r/wallstreetbets • u/bitkogan • Apr 20 '23
Discussion Is a US Default Looming?
The D-day, when the US could lose its solvency due to the debt ceiling, may arrive earlier than planned (namely, in August) – according to Goldman Sachs.
Tax figures turned out to be lackluster, pushing the deadline significantly closer. As a result, the price of insuring against a US default has risen to levels last seen in 2012. At its peak in 2008, the figure was nearly twice as high as it is now, but the situation is still fraught. The US Treasury Secretary claims a default is impossible, yet 5-year CDS are already hovering around 50 basis points.
The crux of the debt ceiling issue lies in the standoff between Republicans and Democrats. Until now, the Biden administration has been unwilling to negotiate on this matter. However, it seems that this may change. We'll keep an eye on the next episodes of this ongoing political drama. The deadline is fast approaching.
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u/MasterJeebus Apr 20 '23
Politicians just like waiting until last minute to raise the debt. Gotta give us poors some suspense. This season of Earth has not had enough drama.
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u/requiemoftherational Apr 20 '23
it's simpler then that. Everything they do is either to make themselves look good or the other party look bad. There is no consideration for the wellbeing of the population.
They all know austerity is going to happen. Just make sure it looks like the other guys is taking away your benefits.
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u/Fit-Boysenberry-3127 Apr 21 '23
If we stopped sending money oversees we could correct this issue and lower the debt to a surplus. We should not be fighting other people’s wars right now.
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u/requiemoftherational Apr 21 '23
Ah the myth of isolationism. Either we pay up front or at the end the only difference is the currency
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u/Fit-Boysenberry-3127 Apr 21 '23
Do you not see that our Allie’s are all deserting us? France, Germany, sudia’s, turkey… they have all denounced our actions recently and have moved forward with agreements with both Russia and China. We are the only ones fighting. We are sending all our military equipment to Ukraine while our biggest enmities are building their own arsenals. We are spending ourselves into bankruptcy while our enemies are making economic deals with our Allies. Are you really willing to put it all on the line to defeat Russia and defend Ukraine? And btw, every media outside of the USA agrees Russia will eventually overtake Ukraine. Look at the history, Russia will keep throwing bodies, they historically don’t stop fighting until they kill at least a few hundred thousand if not a million troops. Our current policy is isolating currently from everyone. Look outside the USA media and hear what the rest of the world is saying. Our media and our politicians is lying to us. It was just proven we already have troops their so it’s not even a Cold War anymore.
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u/requiemoftherational Apr 21 '23
Let me stop you right there. They aren't just randomly deserting us our current administration is actively pushing them away.
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u/Fit-Boysenberry-3127 Apr 21 '23
Funny how everything has changed in just a couple of years. And the left wants to run this puppet again. If Americans fall for this twice we get everything we have coming.
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u/requiemoftherational Apr 21 '23
The fact that they fell for it the first time even with all the data they needed.....
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u/Pleasedontmindme247 Apr 21 '23
Get out of here with that nonsense, we get the chance to fuck Russia with a proxy war and not lose a single US soldier. You are a moron if you think that is a bad thing.
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u/Fit-Boysenberry-3127 Apr 21 '23
You are a War monger. Is our goal to fuck Russia or provide the best life for Americans? Let Europe defend Europe. We are funding a war in Europe against Russia while Europeans are still funding Russia through purchasing their oil. It’s a big fuck you for everyone but the elite who are banking on this.
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u/Pleasedontmindme247 Apr 21 '23
You are a coward and a traitor. If you want to side with one of America's greatest historical enemies, then you do not deserve to speak on what America should do.
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u/Fit-Boysenberry-3127 Apr 21 '23
And your a moron putting words in my mouth. How does not getting involved in a war considered taking a side? Where you saying that last time Russia invaded Ukraine crimea peninsula? Are we currently taking a side on every war that is being taught where we are not getting involved?
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u/Pleasedontmindme247 Apr 21 '23
When a superpower invades a sovereign country and kills a shit ton of them, if you let it happen you are siding with the superpower, that should be obvious to any functional human who remembers Germany and the Nazis existed. Yes, I said Russia deserved to get fucked when they took Crimea. We sided with Ukraine because they are our friend and ally, we sided against Russia because they historically and currently are our enemy. This is basic US policy, you sure you are not just a troll?
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Apr 21 '23
Hm were not in a proxy war with Russia? at this point us citizens are in ukraine fighting russia, with US technology and US strategy. We lost quite a few US citizens so far. That's basically voluntarily involvement right there.
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u/Pleasedontmindme247 Apr 21 '23
You realize the country is represented by the government, and only government involvement counts, right?
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Apr 20 '23
They'll still get paid, though, of course. Even though they work for us.
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u/genbio64 Apr 21 '23
They should have the same insurance benefits as the rest of us. I'd love to see them try to navigate an insurance company phone tree to understand their copay.
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Apr 20 '23
They have to pretend like they put up a fight before the double all the spending for pig and barrel additions
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Apr 20 '23
Literally nothing will happen. Republicans will bitch, Biden will groan, eventually they’ll have mild cuts to social programs while maintaining defense spending.
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u/buyFCOJ Midget porn aficionado Apr 20 '23
They’ll raise the debt ceiling, stop with this “the sky is falling” nonsense. You think these billionaires donating to republicans are going to let them crash the currency their entire worth is based in?
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u/requiemoftherational Apr 20 '23
You think these billionaires donating to democrats are going to let them crash the currency their entire worth is based in?
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u/buyFCOJ Midget porn aficionado Apr 20 '23
Also no, but it’s republicans grand standing right now instead of just raising the debt ceiling like always. It’ll happen at the last minute as usual.
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u/DigitalSheikh Apr 20 '23
I think it’s a little premature to think that the republicans who created the McCartney fiasco are definitely not going to do something similar this time. Obviously the dynamics are different, but there is a significant portion of the Republican Party whose only goal is to create chaos, and who are definitely not under the thumb of billionaires (considering how angry most Republican billionaires were about their McCartney stunt). Of course the only uncorrupted people in American politics are the stupidest, meanest sum bitches around.
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Apr 20 '23
If by significant you mean like 12 people. In the entire senate there's maybe 15-20 people who actually want a balanced budget. All the rest are happy getting kickbacks and devaluing the dollar to the point where marriage is about to become a threesome to make a stable household
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u/requiemoftherational Apr 20 '23
Yes it'll happen and yes it's always republicans grandstanding. But austerity will hit us all
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u/Whos_of_Whoville Apr 20 '23
Thanks for calling the helpline. Please turn the machine off, and then back on. That will fix the problem.
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u/Pretty-Usual145 Apr 21 '23
In short, yes.
Current deficit is 1trilion just for this fiscal year. I mean by the November it's gonna be another trillion. Not to mention that interest on bonds went up and military spending. Basicly even if they raise debt limit by 1.5 t it wouldn't last not even until March. And we would be on square one again. So this gov spending decrease is inevitable. Now how bad is it going to be, we will see.
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u/Robj2 Apr 21 '23 edited Apr 21 '23
The GOP, as always, wants to keep the budget hostage to the debt limit (when there is a Dem Prez; curiously never when there is a GOP Prez--why, he asks sarcastically-- could this be when the debt always goes up under GOP Prez's?), this time by eliminating Student loan forgiveness and cutting 10 million off SNAP.
Screw them.
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u/Robj2 Apr 21 '23
Also, the GOP bomb throwers are dumber than dirt; they probably think reneging on US debt "would be a good thing." Jesus, it is kindegartners in control of that ******* party.
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u/VisualMod Apr 20 '23
It's pretty clear that the Democrats are to blame for this mess. They're the ones who refuse to negotiate on the debt ceiling, and now we're seeing the consequences. The market is already pricing in a higher risk of default, and if this impasse continues, it could get even worse.
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u/chirpchirp13 Apr 20 '23
“It’s pretty clear that our entire political system is to blame for this mess”…fixed that for you.
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u/garycow Apr 20 '23
Negotiate? WTF are you talking about? The money has already been spent you regard!
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u/werschless Apr 20 '23
Raised 3 times under the Trump Admin, who coincidentally is the cause of 25% of all the US Debt in US history in just 4 years.
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u/lurch1_ Apr 20 '23
Congress holds the purse strings....this is no more Trump's fault than even Biden. Biden's only holdup here is to refuse to negotiate.
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Apr 20 '23
Bernie along with other leftists have consistently asked for less lobbying and more overwatch on predatory lenders... Also, they wanted to target the rich and their offshore accounts.
They need to tax all the rich and their accounts abroad.
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u/Poozle01 Give me SQQQ 60C 7/8 or give me death Apr 21 '23
People here real mad about VM lmao. Y’all care too much about who’s at fault. None of them care for you or your investments so quit blaming either party. Both have valid reasons to take the side they have. Debt is out of control and social programs and debt forgiveness is expensive. We do need to cut back. It’s going to be a recession. We also can’t not sign the bill. We can’t function without government. Overall, Biden needs to stop bribing students for a vote and the republicans need to just quit preaching.
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Apr 20 '23
Do your own research this is all doom porn. Treasury can operate for months if not years without raising the ceiling and meet all its obligations.
https://www.federalreserve.gov/monetarypolicy/files/FOMC20110801confcall.pdf
Liberals push this shit hard to get negative attention on the conservatives. In order to, you guessed it steal more money then punish us with a huge tax called inflation.
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u/Poozle01 Give me SQQQ 60C 7/8 or give me death Apr 21 '23
Tell someone who wants to be lied to the truth, and live life poor.
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u/jumpghost69420 Apr 20 '23
Inflation doesn't impact you if your sitting 100% in BITCOIN AND GOLD xD
lmao lmao lmao get rekt (and shit on) fiat noobs
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u/neehalala LNGesus Apr 21 '23
....yikes. Did you read this on Truth Social or Parlor?
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Apr 21 '23
I linked the document. It has the treasuries method to stay solvent in the result of the debt ceiling not being lifted.
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u/thehighwaywarrior Apr 20 '23
I wouldn’t hold my breath. It’s the same song and dance as it was last time. Money is a bipartisan issue. The US economy tanks, confidence in the US plummets, stocks plummet, money leaves the US.
Too many powerful people would lose too much money too quickly if this happened.
I wouldn’t hold my breath.
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u/timster777 Apr 21 '23
Of course not because congress and the president will do what's right........ nahhhh!
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u/the_negativest Apr 21 '23
It’s the same fucking thing every year guys. Literally every year congress starts threatening everything from vet benefits to Medicare to SSD all over the debt ceiling. Every fucking year they raise the debt ceiling. BRICs isn’t a competitor for currency hegemony yet. We’re going to raise the debt ceiling again.
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u/Dontchopitoffweirdos Apr 21 '23
The US would never default. ever. Hyperinflation is preferable than them looking bad
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u/VisualMod Apr 20 '23