Number 2 isn't really a option now, they've just delayed the crash for a while the real questions are just how big a crash is it going to be and when is it going to happen.
Deficit spending should be allowed but in a controlled fashion. There will come a time when the U.S. debt will become simply unmanageable. Then it will be a very serious problem. We should attempt to get spending under control as best we can, and then if we have to deficit spend we deficit spend. As it is now the government just spends whatever without regard to future integrity of the U.S. dollar.
Right now it stands at $17 trillion dollars in debt with a debt to GDP ratio of well over 100% with no end in sight. According to many on this board we should continue borrowing and spending because there isn't a reason to stop it or get it under control.
Well they have a point. A debt is something you pay, and as far as I know no one can make America pay it's debt.
Realistically Russia would be destroyed, and China won't attack the United States because if it does it economic suicide.
It's not about paying the debt and even if you refuse to pay those countries will simply refuse the dollar for goods and the whole US economy will collapse within a month or two.
What will screw the US isn't the debt itself it's when the rest of the world starts to dump the dollar as a reserve and for use in trade, and it's already stating to happen it's the whole reason they got trigger happy with Iran.
Last WRPG I really like was vampire the masquerade:bloodlines which is nearly 10 years old now, also the old WRPGs like the Black isle games where also great, current WRPGs however suck arse with very few exceptions.
Rating agency downgrades= more expensive for the government to lend money.
As for gold standard vs fiat money.
Gold standard=currency backed by a physical metal resource that is worth something and which limits what they can spend have to live within there means so to speak.
Fiat money=Currency backed by nothing but promises, government needs money they just go print some more and what effect does that have it devalues the currency, want an example just look at the Dollar since it left the gold standard the value has crashed by other 80% todays Dollar is worth about 17-18 cents compared to the 1971 dollar.
This post is full of crap. Downgrades to credit rating agencies haven't caused rising yields on government bonds in the U.S., or for that matter in the U.K., Germany and France. And fiat currencies are 100000x better than the gold standard or any kind of representative currency because governments are able to control their supply. If the U.S. switched to gold the dollar would be massively devalued as a result since the current value of all the gold mined in the world is less than half of U.S. GDP, interest rates would go up and strongly discourage investment and the inability of the government to expand the money supply would put the country back into recession. There is a very good reason why support for the gold standard amongst top economists is exactly zero percent.
Come on use your brain please what happens when you have personal bad credit rating? thats right it become harder and more expensive to borrow money as lenders demand more interest to cover the risk.
And what does all those Fiat currencies have in common oh thats right they're all on the verge of collapse the Dollar,pound and Euro are all in a bad state hell they're even talking about raiding personal bank accounts in the EU to get more money and this is all caused by unlimited borrowing and printing money to cover debts, I'am not saying we should go back to gold standard because thats next to impossible now unless there's a total system collapse which if or when this debt bubble bursts will more than likely happen.
Rating agency downgrades= more expensive for the government to lend money.
As for gold standard vs fiat money.
Gold standard=currency backed by a physical metal resource that is worth something and which limits what they can spend have to live within there means so to speak.
Fiat money=Currency backed by nothing but promises, government needs money they just go print some more and what effect does that have it devalues the currency, want an example just look at the Dollar since it left the gold standard the value has crashed by other 80% todays Dollar is worth about 17-18 cents compared to the 1971 dollar.
Obviously somebody who doesn't know how the monetary system works or about the fact the Federal reserve has been basically printing an extra $40 billion a month out of thin air over the last few years.
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