Wednesday, July 27, 2011

Nonchalance about US default

Just saw this is today's WSJ. What nonchalance among WSJ readers. They are asking for it. Sure there is fuse left to burn, but it will get to the bomb in due course.

May be the pols won't be solving the problem and begin to shift toward how to pin the blame on someone else. That would of course be done behind curtains. Perhaps it has started already.

Wonder how I would feel when I look back at this months from now.

And here are some comments which attracted many recommendations.

6 Recommends (7 hours ago)

Let's be honest. Both parties have been on a spending binge, coupled with the down economy, and you have a real problem. I would like to see drastic cuts like the rest of us have had to make. Not just lip service which they BOTH are trying to hang their hats on. This is an embarrassing quest. They should all be ashamed.

I would say... what good is a ceiling if everytime you reach it, you move it? Sounds rediculous to me! I wish I could do that with my income. Everytime I spend more than I have, I just move up my credit limit and keep going!

25 Recommends. (9 hours ago)

We won't default, the treasury brings in 2.2T of hard earned tax revenues a year. That's enough to cover the debt interest, Social security, Medicare, the troops etc... Where the rubber meets the road will be unemployment, food stamps, student loans and other various government giveaways. It would be tough, but necessity is the mother of invention. It could force a government restructuring just like any corporation and maybe streamline government. That could be a good thing.

As far as the dollar debasement is concerned we can all blame congress for that. The dollar has lost 97% of it's value since the founding of this version of the federal reserve in 1913. (The U.S.'s third attempt at controlling economic cycles)

Lastly, people need to stop saying Clinton balanced the budget. I like Clinton, but his budgets were balanced because Robert Rubin borrowed the difference from Social Security. The Treasury owes 3 TRILLION dollars to the SSA. It was another example of Ivy League Theory meets Goldman Sachs implementation. As we should all know by now; Financial calamity ensues! 

9 Recommendations (13 hours ago)

I'm not worried. It's a bunch of fluff. Stopping the gummit for a couple of weeks will illustrate how little it is really needed.

22 Recommendations (1 day ago)

What does default really mean here and why is it being applied?

We may have a aortal government shutdown, but we can service the debt and so will pay our bills.

If you are spending 2X your salary but can afford your credit card payments as long as you stopped buying new stuff and paying for luxuries then you would have no excuse to default

If the US defaults it will be because someone in the administration decided to pay other things than the debt first, which would be irresponsible

With an income of 2 trillion or so and a debt service of 200 billion or so there is more than enough money. The only thing that is defaulting is the continuous paying of promises to special interests that in the long run cannot be allowed to grow without bound anyway.

Default is the terminology of brinksmanship, not reality.

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