TOTAL DECONSTRUCTION OF HERR GEITHNER’S FOOLISHNESS « The Burning Platform

TOTAL DECONSTRUCTION OF HERR GEITHNER’S FOOLISHNESS « The Burning Platform: "Geithner is correct, aggregate demand would decrease in the event of a default. Dollar X isn't coming out of wallet X, it's being borrowed, at least a percentage of it. Until the deficit is erased, dollar x will remain constant, and the decrease in deficit spending will lead to decreased aggregate demand. This is a much needed correction, as deficit spending effectively competes and crowds out private spending on scarce goods and resources.

With over $100T in unfunded entitlements, there isn't enough money in the world for the US to borrow, without hyperinflation. This appears to be the course for the Fed. Perhaps it's time SS and Medicare were converted to defined contribution, and not defined benefit plans, and put federal retirees on the same system, including our beloved elected officials in Congress.

I apologize to those who think this is extreme rhetoric. It isn't."