The Upside of Default

[elleng]

When the sub-prime loan crisis triggered a global financial meltdown, two issues became very clear.

The first was that America had a serious structural corruption problem with co-mingled interests among the financial sector, regulators and politicians. . .

The other issue was that America had become a nation whose growth flowed from over-consumption and the piling up of debt. China, on the reverse side and quickly becoming a consequential economic heavyweight, was underconsuming and piling up cash reserves. . .

As part of the sub-prime debacle, the US managed to export toxic financial products to the rest of the world -- and failed to protect the interests of its citizens as the financial sector blew up. That was the point at which the rating agencies should have been moving to cut America's gold-plated investment rating.

What we are seeing unfold in the debt ceiling crisis and the irresponsible actions of many legislators is simply the second act of a play on America's decline that began some time ago. The upside of America shredding its international reputation and responsibilities is that it ultimately will be forced to finally get its own domestic economic house in order.

http://www.theatlantic.com/politics/archive/2011/07/the-upside-of-default/242742/

[Morizovich]

1. Who the Hell unrecced this???

:shrug:

Well I'M with ya, elleng!

[elleng]

2. Some teabugger, I guess, Moriz; missed the bus for The Hill?

:hi:

Steve's got quite a head on his shoulders, eh?

[Morizovich]

4. Me Not Understand

:cry:

[elleng]

5. Meant that unreccer prolly a teabagger

who is at DU b'cause s/he didn't make it to Capitol Hill today for 'meeting' w boner.

And meant that Steve Clemons is a pretty smart guy.

Welcome to DU!

:hi:

[lonestarlib]

3. Well, the title does sound exactly like a Wall Street investor's

meme; heard this phrase repeatedly last night: default could be a great chance to invest & rake in millions.
Content is totally different, though

[Uncle Joe]

6. This is a sound article, worth reading, the author makes good points in re: to the

status quo inbred corruption of the system needing a cleansing.

But I also believe the negatives from such an economic shock would greatly outweigh the positives.

I see a more friendly environment for the rise of demagogues from such a catastrophe, particularly as the distinction between the two major Parties has been so greatly blurred, the times will be dangerous for the nation.

Thanks for the thread, elleng.

[pscot]

7. Interesting heresy

Thanks for posting. Default will hurt, but it may help to root out some of the corruption and put a check on American militarism and imperial ambitions. We'll all feel it, but it might be worth it.

[bhikkhu]

8. There are multiple paths forward, even in default

I think the path taken by the collapsing Soviet Union is one that might be as likely as the one in the OP - where being in the right place at the right time during the massive fire-sale/theft of public assets was the difference between spending the next decade a well-set Moscow billionaire, or one of the much more common alcoholic wage-slaves. There aren't many in between.

[jtuck004]

9. The more I think about it, the more I think it would be a tragic, nearly

inconceivable, and deadly outcome to a manufactured crisis.

A clear-eyed look at what is happening now and the economics of the foreseeable future, however, point to nearly the same endpoint, but 2 decades to get there. Just as painful, but for a longer time.

We can band together and get food to people, organize into shelter groups. Medical care might become more generalized, but I am sure we could make some provision. Hooking up in like-minded groups will be key.

If our future means more increases in poverty and hunger, unemployment increasing in low-wage jobs (largest percentage of job growth), I am not so sure it would be the worst thing to get on with a default. It would sure take the wind out of the 'pigger's sails when they threaten and we say "Ok, go ahead, we're going out for pizza". (perhaps for the last time, for awhile). And it would be a great interruption to the uber-wealthy and the conveyor belt of interest money flowing into their vaults.

Beyond the reduction of power for the financial sector, it might incite the beatdown those touting the old ideas of the religious right so righteously deserve. They (and people who use their ideas for purely political purposes) have been angling for the end-times, and knocking the United States into a smoldering ruin seems to appear like a dandy idea to them. (Or at least that's what they have spoken about since at least the late 70's). They are thoroughly convinced that they will win out and do a better job. I am thoroughly convinced that they will harm millions of people and aggressively attempt to take over. IF that happens there might be a backlash the like of which they never imagined. At least I hope so.