Since the House Speaker vote-a-rama in January, I’ve basically been assuming default in ~June-ish is a given. The House GOP has broken new ground on being completely unserious and for a decent portion of them the electoral consequences of not defaulting are worse than a default and recession. I just don’t see anything passing Congress until we are already missing payments and real economic pain starts to emerge.

Since January I have:
-turned down offers from competing employers because I have seniority and rapport at my current job. It should be easier to weather a recession here than a new position.
-Delayed or avoided medium to large purchases so that I can stock pile cash. An area where I was admittedly behind on and needed to catch up (because life!).

So yea, we have reached the point where I am making life decisions based on reading between the lines of wild-eyed Freedom Caucus press releases. Yea, I’m fucking furious about it.

But am I overreacting? Are you pricing in default to your finances/life decisions? What’s your over/under on default, near default, or recession? Any encouraging words to walk me back from the cliff edge?

5/2/2023 1:24:31 PM

So far I have not made any changes as there's not much about the larger situation I can control.

If it happens, it's going to be universally painful across asset classes, as well as the greatest financial self-own of all time.

I had a thought last night that gave me a tiny amount of optimism, and that's that many if not most congressional representatives are corrupt and conventionally rich. In some ways they have much more to lose with a default than your Average Joe. So, when the chips are down will they really vote against their own economic best interests? Maybe.

I'll be pleasantly surprised if we get out of this situation without at least another credit rating agency downgrade. That's survivable. A US default is uncharted territory.

5/2/2023 2:58:40 PM

Totally agree with your assessment.

Since January I have:
Bought many buckets of shelf stable food
Collected all rain and waste water
Stole 13 car batteries
Stopped communicating with neighbors and governmental entities
Stockpiled guns and ammo
Learned how to hunt with a slingshot
Started constructing a fence around my property and digging a moat
Ordered mushroom spores off the dark web so I can still party

5/2/2023 4:14:33 PM

^you’ve been busy! I may need to follow your lead. Fried chicken is the only thing I’ll eat out of a bucket tho.

Quote :

"If it happens, it's going to be universally painful across asset classes ……. I had a thought last night that gave me a tiny amount of optimism, and that's that many if not most congressional representatives are corrupt and conventionally rich. In some ways they have much more to lose with a default than your Average Joe. So, when the chips are down will they really vote against their own economic best interests? Maybe."

I don’t think it’ll be universally painful. Most Congress folk (or the rich) will take a temporary hit. That will force their hand to fix the mess and the market will rebound. If they play the volatility right, they might even come out ahead of their status quo position. Even if they fuck up their strategy, they ain’t gonna starve. For most wage workers, if unemployment climbs to even 5%, the pain is going to look much worse, including for those that keep their jobs (stagnating wages).

What has me much more on high alert this time is that for a substantial chunk of the House GOP, the electoral incentives may very well outweigh their personal economic interests. Their voters are rewarding them for brinkmanship, making an ass of McCarthy, and setting shit on fire. It’s not rational, but that’s exactly where their base voters are. From their electoral success flows the power they want and big wads of cash follow shortly behind obtaining power.

5/2/2023 4:52:07 PM

They can just write a book about wokism or whatever to get out of any financial woes

5/2/2023 5:12:22 PM

synapse's doomsday food bucket source, EXPOSED?!

5/2/2023 7:18:05 PM

I know who I'm going to blame, but who is the electorate writ large going to blame? The Senate could just cave and approve a House proposal. Almost anything would be better than default. Just get rid of the damn debt ceiling. It's enabling brinksmanship in an environment that needs no help with that.

5/2/2023 9:18:52 PM

It's not going to happen.

[Edited on May 2, 2023 at 10:37 PM. Reason : and hasn't in modern times. ]

5/2/2023 10:35:37 PM

^^

some argue that the debt ceiling being hit and broken could lead to a reasonable constitutional challenge via the 14th amendment with the dempres

interesting but I don't think anyone wants it go to that point

5/3/2023 12:14:47 AM

Mint the platinum coin!

https://en.wikipedia.org/wiki/Trillion-dollar_coin

5/3/2023 10:36:46 AM

haha i heard about that earlier today. would be fun to watch heads explode.

5/3/2023 10:58:25 AM

Quote :

" It's not going to happen"

Keep in mind this thread is also about “near default,” similiar to 2011 and 2013. There was some pain from those, but not the type that would’ve made me change my personal finance/life choices. Things that are different this time:

-A lot of banks in our system right now are in increasingly tight spots. In 2011 and 2013 banks had just had their ledgers cleaned up in the post -2008 regulatory and easy money environment. I think it’s low probability, but the potential of a sudden downturn causing cascading bank failures is def a potential outcome.

-Unemployment was already between 5% and 7% back in 2011 and 2013. It’s 3.6% now, and most of the analysis I’ve read suggests a default could send unemployment up into the 5-7% range. Interest rates were like 0% in 2011 and 2013, it’s 5% now. Basically, the economy was already tripping over its dick back then. There is just way less slack in our economy right now and we have a lot more to lose

-the Freedom Caucus has McCarthy’s balls in a vice. Even if we push up close to June 1st and Congress kicks into overdrive to push a solution through, a single House GOP member can gum up the works by calling for another Speaker vote. One of these psychos is definitely going to go there. In 2011 and 2013, Speaker Boehner, at times, went to WAR with the Freedom Caucus to eventually reach a solution. It was a bad solution, but he pushed back hard on the crazy.

-the GOP crazy train was still boarding back in 2011 and 2013. That shit is barreling toward the cliff now.

[Edited on May 3, 2023 at 7:26 PM. Reason : Spaces for easier reading]

5/3/2023 7:24:08 PM

I'm skeptical that congress if functional enough and responsible enough to sort this out like adults.

If a default is likely, I expect the Executive Branch to order the Treasury to pay the government's bills and say the debt ceiling is unconstitutional and that the constitution requires them to fund the budget Congress passed. They can fight things out in court for a while.

5/3/2023 7:41:05 PM

I've also seen premium bonds floated as an off-ramp.

It's probably never a safe bet to assume that the Democrats will grow a backbone, but they seem to be fed up with Republicans' repeated game of chicken when it comes to raising the debt ceiling.

5/4/2023 11:18:57 AM

43 Senate Republicans vow to oppose debt ceiling increase without spending cuts

https://www.cnn.com/2023/05/06/politics/senate-republicans-debt-ceiling-raise-spending-cuts/index.html

Most of the usual suspects.

Quote :

"“Our economy is in free fall due to unsustainable fiscal policies,” the senators write in the letter. “This trajectory must be addressed with fiscal reforms. Moreover, recent Treasury projections have reinforced the urgency of addressing the debt ceiling. The House has taken a responsible first step in coming to the table with their proposals. It is imperative that the president now do the same.” “As such, we will not be voting for cloture on any bill that raises the debt ceiling without substantive spending and budget reforms,” they add. The White House fired back Saturday, accusing the Republican senators of holding the economic livelihood of millions of Americans hostage. “At a moment when the country just posted historic jobs gains, this is no time for these Senators to reverse their support for avoiding default without conditions during the Trump presidency,” White House deputy press secretary Andrew Bates said in a statement. “They need to honor their Constitutional obligation to pay our bills and not unilaterally inflict a recession on the country.”"

5/7/2023 7:50:37 AM

Quote :

" A US default is uncharted territory."

I guess it is hard to look at the clowns and not think this would be some doomsday scenario as Y2K

[Edited on May 7, 2023 at 7:46 PM. Reason : Not not]

5/7/2023 7:46:07 PM

It won't be doomsday, but it will be exceedingly dumb and financially painful. Plenty of other countries that have defaulted are still around, but they aren't a lynchpin in the global economy nor the world's reserve currency. It will just confirm to outsiders that our political system has become so polarized and dysfunctional that we can't be trusted as a reliable partner and leader anymore.

5/7/2023 8:02:36 PM

Who would they use instead?

5/8/2023 1:41:15 AM

Open question. Basket of currencies including Euro, Yen, and Yuan, perhaps.

5/8/2023 6:33:44 AM

Quote :

" 43 Senate Republicans vow to oppose debt ceiling increase without spending cuts"

It really was too charitable for me to keep pinning blame on the Freedom Caucus when the reality is, with only a few exceptions, it’s the entire GOP. It’s just “Party over Country” all the way down.

There has been zero softening of positions between the two sides since the OP. How things go between McCarthy and Biden tomorrow is going to set the stage. I expect it to get uglier before any movement toward a solution.

5/8/2023 12:24:42 PM

If things remain horribly deadlocked at zero hour, I hope Biden will prioritize the interest of the nation and the economy. At least then he could claim the moral high ground. He shouldn't have to do that, but the Republicans are simply being too reckless to be trusted to put nation over party and politics.

5/9/2023 8:10:01 AM

By "prioritize the interest of the nation and the economy," do you mean negotiate with Republicans or do you mean pursue an end around solution?

5/9/2023 4:18:08 PM

https://apnews.com/article/debt-limit-biden-mccarthy-default-0768adc003ceece0d84af9276eaf4005

Looks like Biden and McCarthy met so they could….repeat what they’ve already said to the press 100 times. Great! Def giving me the reassuring feelings over here.

5/9/2023 5:57:34 PM

^^Could accept either. Mainly, don't let us default just because Republicans want to be a death cult. Get it done by hook or by crook.

You're the President. Use it as another executive power grab if you have to since Congress is being a waste lately.

5/9/2023 7:42:36 PM

*pops head out of top secret end times bunker*

“It’s been nice knowin y’all!”

5/19/2023 5:59:56 PM

Get rid of the damn thing! Such a stupid way to "govern".

5/19/2023 6:29:29 PM

If you believe the news media, it seems like a deal is taking form, for better or for worse. I’m a little disappointed in Biden, but there is still room for this to be a feather in his cap too. The tight rope McCarthy has to walk to get any deal approved, within a day or two, in the House is perilous. The Senate is its own mine field. If any deal fails because of GOP intransigence, Biden will have been gifted an enormous amount of political ammo. I guess for me, hope still springs eternal that this episode can help kill the idea that this kind of hostage taking is good politics.

[Edited on May 27, 2023 at 9:52 PM. Reason : I messed up]

5/27/2023 9:48:45 PM

What about people who don't believe the news media?

5/28/2023 7:13:20 PM

^well they finally released the bill text, so it’s pretty concrete now. When I posted it was all just leaks and hearsay.

After a day of Freedom Caucus and the Dipshit Senate caucus rage on Twitter regarding the final product, looks like I was right about the bills path through Congress.

5/29/2023 9:28:00 AM

Chip Roy trying to kill it in committee. It's too bad the idiots who elect these people pay no attention to what they do.

5/29/2023 8:11:16 PM

We still preppin' or naw?

5/30/2023 2:12:25 PM

You got your bunker food buckets, so what do you care about any of the rest of us?

5/30/2023 4:06:07 PM

[/thread] ??

5/31/2023 10:09:34 PM

I thought I heard Tim Kaine, Rand Paul, and Mike Lee were going to postpone it past June 5

5/31/2023 11:15:57 PM

^^ oh it passed the senate??

6/1/2023 7:57:12 PM

Yep

6/1/2023 11:40:20 PM

See y'all in January 2025.

6/2/2023 7:23:39 AM

Yeah that’ll be fun. It’ll be a welcome distraction from the claims of the election being stolen.

6/2/2023 8:57:33 AM

^^^ lol not when you posted that!

6/2/2023 11:32:37 AM

I emerged from my bunker and was so elated the world hadn’t ended I didn’t circle back to post.

-I was surprised with the amount of GOP votes the bill got in the House. I misread what non-freedom caucus members were willing to accept. Good on them for elements of reasonableness still existing.
-I didn’t expect the deal to push the ceiling out to 2025 (theoretically). Getting it out past next years election no doubt won over a lot of Dem votes.

Really interested to see if McCarthy can maintain his speakership. McCarthy sucks, but the Freedom Caucus losing relevance is so tasty. I can’t look away.

6/5/2023 12:38:23 PM