Posted on 01/04/2011 2:58:39 AM PST by Scanian
Real smart there.
We don’t need to default. Just cut off all welfare and Medicaid payments to everyone. That alone will balance the budget, and it won’t cost the GOP a single vote since the people on those programs vote Democrat anyway.
Real austerity that would roll back government regulatory agencies and the federal budget to 1950 levels would result in a booming economy. If we didn’t need this enormous government as we recovered from WWII, we certainly do not need it today.
Taxpayers will always spend their hard-earned money more wisely than the profligate government does.
The following seems true to me:
As long as people get to vote:
1) They aren't going to allow Congress to pass 90% tax rates
2) They aren't going to sell their homes and send their children to work to pay Red China
3) They will say (with some justification), "We didn't agree to these debts".
Therefore: The US is going to default. When and how, we don't know yet.
But, as you say, every week that passes makes the situation worse. The Third Bank of the United States is going down (ever wonder why they didn't call it that?)
The only questions are when, and how much damage will be sustained before constitutional money is issued again.
Look, the Third Bank of the United States has lasted 98 years, compared to the Second, which lasted 25, and the First, which only lasted 20.
Even if you only count from 1971, 40 years of debt-based money is pretty amazing.
Of course, hollowing out and selling off the productive assets of the country bought some time, and there were a lot more of them in 1971 then there were in 1811 or 1837.
Now, we need a plan to restore Constitutional money, starting with sound coinage (which could begin almost immediately), followed by some limiting mechanism for emitting Bills of Credit.
After all FRN-based savings are lost, the People will be receptive.
I hope.
- $14 trillion ain't worth nuttin.
Or inflate, or both. We just need to find the best potential bagholder and hand him/her the bag.
Even better, reduce the debt limit by 1.4 trillion each year for the next ten years. Yes, this will be painful (for the vote buying politicians) but it will become more painful for all of us the longer we wait. And there will be pain for those receiving the government largesse. Still it must be done and there are many places to start. Dumping the Departments of Education and Energy would be a nice start, but only a small beginning. Scaling back or eliminating the EPA would also help. And, while we don’t want to devastate our military, they should be held more accountable for their spending. Eliminating all pork would help along with the downsizing of runaway entitlements.
It does seem that way doesn’t it?
This statement that we would “default” simply isn’t true. We would go on a pay as you go system where we paid the interest on the national debt first then for defense then for medicare then for social security then everything else. Month by month.
It’s the answer to the question, “How do you keep a Rhino from charging?”
Moslems don't read the bible. I bet he has most of the koran memorized though.
“There is nothing else imaginable that would force massive cuts in the nanny state like a bond offering failure.”
Over the past year the Federal Reserve, in the open for the first time in its history, is and has been monetizing the debt.
Open up the entire country to mining and energy exploration. That will crash high energy prices. The resources will act as an economic multiplier and inject trillions of dollars into the economy.
Reducing the debt limit is prolonging the problem. If we were to pay down the national debt by 1.4 trillion each year until it is completely paid off, our children or at least grandchildren might see the day when their government is debt free and can provide basic interstate services and defense without being an unbearable strain on the economy and the future of the USA.
What grows out of that collapse could be better, or it could start a dark age.
If you read Article 1, Section 8 you'll find that there is no specific enumerated power to emit bills of credit. The Founders argued this specific point at some length. The Anti's quite rightly feared such a clause would lead to paper money. The Federalists gave in on the point and so no such authority was granted Congress.
Congress was granted the power to "borrow money on the credit of the United States" and to "coin money" and "regulate the value thereof".
The Founders put a further restrictions on the several States on this point, too. They forbade any State from "coin(ing) Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts;".
The problem, I'm afraid, is that we've let the Feds stray so far from the Constitutional prison designed for them that there is no easy, painless way to shove the monster back into its cage.
They will not go willingly or peacefully.
The demonrats have put this country into a terrible situation. Given where we are we have three choices.
1. Raise the ceiling and kick the can down the road. That only makes the situation worse when it blows up.
2. Default to China. They won’t be very forgiving.
3. Stop the government checks. Imagine the ramifications of that.
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