How do we “default” on our debts by raising the amount we are willing to go into debt??
One would think we’d be further from default by not taking on as much debt and cutting spending.
Depends on your creditors.
Creditors can call you when you have a ‘shift’ in your behavior, even if the shift would pull you out of debt. Why? Because paying off your bills cuts into their revenue stream.
Bernanke’s not a friend of America. The worst thing for him is if America puts on the breaks on spending.
He needs to borrow money today to pay interest for the money he borrowed yesterday.
One would think we’d be further from default by not taking on as much debt and cutting spending.
Looks like everyone in the government is just trying to postpone the inevitable, rather than to avoid it. The reason is that those social programs are all that prevents, so far, the massive urban revolts. A huge percentage of the US population has no other income and is not capable of getting any. What do you think those people will do when the checks stop and they have nothing to eat and nowhere to live? So the government resigned to paying them the "blackmail money" in exchange for them doing nothing, drinking beer whole day, and doing small crimes just for fun.
The real root of such indecisiveness of the government is that in this democracy there is not a single official in charge who is not a temporary worker. We praise that as one of advantages - and it may well be - but it is also an Achilles' heel because every office holder is most interested in not solving problems now, with pain and blood maybe, but just pushing it forward, onto the next generation of politicians. So far it worked.
Can this be fixed? Yes, but only with one of the following two methods. One method is that we get a bloody dictator who will exterminate tens of millions of citizens. I don't think this is likely; though - thinking in abstract terms - such a "surgeon" could be better and more fair than the second option. Which is a complete destruction of the society, total anarchy, in process of which tens of millions of citizens will be indiscriminately killed by forces of nature and by other citizens. However the dice falls, there will be rivers of blood. This is simply because no country on Earth can afford to infinitely feed tens of millions of people who do nothing (at best.)