Wednesday, July 20, 2011

What Happens if We Default?

On a US default, we deduct,
If the GOP reps can obstruct,
Our economy's fatally,
Foolishly, finally,
Fittingly, fecklessly f***ed.

Simon Johnson writes in Project Syndicate that some Tea Party Republicans hope that a US default will radically reduce government's role in the economy,
But the consequences of any default would, ironically, actually increase the size of government relative to the US economy – the very outcome that Republican intransigents claim to be trying to avoid.
The reason is simple: a government default would destroy the credit system as we know it.
The entire dollar-based credit system is founded on the assumption that US government debt is riskless; the entire economy is founded on credit; without the one, the other will contract fitfully, fiscally and ferociously.

Hat tip to Tess Vigeland of Marketplace Money.


  1. The experts have certainly said it --

    That default would ruin our credit.

    But is the solution

    In our Constitution?

    What's more: Has our government read it?

  2. Best economics limerick ever! Next time someone asks me what I think of the possibility of default, I'm going to answer:

    "Our economy's fatally,
    Foolishly, finally,
    Fittingly, fecklessly f***ed."

  3. We could stop spending cash on Iraq

    Then start to bring all our troops back

    And if we withdrew

    From Afghanistan, too

    Perhaps we could get back to black

  4. Joey,
    Please e-mail your contact info to


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