All of the examples cited use a repudiation of the backing of currency or bonds with gold or silver. I don't think I'd call that a default. I know that there is a political minority that still thinks that breaking away from the gold standard was a mistake, but that's not the same thing as straight up refusing to pay back holders of government debt.
The four times the United States government defaulted on its debt (2021)
51–60 of 95 posts
Re: The four times the United States government defaulted on its debt (2021)
#52Earlier quoted context omitted.
But doing so when you are at the top of said system; for no reason other than politcal gamesmanship?
I'm curious who is engaging in the gamesmanship in this scenario. This has been an issue long in the making with our deficit ballooning, even after significant increases in federal revenue. The bill signed by Republicans is hardly extreme, and when we considering the amount of expenses being paid to interest alone, it's clear the federal government needs to do something at this point. Legislators across both aisles h…
Cutting 1/3 of discretionary non-military spending is extreme.
(edited for typo)
Re: The four times the United States government defaulted on its debt (2021)
#53Earlier quoted context omitted.
But doing so when you are at the top of said system; for no reason other than politcal gamesmanship?
I don't understand why this time it's different than every other debt ceiling show. Republicans refuse, Democrats call them a bunch of names, there's a "government shutdown" where about 5% of the federal government is furloughed - the things most visible and painful to the average citizen like passport renewals, immigration, national parks etc... and then the Republicans admit defeat and everything opens up again.
The government shutdowns have been over failures to pass a budget. We have never failed to raise the debt ceiling yet [0]
[0] Unless you count forcing the treasury department to take extraordinary measures, which has happened several times; and has been going on since January.
Re: The four times the United States government defaulted on its debt (2021)
#54Earlier quoted context omitted.
But doing so when you are at the top of said system; for no reason other than politcal gamesmanship?
I don't understand why this time it's different than every other debt ceiling show. Republicans refuse, Democrats call them a bunch of names, there's a "government shutdown" where about 5% of the federal government is furloughed - the things most visible and painful to the average citizen like passport renewals, immigration, national parks etc... and then the Republicans admit defeat and everything opens up again.
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Re: The four times the United States government defaulted on its debt (2021)
#55Earlier quoted context omitted.
But doing so when you are at the top of said system; for no reason other than politcal gamesmanship?
I'm curious who is engaging in the gamesmanship in this scenario. This has been an issue long in the making with our deficit ballooning, even after significant increases in federal revenue. The bill signed by Republicans is hardly extreme, and when we considering the amount of expenses being paid to interest alone, it's clear the federal government needs to do something at this point. Legislators across both aisles h…
We have a budget process. If they fail to pass a budget, we get a government shutdown. Shutdowns are already extreme, but at least they are well understood and incremental. A 1 day shutdown is not too bad. A 1 year shutdown is untenable. Why do they need more leverage?
Re: The four times the United States government defaulted on its debt (2021)
#56Earlier quoted context omitted.
I'm curious who is engaging in the gamesmanship in this scenario. This has been an issue long in the making with our deficit ballooning, even after significant increases in federal revenue. The bill signed by Republicans is hardly extreme, and when we considering the amount of expenses being paid to interest alone, it's clear the federal government needs to do something at this point. Legislators across both aisles h…
Cutting 1/3 of discretionary non-military spending is extreme. (edited for typo)
They want the levels set to the 2022 levels. The idea that they increased by 1/3 in one budgetary cycle is bonkers.
Re: The four times the United States government defaulted on its debt (2021)
#57The US Government has never defaulted on its debt under the current (~50 year old) global financial system. It HAS defaulted when transitioning off the gold/silver standard, when the world moved off Breton Woods, and during the Civil War. I’d note that each of those defaults were related to the total collapse of the existing rules for national/global finance. So ultimately, these defaults do bolster the case for the…
Right! This article very misleadingly confuses leaving the Bretton wood agreement and going off the gold standard as defaults. I think that is the same only in the mind of this author, who seems to be trying to normalize something that would be very dumb to do.
They literally were defaults. The reason for Bretton Woods, and the reason the USD became the overwhelming world reserve currency, is that it was directly convertible to gold. Buying USD was as good as buying gold, which meant the currency was not dependent on any given country.
But then due to poor economic policy we found ourselves in a situation where we had far more issued debt (currency) than we had gold. We were forced to default on those debts, withdraw from Bretton Woods, and basically just told the rest of the world 'deal with it.' A famous quote from the Secretary of the Treasury at the time was, "The dollar is our currency, but it's your problem."
Re: The four times the United States government defaulted on its debt (2021)
#58Earlier quoted context omitted.
I'm curious who is engaging in the gamesmanship in this scenario. This has been an issue long in the making with our deficit ballooning, even after significant increases in federal revenue. The bill signed by Republicans is hardly extreme, and when we considering the amount of expenses being paid to interest alone, it's clear the federal government needs to do something at this point. Legislators across both aisles h…
Cutting 1/3 of discretionary non-military spending is extreme. (edited for typo)
And it's discretionary spending they're trying to cut, not non-discretionary.
Re: The four times the United States government defaulted on its debt (2021)
#59Earlier quoted context omitted.
I'm curious who is engaging in the gamesmanship in this scenario. This has been an issue long in the making with our deficit ballooning, even after significant increases in federal revenue. The bill signed by Republicans is hardly extreme, and when we considering the amount of expenses being paid to interest alone, it's clear the federal government needs to do something at this point. Legislators across both aisles h…
We have a budget process. If they fail to pass a budget, we get a government shutdown. Shutdowns are already extreme, but at least they are well understood and incremental. A 1 day shutdown is not too bad. A 1 year shutdown is untenable. Why do they need more leverage?
I answered that in my second paragraph. They've proven they're incapable of developing a budget that doesn't balloon. Non-discretionary spending is through the roof, as evidenced by their demand of latching spending to the 2022 budget levels. That's last year. How is this extreme or outside the realm of even negotiation?
Re: The four times the United States government defaulted on its debt (2021)
#60Can we just remove the "debt ceiling" completely this time instead of pretending to adhere to it?
It feels a little odd of to me that MMT (with Stephanie Kelton's book "The Deficit Myth" a great example of explaining such) never comes up in these conversations.