Mark Anthony

How Will the U.S. Recover from the Debt Crisis?

No one is able to save the dollar. It is not the matter of the political will of the US federal government, or the FED. It is the matter of the capability of the US government and the FED. Both entities need a bailout themselves, let alone save the currency.

High interest means nothing if the principal currency itself is losing value faster than the interest rate. It will not be able to attract foreign buyer of our debt. It also means the FED needs to crack up the money printer more to just pay for the interest.

High taxation will mean the money will be driven out into foreign land, leaving no jobs and no tax revenue left to be collected.

An even worse outcome will be that individual states may decide that the high federal tax they pay is not worth the benefit of staying in the union. There could be serious talks of secession from the union. That will really collapse the dollar and even the federal government itself!

seekingalpha.com/insta...

On Oct 25 12:07 PM Glen L. wrote:

> I agree with the view that the US will "recover" from the debt crisis
> by defaulting on the entitlement programs, primarily Social Security
> and Medicare which will see gradual, piecemeal reductions in benefits.
> Congress will attempt to negate the "third rail" by targeting minority
> sectors within the geezer population for reduced benefits, never
> enough to seriously threaten their incumbency in the next election.
>
>
> I also think the US will take extraordinary measures to save the
> dollar and continue to pay the interest on the foreign debt. This
> means rising interest rates, much higher taxes, and a true depression
> in the not distant future. The alternative -- printing money to pay
> -- is the road to Zimbabwe. I don't believe the Fed will allow that
> to happen.