Tuesday, October 15, 2013

How to Guarantee a Huge Future US Default

The media has been arguing that a default now would be catastrophic.  But defaulting now, when our debtload is smaller than it will be any date in the future is far, far better than waiting a dozen years and defaulting when our debtload is twice as high and tens of millions of Americans will be expecting social security and medicare payments that they will not receive.

The idea that averting a government shutdown and/or default now is a good thing is ridiculous.  This is the same dumb idea that carried the day with the Greek bailout four years ago.  Now Greece is in much, much worse shape and probably faces a political nightmare ahead as the neo-Nazi and communist parties strengthen and the center left and center right parties disappear.  A similar fate awaits the modern Republican and Democratic parties.  Neither party is willing to face the realities of the US government debt debacle.

Only the much-maligned tea party has it right.  If you don't face the situation now, it may not matter what you do in two or three years.  Who wins future elections may not even matter.

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