

Ask HN: What exactly will happen on debtpocalypse? - yuvadam


======
noonespecial
They already have the solution, but it's unpalatable to each party's dogma.
They'll posture until the last minute and then do what they figured out they
had to do weeks ago.

It's little more than a reality tv show at this point.

~~~
hugh3
As I understand it, the differences aren't even ideological any more.
According to Nate Silver's article from the other day,

[http://fivethirtyeight.blogs.nytimes.com/2011/07/27/its-
all-...](http://fivethirtyeight.blogs.nytimes.com/2011/07/27/its-all-over-but-
the-face-saving/)

the Boehner bill (which has been passed by the House and rejected by the
Senate) and the Reid bill (which may or may not actually exist yet) are pretty
much identical in all important ways. The main sticking point is whether to
kick the can down the road 'til the middle of election season (which the
Republicans want) or 'til slightly after the election is over (which the
Democrats want). Both parties have high-minded-sounding justifications for why
their preferred option is the right thing for the country, but...

I'm trying not to pay too much attention to the whole charade at this point. I
know how this movie ends, it's just that the two leads are still arguing over
who gets to look like the hero in the final scene.

------
stonemetal
Nothing. There will be a small market panic before, then it will happen. After
it will be similar to when the government doesn't pass a funding bill,
government workers furloughed etc. The market will recover. Everybody will
have a good y2k laugh. The US will not default.

------
zg
In the unlikely event that the debt ceiling isn't raised, the government will
need to decide which debts not to pay. I imagine it won't want to default on
any bond payments, so that will leave any non-bond payments such as federal
wages, medicare, medicaid etc.

In addition to this, the US credit rating is likely to fall, and potentially
confidence in the dollar. If the value of the dollar decreases then this will
lead to imports becoming more expensive, leading to inflation.

------
alecco
Instead of empty opinions, check what the market is betting on. And still that
will be off either way, but at least they put their money where their thinking
goes.

------
swhopkins
Nothing. I still believe our politicians aren't stupid enough to actually let
the government default. It just may come down to the last minute.

------
mooism2
Do you want a prediction on what the politicians will do, how the markets will
react, or how various countries' economies will be affected?

------
veyron
Obama invokes 14th amendment, debt may be downgraded, we move on

