Will the US default? what does it mean?
Will the US default? Sounds odd does it not?
Well, if the Congress does not make changes soon….there could be a crisis. Will the debt ceiling be raised? surely?
Or are you saying ‘I do not know?’
do u even understand what an US default means….? read on…
Deepa Gopalan Venkat has written an article on this very topic – her being in the US helps…!
http://blogs.economictimes.indiatimes.com/moneyhappyreturns/entry/debt-ceiling
NATARAJAN
Sir, It is Deepa Venkatraghvan not Deepa Gopalan as you have stated. 🙂
Pravin
I really dislike these types of analyses where only the official partyline is parroted without examining the views of anyone saying that the default is actually a good things. It is not as if the US has never defaulted .It did twice in the 19th century and once famously in 1971 -when it delinked from gold.
The article quotes Moodys about how ‘growth’ will be affected.Well,cancer is also growth!If one group of people is paid to dig ditches by the govt and another to fill it up,the GDP will go up -but is wealth created or destroyed? Simpletonlike GDP calculations are mere accounting conventions that convey very little information about wealth formation in the economy.
Also,the US debt was <5 trillion less than a decade ago starting from 1792.It has managed to triple it in just the first few years of this century alone! Anyone who thinks it is not a problem is living in lalaland.
Ofcourse an US default would be a short term crisis.But govts have defaulted since ages and people always pick up and start again.It is not as if people are going to forget how to produce food,make houses or electronics or go to school. This fearmongering is useful to politicians and wall st -because they gain the most from the status quo.
Pravin
from the article:
“But the Government didn’t have enough money in its kitty for these packages so it decided to print dollars. Failing companies were given money to survive; people were given money to spend. At that time, the crisis was controlled”
d-uh .crisis was controlled? only in the way a drunkard avoids a painful hangover by drinking a little more.
the drunkard has no real solution except pain.and no drunkard will accept pain ,but to call it as a crisis ‘controlled’ is to miss the point altogether.
failing companies were given money -ofcourse!who will be afriad of failure if we have a merciful protector.at the same times,these fellows blame capitalism for the crisis ignoring the fact that failure is as important for capitalism as success.