Didn't happen the last time

The Dumbest Thing Said About the Debt Ceiling ... So Far

Wait, really?

In a recent interview with the Washington Post, freshman Representative Ted Yoho, a Tea Party-backed Republican from Florida’s 3rd District, said the following about the possibility of the U.S. defaulting on its debt:

“I think, personally, it would bring stability to the world markets.”
If by “stability” he means an unholy amount of fear and chaos rippling through the world’s financial markets, where basically all lending freezes up and the world’s safest, most liquid asset (U.S. debt) loses all its credibility, then yes, he’s right. A default would bring about all those things.

Nixon, and Roosevelt actually defaulted on out obligations. It went errratically for Nixon,  and for Roosevelt we ended up in WW2.   But the o9ne was an improvement on the other.  Nixon did not face a world war afterwards, and he quit carpet bombing rice farmers and the subsequent body count was low.  So we face a 15% inflation for a few years, yes.

So, why not improve the process? It Mathew Philips, the author, claiming we have gotten dumber over the years?  That may be the case, I have not seen much intelligence from our central bankers.  But the mathematicians are confident, it is a probability game and we know how to play it, a lot better.

I am not worried as long as an appropriate method of defaulting is available top Fed researchers, they will find it, they are not permanently uneducated.