fmfclwu
Posts: 74
Joined: 5/3/2008 Status: offline
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quote:
ORIGINAL: Sanity DOLLAR TURNS TOXIC... Fever for Gold, Silver Grips Investors... Gold soars to new record... Silver reaches 30-year high... And just what do you think will happen to the dollar if we don't raise the debt ceiling, default on our debt, and suddenly the economic bedrock principle that "U.S. T-bills are a risk-free investment" is no more? Without confidence in U.S. debt being risk-free, the status of the dollar as the de facto world reserve currency would end in a heartbeat as investors worldwide set new speed records fleeing for safer currencies. Also, by historical standards, our debt is not that high, though our deficit is. Obviously our nominal debt has never gone down except briefly under Clinton, but nominal debt isn't the best measure - is $10,000 in debt the same to an unemployed college dropout as it is to Bill Gates? Measured by our ability to pay the debt, we were in much, much worse shape after World War II then we are today. On the other hand, after World War II we had the political will to raise taxes on the rich, which somehow didn't grind the economy to a halt. If we found the political will to switch to single-payer healthcare and restore taxes to historical norms, we would easily be outgrowing our debt again.
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