Posted on 07/18/2011 3:16:35 PM PDT by mdittmar
Washington, D.C.– Nevada Senator Harry Reid made the following remarks today on the Senate floor regarding Senate Democrats’ meeting last week with Treasury Secretary Tim Geithner. Below are his remarks as prepared for delivery:
Senate Democrats sat down with Treasury Secretary Tim Geithner, and he painted a picture of what our world will look like if Republicans in Congress force this nation for the first time in its history to default on its financial obligations.
The picture was grim. This is how he described the state of our government if Congress allows this unprecedented default: “lights out.”
He said default would result in a complete “loss of capacity to function as a government.”
Even those who believe government should be small enough to drown in a bathtub have to admit that a total shutdown of even the most basic and essential functions of government is scary.
It wouldn’t be good for the American people. And it certainly wouldn’t be good for our economy.
The Senate has no more important task than making sure the United States continues to pay our bills for pre-existing obligations like Social Security.
To ensure that we meet this responsibility, the Senate will stay in session every day – including Saturdays and Sundays – until Congress passes legislation that prevents the United States from defaulting on our obligations.
Geithner described how the 80 million checks cut by the Treasury every day could simply stop coming. The federal government would, in effect, go dark.
Paychecks for troops in Afghanistan and Iraq and bases around the world could stop. FAA towers could shut down. So could the FBI and the CIA. Border crossings could close. Safety inspections of the food Americans eat and the cargo that enters our ports could halt. Literally every function of government could cease.
There would be no discussion of which operations and personnel were essential. All the payments would likely stop.
Some have said we could prioritize which bills to pay. Even if that wouldn’t irreparably damage the nation’s credit and our reputation in the global community – which it would – it is also a complete fiction.
Our government won’t even be able to cover the bills due on August 3. It will simply run out of money. And because we’ll be in default and our credit rating trashed, we won’t be able to borrow the money to keep running even if we wanted to.
That’s the picture Secretary Geithner painted. Like I said, it’s grim.
Many of my Republican colleagues understand this fact. They know what is at stake.
But the irresponsible Republicans who say default would not be an unmitigated disaster for this country either don’t know what they’re talking about, or are twisting the truth for political gain.
Americans have gotten this message. Seventy-one percent of them disapprove of the way Republicans have used this crisis to force an ideological agenda. Even a majority of Republicans disapprove of their unreasonable refusal to compromise, which puts our entire nation at risk
Those who say this crisis would be a blip on the radar are wrong. Default would be a plague that would haunt our nation for years to come. Our credit rating would take years to rebuild. The country would never be the same.
Some will say this is an exaggeration, but it is not. This is what Treasury Secretary Geithner told us. And it’s what business leaders, economists, rating agencies and bankers have all told us as well.
If this country defaults on its obligations, Geithner said, it will be “much worse than the Great Depression.”
And it would make the massive financial crisis of 2008 look mild.
“It will make what we just went through look like a quaint little crisis,” Geithner said.
That “quaint little crisis” led to the loss of almost 5 million American jobs. It caused our banking system to nearly collapse. More than $34 trillion in wealth was destroyed in less than two years. The ripples were felt throughout this nation and around the world.
The average American family lost $100,000 on its home and stock portfolio alone. And 400,000 families were plunged into poverty.
That crisis was minor, Geithner said, compared to the potential fallout from a U.S. default.
The leading business and economic voices of our time have said it again and again: the risks of default are unthinkable. It would be a catastrophe.
Secretary Geithner also said we’re running out of time to avoid this iceberg. The rating agencies have already placed our AAA credit rating under review, and could downgrade us at any moment.
This is what Treasury Secretary Tim Geithner said: “The eyes of the country are on us. The eyes of the world are on us, and we need to make sure we stand together and send a definitive signal that we’re going to take the steps necessary to avoid default.”
I ask, what will it take to get my Republican colleagues to wake up to the fact that they are playing a game of political chicken with the entire global economy? They must wake up soon.
In 2006 Reid voted against raising the debt ceiling.
O, joyous day! We should all dance in the street and pass out candy.
Wrong, Harry you guys with Nancy Plouse Co-signed for the African Commie!
Not entirely Harry, as you and your political party have been a plague on this nation for quite sometime already! I bet I am not the first to post this response. GMTA
If you default and have no money it is a real problem for those that you owe money to. However, if you default a brief time because the congress will not increase the debt limit without spending cuts, if will give the lender confidence that when he is paid it will be with a sound currency and not one that is inflated by the Fed.
A short term default would give the world confidence in the United States Currency.
The following is a simplified explanation for the far left:
1. You have 3 bags of high grade weed, Columbian Red.
You give it to your friend based on the fact he will repay with 4 bags of weed in one year. This is an annual return of 1 bag over your initial investment, 33% which is damn good return.
2. At the end of 1 year he returns you the promised 4 bags of weed. With this profit you can now45r expand you business and hire employees to make multiple sales and returns of 33% a year.
3. You then try and sell the weed. At this time you discover to your horror that your original client returned two bags of Columbian Red that was cut with two bags of Orageno. Your new client is very angry about you trying to cheat him.
4. The new client puts a cap in your salesman ass and comes looking for you to do the same thing.
5. You know that you know have real problem. You then meet your client and apologize, replace the bad weed with good weed and give him one bag free so he will not put a cap in your ass. You now have a 25% loss on your original investment and therefore now lay off employees and go chapter 12 bankrupt, but you did not get a cap in your ass so all is well.
6. You now get HUD housing, food stamps, free medical and free education.
7. You now realize that it was foolish to try and make a living as an honest dope dealer.
8. You are now a dependable vote for the Democrat pary.
ps
The moral of this tale is that a dope dealer knows more about economics than the entire Obama administration and in particular Tim Geitner and that unknown organization called the Fed. My personal name for the Fed is, “Looters Incoporated.”
A default would not only be a stake in the heart of Keynesian economics, but as with the original Dracula, it would cut its head off as well.
No more deficit borrowing, AT ALL. The balance of trade would be at first zero, then commodities swaps, with a lot of it us giving away vast amounts of food so that a big part of the world didn’t starve.
And we would have to be on guard like never before, because the foul internationalists would try to swoop in and found all sorts of one world government organizations that would try to steal every bit of national power and wealth they could get. People like Kissinger and Brzezinski would be full time enemies of the United States and call in any and every resource and confederate in the government they could.
We would have to shun further international economic summits, efforts to found international currencies, and leave organizations like the WTO, NAFTA, GATT, and possibly ask the UN to leave and go somewhere else.
You can see why Obama and Reid and their ilk are terrified of the possibility. No more Obamacare, or Medicare, or Medicaid, or Social Security, or most welfare. All the “progressive” agenda for the last century would be to a great extent kaput.
Reid, you and your comrades are a plague that will haunt humanity forever ... well, at least until Jesus comes back to judge you.
“Default Would Be A Plague That Haunts Our Nation For Years To Come”
Senator Reid has a psychological malady known as “projectionism,” whereby the affected individual projects his own problem or characteristic onto another individual or entity.
In this case, Senator Reid is, in fact, the plaque that has haunted and will continue to haunt our nation for years to come.
Well, Harry, you remind me of a lich-King right now.
And Nancy Pelosi is like a scary banshee to scare kids at Halloween.
I think the spectre of liberalism will haunt our nation for generations.
Time to drive a stake through the heart of liberalism.
Outlaw unions. Pass a balanced budget amendment.
With no gubmint handouts, there can be no Democrat party.
Hey Harry. Eat me.
Exactly, within five years the default would become a fart in a windstorm.
Why anyone elected this unqualified alien to the highest office is beyond me. He is not even A black. He is Arab American, well take off the American. He is a foreigner to our country and cannot stand it. I cannot bear to see his mug in My TV and do not. Off that thing goes the moment he shows up.
I’d say the Dems are a plague this country could do without.
0bama is a plague that will haunt our nation for years to come.
I liked it both ways. I agree......:)
and [Geitner] painted a picture of what our world will look like if Republicans in Congress force this nation for the first time in its history to default on its financial obligations.
And,
The Dems are getting desperately desperate
The setup and threat is laid out; Obama and his lapdogs in the media will paint the picture that it was the Repubs fault (nevermind that the dang Dems did not pass a budget for 2 years and rang up $4 trillion in debt without the help of Repubs). Yet, IMO, the Dems know that this is a gamble-it might work and it might not, hence the 1st part of their desperation. The 2nd part of their desperation is if the Repubs actually refuse to give in to the debt ceiling and the (artificial) dead line of August 2nd passes AND nothing happens! Or worse, the senior citizens realize that Obama ordered the SS checks not to be sent out, then gets hammered for it and then relents.
In other words, the Congressional/Senate Dems will have to place their cajones in the hands of the Boy Wonder to not cave after the dead line. Yes, they are desperate.
Hey Congressional Repubs, call his bluff! Send a bill to the Senate that defunds the Depts of Education and half of the EPA along with raising the debt ceiling.
Bring on the inevitable. Let’s roll.
Geez its like a field filled with sacred cows surrounded by starving people, and no one wants their cows killed. While the rats/Obama are to blame, when was the last time govt debt fell and goverment quit growing? Clintoon doesn’t count because govt grew and he paid off the remaining 19B in debt with a dip into the social security stash.
This Government is playing us for fools, both parties are big govt and we sit around distracted by weiners weiner, and golf outings. Lord help us because one group is as bad as the next...
the too big to fail strategy has been an epic failure which will only prolong the misery and make the inevitable worse. Let the defaults begin.
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