A debt ceiling tug-of-war isn’t going to cause US default. But the debt will if the US élite refuses to take it seriously.
OK, you are a powerful American and you have two choices: you can either refuse to raise the debt ceiling and refuse to cut Federal programmes – thus causing the US to default, and creating world-wide panic that destroys the professional lives of you and all your hundreds of thousands of cronies. Or you can do a deal to cut some programmes and raise the debt ceiling some way. Now there are millions of us around the world who would just love to see the former happen, because then it would become abundantly clear even to a Peruvian pipe player what a gigantic, pointless mess the whole global financial system is….and why we probably need to shoot everyone implicated in it. But anyone with a brain cell knows that a member of the US élite would no more do such a thing than give all his money to the Glaser family for safe keeping. Continue reading