A Greek debt restructuring — a polite term for default — is unthinkable, according to the Greek finance minister.
“It would have a tremendous cost, with no benefit,” the minister, George Papaconstantinou, said in an interview on Greek television. “Greece would be out of markets for 10, 15 years.”
To financial markets, and to many other observers, it is more than thinkable. It is very close to a sure thing. When, how, and how messy it will be are open to question.
Thoughts on a Surreal Depression - Victor Davis Hanson
The combination of 2 billion Indians and Chinese in the world marketplace, exporting cheap goods, has meant fewer jobs for Americans and far more material playthings now accessible to every stratum of society. Again, easy credit, combined with little shame or penalty in defaulting on what one owes, has allowed a superficial parity with the upper-middle class. Massive government transfers and relaxed eligibility have ensured households thousands of dollars in entitlements and subsidies. We have printed $5 trillion since 2009, and borrowed $1.6 trillion just this year. And the huge influx of easy government cash shows here.
Cash wages have meant augmented entitlement money and are competitive with those who are formally employed and who pay 30% of their money in payroll, health care, and federal, state, and local income tax deductions. The result is an odd sort of poverty, in which superficially the unemployed and poor to the naked eyed are almost identical to the upper middle classes.
The CAP Act - Bob Corker
The only real way to place America back on a path to solvency is by imposing what amounts to a fiscal straitjacket. To that end, colleagues from both sides of the aisle and both houses of Congress have joined me in offering the CAP Act, legislation that, for the very first time, would establish an across-the-board, binding cap on all federal spending. A real cap on spending tied to a percentage of gross domestic product is a responsible way to impose fiscal discipline and achieve smaller government while incentivizing lawmakers to pass policies that promote economic growth. The CAP Act would result in $7.6 trillion less spending over ten years, fundamentally change the way Washington does business, and finally put America on a trajectory toward fiscal sanity.
