New IMF Head Says US Must Raise Debt Limit, or Face 'Nasty Consequences'

fysdt writes with this from an article on ABC News: "The International Monetary Fund's new chief foresees 'real nasty consequences' for the U.S. and global economies if the U.S. fails to raise its borrowing limit. Christine Lagarde, the first woman to head the lending institution, said in an interview broadcast Sunday that it would cause interest rates to rise and stock markets to fall. That would threaten an important IMF goal, which is preserving stability in the world economy, she said. The U.S. borrowing limit is $14.3 trillion. Obama administration officials say the U.S. would begin to default without an agreement by Aug. 2."

Comments

Re:The sky is falling...OH NO!!! /sarc

[MrMarket]

Rich people pay above 30%.

False. Rich people don't make money from wages. They make money from investments, dividends, and bond interest. That's why the super rich pay almost no tax (and why C-levels get paid in stock as opposed to salary). In the US we tax income from work, but we do not tax income from wealth.

More on the budget

[bussdriver]

-Obama added the wars to the budget so all that military spending that was 'off the books' is now on the books making the budget look much larger when it was there before but was outside the budget!

-When we have a surplus, state or federal there is a big push from our fools to give tax rebates and tax cuts INSTEAD of paying off the debt. This is what we do each time so the debt grows.

-The deficit and debt are two different things people confuse too often. Fixing the deficit does not fix the debt and the interest on the debt only compounds creating more deficit problems.

-Cutting the budget in half will not stop the situation from getting worse. Breaking even will not stop it-- the only way for things to not get worse is if we pay back the interest on the debt and actually break even.

-Trickle down economics do not work; it has a bad reputation... Well, the terms are considered bad-- we've simply shifted the terms while still supporting supply side economics with Democrats slowly warming up to it as well. What is clever is the use of cover terminology that can be swapped out after it takes too much damage. Today its all veiled in terms of jobs-- the rich provide jobs etc. Its just another way of selling the same old failed economics which made huge gains around the Nixon era when the powerful started think tanks to legitimize their positions (the beginning of the modern corporate info war.)

There are other issues leading to a collapse around 2020 besides OUR money mismanagement. Its all interconnected to a point where repair is impossibly difficult.