Wednesday, July 20, 2011

Bob Theil Fails to see Crisis in Debt Ceiling Crisis

LCG apologist Bob Theil appears to have no understanding of why the debt ceiling crisis is a crisis. Obama Says He is Trying to Avert ‘Armageddon’.
Since the USA seems intent upon increasing debt (as the current ‘crisis’ has to do with RAISING the DEBT ceiling AGAIN), this will continue to insure that the USA is the most indebted nation in the history of humankind....

Right now, the USA crisis is that it wants and hopes to increase debt and borrow more from its foreign creditors, yet its leaders believe that not increasing debt will be a greater calamity.
I am amazed that he is so apathetic about this issue.

If the US gets more debt that is fine because those willing to invest in US bonds are willing to buy them, the US government meets its financial obligations, and these matters will be dealt with later in the future.

If the debt ceiling is not raised...

No. Wait. I don't even want to imagine what would happen if that occurred.

The reason why not raising the debt ceiling is a problem is that it would force the US to not pay their debts.

The entire world economy is based around the belief that you can trust the US dollar. You invest in a US bond and it will be paid back to you. You can't be too sure about any other thing you invest in, but you can trust the US bond.

If the debt ceiling is not raised then the US bond, something in which people all over the world have invested in, rich people, poor people, Americans, others, some who are reading this, all their holdings in US debt become unreliable. None of them can be sure that they will be paid back. The US Treasury will not be able to pay the necessary financial obligations of the US.

I recall hearing President Obama saying that Social Security checks will not be made, Soldiers will not be paid, if the US Treasury is unable to meet its financial obligations because Congress did not raise the debt ceiling.

And it cannot but be recalled that back in 2008 when just one major Wall Street bank went bankrupt it caused the entire world economy to freeze, have a heart attack, and brought the world economy to the precipice of another Great Depression.

Far more people are invested in US bonds than was the case with Lehman Brothers.

A lot of people fear that if the debt ceiling is not raised, thus forcing the US government to not pay their debts, we will have another Lehman moment which will freeze the entire financial world.

This is the crisis that Bob Theil pretends that this is not a real crisis. He even puts brackets around the word crisis as though it is not a real crisis. It is a real crisis.

All of that will be avoided if Congress simply raises the debt ceiling.

Somehow Bob Theil seems to think that the US government shirking its responsibilities to its debtors, and causing soldiers to not be paid, Social Security checks to not be paid, etc, and possibly creating another Lehman Brothers moment is less of a problem then for the US government to honor its obligations.

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