Mess in the US

[weezer 316]

I cant believe the problems in the US. In a strange way it may be better for it to default. Perhaps then the people in this country will see that we cant put off drastic cuts and tax rises any longer.

Im still very angry at the people who have got us into this mess too. Why people would vote for parties that openly said they were gonna live on the never never is ludicrous. They then moan when asked to pay more for their pension.

[sandyr1]

The mess in the US just now is mostly about the upcoming election.....next year. I doubt the US will default/ just print more money.
Whatever happens the debt ceiling will go up by approx $2/3 Trillion, thus devaluating the $US.
We are all partly responsible for causing this crisies, which will likely get worse before better.
We are living beyond our means! And All the 'parties' are the same////if they slash the debt...cut back.... they won't get elected.

[John Little]

http://i927.photobucket.com/albums/ad118/johnlittle21/290711-Steve-Bell-on-th-002.jpg

[oldmarine]

The mess in the US just now is mostly about the upcoming election.....next year. I doubt the US will default/ just print more money.
Whatever happens the debt ceiling will go up by approx $2/3 Trillion, thus devaluating the $US.
We are all partly responsible for causing this crisies, which will likely get worse before better.
We are living beyond our means! And All the 'parties' are the same////if they slash the debt...cut back.... they won't get elected.

Sandy, you make a good point here. The USA has been printing more paper for money than they have the ability to back. I believe FDR (President Roosevelt) made a mistake when he took the USA off the gold standard. Look at the value of gold for today. I believe most countries of the world are living beyond their means. That includes individuals. If individuals were into debt as the USA is today, it would be a disaster. One of the largest problems in the USA is credit cards. When my children were in college I had to take their credit cards away from them to keep them falling into unreasonable debt. Today they realize why it was necessary and thank me.

[Kenn]

If The USA can not come up with some form of agreement then the whole world could be pushed into a recession that will make the current situation look like a storm in a teacup!
May be they too need some sort of coalition although I am not sure whether that is allowed under their constitution.

[theone]

It's such an unimaginable scenario that nobody really knows what would happen if they defaulted. Big changes and big problems lasting decades I would think.

One of the problems is, as I see it, is that there is not one democratic country (that has become accustomed to running a deficit) that would vote in a party who would make the necessary cuts on public spending. Unpopular decisions like that will never win votes.

It's a failing of the "great system of democracy" that we've all been brainwashed into believing is unquestionably the right one. Capitalism and democracy may work in the short term, but in the long term they cannot coexist without rules constraining the rulers. Right now we (the US and Britain) don't have those rules, I don't know how many countries do.

We've basically been playing a part in a great pyramid scheme for the last 100 years or so, in that pyramid schemes are GREAT at the beginning, but can only end in collapse....................
Obama isn't even trying to cut the debt, he's just trying to reduce the rate it's rising. Who in their right minds thinks that would be an acceptable way to run a family budget, let alone that of a nation or the world?

[John Little]

But we are not speaking of a family budget. It is entirely a different thing.

You know as well as I that in reality there is no such thing as money. There is debt.

There is more debt in the world than there is money to pay it. That is how the system has evolved.

So to speak of paying back debt when we are speaking of the world's financial structure is meaningless.

All that money is, in reality, is a set of marker buoys pegged in a vast sea of debt. And the reason it works is because it is necessity.

The stuff about our children paying is an emotive soundbite but is also meaningless because the whole system runs on expectation of growth and on confidence.

Lack of confidence that growth will take place is the problem because our money is based on that expectation.


As for Roosevelt taking the dollar off the gold standard-he had no choice. There was so little cash actually in the system that more or less permanent depression was built into the future and the possibility of a breakdown in Capitalism, leading to a revolution. At that time the US Communist Party was the second largest in the world.

What really fuels the current problem is FEAR. Fear that we have spent too much and that we have to throttle back and cut the debt- only in global terms that's an oxymoron.

So you set in train what sounds like good economics - cut your spending and save.

Geordie Osborne's economics are straight out of 6th form.

If you cut, then growth in your economy slides down.

Simples.

[brandy]

what is really going to hurt in the immediate future is when the third comes and no SS checks are sent out.
my mother is beside herself with worry that she will not get her check in the mail..
its 1200 dollars.. and that is all she has to survive on for the month.. that one check pays her bills and buys her food and pays for the meds that medicare dosent cover.
this is something that a vast amount of disabled and elderly Americans will be facing on the 3rd of Aug. if the checks do not come out.
funny how its always the poor that suffer when there is a money crisis but the rich.. are still rich..

[binnes]

It's actually all very frightening because rest assured what happens over there will clearly have an impact with what happens here; maybe not today but in the long term it has to. What was even worse, when reading the paper today, the Tech company Apple has more disposable cash that the USA Government!!

[bagpuss]

In 1929, the US stock market crashed- sending shockwaves around the world. This, coupled with the practice of sending manufacturing to the far East had a seismic impact on the world economy. In the UK this led to mass unemployment (without the income support we have now). Add in the effect of the Dust Bowl on farming and the price of foodstuffs- and the decade that followed was one of real austerity.

These facts allowed people like Hitler and Mussolini to take power- and led to WW2

When the US sneezes the rest of the planet catches pneumonia

[ducati]

I don't think the USA could survive a default and running out of cash. Imagine, the armed forces, police, and all public workers not getting paid. The social security not getting paid. These things alone would bring down the government. It would trigger an all out attack by so many groups around the world sensing vulnerability, and they would be right. The CIA, FBI not functioning, the police and emergency services out of action.

I cannot possibly see it being allowed to happen.