Is the US default inevitable?

[brainhulk]

http://news.yahoo.com/dont-caught-holding-dollars-u-default-arrives-191153227.html

“To get our overall fiscal gap under control,” writes Boston University professor Laurence Kotlikoff in Bloomberg, “the U.S. must cut spending or raise tax revenue by $20 trillion over the next decade, far more than either the president wants or the House Republicans seek.”

Yep: The latest number we see bruited in Washington is $3 trillion. Whatever the final number -- and there will be a last-minute deal; there always is -- it will be substantially less than $20 trillion over 10 years. The can will be kicked as it keeps getting kicked in Greece.

“My guess is that the U.S. will default again. It may not technically be called that, but the only way for the U.S. to meet its financial obligations is to print a lot of money.”

What does that mean in practical terms? In Greece, professor Savas Robolis at Panteion University in Athens reckons that by 2015, the average Greek employee and pensioner’s standard of living will have fallen 40% compared with 2008.

You don’t want to be the average American in a default scenario, whenever it arrives. Ray Dalio, the head of Bridgewater Associates, the world’s biggest hedge fund, puts that day in “late 2012 or early 2013.”

P&N fodder - but I'm pretty sure there are already threads there discussing the US fiscal problems.
admin allisolm

 

[Wanescotting]

ruh roh

 

[yhelothar]

It seems that the only way to politically gain the interests of the people is to bankrupt the country. :\

If someone actually has a plan to be fiscally smart, they're labeled a nutjob, and unsurprisingly so. In America, you have to be nuts to not spend money you don't have.

Ron Paul 2012!

 

[Whoozyerdaddy]

When the minimum payments exceed your ability to pay...

You don't need a PhD in Econ to figure this one out.

 

[Printer Bandit]

 

[KeithP]

Wait, the article indicates we need a 20 trillion 10 year plan or we will default in only 1 or 2 years, how does that work?? Those two time frames seem out of whack.

-KeithP

 

[Whoozyerdaddy]

Wait, the article indicates we need a 20 trillion 10 year plan or we will default in only 1 or 2 years, how does that work?? Those two time frames seem out of whack.

-KeithP

I think you're starting to see the problem... The people who have declared this conundrum also created it.

And there ya go...

 

[OBLAMA2009]

of course this country is financially doomed. it spends way more than it has, and has no plan to ever do anything other than that. its a total fraud that the us treasury has a AAA rating. no individual that behaved like the us would ever be considered remotely credit worthy

 

[zanejohnson]

of course this country is financially doomed. it spends way more than it has, and has no plan to ever do anything other than that. its a total fraud that the us treasury has a AAA rating. no individual that behaved like the us would ever be considered remotely credit worthy

lol it's so true, it reminds me of how like... say i do a service call for a small time company, a plumber, a mom and pop little floral shop (i'm naming places this actually happens to me in real life) and i finish the work, present them an invoice on site.. 9/10 times they break out the check book and cut me a check right then... done deal..

i go into a larger business, say, a bank... i do the work, leave an invoice...of course they aren't gonna cut a check right then, because "they handle accounts payable on thursdays, and it's monday." and THEN, for some reason the check doesnt show up in the mail, so i call.. finally talk to who i need to in accounts payable, and somehow "oooohhhhh somehow i missed this one, we'll have it ready after lunch if you wanna come by and get it, or i can drop it in the mail"

that's exactly the way i think of our government working... i mean look at it.. the first example has more personal credit with me, if they had something wrong that needed immediate attention...and EVEN IF they couldnt cut a check right then but told me so, because they did last time... you better believe i'll be there, they deserved it in my book.

when.. the second example.. that's like the US debt.. they just wanna string this thing along and along... if that second company calls me again, i'm gonna intentionally NOT be quick, TAKE MY SWEET ASS TIME SO I MAKE MORE MONEY, and have a general bad taste in my mouth because of the respect they showed me..

lol..ok rant done

 

[RocksteadyDotNet]

Give another tax cut to the rich, that'll fix the problem...

Facepalm.

 

[zanejohnson]

Give another tax cut to the rich, that'll fix the problem...

Facepalm.

inorite

 

[yhelothar]

Give another tax cut to the rich, that'll fix the problem...

Facepalm.

 

[Fritzo]

The real problem is the left is too far left, and the right is too far right. Congress pretty much runs the country now, and there are no moderates left. The position of president has been reduced to the public face of our government and a person that can make suggestions that nobody listens to.

We should move to a strong president system - congress presents the President with options, and he decides which one to go with. That way things get done, and if his decisions don't work he gets elected out of office.

 

[KnickNut3]

While I like the jpg, these issues involve the treasury, run by Geitner, not the Fed, run by Bernanke. Bernanke has no effect and nothing to do with the national debt.

In fact, Bernanke could print money, give it to the treasury for free to pay off some debt, and we'd suddenly be under the debt limit and without danger of default.

The effect that'd have on purchasing power of the dollar, however...

 

[zanejohnson]

LOL that's a great picture caption!!!