Correctamundo! The "debt ceiling" BS is all about deception.. like, we're actually giving it some thought with intention of repaying.... Hahahahaha! Our "debt ceiling" is nothing more than our print-money deception with a twist.
http://usdebtclock.org/ Check that site out. Currently, we are at $12.3 trillion national debt. That number is constantly going higher and will never stop.
I think the Germans are probably going to be laughing at all of the Americans when they hear about this since it happened after World War 1 with the new government they had except on a much more smaller scale. Ironically, the Germans are already out of the recession now.
Misthos, You make some great points here. As for your question about the end-game, this is what has made financial markets interesting in recent weeks, and what will make it interesting in the coming months and years. As you suggested, it's just a case of watching which country / countries will be first to default or hyperinflate as a result of their debt burdens. So far it seems that a rough order is: Greece Ireland Portugal Spain Japan UK USA Even though the USA is in trouble, (in the eyes of this observer) it will still take some years before we reach the end-game. However while we wait we can watch the PIGS, Japan and UK and see how these countries work through their difficulties.
The Germans didn't suffer the same as America. They make "middle-class wages because they make high quality goods not commonly available elsewhere in the world". America expected to make "middle class wages, manufacturing run-of-the-mill goods... and the Chindians usurped our place in the world labor force". America has been hurt perhaps the worst of all developed countries. We had middle-class wages thanks mostly to (1) lack of competition, and (2) union extortion.... can't do that any more, so THERE WILL BE FEW/NO MIDDLE CLASS WAGE JOBS FOR AMERICAN HIGH SCHOOL DROP-OUT EMPLOYEE HOPEFULS... We're still in denial, hoping this isn't true.. that the American economy will "get back on track"... NOT A SNOWBALL'S CHANCE IN HELL!! We are forced to accept that the "new" American way of life includes the majority of people making near minimum wage, like it or not... and with PERMAENTLY AND STURCTURAL high unemployment rates!!
And so there shouldn't be... Citizens (and that includes Americans too believe it or not) should not be entitled to "middle class wage jobs" (whatever those are). High school drop outs deserve minimum wage jobs. That's how it should be.
Every congressman except Ron Paul believes we can deficit spend our way out of this recession. It worked so wonderfully well for the Japanese, after all.
Spending our way out of the recession is not going to happen, yes we might see a pick up here or there but true organic growth without intervention is not true any more. They are trying to create jobs with stimulus money, they are trying to forcefully create jobs by spending trillions of dollars, this is not how an economy works.
Lower standards of living: probably, i agree with you. But, when the babyboomers retire, expect a over-supply of jobs and a shortage of working age people.
About the public debt: I expect a period of very high inflation, that will inflate away the debt, without default..