We hear in the news about the pending economic collapse that will occur if the US government does not raise the debt ceiling. This is absolute nonsense.
If the debt ceiling is not raised by Tuesday and the government can no longer borrow to pay the interest it owes to its creditors, the government need not default. But even if it did, there is no reason to think chaos would rain.
Think about what goes on in you daily life that requires daily supervision by big brother. How would you life be impacted if the government defaulted? Any assets you had in government bonds would lose their value, sure, but that is no worse then if you lost money on any other investment. Those at or near retirement would be most effected especially if they have much of their assets in government bonds But for the majority of people, the pain would be small and a default does not mean all debt is tossed.
But even default need not happen. The government would just have to prioritize payments so that default does not occur. Pay first on interest then to those on social security. After that, pay government workers. Things to not pay may include corporate welfare and other unnecessary expenditures.
The paranoia surrounding the current carnival act in Washington in unfounded. The level of discourse in Washington has dropped below its already low level. People of principle are unwilling to compromise the people's future and for that they are the targets of mud slinging.
For once, I agree with the Tea Party. There should be no raising of the debt ceiling unless true meaningful cuts are enacted including entitlement reforms.
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