patrick.net

It likely has not much effect, because housing is going to continue to fall for a while, regardless of what happens in Washington.
There are millions of houses that are 90+ days delinquent on their mortgage.
For the 12th week in a row, 400,000+ Americans filed for unemployment insurance.
What do you think these facts mean house prices?

Well, more specifically, I'm wondering how detrimental it would be if we decided not to raise the debt ceiling.

No effect.

StoutFiles says

Well, more specifically, I’m wondering how detrimental it would be if we decided not to raise the debt ceiling.

Housing prices would be the least of your worries.

StoutFiles says

I’m wondering how the upcoming debt ceiling decision will change the housing market, for good or for worse. Anyone with knowledge?

none but the lowering of Jumbos will..lowering prices to purchase.

http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/06/10/prweb8560737.DTL

thomas.wong1986 says

lowering of Jumbos

Assuming Congress lets it happen. Even dropping to $625K is an abomination. It should be dropped back to $417K or lower.

as soon as the markets so much as burp in the wrong direction the Reps will drop their issues and turn 180. nothing to see here.

The sky is not yet falling. Interest payments on the debt can be met without raising the debt ceiling.
Asking whether this has an effect on housing is like asking whether or not putting your convertible top up or down matters when you are flying down the road and lose your brakes. Either way, you're going to have a bad experience.
I think the debt ceiling will be raised but the nonsense of railing about miniscule issues like 5 v 7 year depreciation of jets shows that a little more chicken playing is in order.
Obama forgets that the election last November changed things in Washington. The new people are unafraid of nonsense. Geithner said back in March that doom was imminent and he was lying, so now no one cares, he cried wolf.

"No one knows for sure what will happen because this has never happened before."

So we didn't default when Bretton Woods ended?

When Nixon got us off the gold standard it's because we ran out of it. But that also caused OPEC to be angered that what was gold was now power..which came to no surprise that the embargo occured

We also defaulted during the civil war and don't forget nearly every treaty we made with native amerians and of course the bonus march for ww 1 vets.

We have defaulted a number of times

If we don’t raise the debt ceiling, the United States will default on debt tied to nearly every single financial transaction made across the globe.

Nope.

The Treasury will just have to make choices. Pay interest on the debt or pay for small business loans that small businesses aren't even applying for.

If we default, we will get downgraded by the rating agencies, borrowing costs will go up as a result. Mortgage rates will follow suit, further depressing housing sales, and house valuations.

Increasing repos and banks sales as more people tire of making payments on houses whose mortgages are under water.

A default would push us back to another 2008 type crisis, but this time the government couldn't step in to bail out the entire BREIM (banking real estate insurance mortgage) industry.

Add to that Geitners statement that we would need to cut government spending by 40% immediately, and we can see that the troubles of 2008 would pale.

We would be looking at something more akin to the great depression. Which, given stock market and unemployment curves of that crisis, over 10-15 years, may just be history repeating itself.

1929 to 1932 saw a small recovery before the real crash occurred, which took the massive deficit spending of WWII to resolve.

We have seen a lot of improvement since the depths of the 2008 crash, but I don't think that pig has worked its way through the snake yet.

If we attempt to solve our problems by going cold turkey on debt, the current unemployment numbers and housing values will look like the good old days.

yup, last time around we needed a war to bail us out... and in a srange coincidence Europe having similar problems has, along with the good ole us ofa, decided to destabilize the middle east by attacking (with propoganda and with actual force) sovergn nations in that area.

Lets just bomb Libya while the Saudi's stone women, lets just decry the oppressive regimes of Egypt and other countries in favor of revolution & democracy.

I would definitely say a war is next

darrellsimon says

I would definitely say a war is next

It's not like that would help. A war wouldn't send many people overseas and give many people a job to fund the war effort like it did in the 40's. It'd just be really expensive and make things worse.

bob2356 says

That’s odd, I seem to remember a Republican president being in office in 20 of the last 30 years that the debt has been run up. Is my memory faulty?

Why do people argue about this stuff? If everyone would stop picking sides they'd realize that both parties are awful, and we shouldn't even have them.

StoutFiles says

If everyone would stop picking sides they’d realize that both parties are awful, and we shouldn’t even have them.

the parties represent the emotional and intellectual make-up of their mainstream supporters.

It is not the parties that are fucked, it is us.

Troy says

it is us.

Of the people,by the people,for the people. :)

The debt ceiling has been raised about 90 times in US history. I don't think raising or failing to raise the debt ceiling is going to affect housing or much of anything. By the way, I think it is going to be raised without doubt.

To me the debt ceiling issue is a distraction from the real issue of too much theft by people in government.

regarding stout files:

War reduces the surface population, it gets rid of debts as well.

corntrollio says

Assuming Congress lets it happen. Even dropping to $625K is an abomination. It should be dropped back to $417K or lower.

Your so right about that... even lower! Inflating home prices helps no one!

Troy says

StoutFiles says

If everyone would stop picking sides they’d realize that both parties are awful, and we shouldn’t even have them.

the parties represent the emotional and intellectual make-up of their mainstream supporters.
It is not the parties that are fucked, it is us.
“Nessuna soluzione . . . nessun problema!„

noone supports fraud and stealing. That is pure influence of special interest money to buy legislative graces.

"Geithner said back in March that doom was imminent and he was lying, so now no one cares, he cried wolf."

You clearly do not understand how the debt ceiling works. The US has already hit its debt ceiling and has only avoided defauly through the use of accounting gimmicks, like not making contributions to employee pensions and not holding certain auctions. However these measure sare TEMPORARY and can't go on forever. Geithner was also able to push the date back a few months due to higher than expected tax revenue. You see, tax revenue is very unpredictabel and before April 15th, few peopel know what it will be.

I don't think it will be a disaster. For sure, treasuries will fall thru the floor and all bonds as well. Stock market will go down. Interest rates - sharply up.

Credit will become nearly unavailable. In short, it means Deflation.

We, the U.S., DO make enough to pay our debts, about 2.4 TRILLION a year. PLenty enough to pay our bonds. What we don't have enough for is all the programs that favor this group and that group. Both parties have them. Power needs to and will be, devolved from Washington. That is ELIMINATE most of the programs and we will SAVE OUR COUNTRY. The private sector charities will fill-in where need is critical, they always have throughout history and only in the last 70 years do we believe the preposterous notion that government should take care of all our needs.
DON'T ELIMINATE them, hold out for the bitter end, go WAY further into debt, and we probably don't survive as a country. We likely break into a smaller nation much like the Soviet Union did, or at least be beholden to numerous foreign interests who are stronger.
So I say to the Patriotic Republicans STAND YOUR GROUND. Pay our debts with the tax money you ALREADY take in and roll back the spending. It's our ONLY chance.

Why is everyone blaming Republicans? Democrats are TRYING to pin this on Repubs so they can spend at foolish, lavish and spendthrift ways. If we raise the debt ceiling, when the bond markets DO wake up they will raise the yie
ld so high, we the U.S., will not be able to pay the debt and the economy will be so tight, making money( to pay taxes,live life, etc.) will be difficult.

This is like GM before it went bankrupt. At first there was "NO WAY" we could let them go bankrupt. After a another month or two(and after a corrupt payoff to the unions) it suddenly became OK, and they went through bankruptcy.

"That is ELIMINATE most of the programs and we will SAVE OUR COUNTRY. The private sector charities will fill-in where need is critical,"

So you want to replace Social Security and Medicare with charity? Ok, yet another crazy idea.

The odd thing is that much of the debt comes from the wars. So when the democrats had control of congress under bush they continued them..and for a whole year under obama they continued it as well.

The left could have removed funding the wars but they didn't..why not? Political suicide maybe...but they could have at least said they would stick to things.

Obama won the primary because he could say iraq was a mistake and won against hillary..then we watched as palin and mccain tripped over their own feet.

Even if we let the bush tax cuts expire, ended the exemption on social security and let obama care sit we would STILL have significant debt.

We've never cut government on the federal scale that much. We have to mortgage the future on the basis of what we borrow.

darrellsimon says

yup, last time around we needed a war to bail us out…

The war of 1979? I must have missed that.

and in a srange coincidence Europe having similar problems has, along with the good ole us ofa, decided to destabilize the middle east by attacking (with propoganda and with actual force) sovergn nations in that area.

Did the U.S. start the Arab protests? That's what the dictators there would like you to believe. More pro-U.S. Arab regimes are threatened by popular uprising than are anti-U.S. regimes. I doubt from the tone of your comments you really give a shit about the people's suffering there right now.

I would definitely say a war is next

War would not help our situation. It is part of what drove us to this point. History, economics, it's all inconvenient when trying to keep one's conspiracy theories afloat.

"So you want to replace Social Security and Medicare with charity? Ok, yet another crazy idea."

Both programs came from Ottovon Bismarks ideas in the 1880's for two major reasons

1) to deter the spread of red scares and communism. Sometimes the best thing to do is compromise to lower the argument

2) provide an incentive

This is where the whole "..at age 65" came in. When Bismark made the programs life expectancy was 45..meaning most would not live to collect these. When FDR created SS the life expectancy was 62..which again meant most would be dead.

LBJ passed medicare but in retrospect this occurred after the civil rights act. In a sense it was probably created to establish more unity on the left than anything else..of course it didn't really help given the chaos of the '68 convention..

There's never been a single generation that has allowed an entire generation of people to stop working and start collecting from the state en masse. If someone makes the case for Europe well their military was subsidized by the US and even then as we watch the whole PIIGS start to fall apart it could be on the chopping block.

As people age they need more health care. As a generation ages this becomes even more obvious. If there are mandates it will create lines (as what is happening in mass)

mdovell says

When FDR created SS the life expectancy was 62..which again meant most would be dead.

This is a very common piece of mis- or disinformation found among people who don't know anything about anything (i.e. conservatives).

In 1940, survival rate from age 21 to 65 was over 50% for men and 60.6% for women.

http://www.ssa.gov/history/lifeexpect.html

In a sense it was probably created to establish more unity on the left

And also, funny enough, Medicare was established to make it possible for the elderly to get the health care they needed. Obviously this isn't on any conservative's radar.

The expansion of the economy and rise of productivity has made it possible for working people to support retired people. Retired people really don't need much, some food, some TV.

If there are mandates it will create lines

Good. Health is wealth. Health care should be a human right, and conservatives who disagree with this are defective people.

mdovell says

The left could have removed funding the wars but they didn’t..why not? Political suicide maybe…but they could have at least said they would stick to things.

"The left" wasn't running things in 2009-2010. Pelosi is a centrist, and the Dem Senate caucus was/is not "left" at all. And Obama has to win Colorado and Virginia, so even if he were a secret Marxist he still has to pander to middle America.

timh says

If we raise the debt ceiling, when the bond markets DO wake up they will raise the yie
ld so high, we the U.S., will not be able to pay the debt and the economy will be so tight, making money( to pay taxes,live life, etc.) will be difficult.

Screw the "bond markets". If we were smart we would just raise taxes and print. Any dollar borrowed should have been a dollar taxed.

The central problem facing our economy is the trade deficits pulling hundreds of billions out of the economy every year.

Plus wasteful spending on defense and healthcare that is not providing enough bang for the buck.

Troy says

Pelosi is a centrist

Ever wonder why nobody takes you seriously?

klarek says

Ever wonder why nobody takes you seriously?

The conservative clowns on this board, I could really care less. I have yet to see one intelligent thing posted from any of them.

As for Pelosi, she is not a leftist. It's your cramped & overly ideological understanding of the world that is defective, not mine.

klarek says

Ever wonder why nobody takes you seriously?

I thought Troy was taken more seriously than just about anyone on this forum.

Nobody is perfect.

Maybe it's Troy's constant reference to facts that bothers you.

In Klarek's defense, if you listen to right wing propaganda all day, then your frame of reference would get more than a little out of whack, losing all ability to know where the center is (or where it used to be).

marcus says

klarek says

Ever wonder why nobody takes you seriously?

I thought Troy was taken more seriously than just about anyone on this forum.
Nobody is perfect.
Maybe it’s Troy’s constant reference to facts that bothers you.

You think ideology = facts. That's cute. Keep licking Troy's balls.

Troy says

The conservative clowns on this board, I could really care less. I have yet to see one intelligent thing posted from any of them.

You're a partisan clown. You'll never think anything anybody says is intelligent unless it conforms with your own beliefs. You're very close-minded.

Troy says

As for Pelosi, she is not a leftist. It’s your cramped & overly ideological understanding of the world that is defective, not mine.

Just because she's corrupt and incompetent doesn't mean she's not a leftist. If you want to paint her as a leftist, go for it. Please explain.

It's an interesting question, with us all having or biases, how do we know where the center is?

A decent argument can be made that Troy is wrong, that is that in the past 30 years we have moved so far to the right, that what was and should be the center is now the left. Why? Because the super rich and the corporations own our government.

For example if you think that having income (just the part that is) over 300K taxed at 39% is radical left wing, then hey maybe you are right.

But again, I do like the question. What or where is the center ?

Maybe the path back to greatness for America is having more poor and less middle class. How are we supposed to compete with Asia and India when our workers are paid too well? I can see how becoming basically third world country would be good for global corporations.

Except for the problem of "demand."

Oh, and also that nasty little "government by the people and for the people."

Where is the center?

Would publicly financed elections be dangerous? If so, for whom? Are publicly financed elections a radical left wing idea? Where is the center?

marcus says

It’s an interesting question, with us all having or biases, how do we know where the center is?

Generally, the lexicon for defining such a thing would be the current U.S. political makeup and/or climate. That's why when a smug ideologue like Troy tries to redefine the center, the left, or even the right (without the courtesy of providing a framework to his loony world), it is cheapening the discussion.

marcus says

A decent argument can be made that Troy is wrong, that is that in the past 30 years we have moved so far to the right, that what was and should be the center is now the left. Why? Because the super rich and the corporations own our government.

Have we? The religious right is dying. Social liberalism is in its hey day. Yes, the wealthy have their tax cuts, but they aren't going to have them forever. They can't. It only benefits ideological freaks like Troy for them to make off like bandits, so he can frame everything from that point of origin.

marcus says

It’s an interesting question, with us all having or biases, how do we know where the center is?
A decent argument can be made that Troy is wrong, that is that in the past 30 years we have moved so far to the right, that what was and should be the center is now the left. Why? Because the super rich and the corporations own our government.
For example if you think that having income (just the part that is) over 300K taxed at 39% is radical left wing, then hey maybe you are right.
But again, I do like the question. What or where is the center ?

It's not that Troy is wrong, it's that he is framing the general "center" from where Castro or Marx would have it. To put it kindly, that is very preachy.

klarek says

You’re a partisan clown. You’ll never think anything anybody says is intelligent unless it conforms with your own beliefs. You’re very close-minded.

I actually detest the Dems, but they are the best the US system can vend right now. In my personal ideology I am a left-libertarian, which most closely matches the Norwegian and Swedish economic systems I guess. They're miles more left than Pelosi, as is Western Europe, the part not exposed to the abuses of Soviet Communism.

Conservatives are just utterly 'round the bend right now. Their Creationism, Christianism, absolute dismissal of anthropogenic global warming theory, belief in "voodoo economics", mindless support of "deregulation", gay-hate, etc etc. There's not a single intelligent thing conservatives -- cultural or fiscal -- bring to the table. Just look at the clown car that is the current Republican presidential field. Huntsman would be my guy, but he's being forced to walk back his previous non-insane policy positions.

The major problems this nation faces is a dollar that is too strong against our major trading partners, and the growing cost of energy, which will continue to squeeze us as peak oil meets growing global demand.

And a military that is totally out of control. Ron Paul is the only voice of reason here, alas, but he's far from the conservative mainstream on this.

Conservatives have zero answers to what faces this country in the 21st century. They are irrelevant.

Troy says

Conservatives are just utterly ’round the bend right now. Their Creationism, Christianism, absolute dismissal of anthropogenic global warming theory, belief in “voodoo economics”, mindless support of “deregulation”, gay-hate, etc etc.

I don't disagree with anything you're saying here. I just choked on my oatmeal when you said Pelosi was a centrist. Maybe you're conflating establishment Republicanism with conservatism?