The above is basically the crux of your argument. Wasting my time arguing with someone who is probably still in college, not how I want to spend my Saturday. Good day. You're right, I'll never change my "tune". Someday you will though...
Sadly, Keynesianism has been passed off as a form of capitalism. In reality it is fascism. All modern Presidents since Nixon have followed Keynes in economic theory and application. This is what we get for it. His economic policies were successful during WWII because of single, underlying objective- win the war. Conditions have greatly changed since then, and Keynesianism has proven it cannot effectively manage a 21st century economy. The way I see the situation, we will default one way or another with the current DC leadership. We'll either create money to the extent we destroy the currency, or we'll stop paying the bills. God forbid we do what is sensible- cut spending (drastically), lower taxes, and deregulate. That way we could still pay from the poor and grammy's healthcare if we gave up our foreign, militaristic adventures. Common sense, once again, eludes our leadership.
Raising the debt ceiling is newspeak for default. You think China is like, "Phew, they raised their debt ceiling now they can continue to devalue our securities!"? No.
Don't forget Keynes, the Bretton Woods Agreement, and the IMF. Circa 1944. Hell, he wanted the bancor, a World Currency Unit, and the US objected. Maybe he'll get his wish once the dollar collapses because of people following his policies and listening to people carrying his water. Then, those same people who ruined us will swoop in to save us!
"The U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone," China's official Xinhua news agency said in a commentary. Source: WRAPUP 8-World leaders to confer on debt crises this weekend | Reuters
America at large is still in denial of the fact that deficit spending cannot go on forever, but at least the armor surrounding our leaders collective ignorance is slowly starting to crack.
@ HongKongPhooey It is a default on the dollar because as the Federal Reserve creates more money out of thin air to pay off the debt of the US, the purchasing power of the dollar goes down. So basically the idea is that as they (the Fed) print more money (issued to the treasury) to pay off the bad debt, the less our money is worth, so we are able to afford less and less with the money. Consider, your $1 represents a larger fraction in a nation's hypothetical money supply of $10 million versus $10 trillion, therefore it is able to purchase more in the former supply then the latter. Given the fragile state of our economy, wages aren't exactly going up for workers anytime soon, so as the value of the money goes down, we can't keep pace with our inflated cost of living, the money will no longer hold value, thus achieving default on the dollar. The default doesn't happen overnight, but in a very gradual and painful process. Inflation is the worst form of tax on the common man, because so few understand it's root cause.
[ame=http://www.youtube.com/watch?v=CqgQukSK8ws]Tim Geithner Fail: 'No risk' of AAA downgrade! - YouTube[/ame] FAIL
Pretty much... I had a large write-up with analogies and examples written but then I remembered an old saying: "KISS" (keep it simple stupid). So here is a pretty concise explanation provided by the good doctor: Bonus Reading: Quantitative Easing Definition Graphs:
Yeah but if everybody else is taking steps to devalue their currency, then I guess it sort of evens out? Maybe not. But who cares really. If china dumps its US bonds and they don't get a full return they might be butt hurt for a few days. It's not like we're going to start lobbing ICBM's at each other over the matter. Do they have missiles that can reach us?
Because, in general, Americans don't care. Especially all the party kids. Sure, you might not make many friends talking about the state of the nation, but at least it means more than BEER PONG and grinding all over each other, sharing sweat. To be blunt, apathy is the reason idiots govern.
And this. I agree. I'm in college right now, and from what I've observed, higher education isn't about fostering intellectual growth, but about getting a degree. Getting a degree is a key step in getting a higher paying job, which means more materialistic purchases and goods. What a sad society.
So you're saying America is not in a bad situation? Or that I should already know the long range nuclear capabilities of China?
they have bombers that can for sure.. but yeah.. they aren't gonna bomb us because of this.. they'll just take our stuff..