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Russia defaulted on their debt in August of 1998, but it "bounced back from the August 1998 financial crash with surprising speed." (Wikipedia) The ruble is still with us and Russia is doing just fine, thank you.
If the US had to default in a similar fashion my guess is that we'd weather it just as well. There'd be a few years of hard times, but America would come back revitalized and more robust than ever before, it's books cleared of trillions in debt. If the world didn't castigate Russia for defaulting, then why should it castigate us? We'd still retain superpower status and still have our abundant natural resources, chief of which is 350 million people ready to put their backs to the plow and begin to rebuild this great country of ours. It's going to happen, it's just a matter of time. Why not just do it and be done with it?
why don't we just accept our failed financial polices and pay it off?
Didn't you get the memo? It's the new mindset of many Americans. "Hey, I'm in debt up to my eyeballs, I live in a house I can't afford and I live waaaaay beyond my means! I can no longer keep up financially so I'll just stop making payment and walk away from it all...problem solved!"
Didn't you get the memo? It's the new mindset of many Americans. "Hey, I'm in debt up to my eyeballs, I live in a house I can't afford and I live waaaaay beyond my means! I can no longer keep up financially so I'll just stop making payment and walk away from it all...problem solved!"
This country is going down the tubes.
We're going to default anyway. It's a given. It's not a question of if, just when, so shouldn't we get on with it and give ourselves a fresh start? I reiterate: Russia did it. The world didn't end. The world didn't cut them off. America didn't utter a peep, even though we'd just lost billions of dollars. They were back on their feet in just a few years freed of that massive debt stone around their necks. Please, no ridiculous arguments of "Just because they did it, does that make it right?" On a geopolitical scale a nation does what it has to do to right the ship and start over, otherwise we're finished if we continue down this insane path of piling billions upon billions in interest payments.
Russia defaulted on their debt in August of 1998, but it "bounced back from the August 1998 financial crash with surprising speed." (Wikipedia) The ruble is still with us and Russia is doing just fine, thank you.
They are? Currently, Russia's GDP is lower than that of Italy. Besides, Russia is a net exporter of energy, unlike the US.
If Uncle Sam decides to stop paying his bills, the dollar plunges. OPEC will move off it right quick. And you won't be able to buy a damn thing overseas. Sure, American-made stuff will be wildly underpriced and thus exportable, but if you can't import oil, what's left of the US manufacturing industry comes to a screeching halt.
The world economy did not hinge on Russia's success in 1998 as it has America's of every decade since the 1940's. The U.S. dollar is the currency of safe harbor. Every nation has a piece of the U.S. Treasury. If we default the world drops into crisis, which extinguishes our chance of recovery.
I do agree with the sentiment that it's only a matter of time. At the outside, I'm giving it 10 to 15 years, at which time enough baby-boomers will be retiring to cause medicare and social security to default. They are effectively broke, as the government 'borrowed' out of social security to fund operating expenses and of course never repaid.
It'll happen well before that if some large natural disaster occurs, or we are nuked or have a large biological attack take place.
Three of the more important reasons you are wrong.
1. Russia did not have the debt load we have.
2. The Ruble was not/is not the world currency.
3. T-Bonds are currently the preferred way many if not most central banks hold their foreign currency denominated reserves if we default they default and if they default everyone defaults. Essentially it would be similar to East Asian financial crisis of 1997 only global and much much worse.
Three of the more important reasons you are wrong.
1. Russia did not have the debt load we have.
2. The Ruble was not/is not the world currency.
3. T-Bonds are currently the preferred way many if not most central banks hold their foreign currency denominated reserves if we default they default and if they default everyone defaults. Essentially it would be similar to East Asian financial crisis of 1997 only global and much much worse.
Actually T-Bonds are the largest share of what they hold, but interest has largely shifted to IMF Bonds in the last few months. The rest of the world isn't stupid. They are going to try to localize the damage as much as possible and not get pulled in.
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