Evans-Pritchard in the Torygraph...Since tax revenues cover just 60pc of the federal budget, the squeeze would have to be on a scale large enough within a few months to tip the US economy into a downward spiral and take the world with it.
As an historic policy error it would match the New York Fed’s decision to raise interest rates twice in one week in October 1931, but at least the Fed had an excuse. (The Banque de France had withdrawn gold reserves from the US).
Mr Obama might conceivably calculate that mass furloughs or Social Security cuts or whatever shape austerity might take would do more damage to the Republicans than to the White House. It seems an unlikely hypothesis to me. I leave it to American readers to debate who would come out of this in worst shape. I adamantly refuse to take sides in this dispute. Both parties have brought America to this unhappy pass over the last 50 years. A plague on both their houses.
Should America embark on such fiscal contraction at a time when economic growth has already slipped to stall speed, and debt deleveraging continues with a vengeance, I would like to flee to Mars for safety.
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Those who choose to breach America’s sacred bond to creditors across the world in this squalid way, in circumstances short of war or extenuating distress, deserve our contempt. Be they accursed forever if they stoop so low.
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http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100011129/flee-to-mars-if-america-commits-worst-error-since-1931/