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View Diary: The Great Depression Pt. III (172 comments)

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  •  repudiating foreign creditors (1+ / 0-)
    Recommended by:
    3goldens

    essentially would end any likelihood of anyone ever buying a treasury bond again. to do so would be a very ballsey move, and i suspect the the new state would retaiun the bad feelings of those who had been buirned by its predecessors.

    in short, while i agree that we're getting jobbed, i have not seen much evidence that the north american union is a likely candidate for HOW we eventually get jobbed.

    at any rate, canada would be the ones most screwed in that setup. who wants the US?

    surf putah, your friendly neighborhood central valley samizdat

    by wu ming on Mon Jan 05, 2009 at 08:28:42 AM PST

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    •  Nevertheless... (0+ / 0-)

      Bush's governors have been negotiating it.

      Where did you get the idea that our greedy oligarchy...

      ...the new state would retain the bad feelings of those who had been burned by its predecessors.

      ...gives a rats arse about America or its any new amalgam it is merger into. States are just convent fictions to those bent on a Global system of multi-mega-national corporate governance and a New World Royalty(I like that...NWR is descriptively better than NWO or Globalism)based on wealth.

      The young man who has not wept is a savage, and the old man who will not laugh is a fool. George Santayana

      by Bobjack23 on Mon Jan 05, 2009 at 08:57:31 AM PST

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      •  it's not a matter of caring about america (0+ / 0-)

        it;'s the fact that any successor regime would not be able to borrow bupkis. so why the need for the new mega state fantasy scenario? why won't simple smash loot and discard suffice?

        surf putah, your friendly neighborhood central valley samizdat

        by wu ming on Mon Jan 05, 2009 at 09:03:44 AM PST

        [ Parent ]

        •  Old sport it is coming and there is a reason... (0+ / 0-)

          ...live and learn (and if your not part of the Oligarchy’s home team suffer).

          It is no fantasy anymore than the European Union was before it happen up on the European States. It is being negotiated out of public view at this time.

          The young man who has not wept is a savage, and the old man who will not laugh is a fool. George Santayana

          by Bobjack23 on Mon Jan 05, 2009 at 09:23:37 AM PST

          [ Parent ]

    •  There are many possible bad resolutions (3+ / 0-)
      Recommended by:
      Sparhawk, bablhous, BlueOak

      ... to the preposterous financial mess that the financial boys have gotten us into. Our job is to find the good solution.

      How will we repay our huge debt? And why should the world continue to fund new US debt?

      A possible answer to the second question is, becasue it is in their interest to do so. For all our many faults, the US is still the largest single piece of the global economy. If we collapse, everything collapses.

      Keep in mind, anyone with money to buy T-bills is doing well within the current financial reality. If that system collapses or changes radically, what reason to they have to believe they will still do as well in whatever the successor state of things turns out to be?

      Here's another way to look at it: why have China etc been funding our debt up to now? Whatever their reason have been in the past, they still have those reasons. What is new is that there is now evidence that the US has not used the money wisely (to say the least-- heh). But if the Obama adminstration (and the rest of us) can convince lenders that new investment will be used wisely, then there is still reason for them to invest new money. It's too bad about the waste of the previous investment, but, outrage aside, that's water under the bridge.

      Now for the first question-- what about our existing debt. I have long argued that this is substantially uncollectable. Presumably, the holders of that debt know this. In business, situations like this are often resolved through restructuring of the debt-- lower interest, longer repayment schedule, and/or partial cancellation. The reason that creditors agree to restructuring is that some repayment is better than no repayment. So while they could demand full payment, they know we can't do it, and therefore there's no point in demanding it. It's true that they have a "gun to our head", but we also have our finger on a dead-man trigger that is wired to a bomb that blows up the entire world economy. No one wants to go there.

      I have no idea how we get out of this in the long term. But then again, in the long term we have to  overhaul the entire world economy in order to deal with the sustainability crisis. We've known that for a long time. The thing that would make me happiest would be if I thought the People In Charge knew that too, because if they don't, then nothing else we do or don't do about the economy will make any difference at all.

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