The best option for many overloaded borrowers may be to just say no, argues an organizer in the debt strike movement.
Conservative Republicans have lost their fight over the shutdown and debt ceiling, and they probably won’t get major spending cuts in upcoming negotiations over the budget.
But they’re winning the big one: How the nation understands our biggest domestic problem.
They say the biggest problem is the size of government and the budget deficit.
In fact our biggest problem is the decline of the middle class and increasing ranks of the poor, while almost all the economic gains go to the top.
The Labor Department reported Tuesday that only 148,000 jobs were created in September — way down from the average of 207,000 new jobs a month in the first quarter of the year.
Many Americans have stopped looking for work. The official unemployment rate of 7.2 percent reflects only those who are still looking. If the same percentage of Americans were in the workforce today as when Barack Obama took office,
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The war isn’t over. It’s only a cease-fire.
Republicans have agreed to fund the federal government through January 15 and extend the government’s ability to borrow (raise the debt ceiling) through February 7. The two sides have committed themselves to negotiate a long-term budget plan by mid-December.
Regardless of what happens in the upcoming budget negotiations, it seems doubtful House Republicans will try to prevent the debt ceiling from being raised next February. Saner heads in the GOP will be able to point to the debacle Tea Partiers created this time around – the public’s anger, directed mostly at Republicans; upset among business leaders and Wall Street executives, who bankroll much of the GOP; and the sharply negative reaction of stock and bond markets, where the American middle class parks whatever savings it has.
The saner Republicans will also be able to point out that President Obama means it when he says he won’t ever negotiate over the debt ceiling.
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All the usual suspects are giving us all the usual warnings about the disaster that would ensue if the government defaults on its debt. Much of what they say is undoubtedly true; it would create a huge amount of fear and uncertainty in financial markets.
Look for stock and bond prices to tumble and interest rates to soar. The viability of many banks and other financial institutions may be called into question if even government debt cannot be viewed as entirely safe and highly liquid asset. This is not the sort of thing that an economy still struggling to recover from the recession needs right now.
But there is one part of the horror story that should be discarded. We have been repeatedly warned that the dollar could lose its status as the world’s reserve currency in the event of default. While this is a dubious claim (will countries rush to the euro?),