It's my understanding that 43% of tax revenue raised per year in the US is now required for debt financing. I can't see how the US can ever pay that down. No-one has the political will to attempt it.
+1. The payment on our paper is a fraction of GDP. step 1: pay the notes step 2: pay the army step 3: pay SS step 4: decide what to pay off with whatever is left Sovereign Default is a logistical impossibility right now for the US.
That's incorrect - it's closer to 10%. The TOTAL debt is around 40% - the interest to maintain that debt in good standing is a fraction.
OK Fine. Default on the debt on August 2. What do you do on August 3rd? What's next? How long would we prolong the crisis that is sure to follow? When asked if we should raise the debt ceiling, most of America says NO. OK. But they haven't been asked the right question. Which should be: "Do you favor not raising the debt ceiling, which would result in your 401K balance being reduced by 90%?" Now do you really not favor raising the limit?
Loss of faith and buying in Treasuries will escalate interest rates across the board. Interest rate sensitive businesses will begin laying people off. New Depression will ensue. Tea Party and like minded Repub's are the new Neanderthals resurrected to extract revenge.
That's funny, those sound like the same consequences of profligate spending a few years down the road.
I've said it before and i'll say it again... THE US GOVERNMENT DOES NOT NEED TO GO INTO DEBT TO FUND ITSELF BECAUSE IT HAS POWER GIVEN BY THE CONSTITUTION TO PRINT MONEY!!!!!!!! Yes the founders of this nation intended for congress to print money- not some private agency (Federal Reserve) via the IDIOTIC idea of debt monetization. This is something everyone's learned in grade school. The solution is so mindblowingly simple it just BAFFLES me that there are even debates on debt ceilings and defaults even among seemingly well-educated and intelligent people!!! Is anyone listening!? Has everyone gone mad??
That's the wrong question. Ask if they'd rather raise the limit, or cut defense and SS by 50% -- they'll choose the debt. And therein lies the problem...