Watch what you say because it's a bummer when it is your turn to govern....

Friday, January 7, 2011

Unknown said...: If we do not raise the debt ceiling there will be a mess BUT it will force politicians to make real cuts in government spending and we would finally get to see prices fall so that resources could be reallocated efficiently which could actually lead to recovery. However, for this to take place the Fed would also need to raise rates and take their foot off the gas (we have to get the car off the treadmill before we can go anywhere). If we DO raise the debt ceiling nothing is going to improve, it will simply result in a total dollar collapse as China abandons the dollar. As the dollar begins to devalue significantly (which we are already seeing despite the horribly slow economy) costs for average Americans, businesses, municipalities, and states will continue to rise while the amount we are able to produce continues to fall. Don't take my word for it, Peter Schiff explains it much better than I do.

http://www.oasisofliberty.com/Oasis_of_Liberty/Keep_an_Open_Mind/Entries/2011/1/6_Could_America_Lose_it_All.html; January 8, 2011 at 3:25 PM

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