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We'll end up inflating, IMO.
If interest rates go up, the interest on the national debt alone will bankrupt us
it will be bigger than the actual deficits of the past (pre-Obambi $Trillion-dollar deficits)
If and when the reasonable assumption comes to pass that we are facing a massive, international depression, instead of fussing and fretting about it, since it likely cannot be staved off, the logical thing to do is come up with ideas to extricate us from it once it happens.
Some ideas:
Renouncing the US national debt.
Why is this regarded as such a bad idea? To start with it means a lot of the scoundrels responsible for starting this mess in the first place get some real bad haircuts, instead of getting insurance for their mischief at taxpayer expense.
How disastrous will it be for the rest of us if “billionaire’s gambling” like derivatives markets and hedge funds take it in the shorts? Do we really need to protect parasitic scoundrels like George Soros and Warren Buffett, who create nothing and destroy healthy businesses?
And how about villains like the Chinese government and many of the Middle East tyrant’s sovereign wealth funds? Many tears shed for them no longer being able to create trouble in the world?
On the home front, it means that America has to stop both outsourcing jobs and industry, because if nobody makes it here, we have to buy it, and if nobody will extend the USG credit, we *have* to make it here.
So suddenly we need a whole lot more employment. Not a bad thing.
Likewise, if the USG can’t get “free money” to spend, it *has no choice* but to have a balanced budget. And if it tries to “print money”, it will cause Weimar style hyperinflation. So sorry, Mr. Federal Government, you can no longer fudge your way to overspending.
It also means an end to most federal largess. No more welfare, social security, medicare or medicaid. They never should have existed in the first place, so adios.
Collapse. The freeloaders will be marching in the streets demanding their free handouts. "We want our entitlements!"
U.S. money will be worthless. Right now, we're already borrowing half of everything we spend on entitlements. We can't keep borrowing forever.
Because of Obomanomics, people have no jobs. No jobs mean no tax revenue, so things are getting even worse. Where will Washington get the money to pay back our loans AND maintain the entitlements? They'll have to keep printing money to maintain the illusion, but each time they do our money becomes even more worthless.
Lenders who haven’t figured out that we won’t pay them back, deserve to be robbed. But wait, we are the lenders, or our kids and grandkids and future generations, and there is no one who can say stop that the borrowers will listen to.
—default and collapse, or runaway inflation.”
We’ll end up inflating, IMO.—
You know I believe this, but I’ll say it anyway: No matter what they try, it will fail, and that will leave the last arrow in the quiver: Monetize the debt. Inflate. And they will get that money out there any way they can, even if it means increasing the minimum wage to $100 an hour.
Any rate increase would be the equivalent of taking a hunting knife to an inflatable boat that is already taking on water.
It ain’t gonna happen.
It’s time to revoke not just ObamaCare, but the New Deal, the Great Society, and every other unconstitutional program and agency, before we are swallowed up.
Thought you might find this interesting.
The Fed is “feigning solvency” by keeping interest rates at historic lows. This means we can pay the ‘teaser rate’ interest, but once interest rates rise, we’re screwed. The Fed can try to keep them low indefinitely, but that will destroy the dollar.
Part of the reason we’re getting away with it is because of the problems in Europe and the distraction they offer. Once resolved, the attention will once again return here, and investors won’t like what they see. The euro crisis is a godsend, in a way, but it won’t last, we’re actually much worse off than them.