Consequences of a credit default

    167
    1
    SHARE

    Paul Krigman had a downbeat if excellent analysis of what to expect in today’s New York Times.

    What the professor did not tell us–because there is no model for it–is what we can do to prepare.

    I’m an ordinary Jane, and because of a lifetime of fiscal prudence which ought to make me a Republican, I am appalled by the ignorance of the GOP in matters of money.

    My husband and I are federal retirees. I assume if the country defaults, our pensions will be delayed. The Federal Employees Health Benefits program  will default in paying its share to my health insurance company (I’d be in default as well because my premium is paid out of my pension, which won’t be paid), so my health insurance will stop. Since so many businesses will fail, they’ll do the same, and the insurance industry will fail

    I can last a while, but with the market in chaos  won’t be able to access the money in my checking accounts, because the banks will fail, and no one from the government will be on the job to reopen them.

    Nor will I be able to cash in my triple AAA rated State of Virginia and Virginia city municipality bonds, because they’ll be on default as well. I bought them because they were safe, conservative and I wanted to invest in the infrastructure of the state where I lived.  Instead of squirreling away my money in some Cayman’s Island account.

    The state of Virginia is already wobbling under the effects of the government shut down, which has thrown 175,000 federally employed Virginians out of work.  

    Dear 1-percenters :  news flash. When the US government goes down we’ll take the planet with us, and your money will be worth precisely zip.

    The list of cascading consequences is endless and real.

    I suspect the Glen Becks and Goldmines of and their low information adherents of the right wing are chortling because they own gold. Well, grab a clue: you paid twice what it was worth when you bought it. In a world wide catastrophe the value will drop like a rock, because no one will have the cash to buy it from you. Last time I checked, you can’t burn it to keep your family warm. Or eat it.

    When should we expect an undetected, widely disseminated and learhal outbreak of bubonic plagued?

    • “a lifetime of fiscal prudence which ought to make me a Republican”

      Why would that be?  Seems to me that a lifetime of fiscal prudence would make one anything BUT a Republican, given their wildly irresponsible record in pretty much every area. Also, if you’ve been fiscally prudent, presumably you have money to invest, which again means you shouldn’t be a Republican, given that the stock market has performed significantly better under Democrats than under Republicans (as has the economy more broadly).