Defaulting on our debt and money without interest questions

[pvsi.]

Please answer these questions directly unless you can not:

1. If we default on debt, how will the vast majority of American middle class suffer given the jobs that China/India no longer would do for us, Americans would have to do themselves creating more jobs. are we really that degenerate that we can not find people among ourselves who can pick apples and cut grass?

2. Was POTUS Thomas Jefferson an idiot when he said "I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a monied aristocracy that has set the government at defiance. The issuing power (of money) should be taken away from the banks and restored to the people to whom it properly belongs."

3. If money is loaned at an interest, and the people always need to find more money to pay that interest, then mathematicaly doesn't that inevitably lead to collapse/disaster? if you think not, then explain the math.

 

[Flopper]

Please answer these questions directly unless you can not:

1. If we default on debt, how will the vast majority of American middle class suffer given the jobs that China/India no longer would do for us, Americans would have to do themselves creating more jobs. are we really that degenerate that we can not find people among ourselves who can pick apples and cut grass?

2. Was POTUS Thomas Jefferson an idiot when he said "I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a monied aristocracy that has set the government at defiance. The issuing power (of money) should be taken away from the banks and restored to the people to whom it properly belongs."

3. If money is loaned at an interest, and the people always need to find more money to pay that interest, then mathematicaly doesn't that inevitably lead to collapse/disaster? if you think not, then explain the math.

The only way the US will default on it's debt is if Congress does not raise the debt ceiling. There will always be buyers of US debt if the interest rate is high enough. If the US financial situation deteriorates in relation to other countries, buyers of US debt will just demand higher interest rates. However, a continuous deterioration of the US economy would effect the economies throughout the world just as Greek debt crisis is proving to be a drag on the US economy but because of the size of the US economy, serious financial problems would have a devastating effect on the world economy much more so than a country the size of Greece.

I'm not saying that unconstrained deficit financing will not seriously effect our economy. If the deficit is not brought under control, bond rating agencies will lower their ratings and eventually buyers of US debt will demand higher interest rates. If still no progress is made, ratings would continue to fall and interest rates would continue to rise. Eventually investors in sovereign debt would find other places to park their money putting more pressure on interest rates. At some point the US economy would unravel along with most of the major world economies. The result would be devastating to all classes in most all countries as as well as the US, which is the primary reason why it's not going to happen.