Skip to comments.Debt Default In America
Posted on 09/09/2011 8:14:42 AM PDT by Ohioan
In recent weeks, there has been some discussion over how to handle the soaring public debt of the United States; how that debt--its extent & the method by which it is managed--affects the credit worthiness of the United States & the likelihood of default on that debt; finally, the effect of such phenomena on the future economic well being of the people of the United States. There was also a hue & cry, when a popular financial rating agency issued a minor downgrade of the quality of that debt.
In this essay, we will focus on the question of debt default, debt ratings or evaluations & Constitutional, philosophic & moral issues involved with such. We will also suggest that the Standard & Poor evaluation of present Federal debt offerings remains absurdly high; that the recent downgrade was both late & inadequate, continuing a fantasy that misleads savers & investors, while accommodating demagogues & scoundrels.
(Excerpt) Read more at truthbasedlogic.com ...
People need to understand the damage that economic quackery has already done to American resources, American prospects, our hopes for any meaningful American future.
We need to rededicate ourselves to restoring the sound understanding of the framers of our Constitution; men who knew how wealth was created; how wealth was preserved & allowed to provide growth & ever greater achievement down through the generations. They also understood, of course, that economic gimmicks are no substitute for honest endeavor, nor political posturing a substitute for provident & frugal behavior by those in high office.
Good reading wf, bookmarked for later...
The author points out the obvious - by inflating the money supply, the Fed has allowed the Federal Government to steal, bit by bit, the savings of everyone who holds US treasury bonds ... and this qualifies as an “incremental default”.
This was recently driven home to me when I sold my parent’s house. My parents bought a small 2 bedroom house in 1948 for $2500, and an insurance policy with a face value of $1000.
In this very bad real estate market, the house recently sold for about $150,000 (demonstrating the amount of inflation). But look what happened to the insurance policy -— in 1948, it would have bought 40% of a house; today that $1000 would buy less than 1% of a house.
While paying off US Treasury Bond holders with dollars with much less buying power (due to inflation) may be considered as an incremental default, the much more serious problem is the the reduction in buying power of dollar denominated assets held by everyone ... which should be considered as theft. But our education system will not educate our children enough to understand this.
The question of the day will be, whether the plummeting market is more the result of a European debt crisis or the Obama speech.
The situation is somewhat masked from the benefit of technological breakthroughs that have held down the upward price thrust in many products. But the same dynamics are in play, only being at least partially offset by other factors.
While the Keynesians pretend to be concerned with the plight of those whose pay levels have not kept up with inflation, the problems of the "working poor," are virtually entirely the result of their half-baked gimmickry, that Obama seeks to employ even now.
Bump as an answer to Obama’s economics.
I agree, and You Lie is stealing it from our grandchildren’s descendants.
But everyone with any kind of an account receivable or other claim payable in a sum certain in dollars, is being ripped off, in a constant process, that has devalued the dollar at a compound rate of over 9% per annum since 1971--a rate that has been accelerating under Obama. Not since the Weimar Republic self-destructed have we seen anything like this in a developed country, with a large, educated, middle-class.
Marking for later read
Obama continues to push policies that have previously led to the destruction of the dollar, as discussed in the Feature.
Obama’s policies continue to lead to ever greater debt defaults in America.