Galt's Gulch

"The US Is Bankrupt," Blasts Biderman, "We Now Await The Cramdown" | Zero Hedge

Posted by straightlinelogic 10 years, 5 months ago to Government
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Fairly long article, but the author uses the US government's own numbers to reach the conclusion stated in the title.
SOURCE URL: http://www.zerohedge.com/news/2014-08-04/us-bankrupt-blasts-biderman-we-now-await-cramdown

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  • Posted by Solver 10 years, 5 months ago
    Keep the faith in our all wise rulers. Keep forcing interest rates near zero percent and all will remain fine. In the Fed we trust. Debt creates growth. The more the better. Boost big government spending to simulate the economy. The more the better. If it doesn't work, do more! Wait for a bailout. Repeat over and over. Just blindly follow Keynesian canon and all will be saved. Hallelujah!

    For the rest of us, think about investing in select real solid things.
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  • Posted by CircuitGuy 10 years, 5 months ago
    Most of the liabilities are Medicare and SS. We can make that problem disappear simply by reducing benefits and/or increasing payroll taxes. Less than a quarter of it is actual debt. It's close to being equal to GDP. If we just froze real gov't spending GDP growth would make the problem go away. It's an easy problem to fix, but politicians do not do it. It will be a shame if we wait until rates rise and then we have to allow inflation to eat away part of the debt. We should act now.
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    • Posted by Solver 10 years, 5 months ago
      "We can make that problem disappear simply by reducing benefits and/or increasing payroll taxes."

      I'd like my mortgage to just disappear. I could reduce mortgage by telling the bank I'm paying less while demanding a big raise from my employer. Paying less than promised has consequences. Demanding a big raise would likely have consequences.
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      • Posted by CircuitGuy 10 years, 5 months ago
        "I'd like my mortgage to just disappear. I could reduce mortgage by telling the bank I'm paying less while demanding a big raise from my employer."
        But this is a fact, not a wish. It would require not increasing spending, something gov't has a hard time doing. But if they did it, and GDP keeps rising within reasonably historic rates, the problem goes away. It's a problem only b/c politicians won't enact very modest spending cuts.
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  • Posted by $ jbrenner 10 years, 5 months ago
    The second cramdown since 2008. Wasn't one of the stated objectives of the Federal Reserve to introduce stability into the economic system? When have they been stable since? Maybe the 50's.
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