Who Will Suffer if There's No Debt-Ceiling Deal

[OmahaBlueDog]

US News via Yahoo!

There's a lot of talk about the government defaulting on its debt, but that's not likely to happen. The government collects about $200 billion per month in taxes and other revenue, and that cash would keep coming in. It borrows another $130 billion or so each month--the money it would have to live without. Interest payments on the nation's debt--which Washington must pay on time to avoid being in default--amount to about $30 billion per month. If forced to choose, the government would almost certainly prioritize debt payments above other obligations, because welching on bonds considered the world's safest would sink financial markets everywhere and make American the world's biggest deadbeat. And the Treasury Dept. would still have adequate cash flow to cover debt payments and remain in good standing with borrowers.

Almost everything else the government pays for, however, would be vulnerable to sudden cutbacks. Here's who would feel the pain most abruptly:

Social Security recipients. The government is due to deliver $23 billion in Social Security payments on August 3, according to forecasting firm IHS Global Insight. If the government is forced to cut 40 percent of its spending, these Social Security checks may not arrive. The suddenness with which the political battle in Washington will hit the wallets of ordinary Americans is one reason many analysts assume that a true impasse over the borrowing limit will be short-lived. But it could still be damaging. Social Security recipients who depend on their checks to pay other bills could end up running behind, incurring costly late fees or damaging their own credit. And it's no guarantee that if stopped, the government's check-writing machinery will start up again without delays or snafus that hold up checks even longer.

Read more at http://finance.yahoo.com/news/Who-Will-Suffer-if-Theres-No-usnews-1162833064.html?x=0

[FirstLight]

1. I repeat... it's not IF, it's WHEN

the states are borrowing from banks to keep floating, the fed is broke and the only ones with money are the top %2 and the warmongers (pentagon budget passed with NO issues!)

so.... there is a HUGE chunk of the population that depends on fed & state money to survive and do business, etc...

What are YOUR plans for survival as basic services and goods dry up?
I *really* want to know

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x1489450


not meant as a freak out, just a serious discussion of the inevitable

[OmahaBlueDog]

4. There's danger of unintended consequences at several levels

I mostly agree with the article. The Government will continue to pay interest on the debt first, and subordinate everything else.

Those depending on WIC, TANF, Social Security, Medicare, Medicaid, Section 8, and other programs will most likely have to look to faith based organizations and organizations like the United Way for assistance.

There are instances in which individuals in nursing homes depend on Social Security for a substantial portion of their monthly charges. What do we do? Try and care for them at home? Try shipping them to someplace with lower costs like Guatemala? Let them die in the street?

[sloughtermark]

8. I agree...the shit WILL hit the fan

Seriously, financial Armageddon for the United States is well on it's way. It just a question of time. Sooner or later, the financial irresponsibility of the US Government is going to hit home harder than you could ever imagine. I think I'd rather be dead...

[Ragnarok]

10. If the Fed goes bust...

...it will cease to perform it's functions one by one. If it ceases to perform functions, people will fill the void because the need and/or desire for the function doesn't go away. Don't expect everyone to just sit there saying "Oh gosh golly, no permit. Guess I'll just close my business." The black market is only the black market because the government says it's the black market. If there is not official market open, then any market will do when you need something.

My plans? I'm a S&P'er (prepper) like my whole family. We all aim for 3 years of self sufficiency. There are alternatives to most things we buy these days, and we were taught from an early age to become proficient in those things. If you haven't started already, I'd suggest doing it soon. FerFal is a good place to start, as well as some research on Argentina's little bout of insanity.

[bluestateguy]

2. "Golly, we don't have the money to keep Guantanamo open anymore!"

I mean, ain't that just a shame?

[OmahaBlueDog]

6. Yes, but we don't have the money to keep the VA Hospital open either.

Ain't that shameful?

[Ruby the Liberal]

3. Social Security funds do not come out of the general budget

[OmahaBlueDog]

5. Right, but physically mailing the checks or transferring the funds does come out of the budget

Thise workers will be home, enjoying an unpaid vacation.

[Ruby the Liberal]

7. You don't need workers for direct deposit

Its automated.

[EC]

9. I wonder what permits won't go out and other things like

that? Like in Minnesota's lack of beer and cigs because of permits. What would the Fed have that requires licensing other than patents?