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girl gone mad Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jul-31-11 08:05 PM
Original message
That's another option..
just canceling the $1.6 Trillion we "owe" to ourselves.

If push comes to shove, Treasury has to be prepared to use one of these bullets, imo. We can't afford the fallout of a default, and I don't mean because of the ratings downgrade, which I think is relatively inconsequential.

If a lot of money which was expected in the economy suddenly disappears, we could see a big spike in the dollar, a big drop in equities markets, further deterioration in housing and employment, and a sudden increase in trade imbalances. It would basically set off a chain reaction that could grow out of control very quickly.

If you're Tim Geithner and you understand this (I'm assuming he must), you're going to do the right thing. As much as I detest him, I can't imagine that he would risk political and economic collapse because of teabagger tantrums.
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