U.S. Debt Default Would Be Worse Than Lehman Brothers Collapse

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  1. Paul G Huber | July 27, 2011

    Sir
    You like to writer stories about finances and stocks. Why not write one about what will happen when the greenback is so inflated it goes the way of Nazi Reichmark or the Zimbawee Dollar? What sort or anarchy would exist during a transition to reforming our government or our monetary system and how might they go about it? Could the US Military take over as happens in other countries? What might life be like? And perhaps a detailed list of what to own and what not to own before during and after? Something more detailed then the obvious Guns & Gold, Bullets, dried food, silver? What skill sets would be in demand?

    And if I own 100 shares of XYZ company after a transitional period, would I not still own some portion of XYZ Company?

    Lastly, I hate these little boxes to type your message. Why not make it so my Outlook pops open and I can spell & grammer check. My apologies for and typos or disjointed grammer.

    Paul G Huiber, CPA

  2. Paul A. Teel Sr. | July 27, 2011

    The best Case scenario: Give Obama a two month extention; enough time for the gov't officials to identify the absolute total amount of the US spending at that instant. Also provide a complete list of each incividual component of the spending, including the recipient of the money and the purpose of each component. Independently verify (a panel of young experts with no axe to grind) that the list equals the total provided above. Allow the same panel of young experts (age group 35 to 50) to slash sufficient lines of the list to balance the budget. Fix the spending ceiling and establish the individual spending percentages to leave a 5% surplus after all debts are being paid, including the interest on the current debts. Until the debt is eliminated, no free spending by the president, congress, or any other govenment official or party. Certain current expenditures are to be treated as sacred. These include Social Security, certain government payrolls, etc. It is my opinion that drastic action of the type is absolutely necessary. The poor will hurt as usual, the rich will attempt to become richer (on a relative basis) and the country will suffer a severe shock. However, the shock will abate, but the rich need to become poorer and the poor wealthier. No French Revolution, if possible, but a massive and gross adjustment is necessary to reconstruct the path this country should be taking. The current crisis is cannot be corrected without a severe restructuring. I am no expert, but this is the situation I perceive.

  3. Russell Sanderson | July 27, 2011

    I'm for maintaining the current debt ceiling and let the chips fall where they may. Does anyone feel that by increasing the ceiling now would avert it needing to be raised again when the true costs of Obamacare are know. Oh, by the way, there is little discussion about our $100 billion unfunded liability to Social Security and Medicare. How about the fact that there is no retirement fund sitting there for military retirees; it's paid out of the annual defense budget. The same is true for disabled veterans who have sacrificed for our country that is now considering that we may not pay the war wounded.

    Some ideas:

    1) Immediately stop all foreign aid except for Isreal (Did you know that we give foreign aid to China and Saudi Arabia (look it up)

    2) Immediately pull all troops out of Afghanistan and Iraq; most of the bad guys have moved to Somalia. Iraq and Afghanistan are not worth one drop of american blood.

    3) Bring home all of our troops from Europe; let them remain in S. Korea because of the madman to the North.

    4) Drill Baby Drill ! You idiots!!!!!! Get nuclear powerplants up and running. Forget Chernobyl, that was a man-made disaster caused by two scientists. Start tapping our natural gas deposits. Pursue clean coal. Eliminate all environmentalists and their snails and frogs.

    5) Consider closing several embassies; people hate us anyway

    6) Draw down the size of the military force (remenmber we're out of all wars) and let Reservists go home to their families.

    7) Take back the 16% raises that Obama just gave to all his staff.

    8) Smash the printing presses at the treasury

    9) Sorry, but I've run out of time.

  4. j gordon | July 27, 2011

    I believe the US gov. would like to have a clever , silent , selective default in order to shed some debt.

  5. Bea Herrick | July 27, 2011

    This is exactly what Oboma had planned all along. He does not like this country, does not believe in democracy and wants to destroy our way of life. This is his opportinity to do so and blame everyone else. I hope someone has the know how to avoid all of this be it either party. He as never had a job and really does not understand what he is doing. He needs to step down. He said after the election WE WON SO SHUT UP Bet he wishes he had not won. Life as we know it is gone.

  6. Mike Dunn | July 27, 2011

    First of all there is no reason for a U.S. Default. There is plenty of revenue coming in to service debt payments. Who came up with this artificial Aug 2nd default date? Just pay the interest payments on the debt as they come in. David Zeiler and other media types are trying to panic the financial markets & the American people into believing financial Armageddon is about to occur. The main goal is to get Boener & the house Republicans to cave in on real spending cuts as they always do under media led pressure. Doesn't anyone realize we are broke as a nation and can not continue to run up huge massive spending deficits, year in and year out. The problem is do to baseline budgeting that mandates increased spending each year. We have a spending problem not a revenue problem-Mike

  7. Meg in Minneapolis | July 28, 2011

    When Republicans morphed into rogue elephants, they abandoned democratic principles. Instead, they use tactics to have everything go their way, or no way at all… for only they are "right."

    I'm sure that each of us has had conversations with the sort of people who are "right." They disregard our viewpoint, disregard statistics, disregard needs, and disregard history. The best response to such people is to CLOSE THE DOOR to further communication on the topic. By refusing to engage with bullying tactics, we at least gain some respect. And in the future, the always-right sorts may change their approach and deal with us more as co-equals.

    Rogue elephants are crazed. Rogue elephants trample all in the path. Rogue elephants are irrational. When trying to deal with the Republican rogue-elephants, it does no good to appeal to tenets of democracy. For they will not adhere to principles of compromise, majority rule, and justice.

    So I think that the only effective tactic is to disengage and evade so that the nation does not go into default. Otherwise the rogue elephants will push us all over the cliff.

  8. Betty Bunnell | July 28, 2011

    Couldn't agree more.

  9. William Patalon III | July 28, 2011

    Mike:

    In your comments, you accuse us of hyping this story and say that, as a country, we need to control our spending.

    Clearly you cannot be reading us regularly, for fiscal prudence at the federal level and better regulation of the out-of-control Wall Street institutions that (along with Washington) have been central catalysts to the financial crisis has been a Money Morning mantra since BEFORE the financial crisis began. In fact, with stories such as the one I post the link to below, we WARNED of the coming financial crisis.

    And we've been resolute in following our mantra. We've published a number of open letters to Washington in which we urge our elected leaders to adopt smarter, sounder spending and regulatory policies.

    So accusing us of fear-mongering and hype is not only unfair — it's completely inaccurate.

    Let me make one other point in closing. Money Morning's key role — in other words, the focus here that is Job One — is to serve our readers. That's why, each and every weekday, we deliver all this content, carefully researched and written, much of it derived from our group of global investing gurus (who, I might add, are some of the smartest investing minds I've worked with in my 25 years in journalism).

    It's why we deliver twice-weekly "Buy, Sell or Hold" features. It's why we write lead stories that predicted the huge run-ups in gold and silver and cotton — and that also provide our readers with specific recommendations as to how to play these trends.

    Our track record is pretty doggone good. And we do all this — paying a complete editorial staff to do so — and yet we don't charge our readers one thin dime. Money Morning goes out each morning … free of charge.

    There aren't many other publications that do what we do, and we do it quite well.

    I appreciate your taking the time to comment. But I think we do quite a lot for our readers, and know that creating fear among our readers is not one of our pursuits.

    Thanks.

    William Patalon III
    Executive Editor
    Money Morning

    http://moneymorning.com/2008/04/02/credit-default-swaps-a-50-trillion-problem/

    http://moneymorning.com/2011/01/05/open-letter-washington-slash-federal-budget-deficit-save-us-economy/

    http://moneymorning.com/2011/01/05/plan-to-cut-the-u-s-federal-budget-deficit-draws-strong-response-from-money-morning-readers/

    http://moneymorning.com/2010/10/28/deficit-debate-tobin-tax-cuts/

  10. Dan LaBerge | July 30, 2011

    Hey !
    We are all going to die some day !
    Won't be taking our $ with us !
    Suppose there is a WAY we can use any of our wealth to HELP those of our human race who are In Need of Help ?
    Maybe LESS Guns and Tanks and Airplaines / Ammunition Expences MIGHT Contribute to more Justice in our World ….. more focus on United Nations and its initiatives .

  11. karen duncan | July 31, 2011

    i don't know very much about investing,but i really enjoy moneymorning thankyou for the up to date info

  12. Systemicinequality | July 31, 2011

    Thankyou William. Yes you guys do a fine and fair job with no spin. I enjoy reading your free paper,E-mails and posts. Our Government is either afraid of the Elitist or they don't care about Americans and the majority of republicans and democrats are both responsible for this mess. Any bailouts are merely stolen funds to funnel
    to TBTF banks or foriegn governments. Since FDR the system has been changed to allow for corruption and thievery and anyone who gets in their way (like the Kennedy brothers) is killed. I don't think you guys have been fear mongering and from the information i've been gathering it seems that you are optimists to what's coming down the road. It's a big damn CAN and it's about to squash all the small guys and grow as it goes! So good luck all you MM fans and i hope you all have some nuts stored for the winter cause it could be a long one!

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