So what happens in a default?

[nadinbrzezinski]

Let me take you back to Mexico oh circa 1985... and the debt relief package.

Many of the state funded projects came to a grinding halt.

Salaries for government workers not only were frozen (which has already happened here) but where reduced.

Social Security checks did NOT go out.

Subsidies for silly shit like tortillas were greatly reduced, increasing food insecurity.

Public Transportation subsidies were reduced (later reversed)

Hospitals had to go on austerity measures.

Money for cops, and fire dried out, yes their salaries were frozen.

Teacher salaries were frozen, though the government decided to keep funding education.

Public University fees went up

Currency controls came in.

And this is just what I remember

So no, when they tell you that SS payments wil not go out... they are not trying to scare you. They are telling you the rank truth... The US has not experienced this, except (thanks to Hartman) for a day or so during the Carter administration... It will be the most painful thing to happen to the US since, yes the Great Depression. You think 2008 was bad? Just wait. So we'd better convince the Economic jihadist in DC to come to their senses... Of course if they want to destroy Obama and the US... I said six months ago that it was not a threat... they were going to do it.

On the bright side... unintended consequences.. the Empire they so much love... will disappear this FAST.

[JuniperLea]

1. The history of Argentina comes to mind...

You know many people there still do not trust the banks and deal in cash only.

Argentina Economic Crisis of 2001

The Argentina crisis of 2001-2002 exemplifies the economic, social and political upheaval that can occur during a time of economic and financial crisis. During the 1990's Argentina was heralded as a successful in developing its economy. Foreign investors poured billions of dollars into the country, inflation rates were lower than those in the U.S. at the same time, and the economy was one of fastest growing economies in Latin America. Argentina was the darling of international financial lending, strictly adhering to the IMF advice.

But in 2001 the Argentine economy reached its breaking point. The government announced that its foreign debt could not be paid back and billions of dollars in government spending would be cut. This translated to government employees receiving a salary reduction of 13% (Pastor and Wise 2001). While at the same time unemployment skyrocketed to nearly 20% (Stiglitz 2002). In one year Buenos Aires fell from being the most expensive city in Latin America to the cheapest city (Latin Trade 2003).

http://ucatlas.ucsc.edu/sap/Argentina_crisis.php

[nadinbrzezinski]

2. Yep, absolutely

I just went to 1985 since I experienced that one personally.

Here, I think we may see a return to a credit card less society if it gets worst case.

[phasma ex machina]

7. Nickels and pre-1982 copper pennies still circulate, hoard them while you can.

Silver dimes and quarters are long gone from circulation and now sell at 20-30 times their face value. :(

IIRC, 200 years ago motel room rent came to a few pennies a night.

In fact, the more I think about it, it may make sense (cents LOL) to hoard ALL coins, even the zinc pennies.

[nadinbrzezinski]

8. Well that is the normal inflation

I remember running a time travelling game in the 1980s, threw the party in 1940... they tried to pay dinner with a 20... One for all of them. sure... but they could could not believe a coke, fries and a burger could be had for 1.20... or that there was just one size of coke and no diet soda

[abelenkpe]

3. Interest rates will go up too yeah?

Don't see how that will b good for anyone individuals, businesses or government. Does truly see like republicans are eager to crash the entire global economy.

[nadinbrzezinski]

5. Oh absolutely... think Carter or worst

[Taverner]

4. "Money for cops, and fire dried out, yes their salaries were frozen."

Fast Forward to today, where the Zetas and other Criminal gangs are made up of ex-policemen

[nadinbrzezinski]

6. Army, but they enlisted in the late 1990s.

The Zetas were founded by a Corporal who deserted in 1997 iirc... and was killed oh three weeks ago

[jwirr]

9. The idea of austerity is terrifying and when you look at these other

countries it does not seem to have been a solution for these countries, only the rich - often foreign investors.

[nadinbrzezinski]

10. That's what the game is all about

privatizing public goods... why Klein called it Disaster Capitalism.

[jwirr]

11. You are a very good historian Nadine, do you know of any country

that actually was helped by this practice? I know what happened to them and that it was the University of Chicago and the Chicago Boys who did this to those other countries but I do not know what happened to them after the policies were put into effect. Now it seems that it is the turn of Greece, Ireland and the USA to take the plunge. Ironic that what we exported to those other countries is not coming home to haunt us.

[nadinbrzezinski]

12. Before the IMF was infected by Chicago Boys

or the World Bank... see the marshall plan.

[jwirr]

13. Okay I did not connect the two plans. What we need to do is go back

to the Marshall Plan and get rid of the Chicago Boys.

[Odin2005]

14. I am truly TERRIFIED that I won't get my SSI check next month.

No SSI check = I can't pay my rent.

[rucky]

15. Third World - just like that.

what a house of cards we've built for ourselves.