have a catastrophic, trickle down effect.
Depends how much money your state gets from the feds. California may be fine. Louisiana and Mississippi? Good f’ng luck >

This isn't the trickle down effect I was promised >

They let losses trickle down, but not gains. >

Socialize loses privatize gains.
We don’t live in a capitalist world.
We live in a Corporate Socialism one. >

No, you live in a Capitalist one. The whole point is to externalise losses and internalise gains, nothing to do with Socialism.
This is the end-game of Capitalism. This is what happens when your entire system is based around owning private ownership of Capital.
The people with the most Capital bribe the people in charge and politically manipulate the system to their advantage. >

The is absolutely insane.
Modern economics uses an extremely important number that we call the "risk free rate of return" and abbreviate as Rf.
This value is fundamental to modern finance. It's the number that let's you find the current value of any guaranteed future payment.
Economists combine this with other risk factors to do most of the predictive modeling you've ever heard of. Stock pricing models, Black-Scholes even simple mortgage calculations.
The thing is, nobody really knows the true value of RF. All we can do is observe actual rates of return and assume that Rf is some part of it.
In practice, we use US government debt to estimate Rf. Why? Because, historically, it's the only interest rate that reflected 0 investor expectation of default.
The US has never defaulted. Ever.
And this is the really strict definition of default where even a second late payment would count. The US hasn't done it.
Historically, the US has been so reliable about paying back debt that investors assume that the US will always do so. If you lend the US money, you will 100% get your money back, on time and with all interest owed, come hell or high water.
Right now the US has a perfect record on debt repayment.
There's no way to get from a nearly perfect record back to a perfect record. >

The last time they dicked around the US debt was downgraded. >

That was for just getting close >

They might as well downgrade now. I have absolute faith in Republican obstructionism, they will hold the World’s economy hostage and trigger a global recession in an attempt to score political points.
e: To those saying “but the donors!” The donors are fine with this. Remember all those record profits you’ve been hearing about for the last few months? They can take the hit, and in return, everything else suddenly got cheaper, perfect for expanding the portfolio. They’ll come out ahead, just like last time. >

And they don't even know what they want. They are demanding "cuts," but refuse to specify how much and from which areas. Instead, they are demanding that Biden and the Democrats bring them a plan with cuts so they can give their thumbs up or down.
It's like trying to negotiate with a kidnapper who tells you to leave a suitcase full of money in a location and they'll get back to you on whether it's enough for them since they haven't decided on a ransom demand yet. >


And they don't even know what they want.

They want to destabilize the global order.  That's all they want.  Because when they do that, global fascists movements will have their necessary window, to implement their desired political movements at warp speed, once there is enough public unrest to foment dissent, and manufacture consent for atrocities. >

No half measures >

Gotta whole ass one thing. >

I'm out of the loop I guess, but I thought this was squared away?
And if it isn't, what would this mean for everyone if we did default? >

So, and someone with more economic knowledge than me can explain further, but basically there is a debt ceiling that is separate from the budget that Congress passes. Congress already passed the budget, but the debt ceiling was not passed at the same time. The money is already spent, but now the debt ceiling must be raised or by a certain date, the US will just stop paying its bills. The Republicans want to change what’s already been agreed upon, and Biden is just like “uhhh fuck no you agreed to this” 
If the US does default, it’s going to mean serious economic repercussions. All over something that is frankly absurd. >

They've done this dance for decades though haven't they? Every time they raise the debt ceiling cause otherwise imminent financial collapse will follow >

Yeah but thats the point. Republicans are doing everything they can to cause economic collapse in an attempt to make Biden and Democrats look bad. >

But following that economic collapse all their campaign donors will suddenly see interests rates spike to the moon. They wont exactly be happy they cant fund any development, construction, or even basic financial projects anymore. No company can expect a bailout if they fuck up etc. Nobody other than Boebert and Green would be that stupid to actually follow through on this game of chicken >

They'll just blame democrats for the negative repercussions and their voters will believe them.  It's 2023, I'm surprised this still needs explained about republicans >

I just got recommended some bullshit Fox News headline today that was some clickbait shit to the tune of "crime rate rises in Democrat-led tourist destination". Also saw a bunch of billboards before the election about how "most violent protests occur in Democrat-led cities."
The playbook here is insanely brazen. The fact that people fall for it might be even worse. >

everyday there is at least one post that reads, "lawlessness and chaos erupt in dem led city" >


“We have to be prepared for that, not only in this country but in other countries around the world,” Bank of America CEO Brian Moynihan told Poppy Harlow on “CNN This Morning” Monday. “You hope it doesn’t happen, but hope is not a strategy — so you prepare for it.”
Bank of America CEO: We're preparing for possible US debt default

Pretty huge difference in tone between what the headline make it sound like he's saying and what he actually said. >

Correct, because anyone with a brain realizes this is the same stupid brinkmanship they’ve been pulling for decades to secure concessions despite being a minority party and no serious observer believes it will end in default. >

The head of the IMF was on 60 Minutes last night. She basically said that if people in the US haven’t liked inflation up until this point, defaulting would cause prices to go to a place people REALLY won’t like. I guess as long as they’re sticking it to the libs, that’ll make them feel better? >

As long as Congressional Republicans can blame it on Biden, they don't care about the damage it will cause. It's all a political game to them - the lives of their constituents be damned. >


they don't care about the damage it will cause. 

No, they do care.  They’re actively trying to create damage to blame on him, which is much worse. >

It's shockingly immoral, isn't it? >

It's indefensibly immoral and yet 50 to 70 million people continue to vote for them every 2 years.  Makes you wonder where those peoples' morality is. >

They're moral because it owns the libs, who are immoral by default.
At least that's how they see it. >

I remember during the Roy Moore saga that a Republican voter lamented having to choose between a pedophile and a Democrat, as if that were a difficult choice to make. >

That's how it is with these people. Republicans can do literally anything they want and their base will excuse them by saying "well at least they aren't a democrat." One of my friends has a relative that's conservative and she's even said "I don't like Republican policies, but I just can't bring myself to ever vote for a Democrat" so she votes straight ticket R every election. Like how the fuck do you even get through to someone like that that's that deeply brainwashed? >

You don't.
You can try to educate people. And some of them will hopefully finally see reason. And if you educate enough people then the ones that refuse to see reason will eventually die of old age and hopefully sometime in the next few decades things might start to get better. 
Or you can speed things up with violent revolution, but that's more of a short term thing. Violence begets more violence so long term you wouldn't really be solving anything, just galvanizing the opposition by being the aggressor. >

I don’t understand this quote, “The unemployment rate has stayed very low. Extremely low,” Moynihan told Harlow. “That’s one of the challenges for the Fed.” 
So, is he saying that one of the challenges for the fed is to INCREASE unemployment? >

Yes the Fed has traditionally relied heavily on using higher unemployment to curb inflation. 
The old (current) models presume higher employment rates cause inflation. We need a new model that shows how corporate subsidies, corporate tax breaks, stock buybacks, and depressing the minimum wage have resulted in nobody affording to be unemployed (people are working 2-3 jobs now), but the glut of inflation is not being driven by low income Americans struggling to survive. It is being driven by price gouging and other metrics. Money supply circulating among the top 1% dwarfs the money circulating among the bottom 80%. So the old methodology is not working. Thus, we have high inflation with low unemployment and we can’t seem to force the starving to go jobless. Oops. Yet, how could people working 2 jobs to make ends meet that used to only require 1 job actually cause inflation? Is it not more logical this is a result of inflation? 
Unemployment won’t go up because people are desperate to work. Desperate people aren’t causing inflation, particularly when they are effectively earning less (in terms of real dollars) than they were with 1 job. Trillion$ are circulating in the markets, chasing a higher yield. 
But, The Poors aren’t chasing those yields. They’re chasing survival. Hungry stomachs don’t invest for %. They borrow on payday loans from future earnings to eat today. Because tomorrow’s paycheck is pointless if you’re dead. 
The money chasing those yields is why inflation persists. The old models have been blind to this dynamic. I’m no Econ PhD, but Joseph Stieglitz has done solid work nibbling at these concepts. 
Government subsidies and bailouts to corporate titans have changed the way “moral hazard” impacts decision making.  When corporate profits are privatized but losses are socialized, what stops the corporate profiteer from gambling away the assets? There is no more risk. The risk trickles down. The profit gushes up. But that upward gush needs to park the $$ somewhere to increase its yield. 
Reinvestment in worker salaries didn’t happen. So the money didn’t circulate in the economy and diffuse in a way that could mitigate inflation.*
Instead it has pooled to a head like a pimple coming to a head. Or more like a blood clot about to burst the artery. 
Macro-Economic Stroke is the next phase. 
inflation isn’t just about how much money is in the market. It’s also about how diverse* that money is spread through the market. If you drop a trillion dollars into one town’s economy overnight, it’ll suffer massive inflation, theoretically.  But if 1,000,000 towns see 1 trillion infused evenly over all of them, it would be a much less immediate impact. 
Concentration of wealth is itself inflationary if that wealth parks in the same place. Or same few places. 
There will be a cadre of orthodox economists who will call this analysis heresy. But I’ve learned that zealous orthodoxy is when insecurity meets arrogance. It is hard to accept new paradigms.  
As I say, I’m no Econ PhD. But these aren’t original thoughts to myself. >

this was an interesting read, thanks for writing it out >

So, BoA is planning on jacking up loan rates.  Good to know. >

I pisses me off that the republicans are playing chicken with the economy to score political points. They were in agreement with the spending but now don't want to pay for it. They've been campaigning with "the government doesn't work." and then do everything in their power to make the government not work. >


They've been campaigning with "the government doesn't work." and then do everything in their power to make the government not work.

That's exactly right. That has been the Republican strategy since the 80s. Prove government doesn't work by sabotage. >

Before that. Nixon and Kissinger ruined peace talks in Vietnam because "ending the war" was a campaign promise of Nixon. Can't end the war if LBJ ends it first. So he worked with N Vietnamese to sabotage peace negotiations. >


Kissinger was working for LBJ and was giving reports to the Nixon campaign.

why didn't kissinger have to go to prison for that? it feels like a crime? >

It is a crime—LBJ chose not to go public with it because he'd found out through a wiretap and was concerned about the optics.
Considering how ubiquitous the notion of the president ordering wiretaps has become, this is but one of many ways LBJ shit the bed. >

Imagine where we'd be as a country had LBJ hung Nixon and Kissinger for treason. >


Imagine where we'd be as a country had LBJ hung Nixon and Kissinger for treason.

This is a very strong argument in favor of prosecuting Trump and his cronies. >

Politicians never will do that because they know they all have dirty hands. If they make an example out of one, then they all could eventually be made into an example. 
Not saying that they shouldn’t, or that things would be better if we did prosecute them. I just doubt we will ever see true repercussions. >

We the people should probably start making some examples. >

Don’t worry everyone, the billionaires will be just fine. >

Republicans are the only ones pushing us to default, and don’t let anyone tell you otherwise. The party has been swallowed by a cancer of complete nihilists who don’t care who they hurt to make points, and not even good ones; their whole shit about cutting spending is a farce. Refusing to raise the debt ceiling isn’t a prudent fiscal move and has nothing to do with the federal budget, it just makes us deadbeats who can’t pay the debts we already owe and sabotages our country’s full faith and credit. That money’s already been allocated and spent, it’s gone. And then when they’re pressed on specifically what they want to cut they become sheepish and mumble about establishing a Congressional panel to look at the options.
Biden’s job market numbers are too good for them to stomach and inflation is cooling, and they’re licking their lips to inflict some economic pain on Americans and turn those good trends in reverse. That’s all this is about at the core. America doing well under a Democrat isn’t something to be celebrated for them, it is to be destroyed. >

Exactly this. The Republicans don't care how many people get screwed as long as they think they can score political points.