Skip to comments.None Dare Call It Default (Beyond the Fiscal Cliff)
Posted on 11/25/2012 12:05:54 PM PST by mojito
To call Greece First World may be a stretch, but Greece has defaulted once already, and it is only a matter of time until Greece defaults again. Welcome to default-o-rama, the next chapter in the First World's struggle for fiscal sustainability.
Japan is piling up debt in the manner of a nation beyond hope. France, Belgium, Spain and Italy are defaults waiting to happen unless Europe can somehow generate the kind of growth that has eluded it for decades.
America's fiscal cliff is an artificial crisis. We have no trouble borrowing in the short term. But at some point the market will demand evidence that long-term balance is being restored. President Obama said in his first post-election press conference that he doesn't want any proposals that "sock it to the middle class." He knows better. A long-term socking is exactly what's coming to the middle class, which must pay for the benefits it consumes.
A few years ago, when the economy was humming, a common estimate held that federal taxes would have to rise 50% immediately to fully fund entitlement programs. Today, a 50% tax increase would be needed just to meet the government's current spending, never mind its future obligations.
One way or another, then, entitlements will be cut. Don't call it default. The correct term is entitlement reform.
You saw this day coming and saved for your own retirement. Don't call it default when Washington inevitably confiscates some of your savings, say, by raising taxes on dividends and capital gains. Taxpayers accept the risk of future tax hikes that may make the decision to save seem foolish in retrospect.
According to economists...state and local taxes would have to increase by $1,385 per household immediately to make good the pension promises to state and local workers....
(Excerpt) Read more at online.wsj.com ...
If the 47% didn’t get their tax refund, how much would that bring in revenue??
It sucks--and I would love to hang all of the Congress-critters who got us here-- but that would require an ex-post facto law or bill of attainder.
It's silly. These debts cannot be paid. You can raise taxes. You can confiscate wealth. You can inflate the currency. But you'll never pay off a $600T debt.
Solution -- Jubilee. Cancel all the debts. Tell the creditors that they played a good game, but they pushed it too far and broke the bank. Now we all owe nothing, and we start over.
I think we need to look around ourselves. We have people in their thirties now...still owing $45k on college loans, $50k in credit card debt, and buying $35k cars with only $1k on the down-payment. These people will never live decent lives, and find themselves at age 65....mostly in debt with no savings. Their entire life depends on social security and Medicare.
You have city and county governments who have employees now easily making $120k a year, and paying $14k on their health insurance (with no contribution by the employee).
I don’t see anything great going on by 2020. We will be measured along the level of Brazil or Thailand. Our super-power status is virtually gone.
It's a great game. Hey, purchase this, ya need college, loans are fine. Btw, ya gotta pay that back while we outsource and look for lower wages. Oh, ya willing to work for less? Sure, no problem. Also, no more benefits for ya, its just the way it is in today's global workforce.
Wage arbitrage will level the playing field for everyone. Some 'people' will benefit, will others will have a lower standard of living.
It will hit us ALL at some point.
The problem is millions of those creditors are Americans, like those owning US Savings Bonds, military retirees, civilian retirees, those who paid into social security and medicare. No, a total default would be a very bad idea that would certainly bring about a violent revolution.
Please post your solution.
We can vote ourselves Magical House Elves for all the chores we don’t want to do - but it’s not going to materialize.
This is the ONLY solution......., everyone's in the same boat. Start over.
It seems like we’re getting closer and closer to that inevitably happening.
I’m a young guy, and I see plenty of angry young guys these days. I fear that it’s only a matter of time before we become Weimar Germany and people take to the streets.
God help us if it happens.
The solution to debt created in the 1920’s became World War 2.
No, the bulk of the debt issued these days is purchased by the Federal reserve. Private individuals who own that debt should read the writing on the wall and cash out while they can.
Repudiation and/or default are coming. Its the timing and form of that repudiation that are in question.
All it would require is a few feet of rope. It's reusable.
Right after they have been tarred and feathered. G.D. traitors, all of them.
Call it a deficiency of morality and manufacturing. Be good, and deregulate (beginning in state and county governments), or face the consequences. Freedom and the muzzling and layoffs of gossips is the answer.
Of course it's more likely the house of cards remain standing as long as possible to ensure the con artists a safe exit.
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