Obama Won't Pay the Debt -- He Will Default

There must be a default at some point. The question is: "Which kind?" If the central bank ceases to inflate, a recession begins. If the government or the central bank refuses to intervene, many banks go under. This shrinks the money supply. The recession becomes a depression. Bankruptcies and unemployment increase.

Tax revenues fall. The government cannot pay its debt and also meet all of its promises. It must choose:

1. Default on all of the debt
2. Default on part of the debt
3. Tell the central bank to inflate
4. Raise taxes and cut expenditures

Choice #3 starts the process over. The ultimate result: the destruction of the currency. This is default through inflation. It is nonetheless a default. _MarketOracle

Read the rest of the educational article above. Although the world has never seen a debt of this size before, several political entities have been in similar situations. They only have so many choices. Americans are finally learning enough about President Obama to understand that he is likely to choose the least responsible and most corrupt choice available.

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US Unraveling, Breakdown of Society

Multicultural societies tend to be low-trust societies. The larger they grow -- particularly when IQ and character gaps lead to performance and income gaps -- the harder they are to hold together. When times are tough, such schizoid societies tend to fragment -- sometimes violently.

The US has the misfortune to have allowed its political institutions to fall under the influence of members of the criminal class. Corrupt, criminally connected persons of low character are always in search of positions of power over others. Such leaders will continue to siphon hard-won wealth away from middle classes and productive classes, toward politically favoured groups. Just as in a third world banana republic -- which is what the US is beginning to resemble.