What do you think about this guys comment? Is he right?
"What worries me (and hopefully many others who are paying attention) is that at the end of this year the US national debt will be nearly $14T, with total unfunded obligations (social security, medicare/caid, natl health care, etc) approx $110.5T, and there is NO PLAN to pay it off, or even pay it down.
This can tell us one thing, and one thing only - there is no intention of paying it back and the White House, the Congress, and the Fed all know it is only a matter of time until everything fails. It’s just like the guy with 30-some credit cards who finally realizes there is no way the debt he owes can be repaid, so he figures “What the Hell” and he goes out, runs up the tab to the max, has a great time, parties his butt off, and the inevitable day finally arrives for him to file Ch 7. So it will be with us.
He is mostly right, but I like his question in the end, because I think we all know that there is another possibility and a difference between the guy with the 30-some credit cards (essentially Greece) and the U.S.: The U.S. can print its way out of the debt, the end-result of which will probably not be any better though as both the savings of its citizens in dollars as well as the credibility in the creditworthiness and the future currency of the U.S. wil be completely devalued and eradicated. What could follow is either the hopeful end of fiat currencies in the U.S. or possibly the start of a new global fiat currency ala IMF SDRs or something like that. Let’s hope for the former
Besides bankruptcy - declaring they simply won’t pay the debt, or ‘not at those exact conditions’ - it can be paid by simply printing the money. Or both.
Hanlon’s razor: Never attribute to malice that which is adequately explained by stupidity.
An alternative explanation is that President Barack Obama believes that an economic recovery, a reformed healthcare system, and spending less on U.S. military occupations in Afghanistan and Iraq will allow a future balanced budget and the gradual repayment of the national debt.
Hanlon’s razor is good on an inter-personal basis, but in politics it’s almost always misapplied. More like, never attribute to malice that which is adequately explained by self-interest.
How come the prudent people will be robbed? I dont understand.
Government bonds are bought by investors, inflation erodes the purchasing power of savers. So the US will either have to not pay back these USD debt investors or lower the purchasing power of USD savers. Both investors and savers are prudent people that are robbed in favor of the political rent seekers.
