I do not always agree with Moyers but he has always seemed principled and willing to allow other views to have a voice. I think he nails it here.
And Moyer leaves out one of the important financial results of a default – the loss of dominium of the US as the reserve currency for the world. Our debt is so safe that countries actually invest in it even if they lose money.
That safety will be gone in the case of a default. Once you begin picking and choosing who gets their money, the whole system decays. Investors will look elsewhere for safety.
Because they ALL expect to get paid.
As the corporationist Financial Times states, in an article entitled US default would send markets into a panic, “That said, if the Republican strategy leads to sovereign default it would amount to a disastrous case of burning down the house to roast the pig.”
And it points out, that even if there is no huge effect on the markets – a point it only makes for argument’s sake as it already sees the markets reacting – it points out that this will only make other possible reserve currencies more inviting.
China may not be the safest, goes the thinking but neither is the US. No matter what, interest rates would go up.
One amazing thing for the US is being the reserve currency. That could be gone, never to recover.
It has happened to other countries.Will we be the first to do it to ourselves?