What are some potential benefits to allowing the debt to default (not raising the debt ceiling)?
There are none. The repercussions will be felt throughout the global markets and we will enter a new era of economic depression the likes of which will not be enjoyed.
If any nation defaults on national loan payments. It means that nation immediately faces severe economic hits.
The currency falls through the floor.
Lender Nations immediately close all sources of loans.
Internally generally there is massive super-inflation.
A prime example would be the German Weimar Republic of the 1920's. Hyper inflation there meant that one million marks in the morning had more buying power than ten million marks at the end of the day. And to make it worse that million marks might have been the price of a loaf of bread.
Suggestions by some people who support the US default on loans is irresponsible at least.
Few modern nations can afford no-national debt. Balancing a budget is not entirelypractical for a nation. The practical ideal is to have continuous circulation of debt. Sometimes allowing to rise, sometimes allowing the debt to fall. But keeping payment levels within tolerable margins.
The current US debt is dangerously close to the levels where it can just support the debt. Much more could tip the balance. But this also does provide the US some strength. As with the banks in the recent crash, lender nations cannot afford to see the US default. If it did, they too would probably default within hours as they too borrow money from nations such as the US.
National debt is therefore similar to a friendly loan, you borrow $20 from a friend and they do the same with you, at anyone time one or other of you may need to call in the loan but you are happy to let it ride as you value the security and friendship. If that friend refused to repay the loan on demand, you might feel this soured the relationship and walk away.
by James Smith 4 years ago
http://online.wsj.com/article/SB1000142 … 63786.htmlI heard a good argument against the raising the debt ceiling a few years back. This senator argued leadership means that ''the buck stops here. Instead, Washington is shifting the burden of bad choices today onto the backs of our children...
by Susan Reid 7 years ago
From that bastion of lamestream liberalism, TIME. Mr. Klein puts it so darned well I couldn't resist posting the whole article. It's not very long. Enjoy!Oh, and as we all know, there WAS no vote today (Thursday). ViewpointRepublicans’ Debt Ceiling Charade Is Downright DangerousBy Joe Klein...
by sannyasinman 8 years ago
Apparently, all of the billions of Euros just transferred to Greece to ease its "crisis" will go directly to the banksters to cover outstanding interest payments, and will do nothing whatsoever for the country or its people. The situation is clearly unsustainable, and there are other...
by JON EWALL 6 years ago
Is it possible that the US would default on the National Debt?The national debt limit is $14.3 trillion, Tthe Secretary of the Treasury states that if the National Debt limit is not increased by Aug.2,2011, the country could default on the debt.President Obama and the Senate has not presented...
by Susan Reid 7 years ago
Best comment I've seen to date says (paraphrased):"I think the Congress should do this every day. They've got nothing better to do. And the economy's humming along and everything's swell here on the shining city on the hill."You'd certainly think a vote that has been routine for several...
by dutchman1951 7 years ago
...Title should say Raise the Debt, not Deb.. sorry.A facinating Article below. From Huffington Post. Is it a real possibility that President Obama could, or should Bypass and Ignore Congress, If Negotiations fail?Could Obama ignore Congress if they refuse to raise the debt ceiling?...
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