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I'm trying to figure out how defaulting on the U.S. debt is going to affect my life.

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scarletwoman Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-26-11 10:35 PM
Original message
I'm trying to figure out how defaulting on the U.S. debt is going to affect my life.
I suppose there's a chance that I could lose my job. I work for an Indian casino, and if there aren't enough rich white gamblers left, maybe the casino will decide that I'm not essential.

But honestly, I don't see any great shortage of rich white people coming down the pike anytime soon. I imagine that they'll find some way of landing on their feet, one way or another.

After all, that's what rich white people have been doing all through the "Great Recession", right?

The one thing I know will REALLY affect me is any kind of "Grand Bargain" that fucks with Social Security and Medicare.

So pardon me if I don't get all freaked out about the debt ceiling and August 2nd. Let the monied class worry about it, I already know I'm being fucked.

sw
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Drale Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-26-11 10:37 PM
Response to Original message
1. Well if you ever want to borrow money and have to pay
50% interest I bet you'll be crying then.
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scarletwoman Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-26-11 10:42 PM
Response to Reply #1
3. 50% interest? Is that what you see?
Please elucidate the mechanism(s) by which 50% interest on borrowing will occur.
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nadinbrzezinski Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 12:13 AM
Response to Reply #3
32. When T BIlls go up to 50% to atract investors
something similar happened to Carter and 30 year T Bills staid at 20+ for a few years. When it is that expensive for the US Government to get a loan. aka your T-Bills, it trickles down, no pun, to the rest of the loaning system. T-Bills are the floor by the way.
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A HERETIC I AM Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 12:46 AM
Response to Reply #32
45. Oh, for fucks sake. The 30 year Treasury BOND (it isn't a "T-Bill") was NEVER at 20%
under Carter.

Ever.

The highest yield for a 30 year Treasury Bond since 1977 was about 13.5% and it didn't last "for a few years".

Jesus H. Christ on a pogo stick.

http://www.federalreserve.gov/releases/h15/data.htm

Scroll down to "Treasury Constant Maturities" and to "30-Year" then click on the link to the far right - "Annual"

1977,7.75
1978,8.49
1979,9.28
1980,11.27
1981,13.45
1982,12.76
1983,11.18
1984,12.41
1985,10.79
1986,7.78

The above are YIELDS, not coupon rates, BTW. IN order to realize yield one has to either hold the bond to maturity or be able to sell at a premium to the price paid at such a point as to see a gain on an annual basis of the given percentage.

In other words, Nadin is wrong, once again, on her take on the US Treasury Bond market.
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nadinbrzezinski Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 12:47 AM
Response to Reply #45
47. Whatever my expert,
whatever... since things are never going to be bad, in your world.. have a good day. No, no iggy list anymore.
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Jim Warren Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 01:05 AM
Response to Reply #45
52. +1
For tempering the hysteria with a bit of reality.
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dionysus Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 08:22 AM
Response to Reply #45
67. what, you have a problem with someone pushing pure bullshit as a fact?
;)
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WCGreen Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 12:50 AM
Response to Reply #32
48. BTW, it's the 10 year note that is used as the floor and not the 30...
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nadinbrzezinski Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 12:57 AM
Response to Reply #48
50. Yeah but you know what I mean,
Edited on Wed Jul-27-11 12:58 AM by nadinbrzezinski
that is how the mechanism works... people have forgotten the early 1980s and how high interest rates were.

I haven't... but not for the same reasons most people do here.

Oh and I fear that in this case, WORST CASE, we will wish for 1980s rates.
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Cosmocat Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 11:55 AM
Response to Reply #3
76. 50% is hyperbole ...
But, it will be at best a real, tangible kick in the nuts to what is already a sluglike recovery.

An increase of a percentage point or two is not going to break too many people, but across the whole country it adds up signficantly. It adjusts everything up a bit.

This the best case scenario. I don't imagine it will be the apocolypse, but it won't be good, for fricken sure, and it is pure, 100% self inflicted wound if it does happen.

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Sheepshank Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 12:56 PM
Response to Reply #1
82. OP has a point when it comes to how she would be personally impacted
Remember we had 18-20% 30 year fixed mortgage rates under Reagan...who by the way got all the debt ceiling increases he asked for.

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TexDevilDog Donating Member (102 posts) Send PM | Profile | Ignore Tue Jul-26-11 10:41 PM
Response to Original message
2. Wife and I are debt free except for mortgages
on two houses. We have six months of expenses in saving account. We have had our emergency fund in place for over a year. We don't need to borrow any money. So interest rates wont effect us.

Plan for the worst, hope for the best.
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shraby Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-26-11 10:52 PM
Response to Reply #2
4. I hate to disillusion you, but 6 months expenses will not tide
you over unless you are able to hold on to your jobs. Think world wide depression.
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TexDevilDog Donating Member (102 posts) Send PM | Profile | Ignore Wed Jul-27-11 09:16 AM
Response to Reply #4
72. We could pay everything for six months
If I loose my engineering job and wife looses RN job and we don't get any unemployment payments. I think we are fine. N
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pnwmom Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-26-11 11:30 PM
Response to Reply #2
15. Are your jobs so secure that you think 6 months savings is enough?
If you have enough socked away for the rest of your lives, then I can see why you wouldn't worry. Six months, not so much.
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TexDevilDog Donating Member (102 posts) Send PM | Profile | Ignore Wed Jul-27-11 11:48 AM
Response to Reply #15
74. Yep
If I loose my engineering job and wife looses RN job AND we don't get any unemployment payments. I think we are fine.
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pnwmom Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 12:03 PM
Response to Reply #74
77. If you're fine with no jobs and UI, then you have a lot more than 6 months savings. n/t
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TexDevilDog Donating Member (102 posts) Send PM | Profile | Ignore Wed Jul-27-11 01:05 PM
Response to Reply #77
83. No I have six months of expense in savings.
I do a budget and know what I spend a month. I can do math, I had taken 3 semesters of calculus in college, differential equations and linear algebra.
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pnwmom Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 04:29 PM
Response to Reply #83
88. You claim that you and your wife would be fine if you both lost your jobs
because you have 6 months of savings. I believe that you can do math. But are you aware that the median length of unemployment is now 9 months, and that half of the people are unemployed longer than that? And many employers now are refusing to hire anyone who has lost a job; they will only hire currently employed people.

I wouldn't be feeling secure with only 6 months of savings.
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dkf Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 12:07 AM
Response to Reply #2
29. Where is your income coming from?
If you have a pension your fund may be affected. If you own investments you may be affected. If you have an employer you may be affected.
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TexDevilDog Donating Member (102 posts) Send PM | Profile | Ignore Wed Jul-27-11 11:50 AM
Response to Reply #29
75. My employ may be effected but I know I have one of the highest
performing in engineering. So, I can say that I am 95% sure that I would not be layoff any time soon.
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seabeyond Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 09:17 AM
Response to Reply #2
73. i have less debt than you, and more saved than you and YET.... i am tired of being fucked and
Edited on Wed Jul-27-11 09:47 AM by seabeyond
dipping into savings... for college, for retirement, because of greed.

i am not nearly as accomodating with my money as you
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safeinOhio Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-26-11 10:54 PM
Response to Original message
5. Dire situations
turn out to be about half as bad as expected.
I see the markets over reacting and there will be some good buying opportunities in boring high dividend utility stocks. I'm not rich or anything. Pension and minimum wage part time job, but no bills, everything is paid for and have some money left after the divorce.
I'd suggest paying off as many credit cards as you can and only buy what you need.
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scarletwoman Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-26-11 10:57 PM
Response to Reply #5
7. Since I don't have any credit cards and have never done anything BUT buy what I need,
I don't see any major lifestyle changes if default happens.
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pnwmom Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-26-11 11:31 PM
Response to Reply #7
16. Will you ever buy anything ever again?
When everybody else has to pay more for interest and for running their businesses, prices of many necessities will go up.
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anneboleyn Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 03:56 AM
Response to Reply #7
58. The price of all imported products, which is most of what we buy, could skyrocket as the dollar
plummets.
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RebelOne Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 12:27 PM
Response to Reply #7
79. Same here. I declared a Chapter 13 bankruptcy several years ago.
After everyone was paid off, I vowed no more credit cards because that is what got me into financial trouble. Now I pay cash for everything. I do not have any bills except for the usual household bills such as electric,, phone, Internet, etc. I live in a mobile home that I own. My car is paid. I collect social security. I have plenty of savings to tide me over if social security checks are delayed.
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Liberal_Stalwart71 Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-26-11 10:55 PM
Response to Original message
6. I work for the federal government, and guess what?
We are working now on the FY12 and FY13 budgets and the president is pushing for MORE money to address homelessness and poverty. For those who assert that he hasn't done anything on this. All of the fiscal year budgets have asked Congress for MORE money to address the needs of the homelessness and the poor.

Now, if I'm on furlough for a few weeks, I'll be o.k. I won't be homeless. However, what will happen to the most vulnerable of us? I'm much more fearful of how they will be able to live.
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scarletwoman Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-26-11 11:04 PM
Response to Reply #6
9. I get what you're saying, but those budget requests are in trouble no matter what.
Not raising the debt ceiling won't be what messes them up, budget cuts will be what defunds programs for the poor and homeless.

Linking raising the debt ceiling to cutting the budget is a wholly manufactured crisis.
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Liberal_Stalwart71 Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-26-11 11:19 PM
Response to Reply #9
13. Right. And my question is why is it that the President is being blamed for it?
Federal agencies have been working on FY11, FY12, and now FY13 budgets. And yet, I'm here on DU seeing all these threads about how Obama "isn't doing anything!' Are they fucking crazy? I'm working my ass off on these budget proposals.

And, by the way, the larger argument is that the President is NOT the final arbiter of what gets spent and what gets spared. The U.S. Constitution clearly gives that authority to the U.S. House of Representatives (Article I, Section VII). Now that the House is dominated by crazy wingnuts, how can we expect the President to get anything he wants?!??!?

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avaistheone1 Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 01:08 AM
Response to Reply #13
53. Perhaps because Obama has taken every opportunity as well as his spoken word
to support cutting programs for the poor, working class. He is repeating the republican talk and deliberately mis-speaks and calls Social Security an entitlement. When the hell has a Democratic president said something like that before? I say NEVER. :grr:
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Liberal_Stalwart71 Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 05:32 PM
Response to Reply #53
89. It's simply not true. I work for HUD and he has proposed EXANDING funds
for public housing, veterans housing, and addressing homelessness!!!
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Liberal_Stalwart71 Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 05:40 PM
Response to Reply #9
90. Yes, you're right. But my larger point is that the president doesn't do much on that issue
because it is a function left to Congress, not the Executive!
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sofa king Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 06:19 AM
Response to Reply #6
63. Don't worry about us at the bottom. We've already lost it all.
And your assistance for the poor never passes in conference as long as the Republicans have a say. So I for one will be watching with a degree of impartiality as I watch the ranks of my socio-economic bracket swell.

When you have nothing, you have nothing to lose.
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killbotfactory Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-26-11 11:00 PM
Response to Original message
8. I always thought the "I got mine, screw everybody else" was a conservative attitude.
I don't understand how unsubstantiated rumors of SS and Medicare being cut would make someone feel any better about republicans screwing over millions of struggling people to protect the pocketbooks of their rich friends.
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scarletwoman Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-26-11 11:16 PM
Response to Reply #8
12. Yeah, I'm really living on easy street. I guess the giveaway was saying I was worried about SS
and Medicare.

Seriously, explain to me how we, the wage slave underclass, will be worse off if the debt ceiling isn't raised than we already are.
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killbotfactory Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 12:16 AM
Response to Reply #12
33. It will put SS and medicare payments at risk, threaten unemployment benefits
Raise the cost of goods for everybody.

Not sure why anyone who has or does suffer through poverty can be indifferent to that, unless it's just a death by a thousand papercuts thing. Which I can understand. For several years my life has just been one minor crisis or indignity after another, all related to a lack of money. It's easy to get numb to it.

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anneboleyn Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 04:05 AM
Response to Reply #8
61. Yes, exactly -- insulated self-righteousness (I've got it all under control, not me, etc.) usually
is right-wing in nature. Most lef-wingers have some sense of social responsibility and an awareness that a national (or even global) crisis would certainly have some degree of personal impact, not perhaps easily anticipated by what one expects to be the case.
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Selatius Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-26-11 11:08 PM
Response to Original message
10. The cost of most manufactured goods will inflate in the event of default.
As the value of the Dollar declines relative to other currencies, the foreign labor that makes our products could become much more expensive. The costs will naturally be transferred to consumers. Likewise, the cost of foreign crude will inflate too.

This will cause consumers to curb spending, which means demand drops for products and services, which would likely lead to lay-offs and higher unemployment rates. The Great Recession could turn into The Second Great Depression with all the unemployed and homeless drifting around.
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rhett o rick Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 12:05 AM
Response to Reply #10
27. When people stop buying, wont that hurt the Chinese? They make all of our products. nm
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nadinbrzezinski Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 12:16 AM
Response to Reply #27
34. The chinese have OTHER markets
and this is when it comes into the US getting a cold and everybody else getting pneumonia.

:-)

But seriously the South East Asian market is larger than ours.
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rhett o rick Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 08:40 AM
Response to Reply #34
68. I am surprised by your last sentence. nm
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nadinbrzezinski Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 10:03 PM
Response to Reply #68
96. The expanding middle class in China alone is about the size of the
American middle class... and India is not far behind.. by percentage of the population they are smaller, but in raw numbers, they are larger... and growing.

This is one of the reasons why your companies are starting to move there... see GE and X-Ray division.
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DeschutesRiver Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 10:08 PM
Response to Reply #96
98. But isn't their expansion due in large part to our trade deficit with them, and
Edited on Wed Jul-27-11 10:17 PM by DeschutesRiver
if we go boom abruptly, won't they go boom as well?
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nadinbrzezinski Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 10:12 PM
Response to Reply #98
99. yes and no... India has a very healthy internal
market that relies almost none at all on us. China has moved that way too.

One good example is Wally Mart... what Wally mart carries in China is very different from what they carry here.

Import fees are close to 20% while ours are a joke. They have done this in a way that expands their market and economy... and a middle class that is NOT political.

Alas to avoid those inport fees GE is moving to China... because it will be cheaper to produce it there for INTERNAL use, and export.
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DeschutesRiver Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-28-11 12:01 AM
Response to Reply #99
100. Interesting about India, hadn't thought about them. As for China, while I too think they are moving
in that direction, I am not convinced that they've made nearly enough real progress to weather the coming storm if/when we go boom.

If they were further along, then maybe...but from what I've read, I just don't see them as being where they need to be to be free from the impact of our foolishness (which they are tied to by their foolishness).

I'd like to be hopeful about a lot of things, but frankly, I am not optimistic about the bump in the road we are about to hit. That said, when dh and I were looking for jobs and our first home, jobs were almost impossible to find, and when we did get them, the interest rate for our first house was a first mortgage, variable, of 9%, with a second at 14%. And? By the time we'd lived there for a couple of years (iirc), the value dropped from the $67k we bought it for to the sale price we got of $47k. I'd forgotten about those times, until recently - been talking to more and more people who never lived through that before, and even a few who think I am remembering things wrong. Which I am not.

It sucked then; it will suck in the near future. I just don't see any way around it.
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nadinbrzezinski Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-28-11 12:48 AM
Response to Reply #100
101. Thom Hattmann goes into this regularly
and how China wants everybody to play by pretty low barriers, except itself.

It is an interesting discussion... and this bump... will not be fun. I remember an economy hundreds of times smaller, going into government default... that will look like walk in park. Most people in the US do not have that experience. oh and the tea party is right about one thing... chaos.
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LooseWilly Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 01:32 AM
Response to Reply #10
55. So we should buy used manufactured products and drive less... check.
Problem solved?... :+
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Selatius Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 03:41 AM
Response to Reply #55
57. Not necessarily so. Fuel is needed to move farm products from field to store.
You would be paying inflated prices for food as well.
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Name removed Donating Member (0 posts) Send PM | Profile | Ignore Wed Jul-27-11 06:02 AM
Response to Reply #57
62. Deleted message
Message removed by moderator. Click here to review the message board rules.
 
EFerrari Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-26-11 11:10 PM
Response to Original message
11. I'm with you. I know when I'm being disastered.
They already took my equity in the last round. There's nothing left to blackmail me with, lol.

:)
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scarletwoman Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-26-11 11:50 PM
Response to Reply #11
23. Thank you. You can always be counted on to make a sensible post!
:D
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rhett o rick Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 08:44 AM
Response to Reply #11
69. If the capitalists are smart they would heed Machelliveli and not leave us
with nothing more to lose. But capitalists, fighting for the last golden egg before the goose dies, arent smart.
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Maru Kitteh Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-26-11 11:25 PM
Response to Original message
14. Well, as long as you got yours, right?
:thumbsdown:
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scarletwoman Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-26-11 11:39 PM
Response to Reply #14
19. Yes, I'm a fuckin heiress. Anyone who's read my posts over the last 10 years knows that.
So please tell me, how will a default affect the poor peons at the bottom of the ladder? Will they lose value in their stock portfolios? Will their money market funds tank?
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Maru Kitteh Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 12:04 AM
Response to Reply #19
26. Apparently you have enough to not be worried about how it will hurt others, so good for you.
Edited on Wed Jul-27-11 12:19 AM by Maru Kitteh
I have a nephew who is a single dad of 4, lives in an old double-wide and washes dishes at a truck stop for a "living." What do you think is going to happen to his trailer payments after default?

I guess they can come live with you.



edit for typo
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former9thward Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 12:27 AM
Response to Reply #26
39. If he is paying off his trailer on a contract they would not go up a penny.
So stop with the drama.
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Maru Kitteh Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 12:36 PM
Response to Reply #39
80. I'm so glad you know more about my nephew than I do. You're smart.
But apparently, you are a very poor psychic.

So stop with the divinations, you suck at it.

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former9thward Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 01:15 PM
Response to Reply #80
85. I just commenting on what YOU posted.
You said he would not be able to afford his trailer payments. His trailer payments would not change by a dime. So I guess you are the one who doesn't know.
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Maru Kitteh Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 06:55 PM
Response to Reply #85
92. No really, you're a genius - you know everything.
Hey, I have a 2nd cousin who just bought a truck but I don't know about the details of his transaction. If you get around to it, why don't you give me the details on that if you would please? Thanks. You're a peach.

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former9thward Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 08:09 PM
Response to Reply #92
93. At least I know the basics of a contract.
Edited on Wed Jul-27-11 08:09 PM by former9thward
How people can get by in life not knowing the basics I don't know.
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Zorra Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 02:14 AM
Response to Reply #19
56. Well, as far as my stock portfolios go, I'm pretty sure the
chickens can make it at least until fall if I let them go free range part of the day, and if the coyotes and/or bobcats don't get them, of course. Not sure about the rabbits, don't think I'll be making any profit on my rabbit stock this year. Sold off all the goats at a loss last winter, the bears got some of them. Lost a lot of stock to the bears in the past few years.

Had to cash in some of the market money funds (you said it backwards, sweetie, it's market money, not money market), cuz the well pump tanked and I had to get a new one, so I had to take extra market money funds out of the cookie jar to buy food.

Oh, yeah - and about those peonies at the bottom of your ladder? Don't worry about the faults, just add some bonemeal and woodash to the soil real early in the spring and they'll bloom real good if they get enough sun.

Some folks just don't seem to get this, but life's not as easy as it used to be for us heiresses these days.
;-)
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KurtNYC Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 06:36 AM
Response to Reply #19
64. Many of us peasants will have to make do with fewer silk handkerchiefs
the silver may go unpolished for 10 days or more, fewer shopping trips to the habberdashery, the stable of polo ponies will be limited to 3 ponies per rider, the gull-winged Mercedes coupe might not get washed EVERY day, might have to settle for a 90-foot yacht next year, and if it keeps up we may have to tap some of our Cayman Island funds. So basically a complete nightmare!
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nadinbrzezinski Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-26-11 11:33 PM
Response to Original message
17. Lets start with more expensive food and clothes
but you are right, why worry? I mean hyperinflation (not out of the realm here) is nothing to worry about.
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scarletwoman Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-26-11 11:46 PM
Response to Reply #17
21. So you're thinking that not raising the debt ceiling will turn us into Zimbabwe?
At least I'm ahead of the game then, I already own a wheelbarrow.
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nadinbrzezinski Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-26-11 11:49 PM
Response to Reply #21
22. It could... inflation is common in countries that
default, it kind of goes with it. We are a reserve currency, so that effect will be at levels not seen before in modern economic history.

I have the experience of having lived through a default in an economy oh hundreds of times smaller than the US economy. And take my word on this, since you do not have the experience... it will touch you in significant ways. No, not the day after... but it will. And if this is bad enough the effects will be with us for a generation or longer.
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scarletwoman Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-26-11 11:58 PM
Response to Reply #22
25. I suspect, having lived poor most of my life, I may not notice much difference. (nt)
Edited on Tue Jul-26-11 11:59 PM by scarletwoman
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nadinbrzezinski Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 12:09 AM
Response to Reply #25
30. Like your counterparts south of the border
you will.

For them the notice moment was when Tortillas went up by five pesos a kilo, subsidy went away... (that lasted for oh ten weeks or so... they put it back since it got ahem interesting, as in social distress pitchforks interesting)... but you will.

Here is the problem... check the stuff at home. This is where inflation will come. How much of your oh clothes are made in the US? You see, even at poverty and slavery wages, the dollar sliding against the Yuan and the Yen will rise the cost of that shirt, It depends how much it slides and how permanent that is, just how bad that shirt goes up in price here. On the bright side, this a macro effect of this... it may be so expensive that it might be cost effective to bring those factories to the US again... That effect will take anywhere from six months to a year to start to show up. Nor is this an expected side effect by the people who manage oh I don't know Levys, since they lack the imagination and experience too. Ok let me correct this, they have the experience, but not when it affects their home economy.

Other reasons for the inflation, if the IMF gets involved, and the warning today was a shot across the bow... then many of those subsidies that the Republicans are protecting, will have to be negotiated away to get a rescue package (worst case here)... see what I said about tortillas? At that point many of your food products will go up because they will pass this to you.

I know why it does not seem like it will affect you... but it will. Oh and gives me no comfort.

Also, while some think this is disaster capitalism (and partially it is) the kids in DC are convinced that there will be no effect... well that is almost a religious belief... again another bright side... many of the voters who voted for those idiots might FINALLY get it. But the lesson falls in the category of my lord this will be very expensive... and yes... people will die.
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Lex Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-26-11 11:34 PM
Response to Original message
18. The rich folk who own this country aren't going to let it go completely down the shitter.
Edited on Tue Jul-26-11 11:34 PM by Lex

There'll be a last minute deal. They don't care about us, but they do care about THEMSELVES.


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leftstreet Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-26-11 11:40 PM
Response to Reply #18
20. For millions of Americans it already IS down the shitter
and has been for some time
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scarletwoman Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 12:06 AM
Response to Reply #20
28. Thank you. Lots of people are already down at the bottom.
There was a report on NPR today that said the current recession has resulted in black Americans losing 20% more of their wealth compared to white Americans. And Hispanic Americans lost 18% more of their wealth compared to white Americans.

So, I thought I might be forgiven for feeling somewhat suspicious about any "the sky is falling!!!!1!" rhetoric coming from the Political Class - overwhelmingly rich and white as it is.

sw
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FourScore Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-26-11 11:54 PM
Response to Original message
24. You can't imagine it because you haven't lived it.
None of us have. But if it is to increase interest rates, I know how it will have an effect on multiple members of my family and it will be a disaster!
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anneboleyn Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 04:00 AM
Response to Reply #24
60. Yes. OP has it all figured out, while the economists, etc, clearly do not have the OP's incredible
insight into the potential impact from what many argue will be a global disaster.
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cherokeeprogressive Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 01:11 PM
Response to Reply #60
84. Sky-high interest rates will affect every part of your life.
Everyone borrows money, from the credit card user to the farmers to the transportation companies to the banks.

You will feel the pinch.
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EFerrari Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 12:12 AM
Response to Original message
31. I found a great run down from Pro Publica with lots of hot links
*Fears that the U.S. could lose its top credit rating deepened Monday evening after Republicans and Democrats failed to strike a deal. According to The Wall Street Journal, Moodys, S&P and Fitch have all said they may downgrade the U.S. rating <27>, though they all cite different criteria for the kind of deal that could avoid a downgrade. There is some debate about whether the ratings agencies would really do this, and how much it would matter if they did. Yahoo Newss Daniel Gross and RealClearMarkets.coms John Tammy argue that a downgrade is far less likely than politicians and the media are making it out to be <28>. USA Today reports that, while Wall Street money managers are preparing contingency plans <29>, many dont see a downgrade as the end of the world because the rating agencies lost a lot of credibility during the financial crisis when they failed to alert investors of the coming mortgage crisis.

It's long and has a ton of links.

http://www.propublica.org/article/a-reading-list-for-fo...
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scarletwoman Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 12:24 AM
Response to Reply #31
37. Thank you again.
I swear, it seems like some people WANT to freak out.
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Rex Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 12:18 AM
Response to Original message
35. When you fight over groceries at a store and people are killing each
other over a Baby Ruth bar in a gas station, you will remember those words.
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scarletwoman Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 12:20 AM
Response to Reply #35
36. OMG! Who will be Left Behind?
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Rex Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 12:25 AM
Response to Reply #36
38. School children will finally benefit from NCLB. Donuts will grow on trees.
I tell ya what...my car needs some work so I hope it happens SOON! 2012 2012! :crazy:

Zombies roaming the streets, cats and dogs sleeping together, monkeys defying their scientist overlords smarter and more powerful...well supermonkeys and their overlord the WHOPPER2000!

Y2K! Remember how many fish grew wings and attacked their land fairing butchers? Remember that? Remember?

I do.

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Fearless Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 12:28 AM
Response to Original message
40. Gas prices would go up a lot as the dollar loses value...
Gas is largely imported and OPEC does take the value of the dollar into account as it sets prices.

As gas prices rise, people will drive less, less gas tax will be collected, and less money will be available for road work.

If you have kids federal AND private college loan interest rates will skyrocket... in fact the federal program may disappear entirely to pay the interest off the national debt.

http://www.fastweb.com/financial-aid/articles/3196-cons...

Federal funding for social programs will suffer... in addition to the big three... food stamps, welfare, free and reduced school lunch, etc.

National Parks and Public Libraries will be severely underfunded.

School districts will likely lose most if not all federal funding. Most of that funding goes to urban, inner city school districts. They will be hit HARD.

Crime will rise as social programs will be cut and unemployment will rise due to a severe decline in spending on consumer goods.

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Silent3 Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 12:31 AM
Response to Original message
41. Fuel shortages. Food shortages. Starvation. Riots.
It's a least possible that complex supply and distribution chains could completely collapse. The economy today is a lot more complicated than in the 1930s. Food comes from farther away, people are much more dependent on technology, and fewer people work close to the land, meaning fewer are capable of scraping by nearly independently of the rest of the economy.

Huge shortages of food and energy are possible. I'm not saying I know this will happen, I'm not even guessing at the odds, but I suspect it's not totally improbable.

An economic collapse could easily be way, way bigger a disaster than you can conjure up by imagining individual family circumstances after the loss of a job, then in your mind taking that same idea and imagining a lot more of it happening to more people.
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EFerrari Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 12:40 AM
Response to Reply #41
43. Our owners will never allow their estate to get so chaotic.
They're not stupid, they only hope we are.
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Silent3 Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 12:57 AM
Response to Reply #43
49. You overestimate their control
Yes, there are super wealthy people with a lot of control over what happens in this world, but they aren't all, individually or collectively, super geniuses with magical powers to make everything turn out just as they like. When the shit hits the fan, they won't be able to perfectly predict or direct the pattern of the splatter.
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EFerrari Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 12:59 AM
Response to Reply #49
51. That may be very true but this is not the occasion.
This is a drama being played out for our consumption over a routine action that has been spun into a crisis by several interested parties.
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Silent3 Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 09:08 AM
Response to Reply #51
71. Perhaps, but the unnecessary drama could itself be a sign of lack of control.
I think the crazy teabaggers we have in Congress now might be a bit more than the moneyed interests who helped them get into power bargained for.
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nadinbrzezinski Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 10:07 PM
Response to Reply #71
97. BINGO... and the panic in the media
is a symtom of this... I mean the WSJ went THERE today... with their comments on middle earth. and tea parties
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nadinbrzezinski Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 12:45 AM
Response to Reply #41
44. If peak oil hits more or less at the same time
you are more correct than you want to be.

And yes that is the OTHER reason for food inflation Those Apples from Chile are gonna go up... by orders of magnitude as the dollar loses it's value. I don't think their currency is still pegged to ours. If it is, expect them to ahem... get lose.
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joshcryer Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 03:57 AM
Response to Reply #41
59. We'd be OK agriculturally speaking, the rest of the world, not so much. We're the breadbasket...
...for a reason. We export shittons of food, and a lot of people rely on it. It'll be ugly on that account alone.
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Silent3 Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 09:06 AM
Response to Reply #59
70. We've got lots of food...
...but many of the systems that process that food and deliver food to where people live can break down. Like I said, I'm not certain things would get so bad, but the interconnected systems that keep cities fed and supplied with water are very complex, and very energy dependent.

Those systems may be more fragile than we know, and I'm not at all happy that we could soon be doing the experiments that would put them to the test.
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jwirr Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 12:36 AM
Response to Original message
42. One thing that would definitely happen to the casino if all hell breaks
loose is that the elderly (who live on social security checks) will not be coming as often if at all. The casino near me is also letting people go already. If you are native the tribe may have some plans to help but I would not count on it. I tried some years ago to get the tribe to plant perennials such as apple trees at each house - no dice - why would we do that?

The youth on the rez are onto what is happening but I am not sure that the elders who run the show are.
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nadinbrzezinski Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 12:46 AM
Response to Reply #42
46. We have seen that effect at the local rez
not that many people going.
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RebelOne Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 12:20 PM
Response to Reply #42
78. I am surprised that those living on social security can even afford to gamble.n/t
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jwirr Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 03:08 PM
Response to Reply #78
87. Visit a casino sometime. Many seniors. I think they go and budget
themselves - i.e. $20.00 lose and not more. Many play bingo for that amount. It is seen as something to do other than set at alone in your apartment. You set there playing the games and talking to those around you. You can set there a whole evening and never lose more than the $20 you paid to get in. But if they have to choose between vitals and gambling they do not. I have not been to the casino to gamble for a couple of years now but that is why I went.

Now if I go it is to the buffet with the family. But like the casinos the restaurant are also going to miss the elderly if there are no social security checks.


I wonder how the casinos did in the Great Depression?
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glinda Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 05:53 PM
Response to Reply #42
91. Attendance is already down at Indian Casinos according to my elderly father.
Edited on Wed Jul-27-11 05:53 PM by glinda
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Jim Warren Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 01:22 AM
Response to Original message
54. Biflation
If you need it, prices will go up.
If you want it, prices will go down.

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lunatica Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 06:43 AM
Response to Original message
65. Take a look at Las Vegas
"four years on Sin City is bust. Hotels have gone under, others have stalled in construction, and the future looks bleak.

The state of Nevada has the unenviable distinction of leading the US in foreclosures, bankruptcies, and unemployment which stands at 13.2 per cent.

Estimates of the state's budget gap start at $1.5 billion (900 million).

Some people have simply walked away from their homes. Last year there were 167,564 empty houses in Nevada, one out of every seven in the state."

http://www.telegraph.co.uk/news/worldnews/northamerica/...

But I think it would be karmic justice if the Indian casinos flourished and I hope they do.
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JoePhilly Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 07:00 AM
Response to Original message
66. You think a default would protect your Social security and Medicare?
Ummm ... you might want to reconsider that.

What, you think that the government is going to be more generous to those programs AFTER a default??

The GOP's goal with a default is not simply to cut those programs, it is to ELIMINATE THEM completely.
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Tierra_y_Libertad Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-27-11 12:53 PM
Response to Original message
81. You will suffer a lonely death in the sea of despond. Just as you did after the Millenium Bug.
Edited on Wed Jul-27-11 12:54 PM by Tierra_y_Libertad
Mark Twain: "The report of my death is an exaggeration"

Most likely, the peasantry will get wet in this idiotic pissing contest.
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MadinMo Donating Member (519 posts) Send PM | Profile | Ignore Wed Jul-27-11 01:20 PM
Response to Original message
86. So I'm guessing federal student loans
will get flushed down the toilet? That's just terrific..... I have twins beginning college next month and federal loans will cover a large part of their fees!
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TNLib Donating Member (683 posts) Send PM | Profile | Ignore Wed Jul-27-11 09:47 PM
Response to Original message
94. dollar declines oil prices increase drastically cost of everything goes up
nt
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better days ahead Donating Member (44 posts) Send PM | Profile | Ignore Wed Jul-27-11 09:59 PM
Response to Original message
95. If they threaten cuts to the BIG 3, I say SHUT'er DOWN
shut it all fucking down! :bounce:
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