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Comment by crdoconnor | Hacker News Reader

At no point even during the height of Republicans' "government shutdown" was the US government ever actively planning on defaulting on US treasuries.

Their rationale was, in any case, that "entitlements spending" was too high:

https://www.theguardian.com/business/2011/aug/06/sandp-debt-...

The entire rest of the market (and the other ratings agencies) were just about able to determine that if you have the keys to the cash printer you're actually not in danger of running out of cash and political bickering doesn't translate into risk of political suicide.

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The white house and congress was deadlocked, the government was shut down, and the treasury was not legally authorized to borrow more to make payments. There was talk of a trillion dollar coin to side step the national debt cap. This was a really big deal, and people were scared the maneuvering wasn't going to work in time. It totally justifies a small credit rating downgrade.

It was pure political theater. Any attempt to actually trigger default would have been political suicide for whomever tried it.

When actual credit events look likely it triggers a sharp rise in interest rates. It looks like this:

https://4.bp.blogspot.com/-9UVV9J6AdU0/TzxG9W26TsI/AAAAAAAAC...

That did not happen. Nothing happened. Not even a blip. The market (correctly) assessed this as being the usual partisan political bickering.

Oh come on. This is partisan hackery. This "theatre" did in fact cause vital government functions to shut down. I was personally on a project where I had to stop work because our checks were sitting on a table in Washington and a major milestone meeting was canceled because the government was furloughed and would not be there, throwing the entire project schedule off. This was replicated thousands of times across the economy.

Even the ghost of a chance of going down to the wire as to whether a bond payment would be missed by a single day on US obligations, is in itself tremendously disruptive. The economy is structured around U.S. debt as being the safest paper there is. Don't downplay just how dangerous dicking around with this for partisan points was.

No, playing up the fearmongering as you are doing right now is partisan hackery. The main Democratic talking points centered around fearmongering, after all, which was almost as stupid as the Republicans temporarily shutting down the postal service, etc. in a fit of pique.

As I said before: the markets correctly characterized the debt ceiling negotiations as a bunch of drama queens on both sides of the political divide acting up & a storm in a teacup because neither side is politically suicidal.

Check out HyperNormalisation by Adam Curtis - should be on interest.

You are right sir. And after the ratings agencies downgraded US debt, they actually appreciated in value. Because anyone who understands government finance knows that issuer's of currency cannot default on their own debt instruments unless they want to.

However, a fair number of tea party members in congress were actively promoting defaulting on the debt. That's different than some random guy with a page on the internet. That's a lawmaker with a vote who can affect the outcome. So their political career would be hurt. The election wasn't the next day, it would have taken a long time to replace those yahoos and the damage would have been done. Examples:

Ted Yoho, rep for Florida, http://www.rollingstone.com/politics/news/the-tea-partys-gov...

Trump (who isn't in congress, but had a shot at being president: http://mediamatters.org/research/2016/05/08/media-slam-trump...)

yes, it is nuts, but people who vote in congress supported it, and the pres. candidate of one of our two parties also said that.

Actually, most of the Republican party is in the process of committing political suicide right now. Enough with your vacuous false balance.

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