Should America instead opt to evade these fiscal cuts by actually defaulting on debts accumulated by self-indulgent baby boomers, I would also like to flee Mars because such an outcome might be even worse.
Those who choose to breach America’s sacred bond to creditors across the world in this squalid way, in circumstances short of war or extenuating distress, deserve our contempt. Be they accursed forever if they stoop so low.
As for America’s loss of its AAA rating, a number of readers strongly disagree with my view that this would be a one-day drama, arguing that great numbers bondholders would be forced to sell their debt under investment rules.
I do not find that sort of mechanical argument to be convincing. You can change those sorts of rules in a heartbeat, just as the ECB tweaked its collateral rules for Greece when it needed to, or Japan softened regulations after its downgrades.
The AAA debate is a distraction.
Full article here: Flee to Mars if America commits worst error since 1931 – Telegraph Blogs.
