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Dam it Handy, you know how I hate it when I have to agree with you and yet you keep making sense every once in a while.
Wow. Clicking on those links is a trip down the rabbit hole.
I am all for it...except I think we should just let the South leave this time
He is a cake eater...he would sooner drive a Pinto than have to agree with me most days
Yep, we're already bankrupt. Defaulting on the debt (and going through sovereign bankruptcy) is the moral and ethical thing to do, which is why I highly doubt Washington will do that. Instead they'll try to pay it down with increasingly worthless dollars and thereby bring the risk of hyperinflation.
Economically, what happens if the USA defaults on its debts?? Even with the crushing debt following the Revolutionary War, we've never done it.
I'm not a BK expert, but generally you pay off what portion of the debts your assets allow, restructure your company's finances (government's finances in the case), and hopefully recover and become productive again. Of course your creditors are going to take it on the chin since they won't be getting all their money back, but they have to live with the risk they took when lending you money. I think the foreign countries that are lending us money now realize that we're paying them back with more borrowed money, that the dollars we're paying them back with are generally decreasing in value, and I wonder how long they'll put up with that. They're going to start wanting to be better compensated with higher interest rates on the the Treasuries they buy. The dollar may very well lose it's status as the world reserve currency in the process, which will really cause it to be devalued. And I think that's what Washington wants; pay back the debt with increasingly worthless dollars. We'll all pay through the nose for that but Washington will find someone other than themselves to blame. I don't think they'll choose to default on the debt.
I think Kepler would sell them what he calls the Confederacy.
Definitely agree with all of this.
The problem is that the more of 1, 2, and 3 that you do, the less of 4 you get - and the difference could be enough to negate any gains you made from 1, 2, and 3 in the first place. Even if you're not a cool-aid drinking Keynesian, you have to admit that if you cut government spending by hundreds of billions (as you're contemplating), the economy is going to notice.
Nobody really knows what would, or wouldn't happen if/when the USA eventually defaults on its debts. It would be such a massive event with so many ripple effects. About all we know is it wouldn't be good, to put it mildly. Just how bad is open to speculation.
So, if we get sold off here in Arizona, then I guess we get out of being responsible for all the after effects of the default by teh USA, since we're no longer a part anymore? That sounds kinda tempting!
