Large enough to tip the US economy into a downward spiral and take the world with it.

[Ghost Dog]

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 (The Banque de France had withdrawn gold reserves from the US).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.

...

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.

/... http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100011129/flee-to-mars-if-america-commits-worst-error-since-1931/

[OHdem10]

1. Mr Obama had best remember Bill Clinton. He got the blame

or credit for everything. This is the way it works.

[Jefferson23]

2. K&R , fleeing to Mars may be more feasible to attain than ridding ourselves

of poor polices/ representation.

[Morizovich]

5. Unfortunately, the Martian Congress is controlled by anti-immigration forces

Led by Yanus Bruuuver.

[Festivito]

3. The deficit is a 1T$ drop in a bucket compared to CDOs and CDSs at 600+T$

Those 645T$ Credit Default Swaps and Collateralized Debt Obligations OKed by the Bush admin policy makers in 2004 continues to loom doom over the whole world.

1T$ and falling. That's a joke.

[Moostache]

4. Not really....it is doom for the existing system.

That system of US hegemony with the dollar as the global reserve currency is going bye-bye in a BIG way and very soon.

When we all wake up in a few months with zero net worth, and not enough worthless paper to buy any of the junk plastic shit streaming in from China or very a gallon of milk...THEN we will realize what was at stake these last few weeks.

I hope every single politician in Washington...Dem or Rep...gets a seriously debilitating and painful illness and dies very, very slowly without adequate healthcare - the same fate that awaits as much as 50% or more of us living her now.

And for what? For some insane and chronically misinformed malcontents from the right wing to be able to say..."see...we TOLD you it was the black guy's fault...and those sinning homos." I hope they feel really good about it because history is going to record them as the biggest pox this nation has ever inflicted on itself.

[Festivito]

6. The deficit is bad, the debt is worse, the loss of dollar as reserve currency is bad for America,

The CDOs sitting out there waiting to be redeemed is beyond ridiculously bad.

And, as we go down the media will blame anyone and everyone other than themselves or people who pay for advertising.