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Old 02-18-2013, 05:33 AM
 
621 posts, read 549,473 times
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Quote:
Originally Posted by Willy702 View Post
So if the US defaulted it would get no benefit because all its trading partners would crash down beside it making things far worse.
Speaking in terms of the US banks defaulting not the US governments defaulting the what you say is correct. The way that the US government would default on its debts is that it would write checks to everyone it owes money to. This is how the US would default as long as we remain the world's reserve currency.










Quote:
Originally Posted by Mircea View Post

Well, no, if the US defaulted, that would mean instant cuts to Social Security, Medicare and the Railroad Retirement Fund. It would also mean Millions of pensioners and future pensioners who worked in the private sector would see their pensions disappear. And pensioners and future pensioners who worked in the public sector -- teachers, firefighters, police, public servants etc --- would see their pensions disappear.

Your insurance system would collapse. States and cities would economically collapse. Philanthropic and charitable groups would cease operation.

Why?

Because all of them own treasury securities.

Foreign entities only hold $5 TRILLION of your debt. US States, counties, cities, corporations and other businesses, money markets, mutual funds, annuities groups and philanthropic groups hold the other $6 TRILLION and then $4 TRILLION is your 130+ Trust Funds.



That is all true.
The coins in your pocket are USD. They are real money. The bills in your pocket say Federal Reserve Note. They are part of the national debt. The US can't default on its debt, because its debt is the world's reserve currency. The US can and probably will monetize its debt.




Quote:
Originally Posted by Mircea View Post
No, it doesn't work that way. Real Inflation in the US is insignificant.
Quote:
Originally Posted by bugguy View Post
You can't seriously believe that the minimum wage could be increased by 4X and nothing else would change!!!! If that happened, there wouldn't be anymore $180K houses! A hamburger at a fast food joint would probably cost $25! Unemployment would be astronomical!
Hmm. That seams like a more or less reasonable take on what would happen if you radically upped the minimum wage. Cool Aid or not we have very real problems that aren't being addressed by those in places of power.
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