News Stories

[Bri]

Originally Posted by Xellos-_^

while i understand (probably under estimating) the amount of damage that cause if the US default for any reason. i really rather Obama let the republican drive the car the over the cliff. Draw that line in the sand and finally let the people decide what they want.

I understand and I wouldn't mind seeing the lunatic fringe in the GoP reap what they have sown. But the world is a big place, and unfortunately those caught in the fall-out, aren't going to care what political party caused it, they are going to blame Americans.

[Xellos-_^]

Originally Posted by Bri

I understand and I wouldn't mind seeing the lunatic fringe in the GoP reap what they have sown. But the world is a big place, and unfortunately those caught in the fall-out, aren't going to care what political party caused it, they are going to blame Americans.

they already blame Americans for everything anyway. whats one more added on

[Bri]

Originally Posted by Xellos-_^

they already blame Americans for everything anyway. whats one more added on

Because this time they will have a stick to hit back. Look at Greece. Public opinion in other European countries has forced their governments and the IMF to act tough on the austerity measures. The people there are told to bleed for their government's mistakes.

The US, due to its low savings rate, is dependant on external financing. After a default the country will be cut off from the money markets. How *nice* do you think the demands of China, the EU, Japan etc. will be in exchange for new loans, if a bunch of silly US politicians, in a game of texas hold 'em, just hurt their economies?

[Xellos-_^]

Originally Posted by Bri

Because this time they will have a stick to hit back. Look at Greece. Public opinion in other European countries has forced their governments and the IMF to act tough on the austerity measures. The people there are told to bleed for their government's mistakes.

The US, due to its low savings rate, is dependant on external financing. After a default the country will be cut off from the money markets. How *nice* do you think the demands of China, the EU, Japan etc. will be in exchange for new loans, if a bunch of silly US politicians, in a game of texas hold 'em, just hurt their economies?

actually China and Japan at this stage don't have much of a choice. the US is still their primary market and if the US goes, their economy goes. They will both grit their teeth, say things domestically that you can repeat anywhere else. But will refinance those new loans just because without the US economy both their economy would go boom.

[Bri]

Originally Posted by Xellos-_^

actually China and Japan at this stage don't have much of a choice. the US is still their primary market and if the US goes, their economy goes. They will both grit their teeth, say things domestically that you can repeat anywhere else. But will refinance those new loans just because without the US economy both their economy would go boom.

It's guaranteed they will refinance, but it comes at a cost. They will be able to dictate the terms for reducing the national debt level and budget deficit, not the voter. That's the price of losing credibility as a debtor. I assume it will be the standard IMF recipe: raise taxes and reduce welfare spending.

[Ithekro]

Basically take the choice out of the hands of both the government and the people...If it does come to that, I don't think the people will be too keen on it. Especially the conservative and nationalist groups And the liberal groups won't like the welfare reductions.

It will give fuel to the isolationists groups again.

[Vexx]

Originally Posted by flying ^

.....and that's your takeaway on the plight of general aviation industry?

the guys in the G.A. industry better step up against this POtuS or they end up battered like what libs did to the yacht building & servicing industry decades ago

Plight? I think Solace already answered this carping better in his post. Its a soundbite fluff piece and whining. And I think I know just a little bit about the general aviation industry (which encompasses quite a bit more than "corporate jets").

[Jinto]

Originally Posted by Xellos-_^

actually China and Japan at this stage don't have much of a choice. the US is still their primary market and if the US goes, their economy goes. They will both grit their teeth, say things domestically that you can repeat anywhere else. But will refinance those new loans just because without the US economy both their economy would go boom.

Was this scenario ever stress tested? I am not sure if China will be hurt for a long time when the US economy goes bust. I could imagine there will be a short term export/sales problem, but on the long run, the chinese economy will recover much faster from this than the US economy (the european economies will be hit less than the US' but more than China's - and for Japan... well I don't know exactly, could end almost as bad as the US economy for them).

Originally Posted by Vexx

Plight? I think Solace already answered this carping better in his post. Its a soundbite fluff piece and whining. And I think I know just a little bit about the general aviation industry (which encompasses quite a bit more than "corporate jets").

Sounds like an executive-level sob-fest. If they actually cared about their employees, then I'ld sort of understand it. But I suppose those who are whining there do it just because their profit taking is now a little less.

[ganbaru]

UK's Cameron calls for new press regulation system
http://www.reuters.com/article/2011/...7671CL20110708

Britain's Prime Minister David Cameron on Friday called for a new system of press regulation in the wake of the closure of the News of the World newspaper.

[DonQuigleone]

Originally Posted by ganbaru

UK's Cameron calls for new press regulation system
http://www.reuters.com/article/2011/...7671CL20110708

Big news that. I knew he was calling for an inquiry, but I didn't know he'd go that far!

Obviously there's some unsavoury practices that need to be stopped, but on the other hand, it's a delicate balancing act, as such a thing could easily be taken too far.

I wonder if any of this will have repercussions on news corps holdings in the USA? Maybe there'll be investigations of fox news...

[Tsuyoshi]

Originally Posted by DonQuigleone

Big news that. I knew he was calling for an inquiry, but I didn't know he'd go that far!

Obviously there's some unsavoury practices that need to be stopped, but on the other hand, it's a delicate balancing act, as such a thing could easily be taken too far.

I wonder if any of this will have repercussions on news corps holdings in the USA? Maybe there'll be investigations of fox news...

It might be the case that we'll see an end to The Sun before that happens, considering it's owned by the same parent company and there's a hint it was also involved in phone hacking. Personally, I'd do away with the whole company. The Sun and all the other tabloid papers owned by News Corp throw nothing but garbage out of their reporters' asses.

[DonQuigleone]

Originally Posted by Tsuyoshi

It might be the case that we'll see an end to The Sun before that happens, considering it's owned by the same parent company and there's a hint it was also involved in phone hacking. Personally, I'd do away with the whole company. The Sun and all the other tabloid papers owned by News Corp throw nothing but garbage out of their reporters' asses.

Well, even if the Sun imploded as well, some other newpaper would take it's place.

People will always want to buy gutter press. Alas.

[Tsuyoshi]

Originally Posted by DonQuigleone

Well, even if the Sun imploded as well, some other newpaper would take it's place.

People will always want to buy gutter press. Alas.

Makes me wonder why people find it so interesting or make such a huge deal out of famous people buying gadgets and their doctor appointments.

[solomon]

Originally Posted by DonQuigleone

Big news that. I knew he was calling for an inquiry, but I didn't know he'd go that far!

Obviously there's some unsavoury practices that need to be stopped, but on the other hand, it's a delicate balancing act, as such a thing could easily be taken too far.

I wonder if any of this will have repercussions on news corps holdings in the USA? Maybe there'll be investigations of fox news...

MEDIA, REGULATIONS??! AMERICA???!!!

HA HA HA HAAAAAAAA!!!!!

Dude, I know about the way media regulation goes down and went down in Britain. The stringent rules ITV had to abide by as a commercial broadcaster would make American's head and balls explode at the same time.

Pfft, media regulations, those have been extinct since the 90s here. If they ever truly existed.

[MrTerrorist]

Originally Posted by Tsuyoshi

Makes me wonder why people find it so interesting or make such a huge deal out of famous people buying gadgets and their doctor appointments.

It's envy. According to a History Channel mini series i watched about the 7 Deadly Sins, people are curios of the things celebrities do and buy and they want follow in their favorite celebrities footsteps by copying them. There was a lot more but you can just watched that episode and you might get an idea.

[Sides]

Originally Posted by DonQuigleone

Big news that. I knew he was calling for an inquiry, but I didn't know he'd go that far!

He was probably advised by his PR guys to do something. He already known a wish-washy PM, i doubt he wants to be remembered as spineless one as well.

[ganbaru]

Former first lady Betty Ford dies at 93
http://hosted.ap.org/dynamic/stories...07-08-22-42-41

Edit: I can't lets pass this one:
Michele Bachmann signs pledge that says homosexuality is a choice
http://www.washingtonpost.com/blogs/...washingtonpost
Is she even trying not to be worse than Palin...

[Endless Soul]

Originally Posted by ganbaru

Former first lady Betty Ford dies at 93
http://hosted.ap.org/dynamic/stories...07-08-22-42-41

Farewell to a classy lady.

[Sackett]

Originally Posted by Tsuyoshi

Yeah, so as long as they choose not to understand that, then women kill people every month without even intending to Oh, and let's not forget the guys whenever they fap

The only thing I can say about these anti-abortion, anti-benefits nutters are only that way because they have a distorted sense of conservatism. Either that, or they're trying to increase the population and force them to do work/serve in the military (preferably the latter) to finance wars/themselves _through taxes_. Quite the crafty move.

Mothers should not kill their babies.

Babies are babies, even before they are born.

Not sure why feeling that way makes me an evil moronic nutter, but I feel that way.

It is evil to kill innocent unborn children.

Not sure why the position conservatives have on other issues does anything to change the truth of the above statement. (PS: Lately it's been Obama starting the wars, nor have wars historically been associated with conservatives over liberals- they tend to be equal opportunity offenders. Particularly odd is the way Vietnam cemented the view that conservative = warmonger and liberal = peace despite the fact Vietnam was started by the liberal LBJ, and ended by the semi-conservative Nixon.)

Now... do I recognize that the pro-choice position has some moral arguments in favor? Sure. The argument is simple: Women should have a choice.

A choice to what I ask. We are not allowed to choose everything we want, lots of laws constrain our choices.

Again the answer is obvious: Women have the right to choose if and when they will have children.

I accept that as a god given right of all women. I even view it as an obvious right to be protected under the 10th Amendment, (a much better argument then the idiotic "penumbra of privacy" under the 14th).

But I ask you, is it the only way?

Is abortion the only way that a woman can exercise her right to choose if and when to have children?

I do not support making birth control illegal, nor do I know of any legitimately powerful group among conservatives that support that. Oh there are a few nutters, but no more so then there are nutters on the left. The vast majority of conservatives use birth control, they aren't going to ban it.

Focusing on those few nutters is a way of ignoring the true moral challenge that abortion raises. Is abortion the only way a woman can exercise her right to choose if and when to have children?

If the answer is no, then isn't a desire to ban abortion a legitimate position? Isn't it instinctively natural to protect babies? Even if they haven't been born yet? Don't we protect pregnant women with a higher effort then we do non-pregnant women? Isn't that instinct a natural thing inside us to protect the pregnant woman first? Doesn't that say that an unborn child has a intrinsic value?

I understand the position of pro-choice people. They want to prevent men from controlling women through forcing them to have children. That's something that has happened historically in the past (although not in America- or at least not to the extent claimed by feminists). It's an understandable thing to be worried about.

I just have to ask, is abortion really that necessary for it? Couldn't abstinence, birth control and an exception for abortion in the case of rape be sufficient to protect women's choice?

[Sackett]

Originally Posted by Bri

In case of a default by the US, domestic and foreign financial institutions like banks, insurance companies, pensionfunds, trusts etc. that have invested in US debt would fall in to financial trouble. That would risk contaminating the world's financial system again, much like what happened with the subprime mortgage crisis. This crisis could spill over to the real world by making it hard for firms to get loans/credits needed for normal operation causing recessions in many countries.

Also, due to investors losing confidence, the US credit rating would take a plunge, making it far more expensive for the government to refinance debt that is reaching maturity (which happens reguarly and is a normal process). Interest payments on the current debt would increase and take up a far larger part of the country's future budgets, severely lowering available funds for social security, medicaid/care and defense.

These consequences are so serious that a default will never be allowed. Currently it's a game of chicken between the administration and the republicans and who ever gives in first will have to make political concessions. If time starts to run out, pressure by corporations, the financial sector and other governments will become so high that both sides will have to play ball.

I'm curious what would happen if the treasury is forced to borrow without permission from congress. I'm sure it lead to some kind of constitutional crisis, but as an economist I don't know enough about legal matters to make a guess.

1: It would be a Constitution crisis of the worst sort, as the Constitution explicitly gives only Congress the power to issue debt. It would be a clear violation of the Constitution and of the separation of powers. Republicans would almost certainly bring forward impeachment charges, and they'd probably get a bunch of Democrats to go along. Doubt they could get a conviction in the Senate, though they might actually get a majority.

Then the real fun begins. Do the Republicans flee the capital and set up a government in exile in... say Houston? I'm not kidding here. This goes to the root of the Constitution and the way power is divided.

If the Republicans in Congress don't fight back but just submit to it, that's even worse in the final outcome, because it sets the precedent that the President can issue debt whenever he wants, which combined with the Lybia war powers conflict means that the President could start wars and finance them with debt issued against Congressional will, removing the only Congressional restraint on war making left- the ability to defund it.

Essentially the President will become a dictator elected for four year terms, limited to two terms. He will control both purse and sword, and don't think that the Courts could long resist him. The only restraint left on Presidential power would be the elections every four years. Basically the USA would be the same as Venezuela in terms of the power distribution among the branches of government.

Now maybe you are an Obama supporter. Maybe you think he won't abuse the power. Will the next President be as much to your liking?

Maybe this Constitutional Crisis could be recovered from- if the Republicans don't flee the capital, but make this the defining issue of the election, win the election, defeat Obama, and win control of both House and Senate, allowing them to censure Obama and repudiate the debt he issues. This is the best outcome that can be reasonably be expected if Obama issues debt above and beyond the debt ceiling.

This is a bad bad idea.

2: It won't even solve the debt crisis. Why? Because the debt issued above the debt cap would be illegal. Meaning that the government of the United States would not be required to repay it. In point of fact it would depend on whether Obama or the Republicans win the resulting Constitutional Crisis. If Obama wins the debt will be honored. If the Republicans win they will have no choice but to repudiate the debt issued above the debt ceiling- otherwise it'd mean supporting the precedent as described above.

So... are you going to loan money to a government where getting repaid depends on the election outcome?

I don't think so. Not unless you are paid massive interest rates. Which will devastate the financial services of the entire world just as horribly as actual default... if a bit more slowly.

To use an analogy, instead of dying in the nuclear bomb blast we get to survive that and instead die a slow painful death by radiation poisoning.

So what is the solution?

There is an obvious one, I don't get why it hasn't been proposed:

If Congress refuses to pass a debt increase, we will be in a situation where revenues are exceeded by outlays and we cannot borrow to make up the difference.

However, we do have enough to pay the interest payments on existing debt. The 14th Amendment requires this be paid first. After this Obama will have unilateral power to decide which bills get paid first and which are deferred.

He could delay SS payments, but political pressures means those will probably be sent out anyway- which will take up a lot of the cash.

He could cut the military, but again political pressure will probably force him to continue paying at least most of the military.

He could layoff non-essential workers, such as the Dept. of Education or something. Likely he would have to delay Medicare payments- but those are made to the states, and then the states match the funds and run the program. That means that the states could probably step up their payments in order to fill the hole left by federal monies not existing. This would mess state budgets up horribly, but they'll probably put off patching potholes in order to make sure Grandma still gets her hip replacement. (Except maybe California which is so screwed who knows what they'll do).

The finance markets don't care about any of that, they just want assurance that their loans to the government are paid back on time. And they are.

It's the perfect opportunity for Obama to make cuts in whatever he cares about least and make the Republicans take all the blame. And then once he's beaten the Republicans into giving him a debt increase he gets the money to spend anyways.