Published in El Nuevo Herald on June 30, 2011. (It is one of the first written opinions alerting people about this dangerous situation)
If by August 2 is not reached a bipartisan agreement in Congress, the Treasury Department will declare the country's inability to pay its debts.
The Republicans insist on reducing current expenditures by $ 2 trillion and not raise taxes on wealthier class. Under these parameters, debt and the deficit will grow further beyond its highest level in the last 60 years. As a macabre solution, the financial geniuses of Wall Street are offering papers with up to five years protection against default.
In practice, the default is translated as a real catastrophe for the economy, that in the beginning could stop paying pensioners and soldiers, and later to health care (Medicaid-Medicare). To make matters worse, investment banks have threatened to stop selling bonds in the market if it came to default.
The former Director of the International Monetary Fund, Dominique Staruss-Kahn, recently accused of rape in New York, had a plan consisting of two types of dollars, one for U.S. domestic consumption and another external with very favorable exchange rate, while taxing the holders of those dollars overseas. So debts will depreciate.
The Republicans insist on reducing current expenditures by $ 2 trillion and not raise taxes on wealthier class. Under these parameters, debt and the deficit will grow further beyond its highest level in the last 60 years. As a macabre solution, the financial geniuses of Wall Street are offering papers with up to five years protection against default.
In practice, the default is translated as a real catastrophe for the economy, that in the beginning could stop paying pensioners and soldiers, and later to health care (Medicaid-Medicare). To make matters worse, investment banks have threatened to stop selling bonds in the market if it came to default.
The former Director of the International Monetary Fund, Dominique Staruss-Kahn, recently accused of rape in New York, had a plan consisting of two types of dollars, one for U.S. domestic consumption and another external with very favorable exchange rate, while taxing the holders of those dollars overseas. So debts will depreciate.
Probably will have to reach an agreement before the August 2 to avoid default. This agreement will provide raising the debt ceiling above $ 14.3 billion and paying interest payments of $ 250 billion for only six months.
This could affect the U.S. credit rating internationally making even more expensive this debt financing.
If we want to save our country, the economic model we know today can not continue. Private enterprise has to offer jobs and banks have to offer loans because the sacrifice should be for all of us, like it or not.
This could affect the U.S. credit rating internationally making even more expensive this debt financing.
If we want to save our country, the economic model we know today can not continue. Private enterprise has to offer jobs and banks have to offer loans because the sacrifice should be for all of us, like it or not.
BENJAMIN F. DeYURRE
Miami
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