- by New Deal democrat
I just wanted to add a brief, and totally out of the box, comment to Bonddad's last post.
Allowing the US to default, even temporarily, on its debts, would have horrible reverberations to our, and the world's economy, possibly sending us right back into economic contraction, and would increase the interest on all of our debts for years to come.
Making cuts to Social Security and Medicare, and imposing a strait-jacket of fiscal austerity, would have horrible reverberations for our economy and the welfare of 90% of our citizens, would undoubtedly only be the first course in the Grand Banquet of cuts to the safety net, and would cause misery and privation that would last for decades to come.
In short, at this point, as horrible as the disease is, the posited cure is even worse. Given the choice, bring on the default, and we the voters will fix things in 2012.
P.S.: Let me just add that I agree with the first Anonymous below. A "clean" bill or even abolishing the debt limit entirely is the best choice. My comment above speaks to the abysmal choices that are actually being debated in Versailles.
P.P.S.: Prof. Krugman makes a similar point.