jay_a2j wrote:Snorri1234 wrote:DaGip wrote:Frig...they are FOOLING YOU! They are choosing to bankrupt the country, wipe it out, and start over.
And how are they magically going to do this?
Lets see....
trillions of dollars in debt....yet we keep funding a war that costs billions a week to run. Even a basic understanding of economics should tell you, something has to give.
Ah. You don't have any understanding of economics. Fair enough, most people don't.
And, to be even more fair (good sentence, this one, eh?!), that is one of the wierder things about the capitalist system.
On paper, pretty much every developed country in the world is in debt -so how on earth does it keep going?
Well, for a start everyone is in debt to everyone else. (Not a great argument, because i suspect the US is still the largest overall borrower.)
But its all about confidence.The Bank of England has never defaulted on a loan - you lend the Bank money, its 100% guaranteed to get it back. Likewise with the Fed.
(Barring,- shut up Jay -nuclear war etc)
So thats the first part -individuals will always lend the central banks money (ie, they buy bonds), hence, regardless of the debt, the Govt will always have a guaranteed cash flow, not even counting taxes.
But ultimately, WHY do individuals lend the USA govt money? Its not all about past reliability (ie, they have never, or not for a long time, defaulted).
After all, I have always paid off my debts, and yet no one lends me a trillion dollars
Because: I'm not worth that much (the sound of a million female hearts break

)
But the USA IS -when all is said and done, the net worth of the USA outruns its debts by miles. If push really did come to shove, they could sell off the army, all its gold, sack all its workers, abolish all fed spending, collect more taxes, sell Texas (Hurrah!) etc
That why the USA can keep spending a fortune in Iraq. Because global investors know the USA is still the safest bank in town.
*Professor Suggs descends from his lectern, engrossed in "GET RICH, GET TITS" monthly*