I'm not so sure Gruss. I'd like to see us gradually deal with it with higher taxes and lower spending but I'd say that it is likely to go hand in hand with refinancing our debt on more favorable terms. Overall I'd actually guess it will be a combination of 1, 2 and 3. I don't think that we can inflate our way out of the situation. I also don't think we can just default on our entire debt. Nor do I think we have the economic capacity and political will to zero everything out through taxes and spending reduction.
But if we could work our way closer to a balanced current budget with some payments toward debt, a tolerance for slightly increased inflation balancing out debt devaluation with increased domestic prices and then bilateral debt restructuring with an eye toward rewarding political and economic stability, I think we could make some real headway. That isn't an easy balance to be sure and none of the components are trivial. It requires some subtlety that usually isn't found in politics in the country, but I think it is potentially workable. More than anything else I'd say that the increasingly intertwined global economy means that bold gestures in any particular direction will be heavily selected against. Strong unilateral moves will be punished by other participants in the web and if we are going to effect positive change away from the status quo it will have to be slow and steady and predictable. Judah On Wed, Feb 11, 2009 at 7:13 PM, Gruss Gott <[email protected]> wrote: > >> RoMunn wrote: >> the debt, or by the US printing a huge amount of money and devaluing the >> currency. That day is coming, make no mistake. >> > > And here's why that's NOT going to happen: the US can't afford it. > > Like it or not the US, for a loooooonnnngggg time, is going to depend > on foreign credit. The very first day it screws it's creditors it > goes under. > > So, as I've said, there are only 3 choices: > > 1.) Default. > > 2.) Inflation (your suggestion), or > > 3.) Raise taxes & lower spending. > > The only option the US can afford is #3. Unless we want another crisis. > > ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Adobe® ColdFusion® 8 software 8 is the most important and dramatic release to date Get the Free Trial http://ad.doubleclick.net/clk;207172674;29440083;f Archive: http://www.houseoffusion.com/groups/cf-community/message.cfm/messageid:288195 Subscription: http://www.houseoffusion.com/groups/cf-community/subscribe.cfm Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=89.70.5
