Ezra Klein and Evan Solta have a good article about how one crazy faction of the Plutocrat Party actually wants the U.S. to default on our debts. Yeah, you read that right. The Republican careerist politicians (Boehner, McCain, McConnell, etc) WANT to pass something on the Debt Ceiling so the US doesn’t default–but only if it’s a “clean” bill–i.e., without all the additional stuff regarding Health Care or particular aspects of the budget. The President wants a clean bill too. Unfortunately, the nuts holding the government hostage have included the debt ceiling in the hostage negotiations because they actually think it would be a good idea to default. Here’s the thinking:
Analogies between the finances of families and government are typically pretty flawed. But there’s one worth drawing here: That moment when a family realizes it’s broke and stops paying their mortgage, credit card bill, etc? It’s not a good moment for them. It’s a moment that wrecks their credit score and makes it harder for them to be “not-broke” ever again. To try and improve the U.S.’s finances by sharply and permanently increasing its borrowing costs is like trying to prove to your sister that her house is a firetrap by actually setting it on fire.
Unfortunately, it’s not just us in the U.S. that are struck on the Crazy Train….the entire world is. U.S. Treasury bills are the world’s key safe asset–that’s not me just saying it….Nobel Prize winning economist Paul Krugman says so. If we default it won’t just be bad for us, it can and will be REALLY bad for other countries that are always on that economic ragged edge.
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