I thought I would weigh in with a quick thought and a couple links to some interesting perspectives on the US Debt Ceiling debate. Fist of all, the politicians have framed this in a completely disingenuous manner.
If the debt ceiling is not raised, the US does not have to default on its debt. The Treasury could easily pay the interest on the borrowed money from T Bills and Treasury Bonds by using the tax revenue that comes in every month. However, many government programs would need to be shut down because the government could no longer borrow excess money. Isn’t this what the voters demanded in the last election?
There’s also no reason why Social Security checks would need to be halted because they have their own revenue stream which is right around break even. Not sure why President Obama felt the need to lie and demagogue about this, but any thinking person knows this isn’t true.
The Republicans and Democrats will most likely come to an agreement and this story will be behind us in no time. This seems to be what always happens. The American people are going to get alot more debt whether they like it or not. And in reality, they do like it because any cut that is proposed causes outrage everywhere.
People like the philosophical idea of a balanced budget right up until it gets to the point of something actually being done about it. Americans have mostly left their principles and vote by emotion. The media is great at stirring those emotions to get their agenda moving forward. This has all been predicted long ago and human nature is playing out as it always does.
All that said, it’s interesting to see what the Germans have to say about it since they are the leaders of Europe. Spiegel online covers several different German perspectives in this piece… The US is Holding the Whole World Hostage.
Much more interesting is to peer into the past of US credit defaults. here’s a short history… A Short History of US Credit Defaults.
We’ll probably make a new series of videos soon, but if you didn’t see them, here’s the full set of the most recent economic update videos…1) Update on the Economy, 2) European Debt Crises, & 3) World Economic News, & 4) Gold & Silver Facts!, 5) Gold & Silver Update, 6) Government Action, 7) Government Ineptitude, & 8) Inflation, Deflation, & Hyperinflation Facts, & 9) Inflation, Deflation, & Hyperinflation Pt 2.