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[FearfulJesuit]

So, uh, what happens if we default and the federal government shuts down?

[Scoops Novel]

Tell me, if the US and the whole of Europe dramatically raised taxes for the rich, what would happen next? Just throwing out a doomsday premise what if.

[darkrider2]

Weird, my state (OH) seems to be listed as opposing the exchange on that map. I thought we leaned democrat?

[Jervill]

Your state is controlled by Republicans at all levels of government, currently, darkrider2.

[Mictlantecuhtli]

I think in general, there's just a mood that our government is utterly dysfunctional and broken, but most people can't see a way to fix it. Plus, they like "their" Congresscritter, which is part of the problem. A dysfunctional Congress may just be evidence of a dysfunctional nation.

I wouldn't say that the US federal government isn't all that utterly dysfunctional and broken when compared with, say, our own or that of other countries. It's in a bad way certainly, and it's essential to have more co-operation, but I still think David Cameron or Nick Clegg would give a lot to be in Obama's shoes right now.

My theory on the status of our political system [mostly on the quality of representatives and those who do govern]:
Thrash in -> Trash out.

There may be a few outliers, but you can't make a greater quality item out of lousy raw materials.

Also, it really is never over. Republicans are acting like they're still running an opposing campaign, while their job is to fucking govern. See: Nominations of non-issue candidates like Hagel and Lew [except John Brennan, because fuck him] turning into twineballs of Republican Congressional obstruction. For a damn cabinet nomination.

[RedKing]

So, uh, what happens if we default and the federal government shuts down?

Well, those are two different things. The government can shutdown without a default (as in 1995). This occurs when Congress basically refuses to pass a budget (or even a continuing motion to fund the government until a budget is passed...like the last few years have been), leading to a government shutdown due to lack of funding. This means many non-essential government services stop. Period. Federal parks closing is one of the things people notice most, for some reason.

A number of agencies (like the military) keep working anyways, they're just having to pay their people in IOUs, like California did a couple of years ago.

We've never had a long enough government shutdown to know the long-term effects if it went on quite a while.



And we've never had a default, to know the full effects of that. Immediate impact would be a major downgrade in the US bond rating, a spike in interest rates, and probably some inflationary pressure. But we're also the a linchpin currency of the international trade system. It's not like most countries where the currency would suddenly be debased. A US dollar is still very useful outside the US.

[FearfulJesuit]

Gee whilikers! 

...How long do we have until we default, if the House GOP sticks to its guns?

[MetalSlimeHunt]

Defaulting is more of a choice than a deadline. The US only has to state that we will never pay back the debts and stop recognizing them.

[Scoops Novel]

Which would end well.

[Nadaka]

Next month.

[GreatJustice]

Not being able to debate for three years is filling me with sadness, especially without Troll around

However, I ought to mention that several Republican legislatures had the clever idea to pass state amendments making mandatory insurance illegal, which puts them in conflict with present Federal law, which means they could conceivably work out a way to avoid actually implementing the ACA.

[MetalSlimeHunt]

That isn't a clever idea at all. State constitutions are trumped by federal law and have been for almost 200 years.

[Mictlantecuhtli]

And we've never had a default, to know the full effects of that. Immediate impact would be a major downgrade in the US bond rating, a spike in interest rates,

For posterity, I should mention that a 1% increase in the US's interest rates amount to [a minimum of] 1.5 trillion in added costs per decade. So any type of screwing around with our credit rating ends up shoveling more money at the people we owe. Namely, China. To the tune of 100+ billion a year extra in deficit costs.

Since I enjoy sources.

[RedKing]

Gee whilikers! 

...How long do we have until we default, if the House GOP sticks to its guns?

Technically, we already breached the debt ceiling on Dec 31. Treasury automatically then did some bookkeeping magic to keep paying our debts for another month or two, while shutting off things like payments into Federal pension funds, and preventing states and municipalities from issuing bonds (because said bonds are backed by the US Treasury, since states and cities can't print money).


tl;dr We is some broke-ass motherfuckers.

[Leafsnail]

Yeah, any attempt to actually beat federal law won't work.  They are however allowed to not enforce federal laws (I think this is how pot legalization works), although this can lead to financial sanctions.

And I think Japan has overtaken China as the largest stakeholder in the US' debt, so update your scary foreign person adverts!